IBM Outsourcing: How will IBM benefit from outsourcing HR functions to Fidelity?

In early July 2002, IBM and Fidelity Investments announced an outsourcing agreement that will have IBM outsourcing the administration of its pension, employee health plans, and other human resource services to Fidelity. Also, the two companies will enter a partnership on selling human resources payroll and benefits outsourcing services to other clients. Of the numerous benefits that IBM will enjoy from this deal with Fidelity to handle a large portion of their human resources, there are …

…of business where they are already world leaders. The second benefit is that IBM can reduce the number of its employees while saving money and improving employee services. The third benefit is allowing IBM to gain a more focussed vision on their core business. This will allow them to continue to be world leaders in both the personal computer market and high-end computer market, while allowing them the flexibility to enter new and emerging markets.