Russell and IBM join forces in new super administration alliance - Page 1
MEDIA RELEASE: EMBARGOED UNTIL 15:30 AEST, 23 JANUARY 2006
Russell and IBM enter strategic relationship to provide next generation superannuation administration services
SYDNEY, 23 January 2006– Investment and superannuation specialist Russell Investment Group and global business consulting and technology organisation IBM, today announced a seven-year, A$140m Business Transformation Outsourcing (BTO) agreement. Under the terms of the agreement IBM will assume operation of Russell’s Member Administration Service Centre in Australia and becomes a significant provider of superannuation member administration in Australia.
The agreement will involve the transition of the Service Centre operations and a majority of the Service Centre’s 199 staff to a wholly owned subsidiary of IBM Australia. Russell will maintain all client relationship functions, while IBM will leverageits global consulting know-how and IT skills to transform and improve the service experience members have with their superannuation fund. Initial work will include the implementation of new customer relationship management processes and technologies to provide more flexible and responsive member services.
Over time, IBM will create a highly personalised experience for members, delivering an integrated multi-channel service offering – across web, phone and on-site facilities. This next-generation member services offering is expected to set new benchmarks in service and quality.
Russell’s Member Administration Service Centre administers A$19bn in member assets, including Russell’s flagship fund, the A$2.5bn Russell SuperSolution Mastertrust.
According to Alan Schoenheimer, Managing Director of Russell in Australasia, the agreement has been prompted by unprecedented changes in Australia’s superannuation environment, such as the rise in superannuation outsourcing and member choice, which have driven demand for cost-effective, faster, more complex member administration services.
“We believe a seismic change in superannuation administration is about to occur as choice takes hold and more people begin to ‘own’ their growing super balances,” Mr Schoenheimer said. “Super administration requires scale and constant technological innovation to stay at the leading edge of member services. This deal with IBM gives us the ability to scale as well as access world-leading technological innovation to meet the changing needs of our super fund clients and their members.”
Continued strong growth in the Russell SuperSolution Mastertrust is also a major factor behind the deal, he said. Over the past two years, Russell SuperSolution has transitioned more than 30,000 members into the master trust and is expected to grow to 300,000 members by 2010 as industry consolidation and corporate super outsourcing continues to pick up pace.
“With the rapid growth in our mastertrust and other funds, we want to ensure the processing part of our business is able to accommodate growth without compromising the quality of member services. This deal is a great outcome for our employees, clients and fund members as it will provide the support for our growth potential,” he said.
Glen Boreham, CEO and Managing Director of IBM Australia and New Zealand, said the deal was an important step toward IBM’s goal to expand its consulting and technology presence in fast-growing financial services sectorsaround the globe.
“We are delighted to begin our strategic BTO relationship with Russell and welcome Russell employees into IBM,” Mr Boreham said. “We are committed to becoming a leading provider of member administration services to Australian super funds, by leveraging our scale and expertise in Australia and around the world.
BTO is a service that delivers continuous strategic change in the operation of a client’s business processes. IBM provides BTO services to some of the world’s leading organisations. Over the last three years IBM has made a number of strategic acquisitionsandinvestments globally to bolster its BTO capabilities for the delivery of processes for the financial services sector including banking, general insurance and life insurance.
Mr Jason Nyilas, Partner, Financial Services, IBM Business Consulting Services said: “IBM’s unique combination of consulting skills, technology and process delivery capabilities help clients find new ways to improve the way they operate and serve their customers. IBM will use this experience to transform member administration in Australia and set new benchmarks in service and quality.”
Information Technology Services
Under the terms of the deal IBM will also assume control of the Member Administration Service Centre’s Information Technology (IT) operations including IT staff, servers and desktop operations.
In the short term IBM will implement a range of services to streamline IT operations including remote server monitoring and administration and full-time help desk. Over the course of the next year IBM will migrate Russell’s servers to an ‘On Demand’ offering in its Sydney data centre and migrate hosting of Russell’s Member Administration Portal to IBM’s E-business Hosting offering. IBM will also leverage its global application management services capabilities to manage and transform the underlying software applications over the course of the agreement.
ENDS
About Russell
Russell Investment Group is a global firm offering investors a full range of tailored investment and actuarial solutions. Russell’s investment programs, which include a master trust, provide a manager-of-manager approach based on a research driven evaluation of outside money managers. A leader in global investment strategy, Russell advises clients on more than A$3.2 trillion in assets and delivers investment programs to more than 2,000 institutional clients in 40 countries. Russell manages approximately A$212 billion in assets in a variety of multi-manager funds. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Washington, USA with additional offices in New York, Toronto, London, Paris, Amsterdam, Singapore, Sydney, Melbourne, Auckland, Tokyo and Johannesburg.
About IBM
With over 80 years of leadership in helping businesses innovate, IBM is the world's largest information technology and services company. IBM is a leading provider of e-business solutions and is dedicated to helping companies, Business Partners and developers leverage the potential of e-business on demand across a wide range of businesses and industries. The company offers a host of cross-industry and industry-specific solutions designed to meet the needs of companies of all sizes. For more information, visit
For further information please contact
Craig Morris, Russell Investment Group, Tel: 02 9229 5120, Mob: 0413 274 037
Chris Linden, IBM Business Consulting Services, Tel: 02 9397 8815, Mob: 0412 353 523
This news release is issued by Russell Investment Group Pty Ltd ABN 92 003 066 859.