Office Depot has hired Capgemini to support the firm with post-merger integration support in the field of finance and accounting and IT. The new contract comes on top of the existing relationship between the two firms – Capgemini has been a trusted partner of the office supplier since 2011.
With more than 66,000 employees across the globe, Office Depot is one of the largest global providers of office products and services. The company was formally established in November 2013, following the merger of Office Depot and OfficeMax. As part of the merger, a massive integration programme was launched with the ambition of realising a $400-$600 million annual synergy (end-state). With an estimated total merger cost of roughly $2 billion*, Office Depot expects to break even by 2017, and then reap the benefits of what is one of the largest mergers in the history of its industry.
To guide the post-merger integration to a good end, a special programme team has been erected, which based in the US leads the integration planning and delivery, and the benefit tracking. For to functional areas, finance & accounting and IT, Office Depot has called in the expertise of Capgemini, one of the globe’s top-10 providers of consulting and technology services. The business advisory firm has been tasked with supporting the standardisation of Office Depot’s finance and accounting operations, and contributing to the integration of the company’s legacy IT systems. In addition, Capgemini will provide testing services for more than 70 IT merger-integration projects, supported through the delivery of a to-be established ‘Testing Center of Excellence’.
Asked for why Capgemini was chosen out of a number of competitive bids, Office Depot CIO Todd Hale points at “Capgemini’s deep retail industry expertise” and its “proven track record of transformational migration projects”, complementing the already satisfactory relationship between the two. “We knew that its team and services aligned well with our business roadmap.”
Christopher Stancombe, member of the Group Executive Committee at Capgemini, says on behalf of his firm that Capgemini is “excited” to expand its mandate at Office Depot, and is convinced that his team can deliver what it takes to accelerate value realisation. Ted Levine, global sector leader, consumer products & retail at Capgemini, adds: “Our teams’ diverse range of expertise, together with the breadth of services we can deliver, positions us well to help Office Depot drive maximum value from its recent merger as it embarks on this important new phase in the company’s history.”
BPO deal extended
The deal between the two parties comes on top of an already existing contract. Since 2011 Capgemini has been working with Office Depot to streamline its end-to-end finance processes, including business process outsourcing services, a relationship which initially ran up to 2016, but now has been extended until 2020.
* Office Depot incurred $200 million in one-time operating costs in 2013 related to the merger, and forecasts spending up to an additional $400 million in integration costs and approximately $200-$250 million in capital spending between 2013 and 2016 in order to realise the business case.