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ACS and Convergys Bid on Mellon's HR Consulting and Outsourcing Practice

HR BPO Consolidation Creates New Challenges for Industry Leaders

Industry sources indicate that a deal to sell Mellon's HR consulting and outsourcing practice is imminent. The buyer will likely be either ACS or Convergys. IBM reportedly considered the acquisition, but decided against pursuing it.

New and more formidable competitors are emerging from HR BPO consolidation, with more to come, according to new research from Kennedy Information, Inc. The briefing, titled "HR BPO Consolidation: Analysis and Implications," tracks changes in the HR BPO industry with special attention to the seven drivers behind consolidation and alliance activity.

"Today's market activity represents the intersection of opportunity for both IT consultancies and traditional HR firms," notes Derek Smith, the Director of Research with Kennedy Information. "Our ongoing research into the HR consulting and outsourcing market finds that there are strong incentives for both the IT and HR firms in these deals." The research puts these transactions into perspective and helps frame how the market will likely change through 2007.

Market changes began when IBM acquired a portion of PwC Consulting's HR business and Mercer acquired mid-market HR outsourcing firm Synhrgy. Now, among the more recent changes being tracked and analyzed by Kennedy Information are Aon's alliance with CSC, Hewitt's acquisition of Exult and partnership with Capgemini, and EDS' acquisition of Towers Perrin's HR BPO practice.

For a downloadable briefing of "HR BPO Consolidation: Analysis and Implications," e-mail research@kennedyinfo.com or contact Dan Daly, Business Development Director, at 800-531-0007 or +1-603-924-0900 ext. 628.

About Kennedy Information, Inc.

Kennedy Information, Inc., the leading information source on management consulting since 1970, annually publishes The Global Consulting Marketplace, Benchmarks in Management Consulting, and other research reports; the monthly newsletters Consultants News, Global IT Services Report and Management Consultant International as well as Consulting Magazine and The Directory of Management Consultants. It also produces annual conferences for thought leaders in consulting and powers the Web portal www.ConsultingCentral.com.

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