Wednesday, January 19, 2005

EDS, Towers Perrin Form Outsourcing Company

Newsday.com reports Electronic Data Systems Corp. has agreed to pay about $420 million to create a personnel-services company with consulting firm Towers Perrin.

The new firm, still unnamed, will sell services in benefits, payroll, recruitment and other areas. Towers Perrin will provide consulting services to clients of the new firm, the companies said. EDS has been trying to expand from its roots as an IT-outsourcer _ running other companies' computers _ into so-called business process outsourcing, in which it runs functions such as payroll, benefits, finance and accounting for clients.

Bryan Doyle, the leader of Lincolnshire, Ill.-based Hewitt's outsourcing business, said he wasn't surprised that EDS would strike a deal with Towers to expand in business-process outsourcing, or BPO. "We see HR BPO as an attractive market," he said. "We know the IT outsourcers are interested because of the growth potential."

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