Big banks are increasingly outsourcing very specific parts of their businesses, and outsourcing companies are creating better-focused processing units to meet that need.
One example of this trend is Computer Sciences Corp.'s expansion into financial services through an agreement to acquire the image-based payment processing unit of TRW Inc.
The unit, TRW Data Services, formerly known as TRW Financial Systems, sells as a service bureau to banks, insurers, and investment companies.
Computer Sciences, based in El Segundo, Calif., is offering jobs to the 200 employees of TRW Data Services, who would remain at the California site and at a Nieuwegein, Netherlands, office. Gary Sherne, vice president and general manager of TRW Data Services, will continue to lead the unit within CSC's financial services division.
Michael Brinsford, CSC's president of strategic development, said the company will continue to acquire or align itself with other financial services outsourcing companies. Financial services accounts for 25% of Computer Sciences' revenue, reported at $8 billion for the year that ended July 2. Its offerings include core account processing, credit card management, customer profitability analysis, and other computer operations.
A CSC spokeswoman said TRW Data Services' image character recognition technology would be combined with Computer Sciences' technology to process paper or electronic payments more easily.
TRW Data Services is a relatively small part of TRW's business, which ranges over the automotive, pharmaceutical, telecommunications, and consumer packaged goods businesses, a company spokeswoman said.
Nontraditional outsourcing companies are also seeking a share of the niche outsourcing market. They include PricewaterhouseCoopers Procurement Services, a Sydney-based subsidiary of PricewaterhouseCoopers.
Ton Heijmen, a PricewaterhouseCoopers partner, said business-process outsourcing "is taking the corporate world by storm." He said the firm sees procurement as the fastest-growing segment of that market.
The accounting firm has just been awarded a five-year procurement outsourcing contract by Australia and New Zealand Banking Group. The agreement, financial terms of which were not disclosed, calls for PricewaterhouseCoopers to manage approximately $850 million of the $1.3 billion that the ANZ banks spend each year on such things as computers, stationery, telecommunications, and travel.
PricewaterhouseCoopers will provide commodity management, contracting, and transactional processing services to ANZ and install Internet procurement systems for electronic trading with suppliers. It will operate the system at a service center in Melbourne, Australia. ANZ said it expects that the deal will save it $100 million over the next five years through lower transactional costs and better buying capacity and information management.