BP Amoco and PricewaterhouseCoopers forge largest outsourcing deal

BP Amoco and PricewaterhouseCoopers have signed a ten-year contract, valued at over $1bn - said to be the largest ever business process outsourcing agreement.

The contract covers back office operations across a number of locations in the US. 1200 BP Amoco staff will transfer to PwC.

The two companies have similar contracts already in place in Europe and South America. Negotiations are currently underway for an extension to locations in Canada. In each case, PwC is using the BP business as the core of a multi-service centre which is being marketed to other clients as well.

Commenting on this growing trend, Allie Young, principal analyst at market researchers Dataquest, said: "Business process outsourcing potentially redefines the traditional organisational structure of global corporations, allowing focus on core competency. The back office is one of the last untapped areas of value creation, and BPO is the tool that is helping companies to harness this opportunity."

Elliott Chase