BMS grants IBM $324m contract

Under the 10-year agreement, IBM will be charged with providing the drug behemoth with human resource (HR) functions across the globe, with a primary focus on BMS' operations in the US, UK, Ireland, France, Germany, Italy, Spain, Belgium and Puerto Rico. In addition, IBM will offer limited support to 40 other BMS locations in the Asia Pacific, Europe and the Americas. IBM will administer its services from its cost-effective offshore call centers in Manila, The Phillipines, and Budapest, Hungary as well as its delivery centers in the US. The aim of the partnership for BMS is to achieve a more flexible, integrated and improved HR process for its employees across the world, along with ehanced operational efficiencies in this area at a reduced cost, as the company continues to tighten its belt. "Dynamic change in the pharmaceutical industry is forcing companies to become more streamlined in their operations​," said Philip Guido, general manager of Managed Business Processing Services, Americas, at IBM. "In order to manage talent within an organisation, a company must have an integrated view into its employee population and workforce data​." Specific functions that will now be performed by IBM will include recruitment, payroll administration, call center support and other related HR and IT systems services. IBM will also install a SAP solution and integrate BMS' global workforce data into one portal so that its employees and HR professionals around the globe can have access to the information and services at any time. A deal of this nature comes as no real surprise and follows BMS' revelation in November last year that it plans to trim the fat and save cash. Amidst sweeping restructuring plans, around 4,300 positions are facing the chop until 2010 - equivalent to 10 per cent of the company's global workforce - and 1,300 employees have already received their marching orders. The firm indicated that back-office operations, finance, IT and human resources departments will be hit the hardest by the intended job losses, with outsourcing and offshoring being a strategy that it plans to embrace. Wasting no time, shortly after the announcement, in December, the firm agreed to shell out $715m over seven years in a new outsourcing deal with US-based IT services firm EDS. Under the contract, EDS is now administering all of BMS' IT functions in the Americas and the Asia Pacific, and this scope may eventually be extended to cover Europe, the Middle East and Africa. Specific tasks EDS is performing include the management of the firm's critical operations data at a number of its data centres around the world; the supply of computer capacity to BMS from a US data centre; and the provision of multi-language help desk support for the company's employees. As with the recent IBM deal, through EDS, BMS indicated it is aiming to streamline its global IT environment and save money, in addition to improving productivity so that it can "remain focused on what it does best​". With this strategy in place, more such externalisation moves may be expected in the coming months.