Saturday, February 15, 2003

P&G requests IT proposals

Outsourcing plan to cut costs

By Cliff Peale
The Cincinnati Enquirer

Up to 2,500 global Procter & Gamble Co. workers will be affected by the first wave of outsourcing contracts that could be in place by summertime.

P&G has requested proposals from three of the world's biggest technology companies to handle its information-technology services work. And later this month, it will request proposals from four real-estate powerhouses to take over management of many of its facilities around the world, a spokesman said.

The contracts will be the first of many as P&G seeks to cut costs and concentrate on its core of marketing and research and development. It sought last year to outsource most of its global back-office functions to one company in a multiyear contract worth hundreds of millions of dollars a year.

That would have transferred about 5,700 P&G employees - including more than 1,500 in Greater Cincinnati - out of P&G's Global Business Services unit.

But P&G abandoned those plans after the market value of many of the potential providers dropped and employees made their displeasure known. Instead, it said it would carve up the contract, with IT and facilities management to come first.

Overall, there should be fewer than half a dozen contracts, with future ones including employee services and accounts payable.

The IT contract will cover the work of about 1,900 global employees, spokesman Damon Jones said. The request for proposals was sent to Electronic Data Systems Corp. - the company that came within hours of signing the consolidated contract in September - IBM and Hewlett-Packard Co.

That contract will cover the computer infrastructure, applications work and desktop support. It will cover some functions in P&G's global service centers in Costa Rica, Manila and Newcastle, England.

The facilities management request for proposal went to Johnson Controls Inc., Trammell Crow Co., CB Richard Ellis and Jones Lang LaSalle. It would cover the work of about 600 employees.


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