IBM wins $1.1B outsourcing deal in UK

The Boots Company PLC, a pharmacy and health care company, has outsourced its IT systems to IBM Corp., it announced Tuesday.

Boots, in Nottingham, England, has signed a 10-year contract worth about £710 million (US$1.1 billion) and expects to save £130 million over the period compared with the cost of running the systems itself, spokesman Francis Thomas said.

IBM will manage and develop Boots' systems infrastructure, "from the mainframes to the tills in our 1,400 stores, to the computer on my desk," Thomas said. Over 400 Boots IT staff will be transferred to IBM's payroll, but will continue to work within Boots' head office, with extra IBM staff brought in when needed. "The great thing about this is that if IBM has an expert in Singapore and we need that expertise, we can tap into it for three months. It keeps our costs on an even keel," he said.

The £130 million savings will be "ploughed back into new systems," Thomas said. An IBM innovation center is planned for Nottingham, he said.

"We will look at new technologies they develop there, or suggest things that would be useful to us. Current ideas are PDAs (personal digital assistants) for staff to update stock availability, improved loyalty card systems, and systems to increase our recognition of shopping patterns," he said.

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