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Sears Taps CSC for $2B Outsourcing Deal

By Todd R. Weiss
March 22, 2004 12:00 PM ET

Computerworld - Following through on plans disclosed by its CIO in January, Sears, Roebuck and Co. is negotiating with Computer Sciences Corp. on a partial IT outsourcing deal that's expected to be worth about $2 billion over the next 10 years.
The deal would give CSC responsibility for managing much of the IT infrastructure at Sears and would affect about 260 of the retailer's 1,160 IT workers, although Sears this month said it expects CSC to hire "substantially all" of the affected staffers.
A final agreement should be signed during the second quarter, according to Sears. The infrastructure technologies that are due to be outsourced to CSC include servers, desktop PCs and other client devices, voice and data networks, and the systems that support Sears-related Web sites. CSC would also handle help desk operations as well as IT asset and risk management, said Sears spokesman Chris Brathwaite.
In a statement, Sears CIO Gary Kelly said the services provided by El Segundo, Calif.-based CSC should "heighten the stability and reliability of Sears' technical infrastructure" and reduce the cost of future IT improvements. He added that CSC "will also provide fair and equitable treatment" for the affected IT workers.
At a retail IT conference two months ago, Kelly told Computerworld that he planned to outsource some of Sears' IT operations to cut costs and improve profit margins . In addition to CSC, he named IBM Global Services, Hewlett-Packard Co., Electronic Data Systems Corp. and Affiliated Computer Services Inc. as the vendors vying for the deal.
The company's mainframes and core retail systems won't be included in the outsourcing deal, nor will the separate IT operations of catalog retailer Lands' End Inc., which Sears acquired in 2002. Brathwaite said Sears will continue to manage the retail systems internally. The mainframes are already supported by IBM under an existing outsourcing contract, he added.
Sears decided to do more outsourcing after a review of its IT infrastructure showed that some pieces need to be improved, Brathwaite said. Working with CSC on the improvements should yield savings that will let Sears focus more resources on its retail systems, he said.

Read more about IT Outsourcing in Computerworld's IT Outsourcing Topic Center.



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