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Author: Dominique Raviart
Accenture Finance Solutions, the F&A business process outsourcing (BPO) organisation of the Bermuda-based giant, has won a contract to process receivables and collections from Microsoft clients (business customers and channel partners) in EMEA. No financial information was disclosed.
Comment: Why would Microsoft need to outsource its credit collection? In FY 2005, Microsoft earned $12.2bn on revenues of $39.8bn. This is an amazing 31% net margin. Yes, Microsoft's growth has slowed down. Yet, its profit margin for its H1 FY 2006 increased to 31.5%.
We assume complexity of work was one of the drivers behind the deal. Microsoft's indirect channel is huge. This means that management of account receivables must be a costly and time-consuming activity. The size of the contract is hard to quantify. Microsoft has 5,000 employees in general and administration, and derives 32% of its revenues from outside of the US. But certainly, this is big deal for Accenture.
Perhaps one of the lessons here is that any IT services organisation with high hopes in BPO cannot be based only in Europe (excluding the UK of course). Despite some recent traction, most of the activity in Europe is still triggered by US-headquartered MNCs. Look at the largest European players including Capgemini, Atos Origin, T-Systems, SBS, LogicaCMG, Getronics, TietoEnator, Indra, Finsiel, Xansa etc. How many of those with BPO aspirations have a critical mass in the US?
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