DBS Bank and IBM have announced an agreement in which DBS will outsource selected IT services and infrastructure in Singapore and Hong Kong to IBM. The nominal value of the contract is estimated at about S$1.2 billion ($679 million) for Singapore and Hong Kong over the next 10 years.
IBM will consolidate and enhance DBS' data centers in Singapore and Hong Kong, provide an integrated 24/7 customer helpdesk support, manage many of DBS' current applications, and provide systems management disciplines across the bank. DBS' IT group will continue to be responsible for IT services not included in the outsourcing, namely, IT strategy and architecture, IT security and strategic projects.
IBM will also build new IT computing facilities in Singapore and Hong Kong. IBM says this will help DBS integrate many of its applications and technology platforms into a single highly secured computing environment and maximize the returns of its recent acquisitions and regional expansion program.
"DBS continuously reviews its IT services and options to look for better ways of delivering products and services to its customers," says Steve Ingram, chief information officer, DBS Bank. "This relationship will allow DBS to focus on our core competencies and strategic imperatives while leveraging the power of technology in a paced and sustainable manner. We are expecting to reap cost savings of about S$50 million over the first three years of the agreement. These savings will appear gradually after the first year,"
The bank expects total cost savings of about 20% over the 10 years as a result of this outsourcing initiative as well as other cost saving measures it plans to undertake. IBM has agreed to provide a comparable package in both role and compensation for the 500 DBS staff in-scope of the transfer in Hong Kong and Singapore.