Outsourcing's Odd Couple: Xerox & ACS, One Year Post-Merger


There are some areas--new systems within our SAP/Oracle footprint--where our relationships with other parties will remain important to us. But ACS has good capabilities in development in .NET, Java and other Internet technologies and my intent is to use that a lot more.

The transition of IT services from HP to ACS will not be complete until the end of the year. How are you handling that uncomfortable situation, where you're biggest supplier became your biggest competitor when HP acquired EDS?

McDermott: This is the one and only plug I will give to our competitors [at HP]: the local guys on the ground have delivered with the highest level of professionalism. A few of those professionals, as happens in all [outsourcing] transitions, will join the Xerox group. The people at the absolute top will move on to other opportunities. They managed this transition in a way that you'd typically only see in a ramp-up of a relationship, not a ramp down.

It's one thing to run an internally facing IT shop, but another thing to serve external clients' distinct IT outsourcing needs, too. Is Xerox assuming a thought leadership role with ACS's CIO clients?

Kyser: I've only been in my role as COO for ITO for 120 days--I was the CFO as we were going through the transaction--so I have a view of not just ITO but the BPO business as well. We were excited about the transaction because of the that Xerox has inside of their business. That's something we could not afford prior to this. We really struggled with innovation, spending our nights doing R&D.