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Grocery Retailer Awards $500M in Outsourcing Deals
By John Moore, Ziff Davis Internet

Contract Watch: Dutch food retailer Ahold decides to give outsourcing a try, EquaTerra and TPI merge, BlueRoads adds an SFA module and CSG expands its service portfolio.

Less than three weeks after one major food retailer rejected outsourcing, the world's fourth largest grocer announced that it will have a go.

Royal Ahold, based in Amsterdam, the Netherlands, on Monday handed out more than $500 million in outsourcing contracts to a trio of companies: Electronic Data Systems Corp., NCR Corp. and Atos Origin S.A.


The outsourcing initiative, which covers everything from back-office operations to point-of-sale systems maintenance, takes the opposite tack of UK grocer J. Sainsbury PLC, which decided in October to reclaim IT operations it had outsourced in 2000 to Accenture.

EDS values its five-year IT outsourcing contract with Ahold at about $500 million. The project represents EDS' first contract with Ahold, which operates more than 4,000 markets in Europe and the United States. Ahold's stateside holdings include Stop & Shop, Giant-Landover, Giant-Carlisle and Tops.

EDS will manage Ahold's global IT infrastructure, hosting the company's mainframe and midrange servers. An EDS spokesperson said Ahold's environment includes Unix, Linux and Windows servers, with density varying by geographic area.

In addition, EDS will provide LAN support and voice network support, and manage more than 9,600 desktop PCs, laptops, printers and e-mail user accounts. The contract's scope also covers Ahold's corporate applications in the United States, supply chain and merchandising systems, according to the EDS spokesperson.

PointerEDS takes over IT functions for an auto parts maker. Click here to read more.

NCR, meanwhile, said it has inked a five-year deal worth about $49 million to provide managed services support for in-store technologies. That pact applies to more than 1,500 stores in the Netherlands. A spokesperson for NCR said the company has been installing and maintaining point-of-sale and scanner equipment—primarily NCR gear—in Albert Heijn stores.

Ahold also signed a five-year applications maintenance pact with Atos Origin. That deal covers the Netherlands-based Albert Heijn stores as well.

An Ahold statement linked the outsourcing drive to its "Road to Recovery" project, which aims to re-engineer the company's food retail business. The company has been working to regain its financial footing since admitting to accounting irregularities in 2003.

Various Ahold operations have ongoing relationships with such companies as Agilysys Inc. and IBM. Agilysys, for example, last month unveiled a retail solution for Giant stores in Camp Hill, Pa., and Winchester, Va.

That project, which involves IBM and Symbol Technologies Inc. among other companies, focuses on kiosk-based shopping solutions and handheld scanners.

A spokesperson for Agilysys said the company doesn't expect any impact from the EDS deal. "We don't believe it will have anything to do with the business with Giant," she said.

EDS' Agility Alliance partners, however, stand to gain from the Ahold outsourcing transaction. Cisco Systems Inc., EMC Corp., Sun Microsystems Inc. and Microsoft Corp. assisted EDS in its pursuit of the Ahold contract and "will continue to be involved through the implementation," the EDS spokesperson said.

Outsourcing Advisors Merge

EquaTerra Inc. and TPI Inc. have agreed to merge in a combination of outsourcing advisors.

Ed Glotzbach, president and managing partner of TPI, will be CEO of the still-to-be-named new firm. Mark Toon, CEO of EquaTerra, will be president and chief operating officer. Denny McGuire, founder of TPI, will be chairman.

It could not be immediately learned whether Mark Hodges, founder of EquaTerra, will have a role in the combined company. Hodges directed TPI's business process outsourcing practice prior to creating EquaTerra.

The merger, announced Monday, is expected to close in January 2006. The resulting firm will focus on such outsourcing areas as information technology, human resources, finance and accounting, and procurement, according to a joint statement.

BlueRoads Adds SFA Module

BlueRoads Corp. on Monday added a sales force automation module to its channel CRM (customer relationship management) suite.

BlueRoads offers its BlueRoads 6 hosted CRM solution to vendors, providing such modules as deal registration, partner relationship management and lead management.

eWEEK.com Special Report: CRM

The company also offers reseller-oriented software that vendors purchase and provide to their channel partners. The SFA module marks BlueRoads' latest move in that regard. The module provides an online workspace in which a reseller's salespeople can collaborate on opportunities with vendors.

The module isn't the company's first foray into SFA. In 2004, BlueRoads offered an interface to Salesforce.com.

"We thought this was a natural product for resellers," said Axel Schultze, president and CEO of BlueRoads. But the company found the number of users on the channel side employing Salesforce.com to be extremely low.

Feedback from some resellers indicated that most SFA (sales force automation) systems are too complicated for their purposes. BlueRoads' SFA module, on the other hand, tracks opportunities through the sales process and "doesn't do anything more than that," Schultze said.

He added that BlueRoads will revisit whether resellers require additional functionality.

Distributor Rounds Out Service Line

CSG (Coast Solutions Group), a value-added distributor, has rounded out its service portfolio for product vendors and resellers.

CSG earlier this month kicked off its ChannelBuilder Program, which aims to help manufacturers recruit and market to solution providers. The goal is to craft co-marketing programs that bundle products and IT services. CSG acts as a distributor of IT services, managing a network of 110 service providers.

The Channel Insider Special: Managed Services in the Channel

Through the provider network, CSG offers a range of services including network infrastructure assessment, storage assessment, server consolidation and custom programming.

The channel-building effort rounds out the company's offerings. In March, the company began offering technical resources from its network of service providers to resellers. To obtain access to services, resellers purchase memberships that start at $199 a month. Members can place resource requests through CSG's resource management personnel.

In June, the company launched its ServiceBuilder program, through which manufacturers can tap CSG's service partners to create a service delivery presence. CSG provides a turnkey pre-sales support, service delivery and installation network, said Paul Freeman, president of CSG.

Freeman said the addition of ChannelBuilder completes the company's service build-out. With service programs and a delivery methodology in place, the company next year will focus on expanding its customer base and "cracking the code" for providing enterprise-level service delivery in the SMB (small and midsize business) segment, Freeman added.



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