Fidelity Acquires IBM Global Outsourcing Software

October 1, 2003 ( - Fidelity Investments has extended its global outsourcing reach with its acquisition of IBM's global human resources and payroll software applications.

Included in the acquisition are the global human resources and payroll software applications known as HR Access, along with related development, licensing and maintenance assets, from IBM. HR Access is marketed primarily in Europe and with the completion of the deal, about 200 IBM employees located primarily in France and Germany, will join Fidelity.

Fidelity sees the expansion across the pond as a way to not only extend its outsourcing reach globally but also an expansion of Fidelity’s current outsourcing capabilities to provide US based clients with worldwide operations. Currently Fidelity Employer Services Company, the firm’s outsourcing division, provides HR and benefits outsourcing services to 11,600 plans and more than 16 million participants in the US.

With the latest pickup, Fidelity is no doubt trying to capitalize on a growing interest in the human resource arena in outsourcing for profit and better execution. In fact, this trend was detected by Fidelity in an earlier study that found large corporations have begun to outsource more of their human resources administration, including payroll and alternative compensation programs such as employee stock plans.Four out of 10 executives and managers said they outsource either all or part of their payroll administration, recruitment, and full-time staffing needs. Further, 66% have now turned to the outsourcing of their alternative compensation programs, according to the latest release of data from (See Fidelity: Companies Outsourcing More HR Functions ).

Also in the HR and Benefits: The Next Outsourcing Wave study, Fidelity found high levels of satisfaction among employers who outsource HR/payroll plans. Nearly three-quarters said they were satisfied with the implementation and employee communication. The vast majority (89%) of employers who outsource their alternative compensation programs reported being similarly satisfied.

The transaction closed on Tuesday. Financial terms were not disclosed.