Hewlett-Packard Wins First Business-Process Outsourcing DealHewlett-Packard Wins First Business-Process Outsourcing Deal

Hewlett-Packard unveiled its first customer win in the business-process outsourcing market on Tuesday, a multiyear deal to provide finance and administration services to consumer-products maker Procter & Gamble Co. No specific terms were disclosed.

Under the deal, HP will process P&G's payments to its vendors across all major geographic regions. The companies have reached an agreement in principal and expect to close the deal in April, according to HP officials.

HP maintains payment-processing centers in Barcelona, Spain; Singapore; Guadalajara, Mexico; and Banagalore, India. To date, those centers have been used primarily for HP's internal requirements. Anne Livermore, executive VP for HP Services, says those facilities now will be used to gird the company's foray into the business-process outsourcing market. "We're taking a strong internal capability and offering it to the market," she says.

Livermore says HP's BPO services likely won't extend beyond finance and administration. "Rather than target the market broadly, we want to have deep expertise in a few areas," she says. Livermore adds that HP fine-tuned its ability to deliver outsourced finance and administration services by using the operations of Compaq, which it acquired in 2002, as "a beta customer."

Also on Tuesday, HP announced the hiring of Marc Schwarz to head its business-process outsourcing unit. Schwarz formerly was director of global outsourcing for Deloitte Consulting. Livermore says HP will be hiring additional sales and marketing personnel to supports its business-process outsourcing efforts. It also will take on staff from customers upon the completion of new contract wins.