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Sara Lee, IBM sign outsourcing deal

Stretching seven years, contract will see IBM's Philippine delivery center as one of the locations tasked to support finance and accounting services for Sara Lee.
Written by Joel D. Pinaroc, Contributor

MANILA--Sara Lee has signed an outsourcing deal with IBM, that will see the IT giant manage some of the consumer goods conglomerate's global backoffice operations.

In a statement released Wednesday, IBM said it will also maintain a portion of Sara Lee's North American and European financial transaction processing and global information services, including applications development and maintenance, as well as the company's global indirect procurement activities.

Financial details of the seven-year deal were not disclosed.

IBM said its global delivery center in the Philippines has been tapped as one of the locations to support the finance and accounting services portion in the global deal.

As a result, Big Blue said it is targeting to increase and expand the capabilities of the Manila delivery center, which currently has "a multilingual workforce that provides services in German, French and Spanish, in addition to English and local dialects".

"Sara Lee's move to globally-integrated, backoffice shared services will be accelerated with this business transformation collaboration," James Velasquez, country general manager at IBM Philippines, said in the release. "This pact allows us to further grow our local finance and accounting business process services, and at the same time kick off our new supply chain management services locally."

The deal is deemed a timely win for IBM, amid the ongoing global economic slowdown.

Sara Lee, for its part, said it has a long-term strategy focused on building market share positions, leveraging opportunities in emerging markets and driving efficiencies to spur worldwide growth.

The organization added that it is simplifying its workflow to achieve better efficiencies through process discipline, functional centers of excellence, integrated supply chains and outsourcing work where appropriate. Sara Lee said it will look "to drive additional cost and efficiency improvements" with the outsourcing deal.

The transfer of activities will be carried out in phases and in line with local consultation requirements, IBM said.

In its 2008 fiscal year, ended Jun. 30, Sara Lee reported more than US$13 billion in annual net sales, covering some 200 countries. The company's portfolio includes food and beverage and household brands such as Ambi Pur, Kiwi and Sara lee.

Joel D. Pinaroc is a freelance IT writer based in the Philippines.

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