IBM and partners provide on-demand BPO services

In what it sees as a growing strategy, IBM announced Monday it has linked up with a pair of partners to provide business process outsourcing services to two joint clients. In both instances, Armonk, New York-based IBM will provide technology hosting and its partners will provide business software and services.

"The partners bring specific expertise to the table, and IBM is always seeking to partner with best-of-breed companies to deliver" services integrated with IBM technologies, such as grid computing, said James Larkin, a spokesman at IBM's Global Services division.

The business process services will be provided in an on-demand basis, an approach IBM is now championing because it claims it is generally more flexible than traditional outsourcing engagements in which the service terms and fees are more rigid and thus more difficult to modify as the needs of clients change.

"This is one of the ways we're working with partners in the era of e-business on demand. Our partners are just getting started with this, so we want to show them how fruitful this effort can be," Larkin said.

The partnerships, for providing procurement and accounting services, are being announced at IBM's PartnerWorld 2003 conference in New Orleans and served up as an example of IBM's growing emphasis on its partners for delivering on-demand computing services, in particular of the business process outsourcing (BPO) type. In the increasingly popular BPO engagements, a client outsources not just a set of IT tasks but rather complete business processes, such as payroll processing or inventory management.

In one deal, IBM is partnering with Ketera Technologies Inc., from Mountain View, California, to provide procurement services to CNF Inc., a provider of shipping, logistics and supply-chain management services, the companies said in a statement. IBM will host Ketera's Spend Analysis software for CNF, which will use the software to reduce and control its purchasing costs. The procurement system will be used internally by CNF employees and externally by its suppliers of this Palo Alto, California company, which had US$4.8 billion in revenue in its 2002 fiscal year.

In the other deal, IBM is joining up with Intacct Corp. to provide accounting services for Transmarine Navigation Corp., a shipping company based in Long Beach, California, the companies said in a separate statement. Transmarine will use the Web-based accounting system to improve how it manages the financial operations of its ports. The accounting functions will be centralized in the system, with the goal of improving security and making data available in real time. IBM will host the system, while Intacct, in Los Gatos, California, will provide the accounting software and service.

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