French outsourcing giant Capgemini has won a US$53 million outsourcing contract with Brazilian business conglomerate Algar Group to provide finance and accounting services.
This is the second major deal Capgemini has landed with the Brazilian company after the $38 million contract it sealed in 2011. Unlike the previous contract, this time Algar has asked Capagemini to manage the accounting of its telecom and technology business units.
It seems Brazil’s continuously changing and increasingly complex taxation system prompted Algar to hand out the contract.
Capgemini will provide the services from its delivery centers in Blumenau, Brazil and Bangalore, India. Key finance and accounting services that Capgemini intends to provide include Procure-to-Pay (P2P), Order-to-Cash (O2C) and Record-to-Analyze (R2A) as well as Human Resources Outsourcing (HRO).
“Capgemini has helped us to streamline costs and centralize our back-office operations. We look forward to continuing our work with Capgemini in supporting our growth strategy,” said Maurício Lemos, Algar Corporate Solutions Center (CSC) Director.
In an interview with ComputerworldUK, Lemos has expressed concern at Brazil’s constantly changing taxation laws, adding that his group wants its units to focus on their core business.
“We want to mitigate risks. Maybe I could do it cheaper internally, but that is not a risk we want to play, so we are dealing with a provider. If we hire someone that is a specialist on doing tax, then that company has risk,” Lemos said.
With more than 25,000 employees, Algar Group has a significant presence in Latin American countries such as Colombia, Argentina and Chile.
Capgemini, whose 2013 revenue exceeded $12 billion, bolstered its F&A services division after it acquired Order to Cash (OTC) business from U.S.-based Vengroff in late 2011. Today, F&A services account for more than 60% of its revenue.
On its website, the French outsourcer says its F&A service helps companies reduce costs between 30% and 70% and access insights to improve business outcomes.