TD Bank outsources desktops to IBM

TD Bank Financial Group, a large bank based in Toronto, has decided to outsource the management of its PC and network infrastructure to IBM Corp. to lower IT operational costs and devote more resources to developing new financial services, IBM announced Thursday.

The deal, worth about $720 million Canadian dollars over seven years, calls for IBM to manage and support over 40,000 PCs and to transform and revamp the existing data network, IBM and TD Bank officials said Thursday.

"It's an effort to focus greater energy on our core business," said Neil Parmenter, a bank spokesman.

Financial services companies face increased competition and in order to stand out have to excel with top-notch customer service and innovative financial products, said Garth Issett, vice president of strategic outsourcing at IBM Global Services Canada. This market dynamic is prompting them to outsource IT tasks an external provider such as IBM can handle more efficiently and at a lower cost, he said.

The contract became effective in late September and work has already started, Issett said. About 370 bank IT employees transferred to IBM as part of the deal. The bank has been a client of IBM for a long time, but this is the first outsourcing deal between the companies, he said.

The desktop services include manning a help desk for phone support, dispatching technicians for on-site work at the bank and maintaining, upgrading and acquiring PCs.

The revamped data network will add significant capacity to what is available now so that new services can be delivered to branches and customers, Issett said. IBM will supervise the work, which will involve other vendors as well, and manage the network, he said.

The tasks outlined in the contract are a significant part of the bank's IT operations, but the bank is retaining most of its IT work in-house, TD Bank's Parmenter said, adding that "several thousand" employees remain in the bank's IT department.

TD Bank Financial Group has around 51,000 employees worldwide and serves approximately 13 million individual and business clients. It has more than $302 billion Canadian dollars in assets and its subsidiaries include the bank TD Canada Trust, which serves individuals and businesses, investment firm TD Waterhouse, which sells mutual funds and provides brokerage services, and wholesale bank TD Securities, which provides capital market services to corporate, government and institutional clients.

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