Outsourcing, Clustering Take Center Stage

Affiliated Computer Services on Monday said it has captured a human resources business-process outsourcing pact with Delta Air Lines.

The 7-year, $120-million agreement covers HR functions including compensations and benefits, administration, relocation services, recruiting, learning, payroll, HR information services, and employee call center services.

Delta has previously pursued the outsourcing route. In the mid 1990s, the company launched a joint venture with AT&T to run Delta's IT operations. And prior to the HR outsourcing deal, ACS inked a contract with Delta to provide paper-based passenger revenue accounting services, according to ACS.

Delta's HR outsourcing arrangement may signify a new wave of outsourcing among airlines. Mark Hodges, chairman and cofounder of EquaTerra Inc., said airlines have outsourced ticketing and IT over the years, but not necessarily HR, finance and accounting. Airlines, he added, are going to "start looking pretty hard at this trend."

EquaTerra, an outsourcing advisor, assisted Delta in its outsourcing selection process.

The growth of HR and other forms of administrative outsourcing has sparked consolidation among business process outsourcing suppliers. Examples include the merger of Hewitt Associates Inc. and Exult Inc., Mercer Human Resource Consulting's acquisition of Synhrgy HR Technologies, and the proposed joint venture between Electronic Data Systems Corp. and Towers Perrin.

But Hodges noted that the smaller business process outsourcing players aren't going away.

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BI Meets Blue

BearingPoint Inc. and Cognos Inc. are teaming on a business intelligence-related project at Labatt Breweries of Canada.

The partnership, announced Monday, focuses on the implementation of a corporate performance management application. The brewery's 300 salespeople use the system to stay on top of distribution gaps and sales trends.

The application taps Labatt's ERP (enterprise resource planning) and CRM (customer relationship management systems) as well as external data sources. Labatt employs Oracle Corp.'s ERP package and uses a modified version of Siebel Systems Inc.'s CRM.

Jeff Bowman, managing director in the Toronto office of BearingPoint's midmarket practice, said organizations have accumulated the underlying data needed to perform trend analyses, but tend to keep that data at the management level. The Labatt project, however, pushes the data "into the hands of the sales force," he said.

Labatt's personnel typically have pulled together reports from a number of different systems and in a number of different formats: PowerPoint presentations, spreadsheets, Word documents. The new application, however, "pulls performance management into one place," said Labatt's Michael Ali, who is responsible for change management.

As a consequence, salespeople can spend more time with customers and less time gathering information.

Labatt is representative of a trend toward driving BI to a wider audience, as opposed to its traditional enclave of power users, according to BearingPoint and Cognos.

The deal also marks the emergence of CPM (corporate performance management) as an application embedding BI, said Meg Dussault, Cognos' director of market strategy for CPM. CPM intends to provide a view of what is happening in a business, why it is happening and what should happen next, she said.

Cognos' CPM solution includes three components: Cognos Enterprise BI Series, Cognos Planning and Consolidation solutions, and Cognos Metrics Manager.

The first release of Labatt's CPM solution debuted in October and since then "we've been augmenting that base release," Ali said. A planning component now is in the works.

Ingram Adds Sony Ericsson

Ingram Micro Inc. on Monday said the distributor will offer mobile solutions from Sony Ericsson.

The U.S. portion of the agreement initially covers such products as Sony Ericsson's P910a smart phones. Ingram Micro has slated product availability for March.

"With smart phones becoming more popular and accepted in the enterprise and SMB space, our resellers are needed in order to securely tie these smart phones into the end user's network," said Vernon Galvin, a senior manager at Ingram Micro Vendor Management U.S.

In the United States, Ingram Micro already offers Sony Ericsson's GC83 PC Card through a pact with Cingular.

CSC: Expanding in India

Offshore headcount is growing rapidly at Computer Sciences Corp. The company's employment in India will eclipse the 3,000 mark by the end of the company's fiscal year (March 31), according to company officials. That number is expected to double during the next fiscal year.

CSC's India operation provides application development and maintenance, IT infrastructure management, and business process outsourcing. CSC also has offshore operations in Malaysia and South Africa.

Systems integration and outsourcing vendors are developing offshore operations to boost their price competitiveness.

LinuxWorld

At Linux World, Novell Inc. said it will resell and support PolyServe Inc.'s Matrix Server clustering software. The pact is part of Novell's data center initiative. PolyServe provides clustering software for both Windows and Linux data centers.

Novell also announced that Novell Enterprise Server, the dual Linux/NetWare operating system, would be coming out shortly.