Exult Signs $600 Million HR Outsourcing Agreement with International Paper
Press release from the issuing company
IRVINE, Calif.--Oct. 18, 2001--Exult, Inc., the leading provider of integrated services designed to manage human resources functions for large, multinational corporations, today announced that it has signed a ten-year HR process management contract with International Paper.
Exult will apply its business process expertise to refine the transactional and administrative systems used in delivering HR services to approximately 70,000 International Paper U.S. employees covered under the scope of the contract. Exult's Service Delivery Model(SM) is designed to streamline HR processes, reduce costs and improve service to employees through self-service and increased efficiencies.
Under the terms of the agreement, Exult will assume responsibility for managing key core administrative HR services for International Paper, including payroll, benefits administration, service delivery (human resources call center management), HR information services and systems support. Exult will also assume responsibility for various third-party providers related to these processes. The transaction is expected to generate revenues to Exult of approximately $600 million over the life of the contract.
The agreement will result in significant annual cost savings to International Paper for the administrative functions to be directly managed by Exult.
"This agreement supports International Paper's focus on finding innovative ways to introduce business efficiencies, thus allowing us to better focus on strategic HR business issues,'' said Jerry Carter, senior vice president, Human Resources for International Paper. "IP has made a significant investment in building and successfully transforming our HR service delivery platform. Partnering with Exult allows us to continue improving the HR services available to our employees, while providing flexibility required in today's dynamic business environment.''
"We are very pleased to provide International Paper with a comprehensive HR process management solution that can extend its excellence in the provision of HR services, while supporting the company's strategic business objectives,'' said Exult's chairman and CEO, Jim Madden. "We look forward to working with International Paper to develop an expansive, mutually beneficial business partnership.''
"Exult has established itself as a focused HR BPO provider, and in the past two years has validated its model by signing several contracts with global corporations,'' said Allie Young, chief analyst Gartner Dataquest IT Services.
"International Paper, in this major move into business process outsourcing, has made a strategic business decision to outsourceadministrative HR, payroll, and employee call center functions to Exult. Gartner Dataquest sees a growing trend among the largest global corporations to outsource their critical, but non-core business processes to accomplish broad business objectives,'' said Young.
In connection with the on-site contract, Exult will operate International Paper's HR service center facility in Memphis, Tennessee and will extend employment offers to all of the more than 200 affected HR and IT professionals from International Paper. Exult expects to leverage the acquired assets and personnel across additional clients while continuing to serve International Paper.
In particular, International Paper's strong expertise in SAP is expected to significantly strengthen Exult's overall capabilities relating to that platform. Initial transition is expected to be completed by December 31, 2001, at which time Exult will assume responsibility for managing the various processes included in the scope of the contract.
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