The story of global solutions providers cannot be told without mergers and acquisitions. Mergers are a significant source of new protein for the nutrition of global sourcing providers.
A landmark acquisition in 2002 changed the landscape of global outsourcing. IBM’s acquisition of the consulting arm of PricewaterhouseCoopers confirmed the importance of mergers between transaction processing service companies with knowledge-based consulting and advisory services companies to provide business process outsourcing driven by both process and technology. “The acquisition has proven to be a win-win situation for both IBM and former PwC clients. By adding PwC’s expertise in high-end consulting and software installations to its roster, IBM increased the range of services it offers while former PwC clients gained access to IBM’s research labs, outsourcing unit, and financing division.” Source: Texas Society of Certified Public Accountants, National Accounting News, March 21, 2003.
New outsourcing providers need to identify their M&A strategy, keeping in mind the impact of any change of control upon their contracts with enterprise customers.