IBM Global Services (IGS), the service company of IBM (NYSE: IBM), has won a computer services outsourcing contract from Clubmarket Marketing Chains Ltd. The ten-year contract is worth over NIS 100 million.
Under the agreement, IGS bears full responsibility for operating and managing Clubmarket’s entire information setup, including the Jumbo chain, Clubmarket, Hatzi Kupa, Zol Po, and New-Pharm. The Clubmarket chain’s current computer employees will switch to IGS.
The contract is IGS’s second large contract in recent months. The previous contract, which was estimated at $25 million, was with Harel Insurance Investments (TASE: HARL) for eight years. Harel’s 45 computer employees moved to IGS. IGS is currently competing in an estimated $70-100 million First International Bank of Israel (TASE: FTIN1;FTIN5) tender, one of the largest and most desirable outsourcing tenders. IGS is bidding for the 6-8 year contract jointly with Matrix IT (TASE: MTRX), against Ness Technologies (Nasdaq: NSTC) and Electronic Data Systems (NYSE: EDS).
Clubmarket president and CEO Yacov Ginzburg believes that putting the operation of the group’s computer infrastructure in the hands of IGS will enable Clubmarket to focus on its core business and improving its profits, while reducing spending on information systems.
Clubmarket and New-Pharm currently have 172 stores around Israel. The chain’s revenue is expected to total NIS 4 billion this year. Clubmarket was created in the late 1990s, when Co-Op Zafon merged with Hypershuk Marketing Chains Ltd., and the merged company then merged with Supershuk Greenberg, owned by Eliezer Fishman. The Borovich-Mozes-Rosen Group acquired control of the chain in November 2001.
Published by Globes [online] -l www.globes.co.il - on October 25, 2003