Korea Exchange Bank Awards Strategic Procurement Outsourcing Agreement to IBM
SEOUL, South Korea .- IBM (NYSE: IBM) today announced that it has signed a five-year strategic procurement outsourcing agreement with Korea Exchange Bank (KEB), the country’s largest foreign exchange bank.
Under the agreement signed in August 2009, IBM will provide to KEB a full range of enterprise strategic sourcing and procurement services, allowing the bank to focus on its core competency and competitiveness in the banking industry while achieving better cost savings and improving industry compliance and internal control.
IBM will run KEB’s overall sourcing and procurement operations end-to-end, covering areas of information technology, marketing, services, facilities and supplies. As part of the project, IBM will establish and support the bank’s purchasing strategies, improve the purchasing process and systems, as well as manage strategic sourcing processes and relationship with suppliers. IBM will also make purchasing decisions and settle payments.
IBM will assist the bank in reducing cost by centralizing its procurement process. Previously many different departments in the bank had their own purchasing teams performing procurement functions. This made it more difficult to achieve savings from supplier negotiations because spending occurs across many different business units. Furthermore, there was no transparency of information on purchasing and lack of staff compliance.
The implementation of the procurement outsourcing project supports KEB’s Zero Waste Project, which is an employee-engaged management campaign aimed to optimize the cost structure and enhance management efficiency. In addition to optimize the bank’s operational efficiency, KEB also wanted to yield cost savings through an advanced, centralized and streamlined purchasing process conducted by IBM.
IBM was selected over other companies because of its deep expertise in supply chain and procurement management as well as direct experience in managing more than US$48 billion of purchasing spend annually. KEB was seeking a business partner with global experience and a supplier network that could be leveraged to meet its purchasing requirements in overseas markets. IBM’s internal procurement capabilities -- policies, system and processes -- also differentiate its procurement services offering.
“We are pleased to bring our collaboration with Korea Exchange Bank to a new level with the strategic outsourcing agreement,” said Hakdong Kang, business development executive, Managed Business Process Service, IBM Korea. “IBM’s success in process outsourcing despite the unprecedented business environment in the last few years is partly attributed to the process innovation in a range of areas including enterprise purchasing, which helps drive cost saving and ensure industry compliance.”
About the Zero Waste Project
Korea Exchange Bank’s Zero Waste Project includes a series of initiatives aimed to optimize resource relocation, best allocation and execution of budget to avoid waste of resources, which in turn will ultimately strengthen the bank’s competitiveness. Partnership with IBM in the global procurement area is part of the campaign.
About Korea Exchange Bank
Established in 1967, Korea Exchange Bank was privatized in 1989. It has grown to be one of the largest globally networked banks in Korea, with a competitive presence in both the corporate and private banking fields. As a global bank representing one of the most dynamic regions of the world, Northeast Asia, KEB has been securing the top position in terms of capital level, profitability and asset foundation. For more information about KEB, visit www.keb.co.kr
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