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By Laton McCartney
These are not the best of times for Accenture. On the heels of a disappointing first quarter of fiscal 2010 and the embarrassing cancellation of its sponsorship agreement with golfer Tiger Woods, the IT services firm has lost one of its biggest outsourcing clients, Barclays Bank.
In 2004, Barclays signed a six-year contract with Accenture worth more than GBP400 million ($647 million) to outsource information technology application development and management related to its U.K.-based commercial and retail banking systems.
As part of the deal, Accenture was to provide staff and services related to systems development, enhancement, support and maintenance activities -- functions then managed by Barclays’ shared IT service function. In addition approximately 900 of Barclays U.K. employees were to transfer to Accenture in the U.K. over a 12-month period.
Now Barclays has announced it will not renew the Accenture contract when it expires in June. Instead, Barclays is in-sourcing its apps development, while bringing back some 230 of its employees who’d gone over to Accenture.
“Barclays continually assesses its operating model to ensure that it has the most efficient model to support the requirements of the businesses,” said the bank in a statement. “This change arises from one such standard review, combined with the expiry of the current outsourcing agreement with Accenture on June 30, 2010. Barclays will continue to engage with Accenture to achieve its strategy.”
Barclays said that moving application development in-house will give it the “most efficient model” for the work. But at the time the deal was signed, it stressed that outsourcing was a better route to more flexibility and lower costs.
An Accenture spokesman told CIOZone, “I’ve been informed only that they decided not to renew the contract.”
Accenture on Dec. 17 reported net revenues of $5.38 billion for its first quarter, a decrease of 11 percent in U.S. dollars -- and 12 percent in local currency -- from the same period last year.
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