IBM sells call centres for $505 million

IBM has sold its global customer care outsourcing unit to supply chain services company Synnex for $505 million, it announced yesterday.

The IBM operations will be combined with Synnex subsidiary Concentrix – Synnex's global business services division that runs call centres for major banks, healthcare companies and insurance firms.

IBM will stay in the field of business process outsourcing (BPO) in which it runs entire business functions for customers, but has shed its customer services due to low profit margins.

The customer service unit had a gross profit margin of around 20% compared to up to 60% for its newer businesses in analytics and the cloud.

Known as one of the leaders in the PC space, the 100-year old tech giant has undergone a massive shift in focus since 2004 when it sold its PC business to Chinese manufacturer Lenovo.

It has since sold off or other areas of its business seeing low profit margins, including those involving hardware and point of sale systems in order to focus on services, analytics and security.

IBM will continue to sell software, consulting and other services that use analysis software to personalise customer care, as well as offering cloud-based CRM solutions.

Concentrix will become a “strategic partner” to provide customer care for clients in more than 12 industries and work with IBM to pursue other business opportunities together.

“Social, mobile, big data and cloud technologies are quickly and profoundly transforming customer care, enabling companies to take a holistic view of customers across traditional and new channels,” said IBM in a statement on its website.

“Through investment in a broad software portfolio, cloud technology, consulting and advanced analytics, IBM is supporting global clients as they navigate through this customer experience transformation.”

While the deal is being tied up over the next few months, “the companies will continue to operate independently and IBM customer care business process outsourcing services will continue to be sold and delivered as usual,” said the statement.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...