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Arinso Wins HRO Deal With CA

Arinso International has secured a five-year, $60 million HR outsourcing deal with computer networking company CA Inc., marking it the biggest contract of its kind for the Belgian provider.

December 19, 2006
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Arinso International has won an HR outsourcing deal with CA Inc., marking the biggest contract of its kind for the Belgian provider.

Under the five-year, $60 million deal, Brussels-based Arinso will provide HR administrative support through four of its global centers to the computer networking provider’s 15,000 employees in North America, South America and Europe. CA was formerly known as Computer Associates.

Arinso has partnered with CDI Corp. to provide recruitment process outsourcing to process 20,000 candidates and more than 1,000 applicants at CA annually. While the relationship with CDI is specific only to the CA deal, “it might be extended in the future,” says Michael Custers, an Arinso spokesman.

U.S., analysts say. The company has made its name primarily in Europe first as an SAP implementation specialist and pan-European payroll provider, and more recently as a subcontractor in some big HRO deals. Most notably, last spring Arinso was named the payroll provider in the HRO deal between Unilever and Accenture, the biggest HRO contract to date.

But with the CA win, Arinso hopes to have a stronger brand name in the U.S., Custers says.

“This is the biggest deal we have won independently,” he says. “It demonstrates that Arinso is more than just payroll.”

CA chose Arinso primarily because of its SAP expertise, says Michelle Healy, a CA spokeswoman. The New York-based company, which has 200 HR staff, expects only a small number of employees to be affected by the agreement, and those employees will have the opportunity to apply for other internal positions, Healy says. Also, some employees have taken positions with Arinso to help oversee the CA account, she says.

Analysts agree that the CA deal, although small by large-HRO-market standards, puts Arinso on the map.

“This deal is the high end of the midmarket HRO space,” says Lisa Rowan, an analyst at IDC, who until now didn’t consider Arinso a true HRO player. “This could cause other buyers to consider them.”

Still, Arinso’s success remains to be seen, Rowan says.

“Let’s see how they get this deal live and kicking and if they make money,” she says.

The bigger question, however, is whether Arinso will continue to thrive as a subcontractor in larger HRO deals if it continues to win more contracts this size, says Jason Corsello, an analyst at Yankee Group.

“The question of the day is what Arinso will look like in two or three years,” he says. “Does this prevent them from being a subcontractor because they will be viewed as a competitor?”

The challenge for Arinso now will be to keep up the momentum and get a few more deals of this size so that it can be viewed as a true global HRO player, analysts say.

“This is an interesting win,” says Michel Janssen, managing director at the Hackett Group. “But now they have to back this up with two or three more deals.”

Jessica Marquez

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