Looking to trim excess costs across its key support functions, Dynegy Inc. on Friday entered into a multi-year, multi-million dollar agreement with Accenture. Under the agreement, the consulting firm will help Dynegy reduce costs beginning with the company’s information technology (IT), procurement, human resource and financial systems.

The agreement is a follow-up to Accenture’s participation in a Dynegy internal initiative, launched in early 2003, that focused on identifying opportunities for Dynegy to improve its operational efficiencies and transition to a more flexible operating model. The ongoing initiative was also designed to support the company’s need for a scalable service delivery model in the corporate and staff functions.

“This agreement with Accenture will translate into tens of millions of dollars in savings for Dynegy over the coming years, and bring our cost structure further into alignment with the needs of our business units,” said Blake Young, executive vice president of Administration and Technology for Dynegy.

Dynegy said that as part of a co-sourcing arrangement in the IT area, it will maintain architectural and strategic responsibility for its technology investment while relying on Accenture for the delivery of infrastructure and application services. While the companies announced that this will result in Dynegy’s IT workforce being reduced by approximately 100 positions, Accenture said it would consider employing the ousted employees as part of the Dynegy co-sourcing team.

Regarding the procurement function, Accenture said it will work with Dynegy to develop a comprehensive supply chain management process. In this role, the consulting firm will support sourcing of services and materials to reduce costs and improve efficiency, as well as assist in developing and implementing policies, procedures and management tools to support the achievement of these benefits.

In addition, the company will also help Dynegy maximize its recent investment in integrated financial and human resource system technologies by implementing critical process changes and technology enhancements to improve efficiencies and controls.

“Given the solid results following their corporate restructuring, this new project builds on the management culture of efficiency and productivity at Dynegy,” said Paul Calvin, managing partner of Accenture’s Energy industry group in North America. “This agreement will also serve as a cornerstone for Accenture’s offerings to companies engaging in similar business activities.”

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