News Release-- April 16, 1999
CSC ENTERS BUSINESS PROCESS OUTSOURCING AGREEMENT WITH ENRON ENERGY SERVICES
CSC to Market New BPO and Technology Solutions to Utility and Energy Companies
El Segundo, Calif., April 16 -- Computer Sciences Corporation (NYSE: CSC) announced it has signed an agreement with Houston-based Enron Energy Services, a subsidiary of Enron Corp. (NYSE: ENE), to provide business process outsourcing (BPO) services.
Under terms of the agreement, CSC will acquire all of the assets and assume responsibilities for Enron Energy Services' back-office administrative functions. To achieve improvement gains in productivity, CSC will apply e-business technology solutions to functions including traditional meter reading, billing and collection and related customer inquiries for Enron's retail gas and electricity customers.
Assuming Enron Energy Service's growth projections, the agreement has an expected value of $1.1 billion over an eleven-year period and is expected to save Enron Energy Services millions of dollars per year. The agreement also represents CSC's first step into an energy market with more than 200 million meters and $20 billion in annual service revenues.
"Deregulation of the utility industry has opened up a new horizon of opportunities for I/T and energy service providers," said Van Honeycutt, CSC's chairman, president and CEO. "The synergy between Enron's metering, billing, collections and related customer response capabilities and CSC's understanding of how technology can improve business operations, provides us with a strong foundation to offer this new service to other energy and utility companies worldwide."
"As in other deregulated industries, efforts to drive down costs increase the need to outsource various non-core business functions, such as outsourcing check processing in banking, claims processing in insurance and energy management in commercial and industrial businesses," said Lou Pai, Chairman and CEO of Enron Energy Services. "As an energy outsource provider, we understand the intrinsic value of outsourcing our non-core, back-office functions to an expert like CSC."
Approximately 320 Enron Energy Service employees and contractors assigned to the company's billing facilities in Dublin, Ohio will transition to CSC. The transition will give these employees the benefit of working for a company whose core business is providing information technology solutions for functions such as back-office administration.
CSC has significant experience assisting other energy clients adjust to the emerging deregulated market, according to Mike Beebe, president of CSC's Chemical Oil and Gas Group. The company currently provides various I/T and business transition services to Consolidated Edison, Florida Power and Light, New Century, among others.
"The evolution of Internet technologies coupled with the dynamics of a deregulated market, open tremendous opportunities which we will aggressively pursue," said Beebe.
In CSC's recently concluded fiscal 1999, the company announced over $5 billion in U.S. commercial, federal and international awards. In addition, at the end of last year, CSC won a multi-billion dollar contract from the Internal Revenue Service to modernize the nation's tax system. The specific size of that contract has not yet been announced.
CSC's Chemical, Oil and Gas Group, headquartered in Newark, Delaware, will have responsibility for the new CSC energy services unit that will continue to be based in Dublin, Ohio.
About Enron Corp.
Enron is one of the world's leading integrated natural gas and electricity companies. The company owns approximately $30 billion in assets, produces electricity and natural gas, develops, constructs and operates energy and water facilities worldwide and delivers physical commodities and risk management and financial services to customers around the world. Enron's Internet address is www.enron.com.
About CSC
Computer Sciences Corporation helps clients in industry and government use information technology to achieve strategic and operational objectives. The company develops individual business solutions that are delivered by CSC's 50,000 employees in more than 700 offices worldwide in areas such as management and information technology consulting, systems consulting and integration, operations support and information services outsourcing.
Since its formation in 1959, CSC has been known for its flexibility in its relationships with clients. The company maintains numerous agreements with hardware and software technology companies and thus is able to identify and manage solutions specifically tailored to each client's needs. CSC had revenues of $7.4 billion for the twelve months ended January 1, 1999. Its headquarters are in El Segundo, California. For more information, visit the company's web site at www.csc.com.