ACS: Bulking Up

By Steven Vonder Haar  |  Posted 2002-08-09 Email Print this article Print
 
 
 
 
 
 
 

Dossier: Affiliated Computer Services, which handles transaction processing for Aetna and oithers, has been growing rapidly through acquistions. Is that a good thing for its clients?

Affiliated Computer Services (ACS) processes paper claims for Aetna, scanning documents and then shipping the data along with an image of the original to an overseas processing center for quality control. Much of this work is done in Ghana, where workers compare the claims data to the image of the original, then return them to Aetna in electronic form.

ACS has been growing through acquisitions. In June, it completed the $410 million purchase of AFSA Data Corp. from Fleet Holding Co.; in August 2001, it bought Lockheed Martin's IMS computer services division for $825 million.

Not all ACS customers think bigger is better. While ACS has a significant presence providing services to local governments, for instance, that expertise does little to help customers in other sectors. "There's no synergy among operating groups," says Will Shelton, chief operating officer of Arbella Group, a Quincy, Mass.-based insurer that annually spends $8 million on ACS outsourced services. "It's a bottom-line focus, and I'm not sure top management has customers' best interests at heart."

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Some managers worry that ACS lacks skill in handling a complete computing services package; many customers hire ACS for specific chores.

Still, ACS is making some progress. It handles computer-support operations for El Pollo Loco Inc., an Irvine, Calif.-based fast-food chain. ACS has had success creating add-on services, such as computer training. "They've been flexible, offering services as we need them," says Wendy Jacobson, El Pollo Loco director of information technology.

Earlier this year, Metromedia Restaurant Group signed a five-year deal with ACS, even though ACS has a limited track record in providing integrated offerings. ACS manages Metromedia's financial and accounting applications, and provides computer help-desk support. "Doing outsourcing on such a broad scope is new for them," says Metromedia chief information officer Teri Robinson. "It is going better than I expected."

ACS typically gets high marks for the quality of its workers. The city of Santa Clara, Calif., has used ACS for seven years to handle computer-support operations, and is in the final stages of negotiating an extension, says Walter Shipilov, the city's director of information technology. "They're not the cheapest vendor," he says. "But they're not the highest priced, either."

"Pricing will be a problem," says Arbella's Shelton. "They're expensive for what they do."


Affiliated Computer services
2828 North Haskell Ave., Dallas, TX 75204
(214) 841-6111 www.acs-inc.com

Ticker: ACS
Market: NYSE
Employees: 20,500

Jeff Rich
President/CEO
Joined ACS in 1989, and previously served as the company's chief financial officer. Before he arrived at ACS, Rich worked in executive roles with Citibank.

Harvey Braswell
Group President, Government Services
EDS veteran was head of operations for BRC Holdings, which was acquired by ACS in 1998.

John Brophy
Group President, State and Local Solutions
Came to ACS in 2001 when the company acquired Lockheed Martin's IMS division.

Don Liedtke
Group President, IT Solutions
Former CIO of Singapore-based Neptune Orient Lines Group hired by ACS in 2001.

Services

Computer outsourcing and business process services, such as systems integration, document management and insurance claim processing.


Reference Checks

Loma Linda University Medical Center
Bob Blades
Vice President, CIO
(909) 558-4306
Project: ACS has handled mainframe processing services for hospital billing and financial systems for more than seven years.

Metromedia Restaurant Group
Teri Robinson
Chief Information Officer
(972) 588-5000, x5436
Project: Umbrella company managing the Bonanza, Ponderosa, Bennigan's and Steak&Ale chains hired ACS in January 2002 to handle technology applications and computer-support services.

Solano County, Calif.
Ken Phillips
Chief Information Officer
(707) 421-6340
Project: ACS provides 80% of information technology services for the California county's government in a deal worth about $10 million in annual revenues.

First Horizon Home Loans
Charlyn Stacy
Senior Vice President, Systems Support
(214) 441-5000
Project: Mortgage loan processing company in Irving, Texas, uses ACS to scan and handle images of documents.

El Pollo Loco
Wendy Jacobson
Director, Information Technology
(949) 399-2000
Project: Has used ACS for two years to manage computer support and help-desk activities for the 300-restaurant chain headquartered in Irvine, Calif.

City of Santa Clara, Calif.
Walter Shipilov
Director, Information Technology
(408) 605-2021
Project: ACS staff of 35 manages help desk and applications maintenance for city government that pays $3 million annually for outsourced services.

The executives listed here are all customers of Affiliated Computer Services. Their willingness to talk has been confirmed by Baseline.



 
 
 
 
 
 
 
 
 
 

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