MCA Management Awards 10 Year Anniversary: Outsourcing Consultancyin the Private Sector

GOLD WINNER - ACCENTURE WITH THOMAS COOK

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Last Updated: 31 Aug 2010

Thomas Cook is a household name in the UK and Ireland, with a 167-year history in the travel business and market share of about 30%. But after the acquisition of the C&N Touristic AG business in 2001, executives faced significant losses in the coming year and asked Accenture to help introduce a raft of changes across the finance, IT, HR and payroll functions.

The company's three UK units - sales, tour operations and airline - weren't operating as an integrated business but as a patchwork of disconnected processes. Accenture proposed a 10-year co-sourcing arrangement to deliver a series of change programmes. This is focused as much on business outcomes as on systems, and Accenture's fees are based on results. While Thomas Cook UK & Ireland controls strategy, policy, investment and critical decisions, Accenture is responsible for managing the transformation and service delivery, for the performance of a new shared services centre in Peterborough and for delivering an improvement in business profits.

Five months after signing the contract, many finance, payroll and IT staff from the three units transferred to Accenture. New financial systems were implemented and an integrated technology base installed for finance, HR, payroll, purchasing and employee self-service. Four years on, the partners shifted the agreement up a gear: 70% of work once done at Peterborough is now undertaken by Accenture's delivery centre in India.

More than 400 Accenture staff are now employed to provide services to Thomas Cook, which has been able to reduce its cost base by £140m. Some 19 head office locations have been consolidated into three. The next phase of the transformation includes 'eXcelerate', a training programme for sales staff - the number of Thomas Cook holidays sold in its shops has already increased from 30% to 70%. 'The transformation has been just phenomenal,' says the company's CIO Carl Dawson. 'To change a business of this size at the speed it happened and to help us deliver the dramatic financial performance is an incredible success story.'

TAKE-HOME TIPS

Collaboration with Accenture has drastically rduced Thomas Cook's operating costs and boosted own-brand sales from 30% to 70%.

- Share the rewards and the risks to ensure the focus stays on results.

- Free up management to maintain their laser focus on customers and the market.

- Keep collaboration agreements flexible - the scope for co-operation needs to evolve with the change agenda.

HIGHLY COMMENDED

Consultancy: Xantus Consulting

Client: Barclays

Xantus undertook a strategic review of Barclays' communications infrastructure, advising the bank on the pros and cons of the technology and sourcing options available. The result was a seven-year outsourcing agreement with BT worth more than £500m but achieving efficiency savings of more than 30% over the life of the contract.

SHORTLISTED

Consultancy: Xantus Consulting

Client: Prudential.

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