COMPANY PRESS RELEASE: Marking the largest-ever outsourcing contract in Malaysia and the first-ever such agreement in the country’s banking industry, EDS announced a US$250 million, 10-year contract with Bumiputra-Commerce Bank (BCB).
BCB is a $17.6 billion financial institution and Malaysia’s second largest bank. Under terms of the strategic outsourcing agreement, EDS will build and manage the technology infrastructure for EPIC-I, BCB’s new financial information technology (IT) and back office processing subsidiary.
By forming EPIC-I as our technology subsidiary, we are taking a major step towards increasing our efficiency in order to be prepared for the increased competition from foreign banks that will likely occur over the next few years, said Dr. Rozali Mohamed Ali, managing director and chief executive officer for BCB. This agreement with EDS is part of a long-term plan to outsource non-core functions as we accelerate and extend our business strategy.
The decision to entrust our technology infrastructure to EDS enables us to leverage EDS’ experience in business consulting, IT and back office processing, which will help us reduce our start-up expenses and operate efficiently as we begin operations as a separate entity, said Collin Lazaroo, chief executive officer for EPIC-I. The agreement with EDS will help position us to attract third party business for EPIC-I, establishing it as a significant regional player in financial IT services and government industry segments.
The agreement calls for EDS to provide application development and management services; manage the company’s mainframe, midrange systems and network; and manage desktop computers and servers.
The solutions EDS will provide for EPIC-I primarily focus on cost savings of at least 20 percent — achieved with economies of scale, new technologies, re-engineered processes and improved staff productivities — which will help enhance competitiveness for BCB and EPIC-I at low risk, said Doug Frederick, president of EDS’ Information Solutions line of business. As the second largest IT outsourcing contract for EDS in Asia, this is a significant relationship and a positive step in improving EDS’ market position in Malaysia and the region.
EPIC-I commenced operations January 1, 2002. As a part of the agreement, more than 350 BCB IT employees located in Kuala Lumpur are expected to transition to EDS over the next 15 months.