Walgreens signs finance and accounting outsourcing deal
Genpact awarded 10-year multi-process finance and accounting outsourcing (FAO) contract by US pharmacy retailer US-based drugstore chain Walgreens Genpact has awarded a 10-year multi-process FAO contract to business processing outsourcing (BPO) specialist, Genpact.
Genpact awarded 10-year multi-process finance and accounting outsourcing (FAO) contract by US pharmacy retailer
US-based drugstore chain Walgreens Genpact has awarded a 10-year multi-process FAO contract to business processing outsourcing (BPO) specialist, Genpact.
The contract, signed on 31 December 2009, involves Genpact taking over Walgreens' accounting shared service facility in Danville, Illinois, and the transfer of 500 accounting employees to Genpact. A further 200 employees at the facility who handle other services such as IT are not affected and will remain Walgreens employees. An additional 300 positions at Walgreens' other accounting facilities, including the headquarters in Deerfield and nine smaller locations across the US may be affected as part of the transition of accounting work to Genpact.
The services to be provided through the deal include business-to-business (B2B) and business-to-consumer (B2C) order-to-cash (O2C) collections; accounts payable; and general accounting, as well as travel and expenses.
Megadeal marks US giant’s first foray into BPO
Katharina Grimme, NelsonHall research director commented: “This FAO megadeal, adding another new logo, marks a great start to the year for Genpact. The value of this deal is not published, but with potentially [approximately] 800 personnel involved (a number that will reduce as Genpact implements technology and streamlines processes), is likely to be in the range of $200 million (£124m), making it one of the largest FAO contracts awarded over the last year.”
She added: “For Walgreens, this outsourcing arrangement is part of the company's 'Rewiring for Growth' initiative, which aims to align the company's overhead spending with its reduced rate of growth and targets $1 billion (£621m) in annual pre-tax cost savings by fiscal 2011. Walgreens is now responding to the changing competitive landscape, the impact of the economic recession and the pending changes to the US healthcare system. This is Walgreens' first major outsource in IT or BPO: it can be expected that further outsourcing arrangements, e.g. for IT services, will follow suit.”