HP wins $3bn P&G outsourcing mega deal

Soft soaping

By Drew Cullen, 11th April 2003

Magic Quadrant for Enterprise Backup/Recovery

HP has won a 10-year IT outsourcing deal with Procter & Gamble, worth an estimated $3bn.

The managed services contract will see approx. 1,850 P&G employees in 50 countries transfer to the HP payroll. The paperwork should be completed mid-May.

HP won the gig in competitive tender against unnamed vendors. But you wouldn't have to look too far beyond EDS.

EDS pulled out of the running in July, 2002 citing the price that P&G wanted for the "intangibles associated with the business assets". But then it re-entered the race. In September 2002, Dallas-based outsourcer ACS threw in the towel, stating that the "financial, operational and cultural risks (of the P&G contract) were too high". An IT World article on ACS's withdrawal at the time noted a WSJ piece that EDS had returned to fray, noting that - if true - EDS had a lot of explaining to do. On September 19, 2002, P&G said it was back in talks with EDS, "now the sole bidder on the contract, and a spokesperson said the two companies are close to finalizing a deal", Network World Fusion reported.

So when and where did HP come in?

P&G says it is excited about the HP gig, which will
"substantially lower costs and accelerate innovation". The soap powder giant also washes away more than one per cent of the "P&G community", even if the staff it has sold to HP come to work each day and sit in the same desks. Which they will until HP starts consolidating the data centres and help desks.

We'll sign off with a little-known fact: "Two billion times a day, P&G brands touch the lives of people around the world". Is this nice? ®