IBM SA has secured a R1.1 billion three-year contract to supply technology services to local retail bank Absa.
The deal, say players, will not negatively impact the institution's long-standing partnership with GijimaAst.
Absa yesterday announced it had awarded the deal to IBM - its largest single contract with the company - in December. It also noted the new contract consolidated all existing agreements between the parties.
Ian Russell, Absa's chief procurement officer, explained this morning that the deal is aligned with local and Barclays Group strategy.
"We have for some time standardised on IBM technology for our midrange infrastructure requirements. Who better to service that technology than the company who manufactured it? This deal is also in line with our parent company's strategy. Around 50% of Barclay's operations are outside the UK; IBM is able to provide support in all these locations," he said.
The parties say IBM will provide desktop, midrange, mainframe, storage, related services and business strategy consulting services to Absa. The delivery of these services is expected to help Absa improve its business processes and customer service levels, as well as reduce costs.
The bank expects the cost reductions relating to this contract to reach at least R138 million over the duration of the contract.
Room for GijimaAst
Following the announcement of the deal, it was speculated that long-standing IT partner to Absa, GijimaAst, had lost its footing with the institution.
However, Absa and GijimaAst deny this is the case.
"We have not lost any of our agreements with Absa to IBM and our five-year contract to run the institution's IT infrastructure still stands. If anything, this deal has the potential to positively impact on GijimaAst. We are an IBM partner and no doubt will play a role in technology implementation at Absa on their behalf," says Carlos Ferreira, GijimaAst CFO.
Russell confirms GijimaAst retains its partnership with Absa, noting the two providers deal with mutually exclusive aspects of the bank's environment.
Share