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Accenture lands Infineon outsourcing deal

The German semiconductor company taps Accenture to take over support for its SAP software, saying it expects to save almost $50 million through the outsourcing contract.

In a sign the outsourcing market remains healthy, German semiconductor company Infineon Technologies is tapping Accenture to handle SAP software support duties.

Infineon said on Friday the seven-year contract for managing its SAP business software systems should save the company a total of $48.6 million. Accenture's fee was not disclosed.

"Infineon is currently reviewing and optimizing all in-house services," said Karl Pomschar, chief information officer at Infineon Technologies, which expects to almost halve its expenditure for SAP support as a result of the new agreement.

Under the contract, management consulting and information technology services provider Accenture is taking over tasks such as help desk support and regular maintenance of the SAP system. Prior to the Accenture deal, Infineon handled SAP support internally.

Outsourcing deals, which involve a business farming out control of duties such as applications development and tech support, or business tasks such as accounting and finance, have been seen as a bright spot for IT services providers. According to TPI, a firm that advises companies on outsourcing contracts, the total value of large outsourcing deals (those worth more than $200 million) rose from roughly $46 billion in 2001 to about $50 billion in 2002.

TPI, however, has predicted that the outsourcing market will cool off this year. The total value of large outsourcing contracts should drop by 10 percent to 20 percent in 2003, according to the firm.

Other companies competing for IT services contracts include IBM, Hewlett-Packard and Electronic Data Systems.