ABN AMRO, Outsourcing, Multi-sourcing, Shared Services
ABN AMRO signs 1.8B euro contracts with IT vendors, engages in hybrid-outsourcing
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ABN AMRO announced on 16 December 2004 that it would accelerate its Group Shared Services (GSS) programme, with the objective to create value across the Group through increased client satisfaction, higher operational efficiency, optimising operational risk and increased flexibility.
Further streamlining of the bank's global IT organisation will lead to an improved performance of all IT services and to significant efficiencies. Following the announcement on 16 December last year, ABN AMRO announced that it has signed global services agreements with five IT-vendors for five years, for a total value of approximately EUR 1.8 billion.
The selected vendors are:
IT Infrastructure: IBM
Application Support and Enhancements: Infosys, Tata Consultancy Services (TCS)
Application Development: five preferred suppliers Accenture, IBM, Infosys, Patni, TCS
The initiative leads to a new technology organisation of approximately 1,800 full-time equivalents (FTEs), compared to a total of approximately 5,000 FTEs currently working in IT within the bank worldwide. Approximately 2,000 FTEs will be transferred to the selected IT vendors, of which a majority will go to IBM. In line with the former communications, the total estimated IT staff reduction for ABN AMRO will be 1,500 FTEs over the next 18 months.
As previously indicated, the GSS IT initiative is expected to generate at least EUR 258 mln in savings a year as of 2007 (not including savings from the EDS contract). Combined with expected savings related to the other GSS initiatives (Offshoring, HR, Real Estate), the IT savings support the bank in achieving the significant and sustainable GSS savings culminating in at least EUR 600 mln from 2007 onwards, as communicated in earlier announcements.
Hugh Scott-Barrett, Chief Operating Officer and member of ABN AMRO's Managing Board said: "This major IT initiative enables us to deliver the 'fuel for growth' to support the required sustainable competitive growth for the bank. The agreements with selected vendors allow us to utilise the latest technology to further improve the services we offer our clients. We expect that this IT programme that is shared across the Group will contribute to the savings in line with earlier estimates made by the bank, while improving IT services within the Group."
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