Affiliated Computer Services provides business process outsourcing
and IT solutions to commercial and government clients.
Commercial business accounted for about 60 percent ($3.7 billion)
of the firm's revenue in 2008, and government business 40 percent
($2.5 billion). The primary commercial sectors ACS targets
are health care, travel and transportation, financial services,
communications and consumer goods. It has approximately
65,000 employees, with 45,000 working domestically and the
remainder involved in its international operations. ACS'
activities span more than 100 countries.
The firm's business process outsourcing services include
administration, finance and accounting, human resources, payment
services, sales, marketing and customer care, and supply chain
management. Its IT products and services include applications
solutions, data center management, disaster recovery, end-user
computing, network management, security services, storage
solutions, technology review, assessment and planning, and
transition services for human resources.
Out of left field, or a field, anyway
ACS was founded in 1988 by Darwin Deason, currently chairman of
the board. Its humble early function was that of bank data
processing, a service it now hasn't provided in more than a
decade. Deason himself comes from humble beginnings, having
been referred to in a December 2006 Wall Street Journal
article as an "Arkansas farm boy who never went to college."
Creating a billion dollar global company brings agreeable changes,
however. Deason hardly fits the image of an uneducated farm
boy today when sailing on the Apogee, his yacht, or when
entertaining in his Dallas penthouse, said to be equipped with
three wet bars.
After going public in 1995, the firm made significant acquisitions
through the rest of the decade, picking up major BPO and IT
capabilities while simultaneously expanding its geographic
reach. Annual percentage increases in revenue were in the
double digits year after year and, by 2003 ACS had achieved Fortune
Trying to get back in the game
Perhaps disillusioned with yachts and penthouses, Deason made an
attempt in early 2007, with the help of private equity firm
Cerberus Capital Management, to buy out ACS and return it to
private status. Cerberus made an initial offer of $59.25 per
share, which, once refused, was raised to $62 a share and also
refused. Then, in June 2007, due to burgeoning problems in
the credit markets, ACS made it known that it would entertain
offers from other interested bidders. After generating no
interest, the firm began to reconsider selling to Cerberus.
It was too late, however, as the firm's share price on the stock
exchange had fallen to nearly $50, and in October, Cerberus
withdrew its bid.
Still a presence
Though he may never again be the owner of ACS, Deason continues
to leave his mark on the firm. According to The Wall
Street Journal, the residue of Deason's aggressive management
style can be found in "hustle cards", printed reminders of Deason's
business insights distributed to ACS employees. One example
reads (alongside a steely eyed picture of the founder): "Hard work
solves (almost) everything."
It may not be that catchy a mantra, but the notion is certainly
carried out within the firm's culture. In an October 2007
interview with Smart Business magazine, CEO Lynn Blodgett
cited ACS' tendency to provide "high reward for high results,"
especially evident in the compensation structure for top execs that
makes performance bonuses a major component of total pay.
Blodgett hinted that the productivity of lower level staffers is
also watched closely, remarking that no one can "Google the day
away" and still remain on the payroll.