Outsourcing IT can bring business benefit

Shrewd manufacturers are looking to outsource some, or all, of their IT not just to cut costs, but to improve service levels – both in IT performance and business development. So says Wolfgang Erny, managing director of BASF IT Services. “Most CIOs and CFOs are looking at the price of their IT and trying to cut costs. But we are saying ‘How can we contribute to your business management?’ Based on our knowledge we can generate ideas at the business level to add value.” He concedes concerns around outsourcing contracts, scale and business risk, but says that organisations like BASF offer flexible outsourcing contracts ranging from infrastructure consolidation and optimisation to transfer of the full IT resource. BASF IT Services was founded in 2001,consolidating 50 IT departments throughout the BASF empire; it claims to have reduced IT budget by over eur 100m. “We cut cost in Europe by more than 20%.” The company has now expanded, and although 93% of its revenue still comes from the parent, expects to grow external business primarily in process industry SAP ERP re-implementation and managed services, although Erny cites the automotive sector as another target. For example, last month BASF took on full service’ IT services for Sorin, the largest European cardiovascular medical device group, covering 19 European locations in 10 countries, including production sites, in a five-year contract.