Monsanto Hires IBM For IT Operations

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January 5, 1998

Monsanto Hires IBM For IT Operations

Companies also plan ERP consulting venture

onsanto Co. last week agreed to outsource some of its IT operation to IBM Global Services for 10 years. At the same time, IBM and Monsanto created a joint venture to provide consulting services to companies implementing enterprise resource planning (ERP) systems.

Separately, Monsanto, a maker of agricultural products, pharmaceuticals, and food ingredients, formed an alliance with IBM's IT research arm to develop technologies to map the genetic structure of plant groups and human diseases.

The companies didn't give the value of the outsourcing agreement, although IBM said it was one of its biggest outsourcing deals in 1997. Under the accord, IBM will handle data-center management, help-desk operations, and support for 8,000 desktop systems, in cluding LAN and WAN management. IBM is hiring nearly all of the 152 IT employees in Monsanto's St. Louis headquarters, leaving Monsanto with about 300 IT employees at other sites.

The ERP consulting venture will seek as customers other companies in process-oriented industries, such as pharmaceuticals and chemicals. Monsanto believes that much of the development work it has done on its own implementation of SAP's ERP systems can be reused by customers of the venture, without giving away too much proprietary information.

"Out of all the companies we looked at to partner with for a solutions center, IBM best understood how to keep our intellectual capital and work with our reusable system design," says Bob Barrett, former leader of Monsanto's SAP project, on which work began in 1994. Barrett is moving from Monsanto to become director of the ERP joint venture.

Daniel Colby, general manager of products and telecommunications for IBM Global Services, says Monsanto's expertise will strengthen IBM's prese nce in the competitive SAP services market, which includes providers such as Andersen Consulting, Ernst & Young, EDS, and Price Waterhouse.

"When you look at alliances," Colby says, "this is a good example of what two companies can get from each other and what they both can pour into R&D."

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