Basman | Explore: IT Outsourcing

Accenture has signed a 10-year, US$100 million business processing outsourcing (BPO) agreement with AIG Europe S.A. to provide an IT platform and insurance support services to AIG Entrepreneur, an AIG unit specializing in Property and Casualty insurance for small and medium enterprises. The agreement which aims to maximize operational efficiencies and enhance services will be implemented in several European countries starting initially with France.

Services will be provided to AIG Europe by Accenture Insurance Services – an Accenture business that offers insurance BPO services to life, annuity, pensions and P&C insurers globally – through Accenture’s service centre in Bucharest, Romania. The underwriting, policy and claims services will be supported by an IT platform using Accenture’s proprietary insurance solution software. The implementation is expected to be completed in less than six months.

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Convergys Corporation announced it has purchased the assets of AOL’s contact center in Albuquerque, New Mexico. The transaction closed in late December.

A majority-owned subsidiary of Time Warner Inc., AOL had announced last fall that it intended to close the facility as part of its ongoing restructuring, a move that would have impacted about 800 employees at the facility.

“Convergys quickly assessed the opportunity and began to review the AOL site and the possibilities for existing staff members with our current clients” said Dennis Ross, Vice President of Client Support in Convergys’ Customer Care business. “As a result of the purchase agreement announced today, Convergys has begun operating the former AOL facility.”

Convergys is the largest provider of outsourced contact center services in the world with more than 68,000 employees. Convergys operates 75 contact centers globally speaking nearly 35 languages.

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Convergys announced today a 5-year managed services contract renewal with SunCom Wireless to continue managing SunCom’s billing operations. SunCom Wireless, formerly Triton PCS, has more than one million wireless customers and has been a Convergys client since 1997.

As part of the managed services agreement, Convergys will continue to provide billing and customer care software to support SunCom’s growth and rollout of GSM services. Convergys’ wireless billing platform is a comprehensive solution that gives wireless operators rapid new service deployment, ensuring complete revenue capture, and providing proven scalability to handle expanding subscriber bases.

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Capgemini and Tetra Pak, a world leader in food processing and packaging, today announced that they have signed a 7-year global outsourcing agreement covering a range of finance and accounting services.

According to the terms of the agreement, a joint project team from Tetra Pak and Capgemini will transfer elements of the finance and accounting transaction processes operated in potentially up to 60 countries around the world into Capgemini Business Process Outsourcing (BPO) centres which are part of Capgemini’s integrated global Rightshore™ network. Capgemini will provide the multilingual services from its dedicated BPO centres in Krakow, Poland and Guangzhou, China.

“This contract illustrates the value BPO can deliver when working with partners to support optimisation of global Finance processes. We are proud to be working with Tetra Pak and look forward to a long and mutually beneficial relationship”, said Hubert Giraud, CEO of Capgemini BPO business unit.

Convergys Corporation, a global leader in providing customer care, human resources, and billing services, announced today it has signed a 6-year contract to provide human resources business process outsourcing (HR BPO) services to support the Asia Pacific region of the InterContinental Hotels Group. Convergys service centers in Bangalore, India; Kuala Lumpur, Malaysia; and Dalian, China, will provide HR data administration and payroll services for IHG corporate and reservations center employees in the Asia Pacific region.

IHG is the world’s largest hotel group by number of rooms with recognizable hotel brands such as InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Hotel Indigo, Holiday Inn Hotels & Resorts, Holiday Inn Express, Staybridge Suites, and Candlewood Suites.

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Atos Origin announced that it has completed the acquisition of Banksys and Bank Card Company (BCC) from Fortis, Dexia, KBC, ING and other Belgian banks, following European Competition Authorities’s approval of the deal on September 29th 2006. The acquisition will create a European Leader in Payment Services, with combined pro forma 2006 revenues of EUR 630 million.

Within the context of SEPA, the process of European standardisation in payment systems, the acquisition of Banksys and BCC by Atos Origin, through its subsidiary Atos Worldline, creates an entity with a strong expertise in the European payment market and represents a critical milestone in the accelerating consolidation of the European landscape in payment services.

Highlights of the deal:

• Creating a European leader in payment services with combined pro forma 2006 revenues of EUR 630 million.
• A combined workforce of 4,200 staff with extensive experience in payment operations in Germany, France and Belgium, and a presence in United Kingdom, Spain and Italy.
• Multi-year contracts guaranteeing revenue with the major banks in Belgium.
• Consolidation of volumes to better absorb SEPA investments.

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ExcellerateHRO, the jointly owned HR Outsourcing business of EDS and Towers Perrin, combining the outsourcing experience of EDS with Towers Perrin’s HR domain expertise, announced it has signed a contract to provide Benefits Administration Services for 7-Eleven, Inc., the largest chain in the convenience retailing industry.

Under the 64-month renewal agreement, ExcellerateHRO will continue providing 7-Eleven’s U.S. employees with Health and Welfare and Employee Profit Sharing/401(k) Plan administration, as well as Deferred Compensation Plan services added under the new contract.

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Department of Municipalities and Agriculture announced the signing of a 10-year contract with Injazat Data Systems, the region’s leading Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) company, under which Injazat will provide IT managed services and assume full responsibility for the Municipality’s IT services and operations.

The contract was signed by H.E. Dr. Juaan Salem Al Daheri, Chairman of Abu Dhabi Department of Municipalities and Agriculture in his office at Abu Dhabi Municipality Department, and Mr. Ibrahim Mohamed Lari, CEO, Injazat Data Systems.

Established in the 1st Quarter of 2005, Injazat Data Systems is an Abu Dhabi-based joint venture between Mubadala Development Company and Electronic Data Systems (EDS). This deal will be another opportunity for Injazat Data Systems to create new jobs for UAE Nationals in line with its vision of developing UAE National IT professionals.

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Launch Strengthens Company’s Global HR BPO Capabilities, Enhances Client Service

Hewitt Associates, a global human resources services company, announced today the launch of mobility operations in Shanghai, strengthening the company’s global HR BPO capabilities and enhancing client service.  In addition to Shanghai, the company delivers mobility services from North America and Europe.

The company will provide mobility services, which include relocation, logistics, international assignment administration, as well as the integration of payroll and other benefits, to several multinational clients operating in Asia.  In total, Hewitt delivers mobility services — a component of Hewitt’s HR outsourcing suite of services—to more than 200 multinational clients and 10,000 employees in 100 countries.

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New Fujitsu Group company will provide a comprehensive and integrated suite of applications to address key facets of manufacturing business operations.

Glovia International Inc., a subsidiary of Fujitsu Limited and leading provider of extended ERP solutions for engineer-to-order and high-volume manufacturers, today announced the introduction of Glovia Services Inc.—a new company that is the industry’s first provider of Software-as-a-Service (SaaS) solutions specifically designed to help small and midsize businesses (SMBs) manage their manufacturing processes.

In conjunction with the launch of Glovia Services Inc., the company introduced GSInnovate, a manufacturing solution based on Glovia’s successful existing manufacturing product. With its innovative delivery model, GSInnovate is a market-first. The solution supports the management of many manufacturing processes on a state-of-the-art SaaS technology platform that delivers overall business performance with minimal investment and risk.

Glovia Services Inc. is the only company that has a comprehensive SaaS solution specifically designed to help manufacturers in the SMB market manage key processes such as inventory management, order management, procurement and financial/accounting management. The GSInnovate solution is based on a SaaS delivery model in which there is no actual software, hardware or infrastructure for the SMB manufacturer to purchase or maintain. A SaaS application is accessed over the Internet with a browser, eliminating the upfront costs of hardware, licenses and expensive technical staff required to maintain these systems.

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Affiliated Computer Services, Inc. announced that it has been awarded a renewed and expanded business process outsourcing (BPO) contract with First Horizon Home Loan Corporation, one of the nation’s leading home financing companies.

ACS and First Horizon launched their successful BPO partnership in 2002, with ACS providing document preparation, scanning, and indexing of mortgage loan files for the company. These services will continue under the terms of the renewed contract, and will expand in scope to now include mailroom services. The agreement solidifies ACS’ solid position as a top BPO services provider to the mortgage industry.

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Overall Asia Pacific BPO market growth to slow to 9 percent in 2006

Human resources business process outsourcing (HR BPO) now represents the biggest component of the overall BPO market in Asia Pacific, according to Gartner, Inc.

Payroll services, benefits administration and training and development are the most common HR activities outsourced in the region. The Asia Pacific (excluding Japan) HR BPO market is expected to reach US$1.3 billion in 2006, representing 24.7 percent of the total BPO market and an increase of 9 percent from US$1.2 billion in 2005.

The overall BPO market in Asia Pacific is expected to reach US$5.4 billion in 2006, an increase of 13.5 percent over 2005. Australia experienced growth rates higher than the Asia Pacific average for HR BPO, at 10 percent from 2005 to 2006. The total BPO market in Australia will expand from A$779 million in 2005 to A$855 million in 2006.

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LogicaCMG has renewed and broadened the contract with SAP AG to provide managed Human Resources (HR) and Payroll services to its customers based on SAP’s Enterprise Resource Planning (ERP) software. LogicaCMG’s SAP based Business Process Outsourcing (BPO) services for HR and Payroll will be charged to customers on a transaction based monthly fee covering both the initial start-up cost and the on-going operational cost for the services delivered.

The contract will extend LogicaCMG’s offerings to include the full Human Capital Management (HCM) suite of SAP products, including employee self-service, employee portals, workflows and the international SAP payroll engine. This broadened transactional services model will give LogicaCMG and its customers greater flexibility regarding the set-up of BPO contracts and offer customers greater control and understanding of the breakdown of costs which in turn will help their entire budgeting and cost control processes.

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Human resources business process outsourcing (HR BPO) continues to be a major component of the overall worldwide BPO market, as worldwide HR BPO is expected to reach $24.6 billion in 2006, an increase of 4.7 percent from $23.5 billion in 2005, according to Gartner, Inc. The overall worldwide BPO market is expected to reach $134.7 billion in 2006, an increase of 8.3 percent over 2005. However, the HR BPO market has reached a crossroad in 2006, as some vendors struggle with profitability and retrench to improve their bottom-line results. This will exert a drag on the market especially on the growth of the U.S. segment through 2007.

HR BPO is the biggest component of the overall worldwide BPO market at 18.7 percent of the market. Payroll services and benefits administration services comprise the largest segment of the total worldwide HR BPO, together comprising nearly three-fourths of the market in 2006. The remainder of the market is composed of education and training, hiring and recruiting, and personnel administration services.

“HR has long been identified as a key area for outsourcing, usually in the areas of payroll and benefits administration services,” said Robert Brown, research director for Gartner. “As a back-office function, aspects of HR are often deemed critical, yet non-core functions for outsourcing and are usually most companies’ first stop on the sourcing journey for BPO. Payroll outsourcing is also a key area for consideration among small and midsize businesses that are often underserved by larger, more-strategic forms of BPO.”

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Euan Davis, senior analyst in Forrester’s European IT services research group and based in London, tells us in a study to prepare now by capturing internal process efficiencies from shared services:

Forrester predicts that shared services will drive BPO uptake because firms will struggle to fully exploit the shared services model internally. Challenged by creating effective chargeback mechanisms, driving service culture, and capturing value from waves of new technology, firms will hand off elements of shared services activity to third-party service providers that can do all this under contractual safeguards. Firms should prepare now by squeezing out maximum internal efficiency for themselves and preparing for handoff once they reach the trigger points for so doing.