IBM (NYSE: IBM) and Gruppo Monte Paschi Siena today announced a 260 million euro IT Services agreement for IBM to help cut costs and improve efficiencies for the Italian bank's Operational Consortium.
The new agreement is an extension to an existing 420 million euro contract signed in 2003, and is expected to bring approximately 48 million euro in cost savings over the new 6-year term.
The bank has renewed its contract with IBM in order to realize new projects in line with company strategy. The new contract shifts the focus from the provision of IT services to encompass a broader services relationship. The agreement aims to help Monte Paschi Siena Group provide a more flexible and dynamic service to customers. This will be achieved through the alignment of work volume and IT expenses, and the ability to manage process peaks and impromptu requirements, through an advanced, flexible IT architecture and services. This means the bank will be able to rationalize some of its core processes, improving operational effectiveness and efficiency.
One new innovation will be a "test factory," introducing Application Portfolio Management technologies for the monitoring and management of the bank's application portfolio. This will guarantee the development of the bank's Operational Consortium application through a continuous technical, functional and value alignment for the business.
The agreement was signed in June 2007.