Outsourcing company Marlborough Stirling Plc has managed to secure an extension to its flagship business process outsourcing (BPO) project with Canadian insurance giant Sun Life Assurance Company despite notable problems over recent months.
Cheltenham, UK-based Marlborough Stirling said Sun Life Assurance Company (UK) has signed to extend by two years its existing five-year 80m pound ($124.8m) project with the firm, which it expects to generate additional revenue of 25m pounds ($39m).
At the same time, the company said that the troubled software implementation part of the contract, where Marlborough is integrating its Lamda life and pension administration system, would be continued and generate an additional 4m pounds ($6.24m) worth of business in 2003.
The Sun Life project had already been reduced in value from 95m pounds ($148.2m) at the time of the initial announcement in January 2002, and the latest news follows Marlborough Stirling’s announcement in September that the Sun Life project had fallen six months behind schedule as a result of difficulties implementing the Lamda software.
At the time, the company said this would mean profits for the year to December 2002, and again in 2003 will be 3m pounds ($4.59m) lower than expected, and revenue for the year would be in the region of 125m pounds ($191.3m), around 7% below market expectations.
The admission sent Marlborough Stirling’s share price into freefall and left many analysts questioning its competence in the outsourcing market. These latest developments raise further concerns over the dependence of clients upon their incumbent outsourcing suppliers.