Capgemini Signs Deal To Help Office Depot, OfficeMax Integrate IT

Capgemini inked its biggest retail contract of the year to help Office Depot and OfficeMax integrate their technology as the office suppy chains merge.

The New York-based company, No. 5 on the CRN Solution Provider 500, will help Office Depot with technology migration, finance and accounting services, such as business process outsourcing (BPO), application maintenance and testing functions.

"We're helping them with their integration, we're helping them grow and we're helping them with their cost efficiencies," John Kenwood, vice president of Capgemini's retail practice, told CRN.

[RELATED: Capgemini, VMware Team For Enterprise Mobility Management Around AirWatch]

id
unit-1659132512259
type
Sponsored post

The solution provider giant beat out five other firms to win the integration deal, thanks in large part to pre-existing relationships with both companies. Kenwood declined to disclose margins associated with the contract, but said they would be very competitive.

Capgemini has worked with OfficeMax for nine years and with Office Depot for three, making them familiar with both companies' technology and business processes, Ted Levine, the company's global sector leader for consumer products and retail, told CRN.

As part of the deal, Capgemini began independent testing two to three months ago on the more than 70 projects that are part of the integrated platform, Levine said.

The solution provider also will help with supporting and managing the more than 70 applications between the two companies, as well as with risk mitigation work. Some of those applications will be decommissioned following the merger, Kenwood said, while others will live on.

Given the disruption in the retail marketplace, Levine said companies such as Office Depot are trying to focus exclusively on services that are core to the company's mission, and let outside firms manage noncore services such as BPO.

Much of Capgemini's excitement about the Office Depot contract stems from it being a multitower deal, meaning that the services procured cut across multiple disciplines.

The solution provider is increasingly seeing opportunities for multitower deals, Levine said, thanks to spinoffs, divestitures, and mergers and acquisitions, all of which require a rapid evolution in technology platforms.

"This is the kind of business we want to be in, helping our clients transform," Levine said.

Multitower deals increase stickiness with customers, Levine said, since the solution provider works across multiple departments, engaging with the IT staff on application management and risk mitigation, and the chief financial officer on financing and accounting matters.

Capgemini had done large multitower deals over the years, such as helping retailer Jamba Juice move into the cloud following a divestiture situation, Levine said, but the market quieted down as the economy went south.

However, the proliferation of new technology and increasing breadth of applications has prompted a rebound in demand for multitower deals, Kenwood said, as clients increasingly look to obtain all of their IT services from a single company.

The solution provider does $1.8 billion of business each year in consumer products and retail, Levine said. Capgemini's retail business is focused on fashion/apparel, supermarkets/convenience stores/drug stores, restaurants and general merchandise, Kenwood said.

Pressure on brick-and-mortar sales has prompted retailers to go all-in on a digital strategy and omnichannel opportunities, Levine said, which has created significant demand for IT services in the vertical.

PUBLISHED FEB. 10, 2015