Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of Ashwin Shirvaikar - Citigroup Investment.
Ashwin Shirvaikar - Citigroup Investment
My first question is in terms of forward growth what is the impact you assume for the strong bookings you said you had in benefit and healthcare reform or for that matter HR outsourcing contracts that you signed?
Russell Fradin
That covers a lot of ground but let me try and comment one each of the areas. In terms of the benefits outsourcing essentially what we are seeing is that we are having terrific sales results and I can’t compliment our team enough. We are winning a lot of bookings in the marketplace. What we are dealing with are a few things. One, as you probably know our sales implementation time is longer than we would like. So it takes time to implement those and in fact I think if you think of the revenue cycle now as closer to 12 months that is probably pretty accurate. Frankly the sales results were stronger in the second half of the year. The pipeline was growing and the signings were certainly stronger in the second half of the year. That just influences the revenue curve to be more out in 2011. It will help a little bit in the second half of 2010 but you won’t see the full year impact of that until 2011.
Related to benefits outsourcing we have also tried to make people aware that even though we are seeing participant growth we are being impacted by a couple of things. One is the project revenue which is a small portion of the overall revenue but it really is discretionary has suffered a bit in this tough economy. Those project revenue issues are the ones we are dealing with. That is why in John’s guidance we tried to be very explicit in saying we are just not assuming that is going to get any better.
Now, if the economy starts to get some lift will we get some lift there? Our speculation would be of course, but until we actually see it and until those things are turning into dollars we don’t want to sit here and predict that. So that is a portion of it. The other thing you have to think about in benefits outsourcing is in these tough economic times we are under a bit of pricing pressure with the renewals.
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