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Hewlett-Packard Buys Up ExcellerateHRO

Other than signing an HR outsourcing deal with Nestle in 2006, the Bay Area technology giant doesn’t seem to be doing many extensive deals, experts say. According to AMR Research, HP has 13 payroll deals that include other HR administrative elements.

June 19, 2009
Tech giant Hewlett-Packard has bought Towers Perrin’s shares of ExcellerateHRO, according to an internal memo sent to HP employees this week.

Chris Rittenmeyer, the CEO of ExcellerateHRO, is being replaced by Sanjiv Anand, vice president, product portfolio, for ExcellerateHRO, according to the memo.

“As the integration of EDS into HP progressed, HP determined it was in the best interest to have exclusive ownership of ExcellerateHRO,” says an HP spokeswoman, who declined to elaborate on details of the deal or personnel moves.

ExcellerateHRO was created in 2005 through a partnership between EDS and Towers Perrin, but hasn’t amassed many deals, causing experts to wonder about the fate of the company. But in May, when HP bought EDS, experts wondered if the PaloAlto-based technology company would step up its interest in HR outsourcing and buy the remaining shares of ExcellerateHRO.

However this acquisition shouldn’t be a sign to the market that HP, which has just dabbled in HR outsourcing deals, is getting into that business, says Michel Janssen, managing director at Hackett Group, a Miami-based business process outsourcing consultant.

“Don’t jump to the conclusion that this means that HP is committed to HR BPO,” he says. “It could just mean that they are preparing for a sale.”

Other than signing an HR outsourcing deal with Nestle in 2006, the firm doesn’t seem to be doing a lot of extensive HR outsourcing deals, experts say. According to AMR Research, HP has 13 payroll deals that include other HR administrative elements.

“The jury’s still out on whether Mark Hurd will continue to invest in HRO, as he clearly wants to lock heads with IBM's IT business,” says Phil Fersht, an analyst at AMR, referring to HP’s CEO. “My sense is, he’ll watch the space closely for a couple of quarters and gauge whether HP should continue to play in this space or focus elsewhere to combat IBM.”

—Jessica Marquez

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