P&G Looks to Make Outsourcing Deal

Fortune 500 Company Proctor & Gamble announced today its plans to spin out parts of its Global Business Services with a business process outsourcing partner.

Proctor & Gamble this morning announced its plans to spin out parts of its Global Business Services organization—including IT—by combining it with a business process outsourcing partner.

P&G would not release the names of the partners it is considering in such a move, but it will make a decision by years end, according to the Cincinnati, Ohio-based company.

P&G has been studying a variety of business process sourcing options for the past year as part of a move to make the Fortune 500 company more cost competitive.

The Global Business Services organization comprises its IT, Employee Services, Workplace Services and portions of its Puchasing and Accounting operations. The plan is to spin most of that organization out with a business services partner.

"We are seeking a business services provider that has capabilities across that spectrum that matches what we have in Global Business Services," said a company spokeswoman.

P&Gs goal is to leverage a partners scale and technology expertise and spread costs over a larger client base. At the same time, it is seeking a partnership through which it can access best-in-class capabilities and investments in technologies as well as leverage stronger collaboration to identify new opportunities.

P&G had been studying two main courses of action: going the traditional outsourcing route or spinning off the organization as its own services entity, according to one source close to P&G.

That source said that IBM Global Services, EDS and "the usual cast of characters" were being considered.

Another source suggested that the short list is down to EDS and Computer Sciences Corp.

EDS in fact is a strong player in the business process outsourcing (BPO) space, generating $3 billion annually in it, according to Julie Giera, industry analyst with Giga Information Group Inc. in Cambridge, Mass.

If and when P&G strikes a partnership deal, the company estimates that some 5700 employees would become employees of the partner.

Related Stories:

  • IBM Global Services
  • EDS Shakes Up Largest Units
  • Outsourcing Keys CSCs Revenue Jump