Nordic bank signs £1.5bn joint venture with IBM

Nordic financial services group Nordea has signed a 10-year IT joint venture with IBM deal worth an estimated €2.2bn (£1.5bn)

Nordic financial services group Nordea has signed a 10-year IT joint venture with IBM deal worth an estimated €2.2bn (£1.5bn).

Nordea will form a joint venture with IBM, employing around 900 staff, to run and develop the bulk of its IT systems. Nordea will only pay for the IT resources it uses, in an “on-demand” charging model that is becoming increasingly popular for outsourcing deals.

Nordea said it expected to make “significant” savings through the contract, which will handle an IT budget of around €330m, but declined to give a figure.

"This partnership will facilitate a large transformation process to centralise our IT production, and thereby reduce IT costs while enabling us to focus more strongly on core business", says Markku Pohjola, deputy group chief executive officer and head of group processing and technology.

A number of technology platforms will be consolidated into one location, and networks and desktops will be standardised under the deal.

IBM will deploy an environment that automates many tasks associated with key IT functions, such as resource provisioning, asset tracking, workflow scheduling, and real-time infrastructure monitoring.

The multibillion-pound deal shows the continued demand for large outsourcing deals in Europe.

IBM is in final and exclusive negotiations with Procter & Gamble for a business process outsourcing contract to provide human resources services to its employees.

Last month IBM signed an on-demand outsourcing contract with drinks giant Diageo, that could be worth more than £300m over 7 years.

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