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Archive for January, 2001
According to Trey Campbell, last year saw the arrival and the legitimization of the pure play BPO providers. That included his company Spherion, an Atlanta-based BPO provider that calls itself a workforce architect. The Spherion group vice president says 2000 saw a significant transition in the BPO marketplace as pure play providers attracted top talent and venture capital. These developments demonstrated that pure play providers are a viable concept. Last year BPO providers signed some highly visible contracts that added to BPO’s momentum. Campbell cites Exult’s contract with Bank of America, Exult and PricewaterhouseCoopers’ (PwC) contract with BP Amoco, and Spherion’s contract with the American Association of Retired People (AARP.) Spherion will handle all of AARP’s member care services.
January 1, 2001 |
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2000 was the year of the BPO mega deals. BPO deals are getting larger and we will see more of that, says Tom White, global managing partner for BPO outsourcing at Arthur Andersen (AA), a Big 5 accounting firm based in Chicago, Illinois. These outsourcing contracts ranged from $350 million to over $1 billion. And they were long range contracts, spanning a decade. The mega deals included: General Motors (GM) with Arthur Andersen BP Amoco with Exult, PricewaterhouseCoopers and Arthur Andersen Nortel with PricewaterhouseCoopers Bank of America with Exult White says AA’s contract with GM was unique because it was the first time a vendor concluded a finance and accounting contract that brought 17 different countries together in one shared services center. Employees at AA’s shared services center in Barcelona, Spain had to centralize the languages and cultures of those countries into a seamless BPO process.
January 1, 2001 |
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The new millennium saw the dawn of the pure play BPO players, says Chris Kirk, CEO of LeapSource, one of those new pure play providers. LeapSource, based in Phoenix, Arizona, specializes in finance and accounting. Until the pure play providers arrived, companies who wanted to outsource a business process had to select one of the Big 5 accounting firms, recalls Kirk.
January 1, 2001 |
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The emergence of the pure play BPO provider was one of the biggest developments in the BPO world during 2000, observes Mark Hodges. Hodges, a vice president of corporate development for Exult, a human resources (HR) BPO provider based in Irvine, California, defines pure play providers as companies that were founded to do nothing but BPO. Their tunnel vision focus on outsourced processes distinguishes them from other outsourcing providers like EDS and CSC, old school providers who do everything including BPO, explains Hodges. Pure play BPO providers include LeapSource in Phoenix, Arizona, and SourceNet in Houston, Texas. Exult, which uses Web-based technology to take over the entire HR process, is another. We are the human resources department for global 500 companies, says Hodges.
January 1, 2001 |
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Multimillion dollar deals were the hallmark of 2000. These were multisite contracts that spanned continents and had a varied scope involving more than one process, according to Rebecca Scholl, an analyst with Gartner Dataquest in Mountain View, California. And she believes that trend will continue in 2001. A good example of the mega deal is the $125 million contract Nortel Networks signed with PricewaterhouseCoopers (PwC). This global company hired PwC to outsource its human resources (HR), finance and accounting, and administrative services at numerous Nortel sites. The biggest deal was the $1 billion 10-year contract the Bank of America signed with Exult to outsource HR and finance and accounting. This contract is only for the U.S., but it could expand to other regions, Scholl says.
January 1, 2001 |
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This past year companies have shifted their focus from ecommerce to elogistics outsourcing, reports Romala Ravi, an analyst with International Data Corporation (IDC) in Framingham, Massachusetts. Ravi specializes in elogistics outsourcing. She defines elogistics as an IT-enchanced and integrated function that stretches from the front-end online store all the way to the end customer. This process includes: Order management Warehousing and fulfillment Returns management Transport and delivery Customer service issues Hype about ecommerce dominated the logistics world for the last 24 months. Ravi says corporations spent significant sums building their front end capabilities. But the real challenge surfaced when the order was placed. Delivery became a problem. Then the 1999 Christmas season arrived and volume soared. Companies couldn’t deliver because of spikes in volume, notes the analyst.
January 1, 2001 |
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One of the easiest ways to grow overnight is to acquire another company. One of the challenges of any merger is to merge each partner’s software. More often than not, each player has a different legacy system. Amalgamating the two can be a convoluted mess, reports Marc Pramuk, senior industry analyst for e-HR for International Data Corporation (IDC) in Framingham, Massachusetts. One of the most efficient ways to tackle this problem is to outsource most or all of the merged company’s HR functions. Outsourcing the entire HR process gives companies a clean slate, says Pramuk. Outsourcing everything in the HR field, however, is a major change for large companies, says Pramuk. In the past they only outsourced pieces of the HR process. Companies outsourced their payroll or they didn’t, explains the analyst.
January 1, 2001 |
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Traditionally, outsourcing has been IT oriented. Today, however, outsourcing is taking three different paths. I see outsourcing falling into three distinct categories: the traditional IT suppliers,† the application service providers (ASP), and the business process outsourcing (BPO) suppliers. Different currents are buffeting each sector. Historically, IBM, EDS and CSCformed the top tier of the IT [...]
January 1, 2001 |
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If there was one single event in the outsourcing world that characterized the year 2000, it was the megadeals that were consummated in the business process outsourcing (BPO) space. Last year BPO vendors inked six landmark deals. They are: Arthur Andersen with General Motors Cap Gemini Ernst & Young with Ontario Power Generation Exult with Bank of America PricewaterhouseCoopers and Exult with BP Amoco PricewaterhouseCoopers with Nortel Networks Spherion with American Association of Retired People…
January 1, 2001 |
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As the body count of the high flying dotcom grows, companies are getting back to basics, observes Jeff Rich, president and chief executive officer of ACS, a Dallas-based supplier. At the same time old economy companies are growing comfortable with the new economy, using the Web to improve their businesses.
January 1, 2001 |
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With the threat of Y2K glitches, many companies delayed outsourcing commitments during the final half of 1999. But companies returned to outsourcing in 2000. Megadeals lit up the landscape, says Bob Pryor, vice president of Cap Gemini Ernst & Young (CGEY) and head of its Global Operate – Americas outsourcing business in the U.S…
January 1, 2001 |
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Compaq buyers want their outsourcing vendors to introduce innovation and add value to their outsourcing contracts, observes Thomas Simmons, vice president, eBusiness Management Services for Compaq Global Services in Stow, Massachusetts. Buyers want their vendors to be part of managing today’s complexity. They want us to think of different ways of doing business that they would never have thought of, he says.
January 1, 2001 |
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When buyers decide to outsource today, you can bet ebusiness considerations are part of the contract. Paul Cofoni, president of the technology management group at Computer Science Corporation (CSC), says he rarely sees an outsourcing proposal that doesn’t have a substantial ecommerce component. Companies want to create a business-to-business (B2B) exchange, use ebusiness to enhance their supply chain management, or simply make it easier for their clients to have access to them…
January 1, 2001 |
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Buyers are interested in transformation, says Joe Ragusa, vice president, Transformational Outsourcing for IBM Global Services, based in Somers, New York. They see outsourcing vendors as change agents who can provide the skills, processes and technology they need to enter the brave new economy. IT is enabling, adds Ragusa. The Web has created some strange bedfellows. Heated competitors are now working together in business-to-business (B2B) exchanges…
January 1, 2001 |
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The trend to outsource non-core business processes is ‘irreversible,’ says John Barnsley, global leader for Business Process Outsourcing for PricewaterhouseCoopers (PwC), and is steadily moving to include multiple activities. Barnsley attributes an overall increase in acceptance of BPO as an important strategic tool to the rapid transformation in technology. Constant change, accelerated by the Internet, has altered companies’ risk equations.
January 1, 2001 |
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Information technology is moving from legacy information into a commodity. This inexorable shift is altering the nature of the relationship between buyer and supplier. That has been a pretty big change in the market last year, says Bob Chaffin, contract manager of IS for General Motors Corp. in Detroit, Michigan. Today, vendors must differentiate themselves in the marketplace and create an important distinction between their value added abilities and the commodity they are selling…
January 1, 2001 |
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