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The consumer-goods giant says it has signed a 10-year, $400 million deal that will help it cut costs and focus on core businesses.

InformationWeek Staff

September 9, 2003

1 Min Read

CINCINNATI (AP) -- Procter & Gamble Co., building on its effort to hire outsiders to provide some services under multiyear contracts, said Tuesday it has signed IBM to a 10-year, $400 million deal to handle employee services.

P&G, the consumer products giant behind brands like Tide detergent and Crest toothpaste, said the arrangement will allow it to cut costs and focus on its core businesses. IBM will support almost 98,000 P&G employees in nearly 80 countries with services such as payroll processing, benefits administration, compensation planning, expatriate and relocation services, and travel and expense management. IBM also will provide application development and management of P&G's human resources systems. The agreement is effective on Jan. 1 when IBM takes over operation of human resources service centers in San Jose, Costa Rica; Newcastle, England, and Manila, Philippines. The deal with IBM is the third major outsourcing deal signed by P&G this year. In May, Hewlett-Packard Co. received a 10-year, $3 billion contract to take over P&G's information-technology operations, a deal for which IBM also competed. In June, Jones Lang LaSalle Inc. received a five-year, $700 million contract to manage P&G's facilities. P&G, based in Cincinnati, makes and sells products including Pampers diapers, Pringles snack chips, Iams pet foods, Folgers coffee and Clairol hair care products.

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