Affiliated Computer Services

Affiliated Computer Services was a major global provider of business process outsourcing and information technology services. Founded in the late 1980s, it grew through aggressive acquisition to become a Fortune 500 company, serving commercial and government clients worldwide. Its operations encompassed a wide range of services from human resources administration and customer care to complex payment processing and IT infrastructure management. The company was acquired by Xerox in 2010 for approximately $6.4 billion, significantly expanding the latter's services portfolio.

History

The company was founded in 1988 by Darwin Deason in Dallas, Texas, initially focusing on data processing services. It conducted an initial public offering in 1994, listing on the New York Stock Exchange under the symbol "ACS". Under the leadership of Deason and later CEO Lynn Blodgett, the firm pursued a strategy of rapid growth, transforming from a regional operation into an international powerhouse. This expansion was largely fueled by acquiring numerous competitors and complementary service providers throughout the 1990s and 2000s, building a vast portfolio of outsourcing contracts. Its evolution mirrored the broader growth of the business process outsourcing industry, culminating in its acquisition by the document technology giant Xerox.

Services and operations

The company offered a comprehensive suite of business and technology solutions, organized into commercial and government segments. Its commercial services included human resources outsourcing, finance and accounting BPM, customer relationship management support, and transaction processing for industries like healthcare and financial services. For government clients, it managed critical functions such as Electronic Benefit Transfer programs for state governments, Medicaid claims processing, and child support enforcement services. Technologically, it provided IT outsourcing, application development, and systems integration, often operating large-scale data centers for clients like the NASA and the Department of Defense.

Acquisitions and divestitures

Growth was primarily driven by an aggressive acquisition strategy, consolidating the fragmented outsourcing market. Major purchases included the 1994 acquisition of ADP's Commercial Loan Services division and the 1999 purchase of Lockheed Martin IMS, which significantly expanded its government services footprint. Other notable deals were for Aegis Communications Group in 2000, bolstering customer care capabilities, and the 2007 purchase of UK-based Xerox Global Services from Xerox itself, ironically preceding its own sale to the same corporation. The company also divested non-core assets, such as selling its accounts receivable management unit to NCO Group in 2004.

Corporate affairs

Headquartered in Dallas, the company maintained a significant operational presence with facilities across the United States, India, the Philippines, and Central Europe. It was a constituent of the S&P 500 and consistently ranked on the Fortune 500 list. Key leadership included founder and Chairman Darwin Deason and President Lynn Blodgett, who succeeded long-time CEO Jeffrey A. Rich. The firm was known for its "ACS Way" operational methodology, emphasizing Six Sigma and Lean principles for service delivery. Its major clients spanned from large corporations like Microsoft and Verizon to federal agencies including the Department of Health and Human Services.

Controversies

The company faced several legal and ethical challenges during its operations. In 2006, it settled securities fraud charges with the SEC related to stock option backdating, without admitting guilt. Its extensive government contracting, particularly for state welfare programs, occasionally drew scrutiny over service quality and data privacy, such as issues raised in Texas and Florida. Furthermore, the practice of offshoring jobs to lower-cost locations like India was a point of contention with labor groups in the United States. The circumstances of its sale to Xerox also attracted attention from shareholder groups regarding the deal's valuation and governance.

Category:Companies based in Dallas Category:Information technology companies of the United States Category:Business process outsourcing companies