Bank of Ireland ditches HP for IBM

Infrastructure deal closes seven-year chapter

Golden opportunity for IBM on Emerald Isle

Bank of Ireland (BoI) has signed a five-year infrastructure deal with IBM after a previous seven-year contract with HP expired recently.

The financial terms of the deal have not been disclosed, but the contract with HP signed in April 2003 was worth $600m, according to HP's statement at the time.

There have been no significant changes to BoI’s infrastructure since then. The only addition to the new group-wide contract is the bank’s capital market’s division, which a BoI spokesperson described as “quite small in the overall scheme of things”.

The bank selected IBM for exclusive contract negotiations after protracted competitive tendering.

"The signing of this contract marks the culmination of a lengthy process, during which Bank of Ireland assessed a number of potential service providers," said Larry Kiernan, BoI’s head of group IT in a statement.

The bank will continue to work with HP on handover tasks, he added.

The monetary value of the contract was not the only determining factor in choosing IBM, said a BoI spokesperson.

BoI has a chequered history with outsourcing. In 1998 the company outsourced IT to Perrot Systems, only to bring it all back in-house in 2002 before signing up with HP a year later.

Some 495 of the bank’s IT staff - 350 in Ireland and 145 UK-based - were transferred to HP as part of the 2003 agreement. But this only happened following an expensive dispute which nearly scuppered the deal before the ink had dried on the contract.

Angered by changes in working conditions, IT staff fought the deal for months and staged a one-day strike in August 2003. BoI and HP persuaded employees to return to their keyboards with generous concessions on job security and pensions, the scale of which raised eyebrows among outsourcing firms at the time.

A year later HP and the bank fell out over severance payments to disgraced bank chief Michael Soden, who was ousted when disgruntled IT staff revealed to the local press that he was surfing porn and escort agency sites on his office PC.

HP and BoI’s relationship dates back to 1974.