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IBM to Manage Finance, Procurement for Honda in Europe

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International Business Machines Corporation (IBM - Free Report) recently entered into a five-year agreement with Honda Motor (HMC - Free Report) to manage and run the automaker's finance and procurement operations across Europe.

Per the terms of the agreement, IBM will provide integrated end-to-end services and enable the standardization and simplification of processes, bringing cost savings, higher productivity, quality, and improved service levels to Honda’s suppliers and customers.

Per the agreement, IBM plans to manage the source-to-pay, record-to-report, and order-to-cash processes, and roll out a help desk that will have a single view of Honda's entire finance and procurement function in a bid to simplify customer service.

The automaker had previously integrated IBM Watson technology and analytics in its Formula One engines to improve performance and racing decisions in real time.

The companies signed their Finance & Procurement Service agreement in first-quarter 2021. The contract extends an existing 10-year relationship between the two companies that already covered finance.

Strength in IBM’s Automotive Compliance Solutions to Boost Top Line

IBM is expected to benefit from the increasing transformation investments being made by players in the automotive industry toward a connected, autonomous, shared, and electrified world.

Among the automotive product development solutions provided by the company are Engineering Lifecycle Management (ELM) Automotive Compliance solutions. IBM ELM Automotive Compliance is built on a lifecycle data model designed to provide traceability through requirements, tests and systems design, as well as management and supporting processes.

ELM extends the functionality of standard Application Lifecycle Management (ALM) tools, providing an integrated, end-to-end solution that offers full transparency and traceability across all engineering data. From requirements through testing and deployment, ELM optimizes collaboration and communication across all stakeholders, improves decision-making, productivity, and overall product quality.

IBM ELM tools being adopted by various automotive giants include requirements management, model-based systems engineering, test management, workflow management, lifecycle optimization and use of Watson AI natural language processing to enhance requirements quality while helping to reduce defects and manual review costs.

Daimler AG has adopted IBM’s model-based systems engineering tool in Mercedes-Benz to analyze and elaborate requirements through prototypes, simulations and verification of validated designs while facilitating improved productivity and quality.

Moreover, Mahindra & Mahindra’s automotive division decided to implement the IBM Rational solution for Collaborative Lifecycle Management to link all the projects, teams and stakeholders involved in systems and software development together into a single end-to-end process.

Zacks Rank & Stocks to Consider

IBM currently has a Zacks Rank #4 (Sell).

A couple of better-ranked stocks in the broader technology sector are NVIDIA Corporation (NVDA - Free Report) and Texas Instruments Incorporated (TXN - Free Report) . Both stocks carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for NVIDIA and Texas Instruments is currently pegged at 19.5% and 9.3%, respectively.

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