11 September 2003 IBM has won a $400 million business process outsourcing (BPO) deal from Procter &Gamble to handle the consumer goods giant’s worldwide human resources (HR) functions.
As part of the 10-year deal, IBM will provide 98,000 P&G employees in almost 80 countries with services that include payroll processing, benefits administration, compensation planning, expatriate and relocation services, travel and expense management and human resources data management.
It will do so from three HR shared service delivery centres in Costa Rica, the UK and the Philippines.
In addition, IBM will also take on the management and ongoing development of P&G’s HR systems, including the company’s global SAP system and staff portal. Around 800 P&G staff will transfer to IBM as part of the deal.
P&G claims that the outsourcing deal will allow it to cut costs and focus on its core businesses. Its deal with IBM is the third major outsourcing contract it has awarded in 2003.
In May, Hewlett-Packard won a 10-year, $3 billion contract (for which IBM also competed) to take over P&G’s IT management. In June, real estate services company Jones Lang LaSalle won a five-year, $700 million contract to manage P&G’s facilities.