Xchanging

Xchanging

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Type	Public (LSE: XCH)
Industry	Technology
Founded	1999
Headquarters	London, United Kingdom
Key people	Geoff Unwin (Chairman) Ken Lever (CEO) David Bauernfeind (CFO)
Revenue	£668.3 million (2012)
Number of employees	8000 (2012)
Website	www.xchanging.com

Xchanging PLC (LSE: XCH) is a company which provides business processing, technology and procurement services in 42 countries for customers across many industry sectors. The company offers expertise in business processing, with knowledge of insurance and financial services.

Xchanging offers IT outsourcing, infrastructure including network managed services, software products and application management. It also sells procurement services.

Xchanging has offshore centres in India, Malaysia and Singapore.

Xchanging employs over 8,000 people worldwide. It is listed on the London Stock Exchange and is in the FTSE SmallCap Index. Xchanging is also a member of the FTSE4Good Index.

History

Xchanging was founded in 1999, by David Andrews, a former partner in Andersen Consulting. Andrews came up with the idea at Andersen Consulting, to create joint ventures with large multinationals to outsource the processing of back-office transactions.

In 2000, Xchanging and BAE Systems created the first of these 'Enterprise Partnerships', for HR services (see also). A second followed soon after, again with BAE Systems, for indirect procurement. In 2012, Xchanging entered the US Indirect Procurement market through an agreement with U.S. based BAE Systems representing $800 million in spend to be addressed over 7 years.

Two years later, Xchanging and Lloyd's of London created two more 'Enterprise Partnerships', one for claims processing, and one for the London Insurance market’s back office system; the latter including the IUA as a partner too. Further partnerships were signed with Deutsche Bank in 2004 (launching Xchanging into the European financial market), Aon in 2006 (in broking services) and Allianz GI in 2007.

In 2007 Xchanging listed on the London Stock Exchange, entering the FTSE250.

In 2009, Xchanging acquired a 75% stake in Cambridge Solutions, another outsourcing business. This acquisition was to deliver greater scale, broader international reach, and a number of platforms for future growth.

In 2010, Xchanging further expanded in the European financial sector by developing an eighth 'Enterprise Partnership' with Italian group, SIA-SSB. As part of this 'Enterprise Partnership', Xchanging acquired 51% of Kedrios S.p.A. (Kedrios), the Italian subsidiary of SIA-SSB that specialises in securities processing and fund administration services for the Italian market. With this, Xchanging entered the Italian market. This market is one of the larger outsourcing markets in Europe.

In mid 2010, Xchanging acquired security and technology communications company, Data Integration. The company is an IT services business in the United Kingdom. The company specialises in network security, application optimisation, mobility services, high performance networks, IP telephony and open access networks. Data Integration serves more than 300 customers in the UK, spanning the private and public sectors.

Based on a number of long-term Enterprise Partnerships and the acquisition of Cambridge Solutions, Xchanging reported a 35% revenue increase year-on-year to £750.4m, at the end of 2009.

On 8 February 2011, Xchanging issued a profit warning and announced a £100 million write-off on goodwill. David Andrews stepped down with immediate effect and became "senior adviser to the chairman", Ken Lever assumed the role of Acting Chief Executive Officer in addition to his role as CFO.

In June 2011 Ken Lever became Chief Executive Officer with David Bauernfeind being appointed Chief Financial Officer.

Notable partners and customers

Xchanging's partners include Lloyd's of London, Deutsche Bank, Allianz AG, Aon and SIA-SSB.

Other notable partnerships that Xchanging has developed include deals with CAD IT in Italy, Alexander Mann Solutions, and Pegasystems.

Customers include Boots, Cooper Gay, CHEP, SELEX Galileo, QBE, Birds Eye, American Express London Metal Exchange, and the Liberty Mutual

Operations

Xchanging works with large organisations in processing areas such as HR, accounting and procurement, as well as industry specific processing such as securities processing and insurance claims processing. Although the list of back-office processes which could be transformed is non-exhaustive.

Xchanging provides services across industries.

• Procurement – Managing direct & indirect spend and sourcing strategies
• Finance and accounting - Processing of receipts and payments, net settlement and clearance
• Human resources - Providing employment services from recruitment through to payroll and pensions payment, back-to-work and medical compensation schemes
• Technology – Design, build and run IT infrastructure and software
• Customer administration - B2B and B2C services to support customer’s customer

Xchanging provides industry specific processing for:-

• Banking and securities – Processing securities transactions and retail investment accounting
• Insurance – Processing of insurance policies, premiums & claims, and broker annuity
• Other financial services - IT systems & hosting for exchanges, processing services for fund managers, investors, as well as SWIFT managed infrastructure services to banks
• Industrial, commercial and public – Including retail, real estate, manufacturing and logistics as well as services for the public sector in the USA and Asia-Pacific.

Locations

Xchanging has offices in ten principal locations - Australia - Insurance and Procurement, France - RTO and Nasdaq, Italy - Monetary Policy and Compensation, Germany, India, Japan, Malaysia, Singapore, the UK and the USA.

Low-Carbon Shimoga Project

On Prime Minister David Cameron’s visit to India in July 2010, CEO David Andrews revealed plans to create a new low-carbon state-of-the-art 1,000 person processing centre, with an option to scale to 2,000, in Shimoga, a tier three town, north-west of Bangalore. Speaking on the Shimoga project, British Prime Minister, Mr. David Cameron said, “I welcome this latest news from David and his team in Karnataka which showcases the very best of UK and Indian ingenuity and creativity. My government is keen to lay the foundations of an enhanced relationship between Britain and India for the decades to come, and Xchanging has demonstrated here in India what can be achieved by British companies of when successfully opening up new markets around the world”

Chief Minister of Karnataka, Mr. BS Yeddyurappa stated, “Entry of a multi-national in Shimoga is an indication of the potential of tier 2 and tier 3 cities of Karnataka. Xchanging’s association in joint development of the SEZ IT Park at Shimoga would usher in IT penetration in Tier 2 and Tier 3 cities. I congratulate Xchanging for this initiative”.

University Boat Race

Xchanging was the title sponsor of the historic, annual boat race between the Oxford and Cambridge universities from 2005 until 2012. From the 156th race, held on April 3rd 2010, the Boat Race was officially called the ‘Xchanging Boat Race’.

The first Xchanging Boat Race, won by Cambridge after a gap of two years, drew record viewership on television, online and along the River Thames with thousands of spectators lining the banks.

External links

• Official website

• http://www.reuters.com/article/2011/08/17/idUS168170+17-Aug-2011+BW20110817