Any BPO veteran will recall Affiliated Computer Services (ACS) as one of the early darlings of BPO, which existed right at the top of the competitive tree in the early 2000's, whenever a large Finance & Accounting, HR or call center deal was up for grabs. They were also a pretty handy domestic IT services shop before the Indian offshore pureplays arrived on the scene. It would always give Accenture and IBM a run for their money in BPO pursuits, and had a compelling client-focused culture and engagement methodology for many of the old world BPO engagements (i.e. a lot of lift and shift and staff re-badging).
Two years into its $6.4 billion acquisition by Xerox, management has finally decided to phase out this famous old brand... HfS Research's Tony Filippone and Phil Fersht take a closer look into why Xerox brass has now decided to do this, what it means to this heritage business, and where it needs to focus in the future to strengthen its market position.
ACS finally gets its re-brand as Xerox zeros in on integrating the businesses and cultures
Corporate-naming consultants must have pitched ACS a dozen better names, but none better than the one it interred today. The fact is, straight-talking ACS has never spent the billions its competitors have on branding. In fact, even their unremarkable logo remained nearly identical for the company’s 24-year history. All this makes us believe that today’s announcement that ACS will now market itself as Xerox, rather than “ACS, a Xerox company” is a sign of opportunity and synergy.
As its branding has reflected and its customers know, ACS’ success is not because it is smarter than everyone else. Rather, ACS simply outhustles its competitors. Its Midwest American values make the company the likeable, down-to-earth service provider that gobbles up government deals one after the other. Moreover, it is focused on technology-based outsourcing solutions, not headcount. Its vertical experience is a marvel, with strong positions in government, healthcare and financial services.
The acquisition announcement had analysts everywhere wondering exactly what the offspring of a toner cartridge mother and a call center father would be like. Mixing this capability with Xerox’s traditional business has clearly not been easy. Our discussions with buyers suggest that Xerox’s aggressiveness has put off clients who don’t want to hear sales pitches, while Xerox’s recent acquisition of the Breakaway Group indicates that Xerox is supporting ACS’s industry-focused approach. However, we've also heard that Xerox’s rigid financial management process at times conflicts with clients’ needs for flexibility.