Korea Investment and Securities Signs US$157 million Strategic Outsourcing Agreement with IBM

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SEOUL, South Korea - 13 Oct 2009: IBM (NYSE: IBM) today announced that it has signed a 10-year strategic outsourcing agreement with Korea Investment & Securities Co. Ltd. (KIS), which aims to enhance its competitive position in the global marketplace through business process innovation and transformation in information technology (IT) services.

 Valued at US$157 million, this agreement is the largest outsourcing deal in the Korean investment and securities industry. KIS is one of the country's leading securities companies, offering a comprehensive range of asset management and investment banking services. Since its merger with Dongwon Securities in 2005, KIS has been rapidly expanding its presence in other Asian markets. 

Under the agreement, IBM will provide for KIS a full range of IT services, including design, building and installation of an IT infrastructure system consisting of a fleet of IBM Server pSeries and xSeries as well as IBM Tivoli security management and Maximo asset management. IBM will migrate part of the existing storage system to IBM Storage System, and provide the network equipment. The enhanced IT infrastructure system will be used to support KIS' major business areas, including account and financing, channel management, external interface, data analytics and call centers. As a result, KIS will be able to increase its operational efficiency across the company.

In addition, IBM will manage the company's IT infrastructure operation including the management and maintenance. IBM will help KIS operate the IT infrastructure through virtualization and integration services, and improve service quality through improved processes. 

As part of the agreement, KIS will receive on-demand service under the payment system based on usage and manage the service level agreement-based service quality. 

The outsourcing project is being implemented as a strategic move to achieve KIS' corporate goal named "VISION 2020". It has been set to increase the company's responsiveness to the ever changing demands in the global financial market environment and improve the company's competitiveness in the industry by focusing on the company's key business areas such as sales, marketing and customer service. KIS expects to achieve 20 percent improvement in Return on Equity (RoE) for its total assets worth KRW 20 trillion by year 2020. 

"We have selected IBM as our business partner for IBM's superior capability in IT services, its strong track record in operating global outsourcing services and the high business value it could generate for its clients," said Byung-ho Lee, Chief Information Officer, Korea Investment & Securities. "We decided to transform our business process for the purpose of reinforcing our global competitiveness in the fiercely competitive financial industry. By enhancing our IT capacity, we will be able to actively respond to the rapidly changing global financial environment." 

In addition to optimize the company's IT operational efficiency, KIS expects to gain the additional advantage of improving its cost structure -- which will disperse the costs to be incurred to the fixed assets, while securing a flexible, stable service system using IBM's global capability and standard processes. 

"We are thrilled to be Korea Investment and Securities' strategic partner, supporting its business process transformation and innovation. By offering world-class services, we are committed to creating real business value for KIS, which in turn will contribute to the success of our client," said Won-jong Kim, General Manager, Global Technology Service, IBM Korea. 

While outsourcing the operation of the IT infrastructure to IBM, KIS will continue to lead the IT strategy planning and application development and management. 

KIS and IBM signed the agreement in September, 2009. 

About Korea Investment and Securities
For more information about Korea Investment & Securities, visit www.truefriend.com 

About IBM
For more information about IBM, visit www.ibm.com

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