…as Sarah Lee passes indirects to IBM

20 January 2009

20 January 2009

Consumer goods giant Sara Lee has outsourced its indirect procurement to IBM.

The seven-year deal will see the company, known for its own-brand products as well as household goods such as Radox and Kiwi shoe polish, also outsource its finance and accounting (F&A), software development and maintenance.

The agreement forms part of Sara Lee's "Accelerate" project, which aims to save between $200 million and $250 million over the next three years.

The firm added it hoped to improve efficiency and flexibility in addition to the cost savings. Although Sara Lee has confirmed that 700 jobs will be lost as part of the deal, SM understands these will not be in procurement and employing a third-party to handle indirects is intended to boost capacity at the firm.

Rachael Stormonth, vice-president at NelsonHall, said the contract would be an important barometer if bundled deals where procurement is outsourced alongside other functions regain popularity among clients and providers.

SMjan2009

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