Defence company BAE Systems has awarded a contract for outsourced HR services to Logica.
Logica will take over from Xchanging, which revealed in November 2011 that BAE Systems would not be renewing a major HR BPO contract that was due to expire at the end of this year.
Under the six-year contract, Logica will design, build and run an HR service for BAE Systems' UK staff. The value of the contract has not been disclosed, however the previous contract was worth £18 million a year.
"The deal with Logica is for six years and we'd assume is on better terms (but not too much better, we hope)," said Anthony Miller, managing partner at TechMarketView.
The service will be based on Oracle's PeopleSoft Human Capital Management (HCM) and Oracle E-Busines Suite Payroll, as well as on Logica's Dynamic HR Oursourcing framework.
BAE Systems expects to reduce operational costs through the contract by working with Logica to improve organisational effectiveness, employee engagement and performance and service efficiency.
Haydn Clulow, HR director, transformation, at BAE Systems, said: "We recognise that our business needs both agility and flexibility if it is to respond successfully to our changing market landscape."
Xchanging had partnered with HR recruitment process outsourcing provider Alexander Mann Solutions (AMS) on the contract, which will now continue to work with Logica.
Miller described the Xchanging and AMS partnership as a "bit of a 'shotgun wedding' affair" when the former company started struggling with the onsite part of the contract.