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Sharp and IBM Reach Basic Agreement to Jointly Form Solutions Company and Enter into Strategic Outsourcing Partnership


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November 15, 2000, Osaka, Japan .. - 15 Nov 2000: Sharp Corp. and IBM Japan, Ltd. today announced a basic agreement to form a jointly held company that will develop enterprise resource planning (ERP) and supply chain management (SCM) solutions, and for Sharp to outsource its information technology needs to IBM Japan.

Sharp is a leader in utilising ERP operations in both its domestic Japanese operations and its overseas manufacturing centers. In addition, the company is leading the industry in adopting SCM in its domestic Japanese business centers to achieve greater efficiency in managing information and product delivery in all of its business processes from manufacturing to sales and distribution. Through these experiences Sharp now possesses tremendous skill and know-how in ERP and SCM.

IBM Japan has implemented ERP and SCM for many of its customers and has advanced skills in the field of information technology services, specially strategic outsourcing, through its services arm IBM Global Services. The company also has strong solutions operations knowledge and marketing capability.

Sharp and IBM have decided to bring their complementary skills, knowledge and resources together to build a new solutions operations company. Sharp will also work to further strengthen its global ties with IBM with the aim of advancing its global information technology strategy.

The key components of the basic agreement are:

The joint company:
**Sharp and IBM will found a new company, yet to be named, with joint investment of startup capital.
**The new company will develop both ERP and SCM solutions.
**Plans call for the new company to be founded in April 2001 with headquarters in Osaka.
**Employees will be seconded from the information systems departments of both parent companies.
**The number of start-up employees is expected to be approximately 320 (Sharp: 300, IBM Japan:20)

The outsourcing agreement:
**Sharp will enter into a full-scope outsourcing contract with IBM Japan for all aspects of its information systems processes, including system development, maintenance, and operation, but excluding planning and other strategic sections.
**The new company will execute the outsourcing contract, which will enable Sharp to build a leading-edge information technology structure, while reducing its ever-increasing information technology expenditures.

Sharp Corporation is a worldwide developer of innovative products and core technologies that play a key role in shaping the future of electronics. As a leader in liquid crystal displays(LCDs), Sharp offers one of the broadest and most advanced lines of information and communication products , consumer electronics , office equipment and electronic components while creating new network businesses.
Sharp recorded consolidated annual sales of $17.7billion for the fiscal year ended March 31, 2000.For more information ,please visit Sharp's Web site at http://www.sharp.co.jp.

IBM Global Services is the world's largest information technology services provider, with 1999 revenues of more than $32 billion. In addition to consulting, IBM Global Services is the world leader in IT outsourcing, hosting and systems services. IBM Global Services employs more than 140,000 professionals serving customers in 160 countries. IBM Corporation is the world's largest information technology company, with 80 years of leadership in helping businesses deploy technology for business advantage.

For more information, visit http://www.ibm.com/services.

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