InformationWeek

Andersen, GE In Outsourcing Alliance

GE's financial arm to bring money and mainframes to the deal

By Bruce Caldwell
Issue date: May 1, 1995

There have long been questions about Andersen Consulting's commitment to outsourcing, but many of those concerns are likely to be put to rest following an alliance with GE Capital. The deal is intended to provide substantial funding for Andersen outsourcing projects.

GE Capital is the $21 billion financial-services and leasing arm of General Electric Co.

Andersen is positioning itself to deliver systems integration andapplications management services through the alliance, according to statements by Andersen at an April 13 meeting with industry analysts.

If a letter of intent signed by the two companies on March 21 is carried through to contract, "GE Capital will provide remote mainframe power and creative financing and we'll do the systems integration," says Joellin Comerford, managing partner for Andersen's $350 million outsourcing unit in New York.

'Business Process Management'
Andersen refers to its outsourcing activities as "business process management." The unit has some 3,500 employees and about 60 contracts around the globe.

The $3.45 billion Andersen has been at a disadvantage for some time in the data center outsourcing market because of its partnership structure, which doesn't provide the same access to capital enjoyed by EDS, a subsidiary of General Motors Corp., or IBM's Integrated Systems Solutions Corp.

Andersen still anchors its mainframe capacity at a Dallas data center acquired in 1990 as part of a 10 -year, $175 million contract with Sun Refining and Marketing Co. The Dallas facility, which serves eight Andersen Consulting clients, will be sold to GE Capital as part of the alliance.

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