Lufthansa Accelerates Digital Transformation with IBM

German Aviation Group Signs Seven-year IT Infrastructure Contract for 1 Billion Euro to Bring in New Mobile, Social Business and Analytics Technologies

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ARMONK, N.Y. and EHNINGEN, Germany - 18 Nov 2014: IBM (NYSE: IBM) today announced that it has signed a seven-year 1 billion Euro outsourcing contract to deliver IT infrastructure services for the Deutsche Lufthansa AG and its Group companies. According to the agreement, which is subject in particular to the approval of the Lufthansa Supervisory Board and antitrust authorities, IBM will first optimize the airline’s IT processes to increase efficiency, which is expected to generate an estimated cost savings by an average of approximately 70 million Euro annually for the Lufthansa Group. This agreement is in line with the terms and conditions as published already in October.

Over the life of the contract, IBM will bring new solutions that incorporate business analytics with mobile computing and social business to enable Lufthansa to offer new services to customers at the same time making partners and employees more productive.

Outsourcing the IT infrastructure to IBM will strengthen the competitiveness of the Lufthansa Group as a whole. The transformation plan will directly improve our cost base. Together with IBM we will have access to the latest IT technologies not only to lower our cost but also to continue digitalizing our business processes in order to increase efficiency and customer focus,” said Simone Menne, Member of the Executive Board and CFO at Deutsche Lufthansa AG and Chairperson of the Supervisory Board of Lufthansa Systems AG.

In order to strengthen its competitiveness, the Lufthansa Group, with its quality airline brands and its logistics, aircraft maintenance and catering businesses, is realigning the Group’s IT activities. By partnering with Lufthansa AG in this transformation, IBM will first optimize the Lufthansa IT infrastructure for maximum efficiency, make it ready for the innovation of cloud computing and then bring leading technologies in such areas as business analytics, mobile computing and social business to help Lufthansa meet its business objectives.

“By partnering with IBM in its digital transformation, Lufthansa Group has decided to accelerate the move to new technologies such as cloud computing to optimize efficiency,” said Martina Koederitz, General Manager, IBM Germany. “The agreement provides Lufthansa constant access to IBM research and development. This will enable Lufthansa to incorporate the latest technology and innovation into the Lufthansa IT infrastructure including strategic areas such as cloud computing, big data analytics or cognitive computing systems like Watson.”

IBM has been a leader in strategic outsourcing for more than 25 years. IBM partners with some of the world’s largest enterprises – partnerships that span years. Half of the Fortune 100 outsources to IBM based on its ability to work with clients in their transformation, marrying understanding of each client’s industry and business model with leading edge technologies such as cloud, analytics and mobile computing.

IBM will begin the multi-stage transformation of the Lufthansa IT landscape by implementing leading edge collaboration and messaging tools for social business, new network and voice services, an optimized electronic workplace solution and IBM’s security framework with its leading edge security solutions and monitoring.

With IBM’s MobileFirst device management framework, Lufthansa Group will also benefit from a global and secure mobile infrastructure allowing Lufthansa to provision, secure and manage mobile devices and apps easily, giving Lufthansa customers and employees simplified access and new capabilities for its reservation systems and business processes.

As part of the outsourcing agreement, IBM will manage Lufthansa Systems’ entire data center operations, help desk and printer services along with individual infrastructure services.  Around 1,400 Lufthansa Systems employees will transfer to IBM. Infrastructure services are scheduled to begin from IBM on April 1, 2015.

The contract was signed November 15, 2014.

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