By Mel Duvall

IBM announced it has signed a major outsourcing deal with oil and gas giant Sunoco, under which it will provide a wide range of

back office and application support services.

The companies said in a joint statement that the agreement will allow Sunoco to focus more of its resources on its core growth initiatives, while IBM will take on responsibility for finding ways to improve Sunoco’s back office processes.

“This arrangement marks another important step in Sunoco’s continued expense reduction program, which is critical to improving the company’s competitiveness,” Sunoco Chief Financial Officer Brian MacDonald said in a statement.

Financial terms of the deal were not disclosed. Sunoco has an annual IT budget of about $90 million and employs some 250 IT personnel under CIO Peter Whatnell.

In a video interview with Roger Green on CIOZone, first published following the Society for Information Management SIMposium 2009 conference, Whatnell hinted that a major outsourcing arrangement might be in the works for Sunoco. In the video interview Whatnell said the economic downturn had forced many CIOs to look for ways to bring down IT costs while maintaining services.

That, in turn, was leading more CIOs to explore the benefits of outsourcing. “Up until this point you could describe the role of IT as to construct and operate . . . we built things and we ran them,” he said.

“Now the leadership of IT is moving to what I would call acquire and deploy. Our job is to scan the horizon for how we can acquire services the business needs and then deploy them beneficially within the business.” While outsourcing was once relegated to more “janitorial” type services, like IT help desk support, Whatnell said companies were now increasingly looking to outsourcing partners to take on more critical functions.

Under the terms of the outsourcing agreement IBM said it will provide services to Sunoco from its global operations centers. That will include application enhancement, application maintenance, support for finance and accounting and indirect procurement processes.

Sunoco is headquartered in Philadelphia and employs 11,200 worldwide.

Comments (2)

	1. 08-30-2010 10:12
	This deal is therefore an outsourcing and offshoring deal, given IBM's focus on its global operations centers which have a heavy emphasis on resources in India. I'm curious what experience Sunoco has with making such arrangements successful, and it's certainly not a move to bolster US employment. Referring to IT help desk support as a "janitorial service" is probably one of the least appealing characterizations of that task I've heard from a CIO, although we all know it can be a trying necessity. Registered

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	2. 08-30-2010 10:13
	This deal is therefore an outsourcing and offshoring deal, given IBM's focus on its global operations centers which have a heavy emphasis on resources in India. I'm curious what experience Sunoco has with making such arrangements successful, and it's certainly not a move to bolster US employment. Referring to IT help desk support as a "janitorial service" is probably one of the least appealing characterizations of that task I've heard from a CIO, although we all know it can be a trying necessity. Registered

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