ABB OUTSOURCING TO IBM - Essay Example

Most of the tasks that are outsourced are considered to be core to the business. Tasks such as billing, pay roll and data entry are some of the services that are outsourced to other companies. Outsourcing involves signing contracts that can last for many years and can also involve a lot of money. There are some very well known outsourcing companies or service providers across the world. IBM is one of the best known of the service providers who offer outsourcing services to other companies. One of the recent contracts that the company signed was with the Swedish company ABB.

At the time when it was outsourcing its IT services, ABB had been suffering from serious financial problems. The executives decided to outsource the services as they thought that this would greatly help to lower the production cost incurred by the company. The company executives settled on IBM since it is a top player in the Information technology field (ABB Press Release, 2003). Being a Swedish company, ABB decided to use an international company that is based in the US. This off shoring agreement was valued at 1.

1 million dollars. IBM was supposed to perform IT related services for ABB for ten years, as from the year 2003. IBM took over the IT infrastructure in ABB’s 14 stations in Europe and North America. This represent around 90% of Client Company’s IT based infrastructure. IBM was tasked with the duties of server management as well as the management of personal computers, operating systems, help desks and corporate networks that were part of the larger ABB group (The Hindu, 2002). IBM is a multinational company that deals with IT services among other things.

This means that they have the machinery to ensure that all IT operations work out as they are supposed to. This explains ABB’s confidence in choosing IBM as the ideal company to carry out its IT functions. Different organizations have a variety