IBM and Mazda Extend Outsourcing Agreement

IBM Japan (NYSE: IBM) has announced that it has signed an extension to its outsourcing contract with Mazda Motor Corporation to support the automaker's global operations. The agreement extends the previous contract for the December 1999 to May 2010 period by five years, and runs through 2015.

The modified strategic outsourcing contract period will take effect in April 2008 for seven years through 2015. The new agreement differs from the original in that it covers not only the development, maintenance and operation of information systems, but also prioritizes human resources development to enhance Mazda's business and systems know-how. It will also strengthen the strategic relationship between the two companies.

Under the terms of the contract, business and systems know-how will be exchanged between personnel from Mazda's information system division and IBM Global Services Japan Chugoku Solutions Company, a wholly owned subsidiary of IBM Japan. The purpose of the personnel exchange is to facilitate improvements in several of Mazda's operating areas such as purchasing, manufacturing, sales and personnel administration. The program will forge greater links between Mazda and IBM Japan and build high-level skills for personnel involved in business and systems know-how, enabling improved performance from the IT infrastructure.

In addition, IBM Japan will actively utilize its global technology expertise, standard processes and tools, and other offerings for system development and management to build next-generation information systems that will enable Mazda to respond swiftly and flexibly to management needs in the future.

IBM Japan fully utilizes its "front-loading methodology" to develop information systems for its supply chain and customer relationship management (CRM) projects. This approach enables improved system quality, shortened development periods and reduced development costs, among other benefits. Through increased productivity, it also reduces the total cost of ownership (TCO).

IBM will also evaluate the use of its global resources for system management and maintenance in addition to information systems development. Going forward, should additional IT expertise be required, Mazda will have the flexibility to source these resources from the global talent pool.

The agreement was signed in the first quarter of 2008.

Source: IBM