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Unilever-Accenture Deal: A Major HR Contract
Estimated at a billion dollars, the deal was the most prominent among a flurry of other major awards, including the EDS and IBM Global Services deals
Datamonitor
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As a flurry of major awards in June brought an otherwise quiet second quarter to a close, Unilever’s seven-year Human Resources Outsourcing (HRO) contract signed with Accenture in June stood out as among the most prominent. Estimated to be worth around a billion dollars, according to the deal, Accenture will provide HR services, including recruitment, payroll administration, performance management, workforce reporting and third-party provider management.

It will also provide a range of learning services, such as content sourcing and development, program planning and delivery and learning system hosting.

Approximately 200,000 Unilever employees worldwide will be serviced by Accenture’s delivery centers in India, the Philippines, China, Romania, the Czech Republic and Brazil. Fewer than half of Unilever’s 3,300 global HR staff is likely to be affected by the transition to Accenture.

The contract confirms Accenture’s status as one of the frontrunners in the HRO market alongside Hewitt, ACS and Convergys. In February 2005, Accenture renewed its HRO contract with BT Group for a further 10 years in a deal worth $570 million.

The Unilever/Accenture deal was one of four deals worth over a billion dollars that was announced in the second quarter of the year. Both the number of deals and their combined value, however, were below the levels tracked in the previous year at the same time.

Datamonitor tracked 388 deals in the second quarter, down 18% from the same quarter last year, and their combined value fell 11% to $22.2 billion.

EDS captured two large contract extensions in June with the Bank of America and the Commonwealth Bank of Australia worth more than a billion dollars combined.

IBM Global Services had a relatively quiet quarter in contrast, but did secure a $316 million IT outsourcing award from Danish dairy company Arla Foods, which will see it take on 130 employees from the client’s IT department. Several of IBM’s biggest recent wins have come in emerging outsourcing territories such as the Nordic region and France.

There were also major contract wins for two lesser-known Tier 2 services vendors during June.

Xansa, a U.K.-based outsourcing service provider that delivers the majority of its projects from offshore facilities in India, clinched a $140 million extension with financial-services firm, Barclays.

Over in the U.S.A., government-sector services firm, RSIS, won a $111 million contract with the Defense Advanced Research Projects Agency (DARPA) to provide desktop, server, and applications management services.

                         
THE TEN LARGEST IT SERVICES DEALS IN JUNE 2006
Rank
  Customer   Provider   Engagement   Region   Value
($ million)
  Duration
(In years)
1
  Unilever   Accenture   Business process outsourcing, offshore contracting   U.S.A.   1,000 (est.)   7
2
  Bank of America   EDS   Infrastructure management, systems integration   U.S.A.   700   6
3
  Commonwealth Bank of Australia   EDS   Application management, infrastructure management   Australia   350   6
4
  Arla Foods   IBM Global Services   Application management, infrastructure management   Denmark   316   7
5
  NY Dept of Health   CSC   Application development and support, application management   U.S.A.   276   3
6
  AMP   CSC   Data center outsourcing, infrastructure management   Australia   146   4
7
  Barclays   Xansa   Application management, offshore contracting   U.K.   140   5
8
  Cnipa   BT Group   Network integration, network management, network consulting   Italy   126   5
9
  DARPA   RS Information Systems   Application management, network management   U.S.A.   111   5
10
  U.S. Navy   General Dynamics   Computer engineering, infrastructure management   U.S.A.   96   1
DATAMONITOR’S IT-SERVICES CONTRACT TRACKER LOGS EVERY PUBLICLY DISCLOSED CONSULTING, SYSTEMS INTEGRATION AND OUTSOURCING DEAL, WITH A MINIMUM VALUE OF $1 MILLION  

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