IBM Announces Business Transformation Outsourcing Agreements With UTC, Avnet, and U.S. Department of Education

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SOMERS, NY - 14 Aug 2003: IBM Business Consulting Services today announced that it has signed business transformation outsourcing agreements with United Technologies Corp. (UTC), Avnet, and the U.S. Department of Education. In each of these relationships, IBM will work with the customer to help transform one or more core business processes and outsource the ongoing management of those business processes.

IBM has been working with UTC, a $28 billion global technology company and the 49th largest U.S. corporation, since 1998 to transform its indirect goods and services procurement processes. In that time, IBM has helped UTC to establish strategic sourcing teams and preferred-provider supplier agreements, manage purchasing operations and accounts payable, and move toward a single, fully integrated (hosted) e-procurement system. Under the new contract with UTC, IBM will expand this relationship with UTC's North American-based divisions: Carrier, Otis, Sikorsky, Hamilton Sundstrand, UTC Power, and Pratt & Whitney.

"We are pleased to extend our procurement services relationship," said Kent Brittan, Senior Vice President of Supply Management for UTC. "With IBM's help, we've achieved greater control, a common system and increased savings from indirect procurement. Having a reliable partner like IBM has allowed us to focus on core businesses while achieving the results we need from indirect procurement."

For Avnet, a Fortune 500 company and one of the world's largest technology distributors, IBM will transform and assist Avnet in managing all non-inventory spending and provide an on-demand procurement solution powered by Ketera Technologies. Through these services, Avnet anticipates millions of dollars in cost reductions for non-inventory purchases, streamlined purchase-to-pay and approval processes, and a significant hard-dollar return on investment.

"This new vendor agreement represents a powerful proposition," said Phil Wehrli, Director of Procurement, Avnet, Inc. "We expect this system to increase employee productivity and efficiency, while driving costs out of the business. But equally important are the tremendous benefits we expect from transforming our procurement process and making it more responsive to Avnet's needs. IBM is a global leader in this area, and their expertise will be invaluable to us."

For the U.S. Department of Education, IBM has worked with the department to modernize its principal procurement, accounting and financial management systems under a single, integrated platform called "EDCAPS" (Education Central Automated Processing System). With this new agreement, IBM will take on responsibilities for management of software maintenance, enhancements and technical infrastructure. The agreement covers the department's financial management systems, which include accounting, budgeting, procurement, grants management, travel, and payment collection and processing.

"These business transformation outsourcing agreements build on a solid 2nd quarter in this area for IBM Business Consulting Services, and on similar deals already announced this quarter with Raytheon and Ericsson," said Kathy Hegmann, General Manager of IBM Global Business Transformation Outsourcing. "This trend is indicative of customers working with IBM not just to transform and manage IT systems, but to help transform and manage core business processes in a more flexible, on demand manner."

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