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Financial Value of Outsourcing - IV

Here's a look at the financial value of another outsourcing deal off the list published by HRO Today - a $4 billion / 7-year utility based deal between American Express (AXP) and IBM inked in February 2002. I've compared post-outsourcing returns of American Express with the closest size and book-to-market matched firm in the same industry that has not engaged in an outsourcing initiative of significant value - Freddie Mac (FRE). As shown below, AXP outperformed FRE by nearly 52 percent.