HP Enterprise Services Awarded 7-Year Contract

News Source: Nelson Hall Industry Comment

HP Enterprise Services has been awarded a 7-year multi-process F&A BPO contract by medical device, wound management and sports medicine product manufacturer Smith & Nephew. The contract covers the client's European operations (10 countries), which account for 35% of its global revenue.

Services in scope include accounts payable, accounts receivable and general ledger.
Delivery will be from HP's Best Shore BPO centers in Poland (Wroclaw) and India (Bangalore).
In a two-phase transition, the first wave is to be completed by November 2010, with the second tranche completed by May 2011.

Analyst comments:
Smith & Nephew's decision to outsource transactional finance and accounting activities is part of a wider corporate global transformation program: the group is going through a major SAP consolidation program and is looking to streamline and standardize accounting processes across its business units and geographies.

This is not a recession-induced outsource (S&N is growing); rather one where the client has opted for BPO instead of setting up its own shared services organzation, and is looking for a partner with experience in setting up a streamlined and integrated business model. Factors helping S&N select HP included its track record, the rigor of its operational controls, and the quality of the management in the delivery centers.

This is a significant award for HP Enterprise Services, acting as a clear signal to the market that HP continues to be actively interested in F&A BPO opportunities in Europe, having here successfully competed against Tier 1 providers such as Genpact for a multi-process, multi-country deal.

Once transition is complete, expect the relationship to expand into other geographies, including potentially the U.S.