IBM in big deal with Wattie's

A nine-year, multimillion-dollar outsourcing agreement between Heinz Wattie's Australasia and IBM will see operational support services for the food manufacturer run from New Zealand.

Under terms of the agreement, IBM Global Services will provide Heinz Wattie's with e-business hosting services, application management services and IT infrastructure development, maintenance and support.

Operational support will come from IBM staff based in Wellington, Auckland and Hastings, while IT helpdesk services will be provided from an Australian call centre.

Ian Gillespie, Heinz Wattie's business systems manager, said the agreement was an extension of a global partnership that enabled the company to be more "flexible and responsive to the market place".

"By outsourcing non-core activity to IBM, we can free up valuable resources to focus on our brands, our customers, our products and the business process continuous improvements that our customers expect."

Gillespie said the Australasian partnership would provide access to IBM's understanding of the consumer package goods industry and improve cost optimisation and flexibility through IBM's variable cost on demand e-business model.

Matthew King, director of IBM Global Services New Zealand, said the deal would remove Heinz Wattie's fixed IT costs and enable the company to scale its IT resources on a needs-driven basis.

"It also provides Heinz Wattie's with enhanced capability and capacity of resources to meet the portfolio of industry initiatives that it is implementing."

King said the nine-year deal marked a strategic business shift he expected other companies to follow.

"Heinz Wattie's has sought to move away from owning or leasing assets, to a services arrangement whereby it can source full end-to-end services through one monthly charge," he said.

"We expect to see more consumer products companies make this strategic step as they respond to retailer initiatives, drive for growth and manage costs."

IBM will also provide desktop services, disaster recovery, management for both Heinz Wattie's local-area and wide-area networks. Five Heinz Wattie's employees have joined IBM New Zealand as part of the agreement.