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Colgate outsources procurement to IBM

Colgate-Palmolive has signed a seven-year outsourcing contract with IBM for procurement and accounts payable services, to save an estimated $30m (£17.5m) by 2008.

IBM will upgrade Colgate's procurement system for materials and services and provide procurement services for raw and packaged materials and services worldwide.

IBM will also implement and manage purchasing systems based on business platforms from SAP, and manage Colgate's accounts payable function in North America and Europe.

Colgate chief operating officer Ian Cook said, “Combining Colgate and IBM resources will provide an extraordinary mechanism to increase the efficiency of our purchasing and accounts-payable systems, allowing our subsidiaries to increase their focus on serving consumers and the trade.”

The value of the Colgate contract to IBM has not been disclosed. IBM recently won a similar procurement deal with Colgate rival Unilever.

Analyst Gartner said the procurement business process outsourcing (BPO) market was now a growing one.

Gartner said enterprises should now consider whether such a BPO opportunity in procurement was suitable for their business.

The analyst said firms should monitor the progress of the Colgate and Unilever deals closely, before making a firm decision.


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