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Deal boosts IBM strategy as an outsourcing resource

Big Blue will manage Telstra's supply chain services operations

IBM has signed a seven-year deal to manage Australian telecom Telstra's supply chain services operations. IBM's Supply Chain Managed Business Process Services will provide management and reporting for procurement services including energy, utilities and industrial supplies. Telstra also will have real-time access to capacity, inventory, production, delivery and forecasting. IBM would not disclose the financial terms of the deal, but a company representative said Telstra will save an estimated $375 million over the seven years.

IBM has been building its business as a provider of outsourcing services by signing deals with CVS/Pharmacy, Delta, ACOM in Japan, and St. George Bank, also in Australia. The Telstra deal is notable, however, because of its size.