Enterprise IT vendor IBM today announced its €1 billion or nearly $1.25 billion outsourcing contract with Deutsche Lufthansa to deliver IT infrastructure services.
IBM competes with India’s Infosys, TCS, Wipro, HCL Technologies, etc. in the IT outsourcing space.
IBM will manage Lufthansa Systems’ data center operations, help desk and printer services along with individual infrastructure services. Around 1,400 Lufthansa Systems employees will move to IBM.
As per the IT deal, 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 annually for the Lufthansa Group.
The duration of the IT services contract is seven years. The work will start from 1 April 2015.
IBM will transform the Lufthansa IT infrastructure to be ready for 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.
“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,” said Simone Menne, member of the Executive Board and CFO at Deutsche Lufthansa.
IBM will bring new solutions that incorporate business analytics with mobile computing and social business to enable Lufthansa to offer new services to customers. Enhancement of productivity will be one of the focus areas of the IT outsourcing deal.
Martina Koederitz, general manager, IBM Germany, said: “The agreement 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.”
Half of the Fortune 100 outsources to IBM.