Extending Their Global Partnership, Nissan and IBM Announce IS Outsourcing for Japan

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Tokyo - 19 Jun 2000: -- Extending their global partnership for information system (IS) operations which Nissan Motor Co., Ltd. and IBM agreed in October 1999, Nissan and IBM today jointly announced that Nissan will outsource its IS operations in Japan, to IBM Japan.

The service includes Nissan's regular maintenance and operational activities as well as part of its application development, but excludes the planning and design of new systems. The two companies will start operations from October 1.

In North America, Nissan has outsourced these same operations to IBM Corp. since October 1999. This latest agreement in Japan is expected to further accelerate the standardization, integration and centralization of Nissan's IS on a global level.

This outsourcing initiative, together with related improvements, will make it possible to reduce Nissan's annual IS costs by more than 30% in Japan. Simultaneously, this initiative will enable Nissan to implement the latest technological innovations in the IS field based on IBM's highly competitive IT expertise, thereby resulting in the flexible deployment of IS strategies. In addition, focusing greater attention on the planning function will allow Nissan's IS function to be have a leaner and more business-oriented structure.

Nissan is moving ahead with wide-ranging efforts designed to achieve profitable growth under the Nissan Revival Plan(NRP) announced last October. Reforming the Nissan Group's business processes for achieving the NRP will require powerful and global support in terms of IS. There is also an urgent need to secure a competitive advantage by making extensive use of strategic IS activities, which have been expanding rapidly in recent years, as typified by e-business.

The Nissan Group as a whole invested more than 80 billion yen (over $US760million) in IS in its last fiscal year. Nissan intends to use the maintenance and operational cost reductions produced by this agreement, along with the cost savings generated by the recently announced partnership agreement with Japan Telecom Co., Ltd. in the information network field, to make vigorous and strategic IS investments in the coming years.

This outsourcing service will be the largest ever for IBM Japan in the Japanese manufacturing industry. IBM's global organization and comprehensive IT capabilities support Nissan establishment of a new global IS infrastructure. Notably, the introduction of e-business is expected to provide powerful support for reforming Nissan's business processes in order to strengthen the company's competitiveness. For example the utilization of customer relationship management (CRM), proposed by IBM to provide a variety of services specifically tailored to customer's diverse needs.

Based on this partnership, IBM Japan will take over a portion of Nissan's information system operations currently performed by its IS affiliate, NIC Co., Ltd. This will allow IBM and NIC to implement the latest information technologies and know-how, adding them to their capabilities accumulated in providing advanced solutions in the manufacturing field. As a core group of IBM's IT professional community, NIC will provide Nissan and its group companies with competitive and high quality services.

"The Nissan Revival Plan cannot be accomplished without effective information systems," notes Carlos Ghosn, Nissan's Chief Operating Officer. "Following upon the recent agreement with Japan Telecom, this latest partnership with IBM puts in place the global infrastructure which is key to support Nissan's long term profitable growth."

Louis V. Gerstner, Jr., IBM's Chairman and Chief Executive Officer said, "IBM has worked closely with Nissan in recent months to improve its information technology systems, implement a global technology management system and leverage the benefits of e-business. IBM's global reach, leading e-business solutions and vast experience in Japan and around the world uniquely position IBM and Nissan to make this enhanced partnership a great success for both organizations. Nissan has stated that information technology will play a vital role in its transformation and IBM is pleased to support Nissan in meeting its objectives."

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