Sears inks $1.6B IT outsourcing services deal with CSC

The 10-year deal won't include key retail systems support

By Todd R. Weiss

June 2, 2004 12:00 PM ET

Computerworld - Sears Roebuck and Co. has finalized a $1.6 billion, 10-year IT outsourcing deal with Computer Sciences Corp. that covers desktop, server, voice and data network support, as well as systems services for Sears-related Web sites.
In an announcement yesterday, El Segundo, Calif.-based CSC said a majority of the 200 Sears IT employees affected by the deal will begin work for CSC starting June 12.
Sears will retain responsibility for its overall technology standards, architecture and service policies, as well as for its mainframes and core retail systems, which it will maintain in-house. The company's mainframes are already supported by IBM under an existing outsourcing contract.
The separate IT operations of catalog retailer Lands' End Inc., which Sears acquired in 2002, will also not be affected by the deal.
"We are very pleased to enter into this important agreement with a global retail leader of the stature of Sears," CSC Chairman and CEO Van B. Honeycutt said in a statement. "We look forward to applying CSC's experience, as well as our best practices, process excellence, proven methodologies and continuous innovation, to help Sears achieve its business vision."
In March, Hoffman Estates, Ill.-based Sears announced that it was in negotiations with CSC to outsource much of its IT infrastructure (see story). That announcement came after Sears CIO Gerald Kelly Jr. disclosed in January that his company was looking to outsource IT operations (see story). CSC beat out several other companies that were considered for the contract, including IBM Global Services, Hewlett-Packard Co., Electronic Data Systems Corp. and Affiliated Computer Services Inc.
"We believe this strategic relationship will be a win-win for Sears and CSC," said Kelly in a statement. "By working with CSC, Sears will have access to leading-edge technology that allows us to better serve our customers."
The deal with CSC will allow the retailer to focus on its core retail systems while improving operations and saving money, according to the companies.
Spokesmen for the two companies couldn't be reached for comment early today.

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