BT, Accenture sign 10-year, $576M outsourcing deal

IDG News Service - BT Group PLC said today that it has extended an existing human resources outsourcing deal with Accenture Ltd. with a new 10-year contract valued at $576 million.
The deal, set to begin in August, will cover BT's HR functions in 38 countries for all of its 97,000 employees and 180,000 BT pensioners. The previous five-year outsourcing contract covered only employees in the U.K., the companies said.
Accenture will provide services such as customer contact, recruitment, pension administration, payroll and benefits administration.
The business process outsourcing (BPO) contract with London-based BT also has a consulting, or what companies like IBM are increasingly calling "transformation," element to it. As part of its consulting role, Accenture will create a "transition program" with BT before the August rollout.
According to Ovum Ltd. analyst Douglas Hayward, Accenture was a pioneer of BPO, and HR is one of its key target markets. The BT deal plays to Accenture's strengths in that it bundles consulting services with outsourcing services, allowing the two service lines to support each other, Hayward said in an e-mail assessment.
"I don't believe that Accenture would be (or should be) interested in straightforward running of its client's processes per se, nor even in generating value through cost-cutting alone," Hayward said. "Accenture's strength is the way it can ally business-process change to technology change, and BPO can play strongly to those strengths."
The renewal and extension of the contract between BT and Accenture is a positive sign for the still-immature BPO industry as a whole, Hayward said. "A big contract renewal like this can send out a positive signal to large corporations considering the step from IT outsourcing to BPO," Hayward said.