Affiliated Computer Services (ACS) is a Fortune 500 company with nearly $6 billion in revenue, employing 62,000 people in 750 locations worldwide including Lexington. ACS employs more than 4,000 Kentuckians, half of them in Lexington. Tom Blodgett, executive vice president and group president, Business Process Solutions, talked about his company, its role in the central Kentucky economy and some of the challenges of operating from central Kentucky in the global marketplace. You can listen to the entire discussion with Blodgett by clicking on the podcast below. Here are highlights of the interview:
What does ACS do?
ACS is in the business process and information technology outsourcing business, which simply means that big companies will make a decision that there is a part of their technology or a part of their business process that they want to turn over to another company to run.
What are the functions of the Lexington ACS facilities?
We're involved with claims processing in the health care industry; we're involved in the wireless and consumer space with customer care; we also do a lot of technology development since this is our headquarters for this part of the company. We have a lot of higher level technology development and innovation that goes on here.
What are some of the challenges of operating a global business in a place such as Lexington, Kentucky?
The challenges are similar in most of the domestic U.S. cities that we are involved in and that is finding, hiring and retaining the right kind of talent to support the opportunities that we are presented with. So it's really a human resource issue.
What do you think needs to be done on a local level to answer that need?
I think Mayor Newberry is really trying to step outside the box and do some of those things. I think we need to continue to put more emphasis on education and on the right kind of education.
The mayor proposed, and city council defeated, a public/private partnership for a scholarship program with an initial focus on the fields of science, technology, engineering and math. What motivated ACS to offer financial support for the scholarship?
I'd love to be able to hire people here in Lexington and in Kentucky to fill especially those higher tiered jobs - those programmers and those technology positions. But if the people are not trained and are not receiving the right kind of training, then we have to go elsewhere - either elsewhere in the United States or elsewhere in the world - because at the end of the day, we have to find the people. And so I applaud him and I'm hoping that there will be more discussion and flexibility from the City Council to see this kind of program pass. I think it sends a message also to the youth, to the kids: 'Hey look, this is something that is important to us in government and in the private sector and there's the reward. If you work hard, the reward is there will be jobs, and those jobs can be here in Lexington. You don't have to move away to get that kind of higher tier job.'
A concern raised by some members of council was that the mayor's initiative is too narrowly focused, excluding other disciplines such as psychology, literature, the humanities, etc. Yet, isn't it true that many non-STEM fields - arts and humanities, for example, actually converge and intersect with technologies and increasingly require knowledge in those fields?
Yes. Ö If you have kids graduating from school and if they can be involved in something related to the technology field, whether that's technology in health care or technology in whatever, that's where the job opportunities are. We're a technology company, so obviously we're centered and focused on those technology jobs because that's where the demand is, and we will, as I mentioned, go find them. When I first moved here we actually had to go into Eastern Europe and hire programmers, get the right kind of visas and legally bring them here to help us fill our need because we couldn't find them here. So I don't know about these other disciplines, but I do know that in the technology space, there is a need that is not being met and so we need to turn to the education system to be able to provide that need, fill that need.
You mentioned that you would like to see the private sector become more involved in education. How?
A closer relationship between ACS and possibly other private companies and the institutions of education that are here. Lexington and Kentucky are known for being great places for education. You've got the University of Kentucky, you've got EKU, and you've got technical schools. You've got great schools. We need to have a better relationship and closer relationship so we can maybe help advise them a little bit on curriculum. You know, if their goal is to train people to be ready to take good jobs, we can help them in terms of, 'Hey, you need to teach your people this, this is really what the industry is looking for.' ... We ought to be able to feel like we're helping the community create good jobs. Again I'd much rather hire a graduate from Bluegrass Community College to come and fill this programming position than I would to go somewhere else to hire it.
Does ACS itself engage in innovation?
ACS is a very innovative company. ...We have several thousand programmers, we have network architects, and we have solution designers. So part of what we do when we take over the operation of a company's process is we innovate, we apply technology. That's how we are able to provide a better service without spending more money.
How do you strike a balance between operating both globally and locally?
When we moved here, people were nervous because ACS is a company that's known to do some work offshore, and some of the folks that we acquired through the acquisition were a little concerned: 'Does that mean my job is going away?' And I think we've proven that just the opposite is true: we create opportunity by having a full offering, so when we go to these big companies that we deal with and they want to do something domestically, we can handle it just fine. Or, if they want to do something globally, we can handle that as well. And the proof is in the pudding. We've gone from 900 employees in Kentucky to 4,000 employees in Kentucky because we have a full offering and were able to win new business that includes components of global as well as components of domestic work.
What are ACS' strengths?
We started as an information technology outsourcing company. So there are several large Fortune 100 companies who have turned their data center, their computers, their networks and their desktops over to ACS to manage and run.
We're very good at transactional help processing. So, if there is a company that has lots of transactions, a large insurance company, we help them process their insurance claims. We have lots of employees that help support customer care for our companies. If you go buy a new cell phone and you're going to call to get it turned on, you call what you think is the supplier, but you are really calling ACS.
Where are the company's strongest areas of growth?
The growth area for us really is in human resource outsourcing, where big companies are saying, 'Look, we're not that good at running our HR department. Let's turn our HR department over to a specialist to be able to handle that.' We're also seeing growth within our company in terms of our geographic footprints, so we're doing a lot of things in Europe. We're seeing growth in the emerging markets area of India, China and over in Asia and those areas. Really one of the things that's interesting about ACS is that we are what is called 'the defensive company,' which means when the economy is a little softer, when companies are going through a difficult time, they tend to be a little more flexible and a little more open in terms of what they are willing to turn over to somebody else to run, because we come in with a promise with improved quality at a lower price. So when we see the economy soften, we actually see an upturn in our business, which is benefiting us right now. We're seeing a very strong business for our company.
Any exposures to the current economic climate?
We do a lot of work for airlines. And you know airline traffic is down, so our business in that area is down. We do a lot of work for large package shipping companies, and their volumes are down a little bit. And we're very big in toll collections. "EZ Pass" (digital toll collection) in the New York and New Jersey areas is an ACS product. So anytime we are involved in those kinds of products that are related to the economy and specifically transportation, we're seeing some softness in those areas. So we're feeling some of the pain, but the offset of that is that we're seeing more companies being more aggressive in what they're willing to let us get involved in.
Is there anything we haven't touched on here that you feel is particularly important to the conversation?
We came out here on a two-year assignment to Lexington, and we've been here 10 years. That's a lot because we love Lexington. My wife loves Lexington. But also, we're super impressed with an asset that some people don't appreciate in Kentucky and in Lexington and that's the human resource asset that's here. There are great people, dedicated people, loyal people, smart people, and we're very thrilled. So one thing that I'd like to say is that Lexington has been great for ACS. I think we've done our part to contribute. But at the end of the day it's those good people that work for us, that satisfy our customers, that allow us to be successful, and I think that's one of the natural resources that Kentucky has that some people outside of this area don't recognize. So people should feel good about what's being accomplished.