Amtrak farms out information systems to IBM unit - Integrated Systems Solutions Corp - Brief Article

Railway Age, May, 1994

Amtrak has become the second major railroad to enter into an information systems outsourcing agreement with IBM subsidiary Integrated Systems Solutions Corp. (ISSC). Southern Pacific was first, with a 10-year "technology alliance" valued at $415 million (RA, Dec. 1993, p. 20). The Amtrak-ISSC agreement is also for 10 years and is valued at $500 million. Amtrak expects to realize savings of approximately $100 million over the life of the contract.

An Amtrak-ISSC announcement on April 5 said the IBM subsidiary will provide the passenger railroad with "a wide range of information technology services and skills, including data center operations, disaster recovery services, voice and data network services, help desk, PC and LAN support, business reengineering consulting, and equipment moves, adds and changes. All networking services will be provided by Advantis, the networking technology arm of ISSC. Amtrak will retain applications development and maintenance functions, including support for its nationwide computer reservation system, ARROW."

Amtrak Chairman and President Thomas M. Downs said the agreement "will provide long term cost and other efficiencies that will strengthen our company as well as our bottom line. The agreement allows Amtrak to concentrate its scarce capital and operating funds on its core business--running a railroad--and leave the operation of our information technology infrastructure to a company that is an industry leader in that area."

He also said the agreement will "allow Amtrak to enhance its ability to utilize technology to increase its competitive advantage" by "enabling the company to continuously take advantage of advanced and ever-changing technology resources that will reduce costs and improve customer service."

ISSC President and CEO Sam Palmisano said that, in implementing the agreement, ISSC will partner with Covia Technologies, which develops and sells communications systems software, distributed applications, and integration services for use in large-scale, distributed computing networks. "Together with ISSC," said Palmisano, "Covia Technologies will bring to bear expertise in developing travel and transportation industry applications, including passenger handling systems; scheduling; reservations; ticketing; and pricing and fare quotations on several projects under the Amtrak initiative."

Downs said approximately 65 Amtrak employees involved in information technology will be offered positions with ISSN or Advantis.

Founded by IBM in 1991, ISSC is headquartered in White Plains, N.Y.