One of western Canada’s largest financial institutions Wednesday said it was renewing a five-year services pact with IBM Canada worth more than $90 million.
said Big Blue would help manage its IT environment and retail banking applications, including its core banking and administration systems, office productivity applications and financial systems. Based in Edmonton, ATB is a $13.7 billion company serving 600,000 Albertans in 240 communities through 145 branches and 129 agencies.
Joe Leuwer, vice-president of IT at ATB, said the contract extension will formalize its relationship with IBM in a way that would reduce its unit cost of computing over time and allow the firm to stay nimble.
“”We’ve embedded several new service-level measures and performance measures,”” he said. “”As service volume increased or decreased in certain channels, from a pricing point of view ADP won’t feel it is outgrowing the relationship as it was designed at the time of the contract signing.””
ATB has spent a considerable amount of time improving the way it evaluates the success of its outsourcing agreements since it first turned over mainframe, server, desktop, help desk, and network services to IBM in 1998, Leuwer said.
“”Normally people that are excellent at it see what other organizations are doing and tailor it to their specific needs,”” he said. “”We made a point off ensuring that there really weren’t any boilerplate elements of the relationship where there was an off-the-rack view of what Service A or Service B would look like.””
Garth Issett, vice-president of strategic outsourcing at IBM Global Services, Canada, said ATB is not alone in bolstering its ability to work with outsourcers to meet their specific IT demands.
“”The governance model varies from account to account,”” he said. “”Some them include regular insight into IBM’s research and leadership, both in terms of technology and where we’re going in industries.””
Although it does have a governance council that looks at all its outsourcing deals, ATB believes that relationships with suppliers should be owned by the business unit being served, Leuwer said.
“”We don’t get in between what the business is trying to do with that relationship and the vendor themselves; we just provide a context for managing it,”” he said.
Issett said the dependency of various business portfolios upon IT is bringing many other executives to the table.
“”There’s a daily component inside the relationship to begin with, but then there will be a monthly governance at the IT level, probably a quarterly governance above that, and potentially semi-annual at the more senior executive level,”” he said.
Leuwer said ATB is interested in moving towards IBM’s utility-based computing model, called e-business on-demand, but is still exploring the maturity of the concept.
“”Quite a bit of the utility services I’ve seen in the past, backstage are still hand-crafted,”” he said. “”It’s when we can see tools providing metrics that give us the illustration that things are generally utility-oriented.””
Even if ATB isn’t opting for on-demand, IBM can still provide the kind of flexibility and scaleability that utility computing promises, Issett said.
“”Some of it relates to the way we package our agreements and the way charges flow,”” he said. “”(Full-blown on-demand computing) requires a significant investment in standardization from the customer, some advanced middleware.””
ATB also said it would be spending $3 million to have IBM provide custom software, installation and rollout services for 100 Wincor Nixdorf bank machines.