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September 21, 1998

IBM WINS $419M OUTSOURCING DEALS IN FINANCIAL SERVICES

By CBR Staff Writer

IBM Global Services has announced two major outsourcing agreements, worth a total of $407m, with the UK Bradford and Bingley Building Society, today, and Caricentro, the Italian savings banks consortium, on the ninth of September. The Bradford and Bingley contract, worth $168m over ten years, is the first major UK building society to fully outsource its technical infrastructure. Applications development and software administration will, however, remain under the Society’s control. The running of the building society’s data center in Bingley, its mid-range servers and the management of desktop support will be transferred to IBM. The data center’s mainframe and its 15 support staff will be transferred to IBM’s site at Leeds. The mix of servers, including IBM, DEC, SCO and HP equipment will remain at the data center. Under the terms of the deal 40 Bradford and Bingley employees will be transferred to IBM under TUPE (Transfer of Undertakings Protection of Employment) regulations and 40 new jobs will be created. IBM does not expect any problems with recruiting or maintaining employees. Caricentro is an Information Systems Consortium for nine central Italian banks, eight of them partially owned by Cariplo and, therefore Gruppo Intesa set up in 1994. The Caricentro contract, worth $239m over ten years, has resulted in information management services and design application developments being transferred to Mediosystem SpA’s, an IBM-owned company, data center in Perugia. According to David Young, IBM’s banking and financial services strategic outsourcing project manager, it represents a significant move by the banking industry to use outsourcing as a tool to compete against the new supermarket and retailer competitors who have shorter delivery times for new technologies.

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