Wipro is to join our ecosystem of co-sourcing partners in a multi-million euro alliance for go-to-market and business process and product maintenance service outsourcing
After the global Alliance with HP, Wipro - one of the world largest and fastest-growing product engineering and support service company - is joining our ecosystem of co-sourcing partners. This is another step in building effective alliances to win in the marketplace by leveraging the IT/Telecommunications convergence and to optimize our efficiency by entrusting key partners with the execution of some of our operational activities.
The Alliance concluded last week with Wipro has three components:
A Go-to-Market partnership.
A Business Process Outsourcing agreement.
A transfer agreement of Maintenance Services for some mature products.
Similar to the HP alliance, special attention is being paid both by Alcatel-Lucent and Wipro regarding the employee transfer conditions. For both the BPO and maintenance service projects, employees joining Wipro will be provided with an 18-month employment guarantee, credit for years of service and comparable pay and benefits. Wipro is welcoming this addition of talent to grow its strategic presence and is committed to leveraging Alcatel-Lucent employees’ expertise to provide them with more career opportunities.
The Go-to-Market partnership is expected to generate several hundred million euros revenue over the 7-year agreement. We will jointly market each others solutions, products and services and will leverage the customer base of both companies particularly in emerging economies such as India, the Middle East and Asia Pacific.
In the Enterprise domain, Wipro will notably market Alcatel-Lucent solutions in IP telephony, unified communications, data networking, security and contact centers. These enterprise solutions can be operated on customer premises or hosted and managed in a service provider data center.
In the Software domain, both companies will address service providers with software licenses for use in their network in a “software as a service” business model (i.e. subscription based) or in a purchasing model to deliver services, content and applications to their subscriber base.
Through the Business Process Outsourcing (BPO) agreement, Wipro will take over certain Alcatel-Lucent operations currently managed by our Shared Services Centers in US, Mexico, Canada, Romania and China. Wipro, which is one of the top three BPO companies in the world, will help us accelerate improvements to our tools and processes. It will also allow us to optimize our cost base and increase our flexibility to react to variation in business activities.
The BPO covers some activities in Finance and Administration, Order Management and Procurement that are currently managed in our Shared Service Centers in Timisoara (Romania), Alpharetta (U.S.), Kanata (Canada), Mexico city (Mexico) and Shanghai (China):
• Finance: accounts payable, cash applications, fixed assets, bank accounting, general ledger, month end closing and employee expenses.
• Order Management: non-customer facing activities – creation of customer orders in the SAP system, purchase orders to suppliers, date management, master data enrichment and several inter-unit transactions.
• Procurement: call-off activities, verification of purchase orders (compliance of price and payment terms), invoice management, helpdesk for MARS, master data maintenance and an operational dashboard.
Through the BPO project, about 510 employees from the Shared Service Centers in Romania, US, Canada, Mexico and China should join Wipro.
Through the Maintenance Service agreement, Wipro will take over some maintenance and engineering activities for the mature wireline products E10, MGC-10, S12 and MGC-12 in Romania, India, Germany, France, China, Morocco and Egypt.
As sales of mature products that are close to their end of life decrease and this generates less demand for engineering and technical support, the Wipro partnership will help us better accommodate changes in customer demand for these mature products. By leveraging our partner's experience and capabilities in maintenance, this partnership will allow us to better serve our customers with more flexible and cost-effective maintenance services and to focus our R&D on future technologies.
The E10, MGC-10, S12 and MGC-12 product lines continue to be an important part of the Alcatel-Lucent portfolio. These products are very important to our customers as they are deployed extensively in their networks throughout the world. In the partnership, we will keep the entire responsibility for the management and of all future deliveries of these products and will remain the unique interface to our customers with full accountability to guarantee support consistency with our commitments.
The Maintenance Service agreement covers Customer Design Engineering (CDE) and level 3/level 4 technical support, for E10, MGC-10, S12 and MGC-12, as well as a subset of back-end (non customer facing) level 2 technical activities for E10 and MGC-10.
Product management, key technical projects Interface, purchasing and manufacturing activities will not be transferred to Wipro. In addition, the agreement will not include the remaining front-end, level 2 customer-facing employees.
Through the Maintenance Service project, about 370 employees from Romania, India, Germany and France should join Wipro (or Nash Technology, as Wipro is subcontracting maintenance services to Nash Technology in Germany and France). Another 80 Alcatel-Lucent employees will also be temporarily dedicated to transfer knowledge to Wipro and will be repositioned afterwards per existing needs.
For both projects, the transition of activities and teams is expected to be done by the end of 2009.
In the coming days and weeks, country-specific communication will take place in each country with town-hall and face-to-face meetings gathering operational management, Wipro executives and the dedicated teams to provide detailed information about this project. In the meantime, employees can also turn to their line managers and local Human Resources for more information.
By Christophe Savey and Sandra Cornet Vernet-Lehongre.