June 26, 2002 1:20 PM PDT

HP, Deloitte team for customer consulting

As part of its effort to increase services revenue, Hewlett-Packard has struck a deal with Deloitte Consulting in which the two will help mutual customers use software to keep track of clients and business partners.

HP and the Deloitte Touche Tohmatsu consulting unit didn't release expectations for how much money the partnership--announced Wednesday--would generate, but they did say one customer has embarked on a project through the partnership that will bring in at least $90 million.

Customer relationship management (CRM) software is used for tasks such as keeping track of what products customers bought, what service problems they had or what product offerings might be appropriate for them. For example, an auto service company could use the software to generate flyers to send to customers reminding them it's time to get their car's oil changed.

But CRM software often runs on expensive servers with large databases, and planning and installing CRM software can be difficult. Under the deal, HP and Deloitte will help customers adopt the software. Deloitte and HP also offer outsourcing services, running the software on their own computers.

The partners didn't reveal the name of the $90 million customer, but said the deal involves 300 HP and Deloitte consultants working in 56 countries to unify several independent CRM systems. The unified system uses Siebel Systems' CRM software.

HP, trying to emulate the comparatively stable revenue that IBM's Global Services division pulls in, has been trying to increase its services revenue for tasks such as supporting products and installing new products. Thus far, HP's outsourcing group has showed growth, but services overall shrank 4 percent in HP's quarter ended April 30 and consulting plunged 21 percent.

HP failed in its bid to acquire PricewaterhouseCoopers' consulting group for $18 billion and since has been pursuing more modest partnership strategies.

Rival Sun Microsystems, however, is perhaps the most outspoken advocate of partnership with consulting firms. It also has a partnership with Deloitte Consulting, as well as with PwC, Cap Gemini Ernst & Young, EDS and others.

Deloitte Touche Tohmatso, one of the large accounting firms, announced in February its plan to split Deloitte Consulting into a separate company to avoid concerns about conflicts of interest issues raised by simultaneously auditing and consulting for the same clients. That spinoff, which will create a privately owned firm, is expected to be completed by the end of the year, a Deloitte representative said.

 

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