Industry analysts expect procurement outsourcing to be one of the highest growth areas of business process outsourcing over the coming years.
Under the terms of the deal, IBM will handle all areas of procurement for Unilever, including managing analytics applications and restructuring Unilever’s existing procurement processes.
The contract with Unilever North America, which owns food and drink brands including Ben & Jerry’s, Hellmann’s and Lipton, looks set to be larger than the procurement outsourcing deal IBM won just over two weeks ago with fragrance company Coty Inc. IBM also handles the procurement of NiSource Inc, as part of the 10-year, $1.6bn multi-tower BPO deal signed between the two companies in June 2005.
This is expected to be the first of many outsourcing announcements from Unilever. The company’s disappointing recent performance has led it to review its IT and back-office functions with a view to outsourcing some or all of them to third parties in an attempt to cut costs.