Unisys sets high hopes for BPO

Global IT services company Unisys (NYSE: UIS) expects its new business process outsourcing (BPO) service to account for 20% of all outsourcing revenues billed by its Brazilian operations by the end of 2004, Unisys Brasil outsourcing manager Edson Gissoni told BNamericas. "BPO is just now arriving to Brazil," Gissoni said, adding that the company will first unveil BPO payments services to the life insurance, healthcare and banking segments. Unisys is already participating in two large BPO tenders launched by local banks to outsource their check clearing operations, he added, not identifying the names of the banks. Under the relatively new concept of BPO, companies outsource non-core business processes in their entirety to a third party that has domain knowledge in that particular process. In the case of billing, Unisys not only customizes billing software for the client, but also manages call center services and physically sends out the bills. Under a BPO model, professional services providers such as Unisys charge on a per-transaction basis rather than by project, he added. Unisys' outsourcing business is already well underway in the US and in Europe. In the UK alone Unisys claims to process more than 70% of all bank payments under a BPO model, Gissoni said. In fact, Unisys in December 2000 set up in partnership with UK banks Lloyd's and Barclay's a company called Intelligent Processing Solutions (iPSL), with the express purpose to manage its BPO services for bank payments, he said. Outsourcing is currently Unisys' fastest-growing business segment, a trend which is in line with most IT services companies today. Unisys divides its outsourcing business into IT infrastructure outsourcing (ITO) and managed application services (MAS), with BPO representing an emergent category. ITO currently accounts for 60% of outsourcing revenues, while MAS takes in most of the balance, leaving a tiny amount that can be considered BPO. That said, BPO is the strongest growth area within outsourcing, Gissoni added. Among Unisys clients of MAS in Brazil are airline companies, which have partially outsourced their billing systems to Unisys. "We have created a billing software as a base for all our airline clients, which we then customize for each one." To become a BPO service the client would need to additionally outsource all its billing personnel and 100% of the billing process, Gissoni said. In the long term, Unisys expects companies to outsource all business processes except those central to their business intelligence, he added. Financial and public sector institutions are generally the first companies to accept BPO solutions, Gissoni said, adding that Unisys splits the market with fellow US-based IT services giants EDS and IBM, in addition to a few other niche players. Unisys offers consulting, systems integration, infrastructure, server technology and outsourcing services, and splits its business between services and solutions. Gissoni said Brazil is responsible for aboout 6% of Unisys' global revenues, which were US$1.43bn for the second quarter.