The Carlson Contract

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    InformationWeek’s Paul McDougall wrote a quick news piece about Carlson Companies outsourcing some of its finance and tech functions to IBM. Carlson is the company behind such brands as Radisson Hotels and TGI Fridays restaurants.

    Mr. McDougall wrote, “The savings that Carlson will achieve through IBM are double what the company would have been able to obtain through an internal reorganization, [Dave Zitur, Carlson's program executive for enterprise resource planning] says. He adds that the deal will bolster the company's plans to expand into China, where IBM maintains a large presence.”

    The seven-year contract, whose value wasn’t stated, means about 525 internal people will lose jobs, though between 100 and 125 of those workers will be picked up by IBM. The work will go to IBM offices in the US, Canada, India and, apparently, China.

    Interestingly, the company isn’t outsourcing “customer-facing activities, such as hotel and travel reservations, because for the most part it considers those operations too important to turn over to a third party. An IBM subsidiary, Daksh eServices, presently handles a limited number of call-center operations for Carlson's leisure travel business from a facility in India.”

    This initiatiave sounds like it’s being handled with surgical precision, which is as it should be.

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