Bank of Scotland, IBM Sign $Billion IT Deal

[London, ENGLAND] Bank of

and IBM announced
Thursday an IT alliance worth over a billion dollars
to the computer giant.

In what is thought to be one of the largest outsourcing
deals ever made in Europe, IBM will take over the
management of IT operational services for the Bank
of Scotland Group from September 2000 for the next
ten years.

As part of the deal, which includes many aspects of
e-business, IBM will create a new Scottish Delivery
Centre at Sighthill, Edinburgh, currently the site of
Bank of Scotland’s main data processing center.

The companies say there are no plans for any
redundancies among existing staff.

Gavin Masterton, Bank of Scotland’s treasurer and
managing director, said the contract would complete
the transformation in Bank of Scotland’s approach to IT
and create opportunities for growth. He said it made
sound business sense on a number of fronts.

“It will allow Bank of Scotland greater flexibility
to design new products and target new markets on a
more cost-effective basis. As far as customers are
concerned, they will be offered improved quality of
service and have access to new products and services
more quickly,” said Masterton.

A major factor in Bank of Scotland’s decision to opt
for outsourcing has clearly been cost-savings. IBM
estimates that the agreement could save the bank as
much as $225 million in IT costs over the next 10

Richard Atkins, vice president of Strategic Outsourcing
Delivery for IBM Global Services, UK and Europe North,
said IBM was experiencing substantial growth in Scotland.
He said the agreement almost doubles IBM’s presence in
Scotland, outside the 5000-strong Greenock manufacturing base.

“The new center will provide new commercial opportunities
which in turn will lead to greater career opportunities
for both the 500 staff joining us and our existing 700
people,” said Atkins.

Bank of Scotland was the first bank in the U.K. to go
into online banking as long ago as 1985. It launched
Europe’s first end-to-end Internet mortgages in October
1999 and was also first with a WAP phone banking pilot
in November 1999.

Bank of Scotland’s communications network is managed
by BT Syncordia Solutions.

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