/R E P E A T -- CGI and Kesko enter strategic partnership to accelerate digital transformation/
Rhea-AI Summary
CGI (NYSE: GIB) has entered into a strategic partnership with retail services company Kesko to accelerate digital transformation. The comprehensive agreement encompasses IT services including end-user services, capacity and cloud services, and integrations. CGI will also support K Group's retail network in digital development initiatives.
The partnership focuses on leveraging automation and AI-based solutions to enhance business renewal and productivity. Kesko selected CGI through a competitive bidding process, citing the company's international expertise and local presence as key factors. The collaboration model includes shared goals, risks, and joint metrics to guide the achievement of strategic objectives.
Positive
- Strategic partnership with major retail company Kesko expands CGI's market presence
- Comprehensive service agreement covering multiple IT service areas
- Partnership includes shared goals and metrics, indicating long-term commitment
Negative
- None.
Insights
CGI's strategic IT partnership with Kesko strengthens its European retail presence and expands recurring revenue streams.
CGI has secured a strategic partnership with Kesko, one of the largest retail companies in Northern Europe, to accelerate the latter's digital transformation initiatives. The comprehensive agreement encompasses multiple service lines including end-user services, capacity and cloud services, and systems integration - all representing recurring revenue streams for CGI.
What makes this deal particularly noteworthy is its structure as a risk-sharing model with joint metrics and investments, indicating a deeper client relationship than typical vendor arrangements. This approach aligns with the industry's evolution toward outcome-based contracts where technology providers share responsibility for achieving business results.
For CGI, this represents a significant expansion of its European retail portfolio. The partnership leverages CGI's global capabilities while maintaining the local presence that's central to the company's proximity model. The agreement specifically highlights AI and automation solutions as key components, indicating higher-margin advanced technology services rather than just basic IT support.
Kesko's position as a retail leader in Northern Europe makes this a strategically valuable reference client. The K Group (Kesko's retail network) operates approximately 1,800 stores across Finland, Sweden, Norway, Estonia, Latvia, Lithuania and Poland, providing CGI with expanded visibility in these markets.
While financial terms weren't disclosed, strategic partnerships of this nature typically represent multi-year, multi-million dollar engagements that enhance revenue predictability and provide opportunities for scope expansion over time.
Stock Market Symbols
GIB.A (TSX)
GIB (NYSE)
www.cgi.com/newsroom
CGI to leverage global retail expertise to deliver tangible outcomes for Kesko
"K Group's goal is to be a forerunner in digital services within the retail sector. In the competitive bidding process, our aim was to find a partner with the best capability to support our business growth and development by leveraging the newest technologies efficiently. The development of automation and AI-based solutions plays a significant role in renewing our business and improving productivity. CGI's strong international expertise combined with local presence convinced us of the company's ability to support us in achieving our objectives," says Arto Hiltunen, CIO at Kesko.
"The current trend in the IT sector is that forerunner companies like Kesko are now building strategic collaboration models in which partners participate closely in business development and growth as shared goals and risks. We thank Kesko for the trust in forming a genuine and deep partnership, where the achievement of strategic goals is guided by joint metrics and investments," says Leena-Mari Lähteenmaa, President, CGI Finland,
CGI helps retail, consumer and services organizations leverage AI and data-driven strategies to boost profitability by delivering friction-free omnichannel customer experiences, enhancing supply chain agility, streamlining store operations, advancing sustainable transformation, and optimizing IT investments. Read more: cgi.com/en/retail-consumer-services
About CGI
Founded in 1976, CGI is among the largest independent IT and business consulting services firms in the world. With 93,000 consultants and professionals across the globe, CGI delivers an end-to-end portfolio of capabilities, from strategic IT and business consulting to systems integration, managed IT and business process services and intellectual property solutions. CGI works with clients through a local relationship model complemented by a global delivery network that helps clients digitally transform their organizations and accelerate results. CGI Fiscal 2024 reported revenue is CA
View original content:https://www.prnewswire.com/news-releases/r-e-p-e-a-t----cgi-and-kesko-enter-strategic-partnership-to-accelerate-digital-transformation-302533959.html
SOURCE CGI Inc.
FAQ
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