Equifax extends IBM outsourcing agreement

Big Blue’s Canadian operation will play a pivotal role in a global US$800 million outsourcing contract announced Thursday between IBM and credit reporting agency Equifax.

The agreement, which Equifax said would allow it to achieve US$20 million in annual savings by 2006, will allow IBM to take over Equifax’s mid-range servers, Web systems, networks and mainframes. Covering the company’s operations in the United States and Europe as well as Canada, the expansion of the decade-old outsourcing relationship will also see the creation of an IBM global help desk for Equifax that will be based in Toronto.

“”There’s always new tools and techniques,”” said Phil Muzzilli, who retired as CFO from Equifax in January but was brought in specifically to help renegotiate the IBM contract. “”Instead of us investing in four different places, IBM will invest in one place and we’ll get savings.””

IBM first took over Equifax’s U.S. mainframe operations in 1993 and added the Canadian operation shortly thereafter, Muzzilli said. The new contract, which will now stretch an additional five and a half years, will give Equifax the same kind of “”single view”” of IBM that many enterprises want of their customers.

“”Currently we have separate contracts in each of the countries, so when our people have to deal with IBM, they’re dealing with people in multiple countries,”” he explained. “”Equifax Canada and IBM will still have a relationship manager, but we here in Atlanta will talk to a global relationship manager and he would coordinate in Canada instead of us having to do all that.””

Eric Ray, vice-president of financial industry markets with IBM Global Services, said the agreement points to the strengths of IBM’s on-demand model which emphasizes the need for a flexible IT environment.

“”We had been running a large piece of their infrastructure for years,”” he said. “”I think we both figured out that there was some merit by expanding the relationship and broadening it. We can drive additional savings throughout the enterprise and increase their operational efficiencies, and allow them to do the things they do well.””

Equifax is dedicating its internal IT resources to application development projects, Muzzilli said, who admitted that collaborating with another large firm requires a considerable commitment.

“”The important thing — and we’ve done it all this time — is to have a global governance where you talk on a regular basis . . . that way little problems don’t become big problems,”” he said.

IBM will offer Equifax both a dedicated team and a senior delivery executive who manages the governance structure day to day. “”Where we need resources — whether they need them to tomorrow or in the future, they’re available,”” he said.

Last week, IBM signed a similar contract renewal with engineering firm ABB.

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