Siemens launches new IT outsourcing and services group

Siemens has launched its newly organized IT services unit, which bundles five units into one

Siemens has launched its Siemens IT Solutions and Services (SIS) division, three months after announcing plans to bundle all of its worldwide IT services and software activities, including Siemens Business Services (SBS), into a new entity.

In addition to SBS, which has been losing money for some time, the new division includes the entities Program and System Engineering, Siemens Information Systems, Development Innovation and Projects and Business Innovation Center.

By combining all IT services and software development across Siemens, the new unit would be in a stronger position to provide comprehensive and complex systems and services from a single source, Siemens spokeperson, Jorn Roggenbuck, said.

Outsourcing, a core business of SBS, accounted for nearly 60 per cent of sales in the new group, followed by IT services, such as systems integration and SAP software implementation, at 35 per cent, he said. Software development generated the rest of the group's sales of about Euro 5 billion ($US6.5 billion).

The Siemens group, which manufacturers a wide range of electrical and electronic products, currently accounts for about 40 per cent of SIS revenue. But that per centage is expected to drop as the group increases business with new and existing customers, according to Roggenbuck.

Christoph Kollatz will be group president of SIS, overseeing a workforce of about 43,000 people.

Since taking over as CEO of Siemens, Klaus Kleinfeld has shifted the focus of the German engineering giant away from low-margin manufacturing areas, such as telecommunications equipment, computers and chips, to areas he views as potentially more profitable, including factory automation, power generation and automotive systems.

But since Kleinfeld has been on the job, the German company has also been shaken by a bribery scandal. Six current or former Siemens executives, including the ex-head of the group's telecommunications equipment unit, Thomas Ganswindt, are suspected of setting up secret funds outside Germany.

Germany's Justice Ministry plans to propose tougher legislation to fight corruption in the wake of the Siemens scandal and others that have shaken leading German businesses.

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