IBM wins $1.25 billion 7-year IT outsourcing deal from Lufthansa

NEW YORK: Tech major IBM today announced that it has signed a seven-year 1 billion Euro (about USD 1.25 billion) outsourcing contract to deliver IT infrastructure services for Deutsche Lufthansa AG and its group companies.

The German aviation major has signed the IT infrastructure contract to bring in new mobile, social business and analytics technologies, IBM said in a statement.

IBM will first optimise the airline's IT processes to increase efficiency, which is expected to generate an estimated cost savings by an average of about 70 million euro (around USD 88 million) annually for the Lufthansa Group, it added.

This agreement is in line with the terms and conditions as published already in October and is subject to the approval of the Lufthansa Supervisory Board and antitrust authorities, The US-based firm said.

Over the life of the contract, IBM will bring new solutions that incorporate business analytics with mobile computing and social business to enable Lufthansa to offer new services to customers at the same time making partners and employees more productive, it said.

"As part of the outsourcing agreement, IBM will manage Lufthansa Systems' entire data centre operations, help desk and printer services along with individual infrastructure services. Around 1,400 Lufthansa Systems employees will transfer to IBM. Infrastructure services are scheduled to begin from IBM on April 1, 2015," it said.

The contract was signed on November 15, 2014, it added. IBM will begin multi-stage transformation of Lufthansa's IT landscape by implementing leading edge collaboration and messaging tools for social business, new network and voice services, it said.

Lufthansa will also benefit from a global and secure mobile infrastructure allowing the group to provision, secure and manage mobile devices and apps easily, giving Lufthansa customers and employees simplified access and new capabilities for its reservation systems and business processes, it added.