Deloitte Sells BPO Unit After Questioning Value Of Such Services In Own Study

Convergys will acquire Deloitte's finance and accounting outsourcing unit for an undisclosed sum.

Paul McDougall, Editor At Large, InformationWeek

June 17, 2005

1 Min Read

Deloitte Consulting appears to listening to its own researchers and is exiting a segment of the outsourcing business. The firm disclosed late Thursday that it has agreed to sell its finance and accounting outsourcing unit to business-services provider Convergys Corp. Financial terms weren't disclosed.

Deloitte has been in the finance and accounting outsourcing market for about 10 years, maintaining those operations primarily from a service center in Tulsa, Okla. Convergys focuses on providing outsourcing services from offshore locations in low-cost countries such as India.

In a study issued in April, Deloitte said many large organizations are bringing business and IT operations back in-house after becoming disillusioned with outsourcing. "Instead of simplifying operations, many companies have found that outsourcing activities can introduce unexpected complexity," the study concluded. At the time, many observers found the report's conclusions odd, coming as they did from a firm that sells outsourcing services.

Deloitte officials weren't immediately available for comment, but, in a statement, the company's managing director for outsourcing, Robert Frazzini, said the move "was a difficult strategic decision." Frazzini insisted that the rest of Deloitte's outsourcing business is strong but added that Convergys could bring more value to the finance and accounting operations because of its "scale, world-class platform, and leadership in outsourcing."

Deloitte continues to operate an applications-management outsourcing business and a limited human-resources-management outsourcing practice.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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