Solution Provider Scandal in Florida?

Affiliated Computer Services Inc. (ACS) hoped to bask in the spotlight this week, but instead the company allegedly burned one of its customers.

The Dallas-based outsourcing specialist has won lucrative deals with the State of Louisiana and The Goodyear Tire and Rubber Co., but most eyes are focused on ACS’s troubles in Florida.

Specifically, state and U.S. Department of Labor investigators are examining ACS’s welfare-to-work programs in Florida. According to The Miami Herald, ACS “manipulated data and kept sloppy records that could have helped it wrongly earn millions in government bonuses.”

ACS concedes that recent investigations uncovered some problems with its business practices in Florida, and the company has vowed to remove employees involved in any wrongdoing. In a prepared release, ACS CEO Jeffrey Rich said, “We take these deficiencies very seriously and intend to quickly take all appropriate action to rectify this situation.”

Investors pounded ACS’s stock on February 2, driving shares down nearly 8 percent. But trading in the company stabilized on February 3.

Despite the black eye, ACS continues to win business. The company recently signed a 3-year, $3 million business process outsourcing agreement with the State of Louisiana’s Office of Motor Vehicles and a 10-year HR systems agreement with Goodyear. Financial terms of the Goodyear deal were not disclosed.

Deal 2 – Dawn of a New Day?

Deal 2 – Dawn of a New Day?: Perhaps it’s time for me to eat a little crow. I’ve been a Sun Microsystems Inc. pessimist for quite some time. Even during the dot-com boom, I openly questioned how long partners would stand by Sun’s side as more and more customers embraced commodity Intel hardware.

Those who disagree with me should knock on Arrow Electronics’ door. The company’s MOCA division generated more than 2000 customer leads for Sun’s iForce Partners in 2003. Moreover, MOCA sales manager compensation is tied to partner growth.

I’m still skeptical of Sun, but plenty of customers remain staunchly loyal to the company’s high-end hardware. My own college, for instance, recently deployed Sun’s rock-solid iPlanet e-mail system on Solaris servers. And Sun’s year-over-year revenue dipped only 4 percent during the last six months. Perhaps CEO Scott McNealy has truly stopped the bleeding. Now, it’s time to show some growth.

Deal 3 – Let’s Carpool

Deal 3 – Let’s Carpool:

Acxiom Corp. and Automatic Data Processing Inc. are uniting to help automobile dealers maintain more accurate customer contact information.

ADP estimates that up to 40 percent of auto dealer records are duplicates and up to 80 percent of records require address corrections or updates. Sensing opportunity, ADP and Acxiom have designed a database management service that scrubs and updates auto dealer records. Equally important, customers who are on “do not call” lists are protected from auto dealers’ telemarketing efforts.

If you serve the auto dealer supply chain, it might be time to call ADP. The company’s Dealer Services division manages computing solutions for more than 16,000 automotive and truck dealers throughout North America and Europe.

Deal 4 – Repeat Business

Deal 4 – Repeat Business: Keane Inc. has designed a new Web portal for the North Carolina Department of State Treasurer (DST). The site, www.nctreasurer.com, includes both public information and an intranet for NC DST employees.

Frankly, the site isn’t newsworthy. The more important lesson is Keane’s long-term relationship with the North Carolina DST, which stretches back to the early 1990s. During a recent conference call, a senior-level channel manager from Hewlett-Packard Co. said that highly satisfied customers are six times more likely to maintain a vendor relationship vs. customers who are merely satisfied.

So steal a page from Keane: Focus on customer satisfaction and open dialog, and you might generate the type of recurring revenue that Keane enjoys with North Carolina DST.

Joseph C. Panettieri has covered Silicon Valley since 1992. He is editorial director of the New York Institute of Technology . Write to him at joe_pan5@yahoo.com.