Summary
This 8-K filing from Kraft Foods Inc. (which was the predecessor to Mondelez International) on April 28, 2006, details a significant outsourcing agreement for information technology services. The company entered into a Master Professional Services Agreement with EDS Information Services, L.L.C. and Electronic Data Systems Corporation (EDS) for a broad range of IT support, including data centers, hosting, telecommunications, and workplace support. This agreement, with an initial seven-year term commencing June 1, 2006, is valued at approximately $1.7 billion. It includes performance standards and service levels for EDS, with potential credits for Kraft if these are not met. As part of this transition, approximately 670 Kraft employees involved in IT support are expected to transfer to EDS. The agreement also features pricing protections and benchmarking rights for Kraft to ensure services remain at market rates. This outsourcing move signifies a strategic decision to leverage external expertise and potentially reduce internal IT operational costs.
Key Highlights
- 1Kraft Foods Inc. entered into a seven-year Master Professional Services Agreement with EDS for comprehensive IT services.
- 2The agreement has an estimated value of $1.7 billion over the initial term, starting June 1, 2006.
- 3The scope of services includes data centers, hosting, telecommunications, and workplace support.
- 4Approximately 670 Kraft IT employees are expected to transition to employment with EDS.
- 5The agreement includes performance standards and service level commitments from EDS, with potential credits for Kraft.
- 6Kraft has incorporated pricing protections, including periodic benchmarking, to ensure market-competitive rates.
- 7The filing also lists various forward-looking statements and risk factors, including those related to the IT services transition and EDS's performance.