Controlling IT Spend When Australia's premier communications carrier, Telstra, decided to reduce its administrative costs associated with upgrading its personal computer (PC) and notebook fleet back n 1998, it looked to the world's premier IT financer, IBM Global Financing, for help. Working together during a 12-month trial program, Telstra and IBM Global Financing evaluated the financial and administrative benefits of leasing the desktop PC and notebook base of Telstra. The trial involved some 17,000 PC units within Telstra's Business and International Business Unit. The test program was a success, resulting in Telstra selling the majority of its PCs and notebooks to IBM Global Financing then leasing the fleet back in a deal valued close to $AU100 million - the largest PC sale of its type by any vendor in Australia. Under these new arrangements, Telstra achieved an 80 per cent reduction in administrative costs associated with the accounting and management of the equipment, as well as giving line Management more financial responsibility for IT assets. The overall deal involved 80,000 units spread through- out 1,500 geographical sites nationally and 2,500 individual cost centres. "Our goal was to eliminate the costs associated with managing IT hardware including stock takes, upgrades and new orders .We also want d managers to exercise more control over the equipment in their area through greater transparency of costs. These objectives are certainly being achieved through Leasing, "said John Stanhope, Finance Director, Telstra. In November 2000,Telstra and IBM Global Financing extended their financing relationship, announcing a $AU109.5 million deal for the sale and leaseback of Telstra's 6500 file and print, and mid-range application servers over four years -the second largest deal signed by IBM Global Financing in Australia. The Benefits of Leasing "This deal builds on the benefits already delivered from the original sale and leaseback of Telstra's personal computer fleet n 1998,and delivers smarter asset management, cost centre tracking by our line management as well as increased flexibility to upgrade technology as the business requires, "Mr. Stanhope said. "Through our lease plans with IBM Global Financing, we've identified significant process improvements and lease system enhancements which allowed us to manage our equipment more efficiently." According to Andrew Rutter, General Manager of IBM Global Financing in Australia and New Zealand, the solutions developed provided Telstra with a totally new way to manage their IT infrastructure, giving the company an added competitive advantage in the marketplace. "By offering a new way to manage their IT, Telstra is now substantially lowering its overall costs associated with technology upgrades while offering new and better tools to improve work efficiency. Telstra also retains the choice of supplier and product in upgrades, which is then leased through IBM Global Financing," Mr Rutter said. e-Procurement is now a business reality. Most recently IBM Global Financing has established a successful partnership with Telstra to electronically procure and manage all of its IT equipment and services. "This e-Procurement solutions a partnership with Telstra to implement processes and systems to control and manage the complete IT asset life cycle. It includes simplifying the process of IT equipment acquisition through online purchase orders and EDI invoicing, maximising the use of IT equipment through centralised control, distribution of costs, management of transfers, returns and idle equipment,and efficient rollover of obsolete IT equipment, "Mr Rutter said. Mr Stanhope said a total of $200 million had been ordered through the e-Procurement system since it was first implemented in September 1998 translating to benefits including reduction in PC assets from 3 to 1.4 per employee, as well as a reduction in the number of staff required to manage assets within the company. It's a Partnership "Telstra has managed the purchase of IT equipment from over 10 different vendors through the e-Procurement solution and leases the majority through IBM Global Financing," Mr Stanhope said. "By partnering with IBM Global Financing to implement a tailored e-Procurement and asset management solution, businesses with a large PC fleet can gain control of their IT equipment, reduce costs, increase visibility of IT expenses and simplify processes by having a single monthly invoice for all IT purchases,"Mr Rutter said. "With the discipline of a bank and the expertise of an IT vendor, IBM Global Financing understands the needs of technology-related businesses better than any other financial resource, and are committed to delivering industry- leading solutions, "Mr Rutter said. "The biggest change sweeping today's IT world isn't the Internet, or operating systems, or wireless. It's about how businesses pay for them. The advantages of financing are greater than ever. With IBM Global Financing's competitive offerings, you can take full advantage of e-business opportunities while enjoying critical flexibility and investment protect on," he said. | 
