Solectron Signs Multi-Year Contract With IBM for Procurement Business Transformation Services
Wednesday March 22, 10:10 am ET
IBM to Manage $1.2 Billion per Year of Indirect Procurement Spend Across 17 Countries
NEW YORK, NY--(MARKET WIRE)--Mar 22, 2006 -- IBM today announced that it has signed a long-term contract with Solectron Corporation (NYSE:SLR - News), a leading provider of electronics manufacturing and integrated supply chain services, for indirect procurement services across 17 countries. Solectron is expected to realize significant savings throughout the life of the contract by leveraging IBM's global economies of scale and by optimizing core procurement processes. The value of the contract is not being disclosed.
IBM will manage more than $1.2 billion per year of indirect spend in areas such as temporary contract services, office equipment, utilities, and telecommunications. Core to the project is the implementation of IBM's complete Procure-To-Pay procurement solution that will be integrated with Solectron's internal systems and controls. IBM's solution will enable web-based requisitioning as well as efficient procurement and supplier payment.
"The savings we expect from this contract with IBM will contribute to both operational and process innovation and simplification, which improves services to our customers and suppliers," says Perry Mulligan, chief procurement officer, Solectron. "IBM's world-class expertise and experience in sourcing and procurement as well as its ability to serve us globally were keys in the development of our indirect procurement strategy."
Solectron worked closely with IBM to customize the service offerings into a single, holistic procurement solution. This approach combines Solectron's strategy with IBM's leading-edge procurement practices. Elements of the overall procurement solution include IBM commodity experts, a global contact center and an accounts payable processing center supporting Solectron suppliers and employees around the globe. Solectron will also have access to a full range of transformation and maintenance services from IBM.
"IBM's ability to share its internal procurement expertise with clients is an incredibly unique value proposition," says John Paterson, chief procurement officer, IBM Integrated Supply Chain. "Organizations both large and small can benefit from procurement outsourcing which can deliver both short and long-term economic benefits."
Business Transformation Outsourcing (BTO) transforms client organizations and delivers enterprise optimization through innovative business and technology approaches. Using its global network of expertise, industry-leading consulting methodologies, research and engineering capabilities, advanced technologies and analytical tools, IBM's BTO services standardize, streamline and improve business processes. IBM BTO services transform key business functions including Finance and Accounting, Customer Relationship Management, Supply Chain, Procurement and Human Resources. IBM provides BTO services to many of the world's leading organizations, and over the last four years has made a number of strategic acquisitions and investments to expand and strengthen its capabilities, including the acquisitions of PwC Consulting, Daksh eServices, Liberty Insurance Services Corp., Maersk Data, Key MRO, Equitant, Healthlink and Viacore, Inc.
The hosted Procure-To-Pay environment and business operation will go live in the autumn of 2006 in North America and will then be fully deployed globally by early spring 2007.
About Solectron Corp.:
Solectron Corporation (www.solectron.com) provides a full range of electronics manufacturing and supply-chain management services to the world's leading networking, telecommunications, computing, consumer, automotive, industrial and medical device firms. The company's industry-leading Lean Six Sigma methodology (Solectron Production System(TM)) provides OEMs with low cost, flexibility and quality that improves competitive advantage. Solectron's service offerings include new-product introduction, collaborative design, materials management, product manufacturing, product warranty repair and end-of-life support. Based in Milpitas, Calif., Solectron operates in more than 20 countries on five continents and had sales from continuing operations of $10.4 billion in fiscal 2005.
About IBM Business Consulting Services:
With consultants and professional staff in more than 160 countries globally, IBM Business Consulting Services is the world's largest consulting services organization. IBM Business Consulting Services provides clients with business transformation and industry expertise, and the ability to translate that expertise into integrated, responsive, on-demand business solutions and services that deliver bottom-line business value.
Over the past several years, IBM Business Consulting Services has developed industry-leading transformation consulting skills and delivery capabilities in key areas, including Human Resources, Financial Management, Customer Relationship Management and Procurement. For more information, visit ibm.com.
Safe Harbor
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding anticipated savings to Solectron as a result of the services to be provided by IBM, and a successful relationship between IBM and Solectron, in each case based on current expectations that involve a number of risks and uncertainties. Such risks and uncertainties include implementation challenges or delays; unanticipated technical and personnel problems; changes in economic conditions; and adverse changes to the business of either party. Other potential risks that could cause actual events to differ materially are included in the filings of IBM and Solectron, as applicable, with the Securities and Exchange Commission, including on Forms 8-K, 10-K, and 10-Q. Both IBM and Solectron disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact: For more information, please contact:
Corey Olfert
Solectron
408-956-7552
coreyolfert@ca.slr.com
Chris Sciacca
IBM
212-745-4732
csciacca@us.ibm.com
Source: IBM; Solectron
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