JP Morgan KOs $5 Bln IBM Outsourcing Deal
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JP Morgan Chase &amp; Co. (JPM.N: Quote, Profile, Research) , said on Wednesday it was scrapping a $5 billion outsourcing deal with IBM Corp.
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JP Morgan  said on Tuesday it had earmarked $750 million for private equity investment in Asia, aiming to take minority stakes in businesses in a region where buyouts are notoriously difficult.
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(InfoWorld) - IBM reported on Mar. 2 that it has signed American Airlines as its latest major human resources outsourcing customer, announcing a $217 million deal to take over much of the airline's personnel operations. TheÂ technology services giant reported that it will support HR functions including training, recruitment, and staffing -- along with related IT and call center support -- for all of American's 88,000 employees in the United States and Canada. Big Blue won the deal in tandem withÂ consultants Mercer HR Services, which will cover health and benefits and pension and payroll management aspects of the seven-and-a-half year contract. The deal with American represents only the latest in a string of major outsourcing agreements won by IBM, including anÂ IT services pact with rival Delta AirlinesÂ signed in Aug. 2006. Terms of the Delta agreement weren't made public, but IBM reported that it would partner with the airline's internal technology group to help oversee IT mainframe services and other infrastructure management operations. In July 2006, IBM announced another sizable HR services outsourcing deal, signing retailer CVS Pharmacy to a 10-year agreement covering many of the same business processes involved in the American Airlines contract. CVS cited the need to help patch together the 55,000 new employees it added over a two-year span of acquisitions as the primary motivation behind its outsourcing strategy. American, a subsidiary of AMR, said it is hoping the outsourcing pact can help it drive down costs and improve services for employees as well as find new ways to offer access to HR tools to workers. Representatives with AMR said that the company expects to save a total of $60 million over the course of the outsourcing arrangement with hopes to cut an additional $2 million per year in related administrative expenses. American will transfer the work currently being handled by roughly 200 of its employees via the agreement, said AMR spokeswoman Susan Gordon. A small number of those workers will be transferred over to IBM and the remaining people moved into other HR roles at the airline. A major element of the decision making process -- carried out by American over the last year-and-a-half -- was the consideration of IBM's ability to further modernize and streamline American's HR-related IT operations, she said. "The ability to work with IBM and take advantage of the technologies and processes they have in place was a key factor in this decision," said Gordon. "American will retain responsibility for strategy through the partnership with the transition of functions taking place over a period of two years." Researchers at Gartner estimated that the market for HR-related business process outsourcing reached $24.6 billion in 2006, a roughly 5 percent gain over 2005. However, the research firm has also predicted that some services providers might struggle with profitability during 2007, impeding growth of the U.S. sector of the market specifically. HR remains the largest segment of the worldwide business outsourcing market at 18.7 percent, Gartner reported, with payroll and benefits administration ranking as the most popular tasks that are being farmed out to service providers. According to a report published by researchers at Boston-based Ovum Summit in Aug. 2006, IBM topped rivals, including CA, Hewlett-Packard, and BMC Software, in several categories of a recent customer poll, winning praise as the industry's "most strategic IT management software vendor."
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IBM &lt;IBM.N&gt; and Lehman Brothers &lt;LEH.N&gt; have agreed to pay nearly US$17 million for 7.7 percent of Kingdee International Software Group Ltd. &lt;0268.HK&gt;, aiming to establish an alliance under which Big Blue will help the Chinese software firm re-design its...
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JPMorgan Chase on Wednesday canceled its $5 billion outsourcing deal with IBM and said it would rehire about 4,000 workers who had been transferred to IBM under the arrangement.
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After internal documents revealed plans to send nearly 5,000 jobs to developing countries over two years, IBM became an easy target for critics of outsourcing. Will limiting layoffs take the sting out of moving these jobs abroad?
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IBM's loss of its huge JPMorgan contract comes as outsourcing deals are getting smaller.
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Continuing its assault on the European IT outsourcing market, IBM Corp. has signed agreements to buy two Danish IT services companies and another to provide IT services to one of the country's largest banks.
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Cognos executives first approached IBM in the months leading up to&#160;IBM&#39;s pending $5 billion deal to buy the company, not the other way around, according to a document Cognos submitted Friday to the U.S. Securities and Exchange Commission.
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By Trebor Banstetter, Fort Worth Star-Telegram, Texas  Mar. 3--American Airlines will outsource some of its human-resources work to IBM in a deal worth $217 million.   Officials confirmed the deal Friday but said it will not result in layoffs.
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COPENHAGEN  - IBM has signed a pair of outsourcing contracts worth more than &#36;1 billion US with two Danish companies, continuing the computer giant's push into northern Europe.
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InfoWorld - Cognos executives first approached IBM in the months leading up toÂ IBM's pending $5 billion deal to buy the company, not the other way around, according to a document Cognos submitted Friday to the U.S. Securities and Exchange Commission.
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An early end to International Business Machines Corp.&#39;s contract with JP Morgan Chase &amp; Co. reveals how mega information-technology outsourcing deals are falling out of favor, with both IT services companies and their customers.
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IBM has signed on five corporate customers and the Environmental Protection Agency to its ongoing grid-computing initiative, Big Blue said Friday.
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NEW YORK - IBM Corp. lost one of its highest-profile outsourced-IT clients on Wednesday, as JPMorgan Chase & Co. said it is canceling the remaining portion of a contract that was intended as a seven-year, $5 billion deal.
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Banking group Lloyds TSB yesterday awarded IBM a Â£500m contract to supply internet telephony and data services in one of the biggest such deals seen in Europe.
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China agreed to pump $5 billion into Morgan Stanley  as the U.S. investment bank reported a stunning fourth-quarter loss fueled by a bigger-than-expected $9.4 billion of write-downs in mortgages and other assets.