Lufthansa signs 1bn euro IT infrastructure outsourcing deal with IBM

Lufthansa has signed a one billion euros (£830 million) IT infrastructure outsourcing contract with IBM, which includes transferring the control of its data centres to big blue, including one in Hertfordshire.

The deal follows last month's announcement that Lufthansa was selling Lufthansa Systems to IBM. The transferring of the airline's critical infrastructure is significant for the industry as Lufthansa Systems manages the IT and delivers applications to many other airlines.

The new seven year IBM deal is subject to the approval of the Lufthansa Supervisory Board and antitrust authorities. First of all, using IBM, the airline plans to optimise its IT processes to increase efficiency, which it says is expected to generate estimated cost savings by an average of around 70 million euros annually - a figure that was mooted last month.

Lufthansa says IBM will also help improve its cloud, business analytics, mobile computing and social media business efforts with the help of new services for customers, partners and employees.

Simone Menne, a member of the Lufthansa executive board and CFO, said: “Outsourcing the IT infrastructure to IBM will strengthen the competitiveness of the Lufthansa Group as a whole. The transformation plan will directly improve our cost base.

"Together with IBM we will have access to the latest IT technologies not only to lower our costs but also to continue digitalising our business processes in order to increase efficiency and customer focus.”

As part of the outsourcing agreement, IBM will manage Lufthansa Systems’ entire data centre operations, help desk, printer services and other infrastructure services. Around 1,400 Lufthansa Systems employees will transfer to IBM.

Copyright © 2014 IDG Communications, Inc.

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