As part of a new, multi-year agreement with IBM, Chrysler Group will integrate its IT infrastructure with Fiat and CNH Industrial, a manufacturer of industrial vehicles and machinery, to create one global digital platform.
“These (organizations) have been running their own infrastructures, operations, and applications,” says Dave Simpson, general manager of the industrial sector for IBM Global Technology Services. “But they want to be able do to things like share a common solution to design automobiles. Everything from design and manufacturing through delivery and servicing their clients, they want to do more globally.”
“The agreement is all about how we take the infrastructure and systems management and drive that to a common global approach to enable all of those things to happen,” Simpson adds.
The contract, effective Feb. 1 and announced today, means IBM will manage mainframe, midrange, and storage for the three companies in data centers near Detroit and in St. Louis; in Turin and Milan, Italy; and Hortolandia, Brazil. IBM will also oversee infrastructure management and email hosting for more than 150,000 employees worldwide.
“Combining Chrysler and Fiat’s IT infrastructure services into a global capability is a critical step in our journey to building a powerful and agile global operation that supports our company’s growth strategy,” says Scott Sandschafer, CIO of Chrysler Group.
The contract also extends IBM’s relationships with Fiat and sister company CNH. While the size of the new agreement has not been released, Fiat’s last agreement with IBM, announced in 2005, was worth almost 200 million euro annually over nine years ($276 million).
The benefits of outsourcing IT needs are clear for the automakers, Simpson says. “It allows them the freedom to focus on their core business. (IBM) also knows how to operate businesses globally, so we can help accelerate them into becoming a globally integrated enterprise.”