In a deal worth $420 million, Hewlett-Packard Canada Co. has signed on to upgrade and manage TD Bank Financial Group’s national automated banking machine (ABM) network and point of sale (POS) transaction infrastructure over the next seven years.
According to the companies, HP will take over the delivery, upgrades and management of approximately 2,400 of TD’s Green Machines, ABMs and POS networks across Canada. In addition, HP will take over ownership of all equipment and will take on 50 TD employees.
While HP has, in the past, provided TD with service desk, data centre operations, integrated management and communications as well as HP ProLiant servers and HP NonStop switching gear, this is the first true outsourcing relationship between the two parties.
In a media briefing Tuesday morning, HP Canada president and CEO Paul Tsaparis said it was an “honour for HP to be entrusted with the delivery and management of TD’s Green Machine network.”
For TD’s Chuck Hounsell, senior vice-president with TD Bank Financial Group, the deal represents a strategic transformation of TD’s ABM and POS services and will provide an “always on” network of Green Machines.
“This relationship will produce significant benefits,” Hounsell said. “(We will) reduce operating costs, increase productivity…there is a shift from fixed technology costs and a reduction in technology risk.”
The deal, which has been two years in the making, will also enable TD to go after new market opportunities in the merchant business space. Hounsell said that although the technical changes have yet to commence, the planning and development is well underway.
“A strong partner makes it easier for us to come up with new solutions,” Hounsell said. “This is a dramatically larger deal than what we have been doing so far. We are not taking an existing solution and asking someone else to manage it. We are developing a new solution and that is part of the reason why it took us two years to get here.”
HP’s Tsaparis added that both corporations took the time to ensure the solutions are going to meet not only the current needs of customers, but the future needs as well. He said that traditionally, timelines for this type of implementation would be very long, but noted that the companies have been able to “accelerate that through the planning in advance of the technical side of things.”
Still, it will be a long time before both HP and TD get the upgrades complete. The biggest milestone, according to Hounsell, will likely be early to mid-2006 when the bank’s entire network is able to service people with disabilities, a goal the HP deal will help realize.
“We will probably be the first to have our network fully compliant and have 100 per cent of our machines able to service people with disabilities and this new technology infrastructure will make that reliable and provide easier interaction,” he said.
HP will not work alone to satiate TD’s growing technological demands. The company has called on The Diebold Company of Canada Ltd., which will provide ABM terminals and first- and second-line maintenance as well as ACI Worldwide, which will provide its BASE24 core switching solution and the applications development and maintenance services. Phoenix Interactive Design Inc. will bring ABM application software and application development services, while INTRIA Items Inc. has been brought in to provide business process outsourcing services including cash management and forecasting.
“My sense in working with HP through this process is that they are very interested in coming up with a collaborative solution,” Hounsell said. “It is a collaboration, but they also demonstrated a strong focus on what is right for TD Bank and developed a solution that really meets our needs.”