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February 10, 1999


By CBR Staff Writer

IBM Corp’s IBM Global Services division has signed a multi-year outsourcing deal with computer retailer CompUSA Inc. The seven- year deal is worth an estimated $200m and will see Big Blue take over all of the company’s application development and data services operations. One task that IBM will carry out for the chain of 210 stores across the US is to support the migration to ERP software from SAP AG. The arrangement is the IBM unit’s largest ERP deal with a retailer to date and its first outsourcing contract with Dallas-based CompUSA. News of such an announcement from CompUSA has been expected since last August, when the company took a $56m charge associated with overhauling its IT infrastructure. At that time, it said it was implementing a new strategy that would eventually include outsourcing substantially all of the company’s IT processes and implementing an ERP program. The outsourcing deal will also serve to free up the company’s own IT organization to concentrate on e-commerce initiatives as it moves to create a separate direct sales business amid rapidly-growing internet revenues.

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