Telstra seeks $200 million savings with IBM

Stephen Withers
Monday, 10 December 2007 03:40

IT Industry - Deals

Telstra has expanded IBM's role in its supply chain management processes in a move it expects to yield further savings of up to $A200 million.

Replacing old ordering and payment systems with off the shelf software from IBM has already saved the carrier a projected $A500 million over seven years through automation, simplification and provision of a company-wide view.

"In phase two of the program, IBM will provide a single end-to-end view of our inventory supply chain and enable us to deliver the right part, at the right place, at the right time - improving customer service and reducing costs," said Telstra procurement executive director Ian Wheatley.

Starting in March 2008, the expanded arrangements will see IBM take over Telstra's logistics and inventory management for parts needed by communications technicians and engineers for network maintenance, fault repairs and activation of customer services.

This role will include improved inventory management and forecasting, and process standardisation.

"The consolidation of Telstra's supply chain and procurement is not just about enhancing back office systems. IBM will enable a focused, flexible, resilient and variable integrated supply chain - that means competitive advantage, enabling Telstra to respond more quickly to market shifts and the needs of their customers," said David Burns, IBM's managing director of the Telstra account.

In recent years, IBM has diversified from traditional IT activities into business process outsourcing, driven in part by its success in reengineering its own processes. IBM's own supply chain transformation saved the company $US20 billion over three years.