Consumer products maker Procter & Gamble has signed
a 10-year, $400m (£249m) employee services outsourcing deal with
IBM.
IBM said it will provide payroll processing, benefits
administration, travel and expense management, and other human
resources services to some 98,000 worldwide employees of P&G
under the contract. The services will be provided through P&G's
existing SAP software and employee web portal.
About 800 P&G employees will be offered jobs with IBM's
Business Consulting Services division under the deal. There will be
no layoffs.
The contract is scheduled to begin 1 January, when IBM will take
operational responsibility for three P&G service delivery
centres in Costa Rica, Newcastle, and Manila, as well as other
staff members in more than 25 other countries. The workers will be
integrated into IBM's existing global network of Business
Transformation Outsourcing service centres.
The deal is the third of four that P&G has planned for its
operations. In May, P&G signed a 10-year, $3bn IT services
outsourcing contract with Hewlett-Packard, and in June, the company
signed a five-year, $700m facilities management outsourcing deal
with real estate management business Jones Lang LaSalle.
Damon Jones, a P&G spokesman, said the deals will help the
company reduce costs and increase the level of services by working
with companies that specialise in different areas. "It gives us
access to a greater pool of innovation," Jones said.
The fourth outsourcing component will come next year when
P&G will hire a suplpier to take on its accounts payable and
purchase order management.
Last year, P&G was in a series of negotiations with several
companies, including Electronic Data Systems, to outsource much of
its IT operations. Eventually, it chose to end talks with a single
supplier and look at a multisupplier approach to its
outsourcing.
Todd R Weiss writes for Computerworld