Ford Motor Company and IBM Corp have signed a multi-million dollar services agreement, which involves the creation of two accelerated solutions centers, or ASCs to support the company’s European operations. The deal follows the success of a previous $300m five-year contract covering the company’s US operations signed at the beginning of this year (CI No 3,575).
In common with the US operations, the centers will be made up of 50% Ford staff and 50% IBM, which gives Ford far greater control over systems development than a conventional outsourcing deal. In an industry being transformed by the built-to-order model and e-business applications, the way IT is used can give companies a significant competitive advantage.
The two ASCs, which will eventually have 120 staff each, will be based at Essex in the UK and Cologne, Germany. The target is to run 16 development projects simultaneously in each location, leading to 100 new applications every year across Europe.
Ford used to have a systems team for each functional division – a sure recipe for incompatibility. Moreover, it was often the victim of systems teams burgeoning ambitions, so that over-elaborate applications were delivered late and over budget.
The joint approach with IBM is coldly scientific with the speed with which an application can be developed taking priority. To emphasis the urgency with which they operate, staff talk of SWAT teams implementing applications.
IBM claims that in the US it is already close to achieving 50% time-savings on projects and 30% cost-savings. IBM says that the deal with Ford has already provoked the interest from other companies and it may well be a model for an alternative to the traditional outsourcing deal.
