Computer Sciences Corporation Signs $1 Billion Outsourcing Agreement with AT&T

Strategic Insights -

Computer Sciences Corporation (CSC), a global leader in information technology services and solutions, has signed a seven-year, $1 billion outsourcing agreement with AT&T to manage the application development and maintenance (ADM) work for the telecommunications giant's Consumer Services organization. This new agreement, which was announced on April 4, supersedes a previous 10-year, $300 million contract signed in March 1999.

As part of the agreement, CSC will manage various software applications in AT&T's Consumer Services billing, credit and collections, ordering, provisioning, and customer care areas. The company will assume responsibility for 635 full-time employees located in offices in New Jersey and Texas. The outsourcing agreement is expected to significantly reduce costs for AT&T, contributing towards the company's goal to reduce costs by $2 billion by year-end 2000.

Key Takeaways:

  • The seven-year, $1 billion outsourcing agreement between CSC and AT&T is the first major contract win for CSC in fiscal 2001.
  • The agreement subsumes a previous 10-year, $300 million contract signed in March 1999.
  • CSC will manage software applications in AT&T's Consumer Services billing, credit and collections, ordering, provisioning, and customer care areas.
  • The company will assume responsibility for 635 full-time employees located in offices in New Jersey and Texas.
  • The outsourcing agreement is expected to reduce costs for AT&T by $2 billion by year-end 2000.
  • Compensation packages for affected employees moving from AT&T to CSC are comparable.
  • CSC prides itself on developing and maintaining long-term productive relationships with clients.
  • The agreement is a testament to the confidence AT&T has in CSC's ability to provide measurable productivity and service level improvements at significantly lower costs.

Statistics:

  • $1 billion: the value of the seven-year outsourcing agreement with AT&T.
  • $300 million: the value of the previous 10-year contract signed in March 1999.
  • 635: the number of full-time employees located in offices in New Jersey and Texas that CSC will assume responsibility for.
  • 57,000: the number of employees in CSC worldwide.
  • 700: the number of offices that CSC operates globally.
  • $11.3 billion: the value of contracts announced by CSC in fiscal 2000.
  • $9.1 billion: the revenues of CSC for the twelve months ended December 31, 1999.
  • $2 billion: the target cost reduction for AT&T by year-end 2000.

Sources:

  • "CSC Announces $1 Billion Contract with AT&T to Provide Application Development and Maintenance Services," PRNewswire, April 4.
  • "CSC Announces Fiscal 2000 Results," Computer Sciences Corporation, March 31.