Even outsourcers can benefit from outsourcing. Sabre Holdings Corporation is a global leader in IT for the travel and transportation industries, processing 40% of all travel reservations made by 47,000 travel agencies over four continents.
It also supplies total IT outsourcing services to companies such as American Airlines and Gulf Air. Yet while its core business was flourishing, Sabre's IT outsourcing was showing only limited growth. Therefore, in 2000, Sabre decided to sell that business, outsource its own technology platform and create a long-term partnership with the buyer.
Enter PA Consulting Group, which worked closely with Sabre to provide insight and skills for fundamental change. The solution amounted to outsourcing an outsourcer.
A statement of requirements (SOR) was developed, with four companies asked to respond. This outsourcing SOR accompanied a request for bids for the sale of the existing outsourcing contracts and assets, and a request for proposals for a marketing agreement through which the bidders would work with Sabre to market Sabre software.
PA then managed and fast-tracked an evaluation process for the three strands of the subsequent bid. They provided support in the planning and negotiation process from strategy through to implementation. Combining the strong commercial and technical skills of the Sabre team with the best practice and process experience of PA the project delivered outstanding success. "PA was an essential ingredient of our aggressive goal of completing an outsourcing sale and marketing agreement within record time," says William Hannigan, chairman, president and CEO of Sabre.
In March 2001, a tripartite agreement was signed between Sabre and EDS, including a $2.2bn, 10-year outsourcing contract. Under the deal, EDS acquired Sabre's airline infrastructure outsourcing business and internal IT infrastructure assets for $670m. Sabre also retained net working capital of $108m, bringing the total value of the agreement for Sabre to $778m.
