Affiliated Computer Services, Inc. provides business process outsourcing (BPO) and information technology (IT) services in the United States. It operates in two segments, Commercial and Government. Commercial segment provides various BPO services, including administration, human resources and related consulting, finance and accounting, customer care, and payment services; IT outsourcing services, such as mainframe, midrange, desktop, network, consulting, and Web-hosting solutions; and systems integration services that comprise application development and implementation, applications outsourcing, technical support and training, and network design and installation services. This segment also offers various consulting services, which comprise retirement, health and welfare, communications, and compensation services to human resource departments. Government segment provides transaction processing and program management services, such as Medicaid fiscal agent services, child support payment processing, electronic toll collection, loan processing, and traffic violations processing services; and fare collection and parking management systems, commercial vehicle operations, and roadside enforcement programs services. In addition, this segment designs, develops, implements, and operates health and human services programs; and provides student loans. Government segment also offers loan servicing, consolidation loan processing, debt collection, and portfolio management services; maintains and develops information systems; and provides unclaimed property collection services. The company primarily serves healthcare providers and payors, pharmaceutical and other manufacturers, retailers, wholesale distributors, entertainment companies, higher education institutions, financial institutions, and transportation companies, as well as clients in utilities and insurance sectors. Affiliated Computer Services was founded in 1971 and is based in Dallas, Texas.

Technology Industry Analysis

WikiWealth.com Industry Description: Information technology (IT) or information and communication technology (ICT) is a broad subject which deals with technology and other aspects of managing and processing information, especially in large organizations. Particularly, IT deals with the use of electronic computers and computer software to convert, store, protect, process, transmit, and retrieve information. Over the past 20 years, its prevalence has dramatically increased so that it is now a part of nearly every aspect of daily life. Technology generally includes: computer science, electronics, software, and internet. Read More. Also see the Industry Analysis Home Page.

WikiWealth.com Industry Analysis: During economic recessions, consumers and businesses tend to cut back on technology expenses to save money during tough economic times. Less spending decreases business revenue and eventually decreases stock prices. During economic recoveries, consumers have more income and business investment needs, so spending quickly increases. Higher spending increases business revenue and eventually increases stock prices. During a longer economic expansion, discretionary income and business demand increases, but at a slower pace than during the recovery stage.

¹ Investment potential (margin of safety) is a weighted average of the discounted cash flow analysis (DCF), the enterprise value (EV) market multiple analysis, and the Warren Buffett investment analysis. WikiWealth obtains 80% of their quantitative investment potential from fundamental investment analysis.
² The weighted average cost of capital (WACC) analysis for the industry is a broad representation of the WACC for each individual company. A sub-industry WACC analysis offers both stability and accuracy for each individual company.

WikiWealth.com Profit Analysis: The best way to profit from technology stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street Analysis on left side), and have high Main Street Common Sense investment ratings (see Main Street Analysis on right side). When an economic recovery occurs, technology stocks tend to outperform the general stock market, because consumers and businesses quickly resume spending on items they wanted, but resisted buying during tougher economic times. Eventually those investments become overvalued, because profits and stock prices increase past their fair values. During the last stages of an economic business cycle, just before a recession, it is best to sell technology stocks, because they are likely to decrease in price quickly. Technology makes the lives of consumers and businesses easier, but during tough economic times, people tend to work harder, which offsets the benefits of technology temporarily. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. For more information on stock research ratings click here.

Investment Moats

Investment Moats are fundamental investing theories developed by Warren Buffett and adapted to the SWOT analysis. Investment moats are general characteristics that separate great investments from average stock investments. The wider the investment moat the better. Read more: Investment Moats. For company-specific investment moats: SWOT Analysis.

SWOT Strengths Increase Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

SWOT Weaknesses Decrease Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

Stock Price Triggers

Triggers were developed by WikiWealth.com to predict changes in stock price direction, which depend on events outside of the control of the company. In general, if SWOT opportunities are greater than SWOT threats, the stock price should raise; the opposite is also true. For more precise measures, examine each SWOT opportunity and threat, then rank them according to importance and timing. The more important the investment characteristic, the greater the impact on stock direction. The sooner a investment trigger may occur, the more influence it will have on stock price direction. Read more: Stock Price Triggers. For company-specific stock price triggers: SWOT Analysis.

SWOT Opportunities are Positive Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

SWOT Threats are Negative Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

Long Company Description (help)

The ACS Mission

I. We will be the premier provider of business process outsourcing and information technology services
II. We will design innovative solutions to meet our clients’ business requirements and deliver only the highest quality of service
III. We will marshal talented, committed people and create an environment in which they can grow professionally through
their achievements
IV. We will generate dependable and growing revenues, earnings, and returns to our shareholders

ACS is a premier provider of diversified business process outsourcing (BPO) and information technology (IT) services and solutions to commercial and government clients worldwide. ACS is recognized as one of the best performing companies. As a FORTUNE 500 company, ACS has proven success delivering strategic value, business results, and operational gains to our clients. At ACS, it’s people, clients, and culture that make the difference.

ACS provides insight, people, technology, and service to achieve the best results. Our service offerings include business process outsourcing, information technology outsourcing, and systems and integration services. We’re the people who make technology work for our clients. ACS delivers a full range of BPO and IT services and end-to-end solutions to the public and private sectors. We support a variety of industries including education, energy, financial, government, healthcare, retail, and transportation.
ACS is a rapidly growing company supporting operations reaching more than 100 countries with nearly $6 billion in annual revenues. With unparalleled levels of growth and client retention, ACS is 62,000 people strong and growing.

And our clients are seeing results from ACS' solutions:

• Improved international package shipper's turnaround time from 2 weeks to 24 hours, shortened its billing cycles from 20 days to 6 days, and decreased staff from 14,000 to 4,000

• Increased a major insurance company's rate of claims processed-to-completion from 30 percent to 70 percent and improved data accuracy to 99 percent

• Saved a leading manufacturer more than $35 million annually through reengineered processes, reduced its invoice processing costs by 76 percent, improved cycle time from 3 weeks to 15.2 hours, and boosted field accuracy from 82 percent to 99.5 percent

• Delivered 60 percent cost savings to a global automotive manufacturer

History

The Beginning
Mr. Darwin Deason launched Affiliated Computer Services, Inc. (ACS), as a bank data processor in 1988. Then ACS acquired the data processing and electronic funds transfer operations of First Texas Gibraltar expanding into more and diverse services offered. ACS expands out of banking services when it signed a 10-year data processing outsourcing contract with Southland Corp. (7-Eleven). In 1995 ACS becomes a public company and divests bank data processing. By FY1996 ACS became the fourth largest commercial outsourcer in the U.S.

FY 1996
Acquired Unibase and Genix, expanding geographic reach and BPO/ITO capabilities.
Revenue $397 million and 4,500 employees.

FY 1997
Acquired CDSI, entering government systems and integration market.
Revenue $625 million 6,100 employees.

FY 1998
Pioneers BPO adding diverse vertical expertise through acquisitions.
Revenue $1.2 billion and 8,700 employees.

FY 1999
Earned FORTUNE 1000 ranking.
Revenue $1.6 billion and 12,000 employees.

FY 2000
Set goal to be leading BPO company.
Revenue $1.9 billion and 18,400 employees.

FY 2001
Recognized global BPO provider.
Revenue $2.1 billion and 26,000 employees

FY 2002
Acquired IMS becoming a top IT services provider to state and local governments. BPO revenues doubled year-over-year. Global footprint expands significantly.
Revenue $3.1 billion and 32,100 employees (one-third outside U.S.)

FY 2003
Achieved FORTUNE 500 status. Merged BPO and ITO operations securing new business. Supporting clients in 100 countries.
Revenue $3.8 billion and 41,700 employees

FY 2004
Becomes largest multidomain BPO services provider in the world. Divested majority of federal business and acquired additional commercial operations.
Revenue $4.1 billion and 46,200 employees

FY 2005
Expands HR services and healthcare IT consulting capabilities through strategic acquisitions.
Revenue $4.4 billion and 52,000 employees

FY 2006
Increased global footprint and public transportation vertical capabilities. Bolsters learning solutions strengthening end-to-end HRO offerings.
Revenue $5.4 billion and 58,000 employees

FY 2007
Added SAP integration capabilities to IT services portfolio. Extended health and human services competencies.
Revenue $5.8 billion and 60,000 employees

FY 2008
Strengthens global ITO presence by expanding base of European operations.

Recent Growth
Acquisitions and internal growth enhanced capabilities in end-to-end healthcare industry services, customer care, transportation, human resources, and learning solutions. International footprint grows to 25 Centers of Excellence.
Revenue over $6 Billion and over 60,000 employees

FAQs

1. What services do you provide?
ACS is a premier provider of business process outsourcing and information technology solutions. These services enable businesses and government agencies to focus on core operations, respond to rapidly changing technologies and reduce expenses associated with business processes and information processing. BPO, which currently represents 75% of ACS’ consolidated revenues, is the delegation of an IT-intensive business process to an external provider, such as ACS, who owns and manages the selected processes based on measureable performance metrics. Some of the more commonly outsourced business functions to ACS today are state healthcare program-administration, claims handling for large insurance companies, transaction intensive processes of a Human Resources department within large companies, loan processing for commercial clients as well as federal agencies and electronic toll collection for some of the world’s largest electronic toll systems. IT outsourcing and sytems integration services comprise the remaining 25% of consolidated revenues and ranges from designing, implementing and operating data centers for clients to managing networks, servers and desktops.

2. What is the composition of revenue?
Our revenues are comprised of two primary segments, the Commercial segment and the Government segment. The Commercial segment generates approximately 60% of our consolidated revenues. The Government segment comprises the remaining 40% of our consolidated revenues.

3. Can an investor buy ACS stock directly from the company?
At this time ACS does not offer a direct stock purchase plan.

4. What stock exchange is ACS listed on?
ACS is currently listed on the NYSE under the ticker "ACS." ACS has been a public company since September 1994.

SWOT Analysis

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