Swedish Manufacturer Signs $105 Million Annual Outsourcing Deal With EDS

SKF, a Swedish-based global supplier of rolling bearing and seals products, has decided to outsource all its IT services to EDS as a way to reduce costs.

The huge outsourcing contract will run for seven years and is valued at $105 million annually, according to SKF executives. EDS is to provide all internal IT services, including internal business application development tasks.

An EDS spokesman says the integrator beat out IBM Global Services for the contract and has inherited 700 SKF IT employees in 39 countries under the deal. EDS took over operational responsibility for SKF's IT needs on July 1, according to the spokesman.

SKF's existing technology infrastructure includes mainframe and midrange data-processing systems, a WAN, several LANs and approximately 14,000 desktop systems linked to the LANs.

The agreement appears likely to provide impetus to the notion that large global companies can benefit from outsourcing IT operations because they can focus more effectively on their core business.

"We are delighted to have EDS as a partner in the improvement and refinement of our information technology operations, which will allow us to focus on our core competencies," says Gunnar Gremlin, executive vice president and head of IT strategies and service for SKF, in a statement.

Gremlin notes that EDS has demonstrated a successful track record of delivering, integrating and maintaining IT services worldwide.

John Meyer, president, EDS Europe, Middle East & Africa, says the integrator will be able to reduce SKF's infrastructure costs and improve its competitiveness.

SKF has 40,000 employees worldwide, 80 manufacturing sites and sales companies in 70 countries.

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