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Boardroom Blitz: ACS Taking Its Public Lumps, Trying To Make Nice

NegativeCIO Magazine takes a look at the "Mess at ACS" and what it means for customers of the outsourcing machine.

(For the uninitiated, ACS is the former employer of Family and Social Services Administration Secretary Mitch Roob. The company also partnered with IBM on FSSA's 10-year Medicaid privatization deal, which is worth more than $1 billion.)

"Affiliated Computer Systems has had a rough couple of years, to put it kindly.

"After a second failed attempt to take the company private, boardroom upheaval that ended with the exodus of five of its directors and an SEC investigation into backdating of stock options that led to the dismissal of its CEO and CFO, the public image for IT services provider Affiliated Computer Systems (ACS) has taken a hit.

"What has occurred over the last two years at the Dallas-based outsourcing provider is rare, not only in the IT services field. 'It's rare in any industry,' says Eugene Kublanov, CEO of San Ramon, Calif.-based outsourcing advisory neoIT. 'You hardly ever see boardroom issues spill out this publicly into the market. With ACS, it's been particularly ugly because of the merry-go-round of rumors and actions that have surrounded the company for some time.'

"While ACS is issuing statements of reassurance to its clients, and experts say the turmoil has not noticeably affected the quality of the services the company provides, the recent events leave open questions about the company’s future and what it means for ACS customers. 'An actual change in control is much easier to deal with than chaos surrounding a potential change in control,' explains Randall Parks, cochair of the global technology and outsourcing practice at law firm Hunton and Williams. 'I'm not sure anyone could anticipate what has happened at ACS.'"

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