OREANDA-NEWS. February 13, 2012. IBM (NYSE:IBM) and Public Joint Stock Company (PJSC) Ukrsotsbank, part of UniCredit Group, have signed an agreement to outsource the bank's information technology (IT) systems and processes to IBM.

As part of the 10-year agreement signed in December 2011 and valued at approximately USDUSD 200M, IBM will assume responsibility for the development and support of PJSC Ukrsotsbank’s information systems and applications as well as the management of the bank’s IT infrastructure.

By tapping into IBM’s vast cumulative knowledge, PJSC Ukrsotsbank plans to improve customer service, increase performance efficiency and lower operational risk across its country-wide network of nearly 400 branches.

“By outsourcing our information technology activities to IBM we are able to focus on our core business priorities while ensuring the best possible service to our customers,” said Francesco Pusateri, Head of UniCredit’s Global Banking Services Division. “Having already successfully migrated and centralized PJSC Ukrsotsbank’s core banking systems, this decision will help us to strengthen our leadership in the Ukrainian banking sector. Leveraging IBM’s technology assets and industry experience we are able to transform the way we work and run our operations. This step is an important enhancement of UniCredit Group’s strategy of concentrating on core business and cost optimization.”

Under the terms of the agreement, IBM will take over the management and maintenance of PJSC Ukrsotsbank’s application portfolio, data center systems, IT network, ATMs, end-user and deskside support. The move is designed to provide substantial benefits to PJSC Ukrsotsbank and its customers, as well as help the bank achieve significant operational savings.

PJSC Ukrsotsbank has recently migrated to a new core banking system leveraging an innovative architectural approach. The effectiveness of this new system, coupled with break-away performance improvements derived from the IBM collaboration, creates a powerful replicable model that can be ‘exported’ to other UniCredit businesses.

“This is the first instance of full outsourcing in the region and marks a new era in the IT delivery model and in the development of Ukraine’s financial services sector,” said Joseph Benaroya, Vice President, IBM Global Technology Services. “Banks across growth markets are currently under enormous pressure to reduce costs and operational complexities while at the same time improve the customer experience. PJSC Ukrsotsbank has turned to IBM for its unrivalled experience in the banking sector and to ensure that its customers benefit from the very best technologies and business processes.”

The agreement demonstrates IBM’s momentum in growth markets and signals its readiness to broaden its presence in Ukraine where it has been present since 1992. Through the implementation of the latest technologies and business processes, the agreement will also provide an infusion of resources and knowledge into the local skills base supporting the development of next-generation technology talent in Ukraine.

PJSC Ukrsotsbank’s agreement with IBM represents a major milestone for outsourcing within the Commonwealth of Independent States region. It sets a new gold standard and reference point for major Ukrainian and Russian financial enterprises seeking a more effective way of running large and expensive IT infrastructures under challenging economic conditions.” IDC believes that this important initiative will start a wider uptake of outsourcing services in the market, said Andrew Golovnykh, Senior Research Analyst, IDC Ukraine.

As part of its geographic expansion initiative to increase its presence in emerging, high-growth cities and regions, IBM is actively expanding its business operations in Russia and the Commonwealth of Independent States (CIS). IBM has 14 offices across the region including Moscow, St. Petersburg, Krasnoyarsk, Novosibirsk, Perm, Ekaterinburg, Samara, Rostov-on-Don, Kazan, Ufa, Kiev and Dnipropetrovsk (Ukraine), Almaty (Kazakhstan) and Tashkent (Uzbekistan).