Microsoft, Accenture sign $185M outsourcing deal

Microsoft on Thursday deepened its existing partnership with Accenture by signing a seven-year, $185 million outsourcing contract for a range of finance, accounting and procurement services that could become a showcase for Microsoft’s ERP applications.

Accenture plans to host a number of the services on Microsoft’s Dynamics AX ERP platform, which offers reporting, statistics and budgeting/forecasting capabilities. AX also integrates with SQL Server’s business intelligence components, SharePoint Server and Exchange messaging server among other Microsoft infrastructure servers.

Microsoft has been touting the integration of its Dynamics business application software and its plans for Microsoft and partner-hosted delivery of the applications.

Dynamics 4.0 shipped in June 2006 and the 5.0 version is slated to ship in the first half of 2008.

In July, Microsoft added tools to develop mobile applications that work with Dynamics AX. In March, Microsoft unveiled its Microsoft Dynamics Client for Office and SharePoint, which gives users access to back-end ERP via Office or SharePoint Web portal.

The deal with Accenture could provide a showcase for all those capabilities, however, Accenture has not detailed its deployment plans and what client options are involved.

What Accenture did say is that the finance and accounting services provided to Microsoft will cover accounts payable, travel and expense, and record-to-report functions, including fixed assets, general ledger, treasury and statutory reporting.

Those services today are scattered amongst a number of contracts Microsoft has with various service providers. For example, Microsoft contracts with American Express for travel services.

Accenture said the procurement services include category management and requisition-to-purchase-order processing.

The rollout, which is about 30% complete, will cover Microsoft offices in 92 countries around the globe and be offered in 36 languages via Accenture’s Global Delivery Network, the backbone of its services business.

Accenture and Microsoft have had a relationship that goes back nearly a decade.

In March 2000, Microsoft and Andersen Consulting, which changed its name to Accenture in 2001, invested $1 billion to create Avanade, a joint-venture company initially created to develop e-commerce applications and Web-based platforms for corporate customers.

Along with Avanade, Microsoft and Accenture offer an infrastructure consulting and services business to corporate IT shops.

Accenture, which posted more than $16 billion in net revenue in fiscal 2006, is a global management consulting, technology services and outsourcing company.

“This effort will help streamline Microsoft global finance operations, reduce costs, standardize processes and reduce the time spent on transactional tasks, giving Microsoft global finance employees more of an opportunity to make a bigger impact on our business every day,” Microsoft CFO Chris Liddell said in a statement.