IBM Nabs 18 Big Outsourcing Contracts

By John Moore  |  Print this article Print


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IBM rakes in $100 million-plus outsourcing contracts, as Cambridge Integrated allies with McLarens Group to expand their outsourcing businesses, and Accenture plans $100 million investment in info-management services business.

IBM on Tuesday quantified the financial impact of its recent run of outsourcing wins.

IBM Global Services captured 18 deals larger than $100 million during the second quarter ended June 30, according to Mark Loughridge, IBM senior vice president and chief financial officer, who discussed the company's integration and outsourcing arm during a conference call.

All told, IBM Global Services signed more than $14 billion in business during the quarter, a 45 percent increase year-to-year. The surge reversed the trend of six quarters of declining growth rates in signings.

Loughridge cited "good demand in the services business." He pointed to IBM's $1.6 billion pact with energy provider NiSource as the largest of the recent wins. The contract has elements of business process and information technology outsourcing.

At NiSource, IBM "will operate a broad range of business support functions, including processes within the areas of human resources, finance and accounting, supply chain, customer contact, meter-to-cash, and information technology," Loughridge said.

Overall, IBM Global Services generated revenue of $12 billion for the quarter, growing at a 6 percent clip. The unit contributed more than 50 percent of IBM's revenue in Q2. That marks a first for IBM Global Services.

Accenture Boosts Information Management Services

Accenture plans to invest $100 million over the next three years to boost its information management services business.

Accenture will create a global practice, involving more than 5,000 consultants focusing on information-management services.

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The practice will cover the technologies and processes of information management to help organizations handle both structured and unstructured data. Accenture defines this field as including business intelligence, performance management and content management.

The market for services of this kind grows at an annual rate of 9 percent and is projected to exceed $27 billion by 2007, according to Accenture, which cited industry analyst estimates.

The investment will help Accenture create "packaged service offerings that can be used by clients to jumpstart information management programs," an Accenture spokeswoman said. She added that many of those offerings will be built in conjunction with alliance partners.

Accenture's vendor allies in the information management space include Business Objects, Cognos and EMC Corp.

Ben Plummer, Cognos' vice president of global partner development, said he's excited to see Accenture "take such an aggressive position" in the business intelligence/information management arena. "My belief is that this move by Accenture underscores the emergence of [business intelligence and corporate performance management] solutions into the same strategic position as ERP products."

Corporate performance management, sometimes called enterprise performance management, is a category that includes software tools and approaches for tracking an organization's business performance. These include data warehousing applications, business intelligence and "dashboard" applications that filter results from several back-end sales- and operations-measuring applications and present them in summary screens that are easy to interpret.

The spokeswoman added that a number of the services to be developed will target specific industries. This approach is in keeping with Accenture work with Cognos. The two companies have been developing industry-specific solutions in financial services, aerospace, retail, semiconductors and consumer/packaged goods, according to Accenture.

Accenture's investment also will cover training and tools for practitioners, alliances, and marketing.

Accenture appointed partner Royce Bell as chief executive officer of Accenture Information Management Services.

Voda One Shrinks Delivery Time

Voda One, the voice/data/video communications arm of Weston Group Inc., said Tuesday it is handling final channel assembly for Avaya Modular Messaging.

Rob Linder, vice president of sales at Voda One, said channel assembly will reduce the time it takes resellers to provide Avaya's IP telephony solution. Prior to the channel assembly deal, the time lag from order placement to customer delivery was 14 days, he said. Channel assembly reduces delivery time to 2 to 3 days.

The approach helps resellers from a cash flow and accounts receivable perspective, Linder said. Rapid product delivery means that resellers can finish jobs faster. "The time-to-completion and time-to-money is sooner," he noted.

Channel assembly on Avaya Modular Messaging takes place at Voda One's Sterling, Va. warehouse and integration facility. The company already performs final channel assembly for Avaya Communication Manager IP telephony and TDM servers.

Voda One has been "authorized for years to do [public branch exchange] channel assembly," Linder observed. The latest channel assembly deal was born out of the previous arrangements, he added.

Previously, Avaya had kept final assembly of Avaya Modular Messaging in-house to make sure installations were handled properly. Linder said Avaya was eventually won over by Voda One's PBX experience and the technical certification of its people, which he said are certified at the same level as Avaya employees.

Cambridge Expands Outsourcing Presence

Cambridge Integrated Services Group has allied with The McLarens Group to expand what it terms knowledge process outsourcing in Canada.

Cambridge, based in Greenwich, Conn., specializes in insurance claims administration and processing and other processes that require "knowledge-based decision making," according to the company.

The McLarens Group lends its nationwide network of licensed claims administrators to the alliance. The deal was announced earlier this month.

The companies seek to service and manage claims in insurance lines such as auto liability, premises liability, product liability, professional liability, and workers' compensation.

Tracy Mock, senior vice president at Cambridge, said the partnership extends Cambridge's reach in Canada. There, the company has customers but no permanent offices. In addition to the U.S. and Canada, Cambridge has a presence in Australia, India and the United Kingdom.

Mock said the company has few rivals outside of the insurance industry that globally address insurance claims administration and processing. Gallagher Bassett Services Inc., based in Itasca, Ill., competes with Cambridge in the property/casualty administration market.

But, in general, knowledge process outsourcing is an emerging field likely to see numerous competitors. Indian companies, in particular, are poised to move into knowledge process outsourcing, according to the Confederation of Indian Industry. The organization expects the market for knowledge process outsourcing services to reach $17 billion by 2010.

ACS Gets Student Loan Deal

Affiliated Computer Services Inc. has won a 3-year contract to provide student loan servicing for the University of Illinois System.

The company will employ its proprietary workflow and imaging technology to scan and store about 500,000 student loan documents in the contract's first year. That part of the project will encompass the university's historical loan documents. ACS will also scan new-borrower loan documents.

ACS' workflow management application will interface with other university systems such as accounts receivable and student loan records, according to an ACS spokesman.

John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.


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