IBM and Merrill Lynch have signed a five-year outsourcing deal that will see human resources, accounting, marketing, and other administrative IT functions handed over to the technology giant. Merrill Lynch expects to realise significant cost savings through the deal as well as better service and focus on core business activities, such as the maintenance of trading and wealth management systems. "This is an example of a financial institution trying to manage itself with a lot of discipline," says Lee Spirer, IBM Business Consulting Services financial markets industry leader for the Americas. "It's a business trying to put its management talent in revenue-generating activities." Gartner analyst Susan Cournoyer says IT administration for the type of tasks IBM is taking over normally consists of up to 10 percent of a large group's IT budget. In Merrill Lynch's case, the company maintains 11 customised versions of an Oracle database product. IBM intends to consolidate the system and host the system at one of its data centres, and open up user support for the applications for the first time--Merrill Lynch was unable to do so because of the cost of supporting so many application versions. Forrester Research analyst Jaime Punishill notes that even a large global firm such as Merrill Lynch stands to benefit from the scale of IBM's IT operations. Copyright 2004 INFORMATION, INC. Full story in American Banker, 12 Feb 2004 (may require a subscription) | 
