United Technologies Corp. Outsources Non-Product Purchasing to IBM
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SOMERS, N.Y (June 29, 1998) – As part of its program to slash $750 million in purchasing costs by the year 2000, United Technologies Corp. (UTC) today awarded IBM a five-year contract to perform sourcing and procurement of indirect goods and services utilizing a fully integrated online purchasing and payment system.
Delivered by IBM Global Services, the sourcing and procurement offering is part of IBM’s new Business Process Management (BPM) services. UTC is the first client for this new offering.
“We are looking for new ways to drive down costs by leveraging our size and scale, and our agreement with IBM is a critical step toward our goal of cutting our purchasing costs by $750 million,” said Kent Brittan, UTC’s vice president, supply management.
IBM Global Services will operate and maintain the web-based Lotus Notes* system, select, negotiate and manage relationships with suppliers, and administer the entire process — from taking and fulfilling requisitions to issuing authorizations for payment.
“This agreement with UTC is an exciting example of how IBM is leveraging its own successful reengineering to create value for our customers and new growth opportunities for IBM,” said Karen Riley, general manager, IBM Business Process Management, IBM Global Services. “IBM saved over $1 billion in the U.S. over the past few years by implementing the same sourcing and procurement process.”
UTC is a $24.7 billion corporation that provides a broad range of high technology products and support services to customers in the aerospace, building and automotive industries in virtually every country of the world. UTC’s best-known products include Pratt & Whitney aircraft engines, Otis elevators and escalators, Carrier heating and air conditioning systems, Sikorsky helicopters, Hamilton Standard aerospace systems and UT Automotive components and systems.
Source: IBM