Industry News
| News articles supplied in conjunction with Auridian Consulting and Top-Consultant.com |
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| Can HP turn risk into opportunity? | |
| 2 June 2008 | There's been a curiously muted reaction to HP's acquisition of EDS. The main fall-out so far has been from investors, who responded to the $13bn deal by knocking $12bn off HP's market cap. What's their problem? HP has now created a laptops-to-outsourcing IT and services behemoth to rival IBM. Ah. I see what they mean |
| Business & Consultancy News | |
| 2 June 2008 | Slowdown in UK consulting growth reported It's official - the UK consulting industry is no longer booming at the growth rates seen in 2005 and 2006. Growth slowed to 10% in 2007 and is expected to dip further in 2008; but rather than facing a dot-com style crash, the industry will instead experience a period of subdued growth for the next 1 - 2 years. |
| CapGemini unveils new application outsourcing strategy | |
| 2 June 2008 | Capgemini has announced its "Business Aware Application Outsourcing" model, which takes application outsourcing beyond its traditional focus as an IT cost-reduction mechanism towards a business services focus and a platform for innovation. This enables clients to deliver applications that evolve with the business and produce a more measurable impact on business transformation. |
| Booz Allen Hamilton to separate core businesses | |
| 2 June 2008 | Booz Allen Hamilton said that it will separate its US government and global commercial businesses, selling a majority stake in the US government business to The Carlyle Group for $2.54 billion. |
| TCS to manage Virgin Atlantic's IT until 2011 | |
| 28 May 2008 | Tata Consultancy Services (TCS) has renewed its managed services contract with one of the world's leading long haul airlines Virgin Atlantic. By outsourcing the management of its IT infrastructure and applications management to TCS, Virgin Atlantic can focus on core business activities. Under the renewed agreement, TCS will continue to manage Virgin Atlantic's global end-to-end IT systems including a 24x7 service desk, infrastructure and application support services. The company also manages Virgin Atlantic's relationships with other third party IT vendors. TCS' service delivery for Virgin Atlantic is designed around IT Infrastructure Library (ITIL) best practices framework. "Today airlines need to effectively exploit IT more than ever to be successful in a very competitive marketplace," commented Mike Cope, IT Director, Virgin Atlantic. "Thanks to our ongoing partnership with TCS we have the right partner to enable this." A.S. Lakshminarayanan, VP and country manager, UK & Ireland, TCS, added, "Virgin Atlantic's IT infrastructure and services are worldwide and therefore require a partner with a similarly global reach. TCS has established a strong reputation for providing our clients with certainty of outcome in alignment with their strategic objectives and the renewal of our agreement with Virgin Atlantic is testament to our performance over the past three years." The Travel and Transportation sector is emerging as a key vertical for TCS, generating 4.0% of the company's total $5.7 billion revenues in FY08. TCS launched a dedicated Travel & Hospitality Innovation Lab in 2007 to help airlines enhance customer experience and differentiate themselves in an era of increasing competition and new distribution models. |
| HP to acquire EDS for $13.9 billion | |
| 28 May 2008 | HP and EDS have signed a definitive agreement under which HP will purchase EDS at a price of $25.00 per share, or an enterprise value of approximately $13.9 billion. The companies said the terms of the transaction have been unanimously approved by the HP and EDS boards of directors. The transaction is expected to close in the second half of calendar year 2008 and to more than double HP's services revenue, which amounted to $16.6 billion in fiscal 2007. The companies' collective services businesses, as of the end of each company's 2007 fiscal year, had annual revenues of more than $38 billion and 210,000 employees, doing business in more than 80 countries. HP intends to establish a new business group, to be branded EDS - an HP company, which will be headquartered at EDS's existing executive offices in Plano, Texas. HP plans that EDS will continue to be led after the deal closes by EDS Chairman, President and Chief Executive Officer Ronald A. Rittenmeyer, who will join HP's executive council and report to Mark Hurd, HP's chairman and chief executive officer. HP anticipates that the transaction will be accretive to fiscal 2009 non-GAAP earnings and accretive to 2010 GAAP earnings. Significant synergies are expected as a result of the combination. "The combination of HP and EDS will create a leading force in global IT services," said Hurd. "Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of products and services in the industry. This reinforces our commitment to help customers manage and transform their technology to achieve better results." Rittenmeyer said, "First and foremost, this is a great transaction for our stockholders, providing tremendous value in the form of a significant premium to our stock price. It's also beneficial to our customers, as the combination of our two global companies and the collective skills of our employees will drive innovation and enhance value for them in a wide range of industries. In addition, our Agility Alliance will be significantly strengthened." Acquiring EDS advances HP's stated objective of strengthening its services business. The specific service offerings delivered by the combined companies are: IT outsourcing, including data center services, workplace services, networking services and managed security; business process outsourcing, including health claims, financial processing, CRM and HR outsourcing; applications, including development, modernization and management; consulting and integration; and technology services. The combination will provide extensive experience in offering solutions to customers in the areas of government, healthcare, manufacturing, financial services, energy, transportation, communications, and consumer industries and retail. Under the terms of the merger agreement, EDS stockholders will receive $25.00 for each share of EDS common stock that they hold at the closing of the merger. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of EDS's stockholders. |
| Companies seek an edge through engaged employees | |
| 27 May 2008 | The increasingly recognised link between high levels of employee commitment and bottom line results means business leaders all over the world are exploring engagement metrics and measures. They can be used to enhance the image of the company as a responsible employer, or improve employee retention in fast developing markets where staff turnover is high due to a buoyant labour market. Rapid economic change and uncertainty in many markets makes such measures more relevant than ever. Levels of engagement are even beginning to be perceived by some investors as an important indicator of a company's financial health and sustainability. The report shows how companies can plot levels of engagement for an entire work force by looking at data relating to resignation levels, absence rates, employee attitudes, training hours per full-time employee (FTE), performance related pay and incidence of grievance. These range from the high levels of engagement that produce positive behaviours such as flexibility and innovation to the other end of the scale where companies experience resignations, absence, pilfering, theft, oppositional solidarity, even sabotage. The report, Managing People in a Changing World, also looks in detail at financial performance, productivity, outsourcing, leadership, innovation, talent management, diversity, work/life balance and the growing concept of work place wellness, all through the lens of PwC extensive human capital (HC) database, Saratoga. The report is published every two years. Richard Phelps, partner, said: "As the value of choosing the right human capital policies is increasingly recognised by business leaders, we are seeing a greater demand for evidence based human capital metrics. Using these, companies are now able to ascertain how they are performing in previously uncharted areas such as succession planning, innovation and talent management as well as using the 'harder' metrics such as return on investment per worker to determine overall business performance. "It is an exciting time in this area. More and more companies are working hard to be perceived as responsible employers, to build attractive employer brands and fulfil their reputation as a responsible company. HC metrics help them to throw their arms around all of this." The report also charts the rise of a new kind of offshoring - Knowledge Process Offshoring (KPO) - where traditionally sacrosanct knowledge or judgement services such as research and sales and marketing are run from other countries. The KPO market globally is predicted to grow to $16.7 billion by 2010-2011, implying an annual growth rate of 39% and employing some 390,000 professionals by March 2011. Here, countries such as India, China, Russia, Poland, Hungary and republics from the former Soviet Union provide high levels of skills at comparatively low cost for many western economies experiencing skills gaps. A new concept of "connected sourcing" is also emerging. This sees organisations increasingly focusing on what they do best and then orchestrating a portfolio of relationships for the rest. This requires a new approach and highly developed levels of collaboration, transparency, trust and relationship management. A further development is found in the area of talent management. The traditional focus on high performers and "high flyers" is shifting to include "pivotal employees". These are segments of the workforce that are expected to create value and determine the success of the organisation. They can range from the receptionist to the sales director and the contribution of these core people has a disproportionate impact on determining both the success of an organisation and its sustainability. |
| Management award winner turns around automotive giant in just 12 months | |
| 27 May 2008 | Quest Worldwide has been named the overall winner (Platinum Award) in this year's MCA Management Awards in association with Management Today for its work for automotive supplier, TMD Friction Group. Despite starting off with a distressed company, bound for bankruptcy, Quest introduced a top-to-bottom overhaul and helped the senior executive team develop and execute a one page-business plan that has seen sales growth rise 11%, new business wins increase from 40% to 70% and profits up by 20% in just twelve months. The winners were announced at the MCA Management Awards dinner this week at the London Hilton, Park Lane. Other awards presented on the night included Corpra, who received the award for Best Small Firm for their work with The Association of Accounting Technicians (AAT). The Management Awards are organised by the Management Consultancies Association (MCA), and run in association with Management Today - the most widely read monthly business magazine in Britain. The awards identify the best case studies in each of the 10 categories, where organisations, in the private or public sector, have achieved a significant improvement in performance with the assistance of management consultants, either in-house or external. This year's winners are: Platinum Award Winner: Quest Worldwide/TMD Friction Group Best Small Firm Winner: Corpra/Association of Accounting Technicians (AAT) Best Public Sector Project Winner: Atos Consulting/DFID Best Private Sector Project Winner: Sagentia/Vodafone Operational Performance Winner: PA Consulting/OGC Buying Solutions Corporate Social Responsibility Winner: PIPC/ITV plc Outsourcing Winner: Navigant Consulting/Skandia Technology Winner: Sagentia/Vodafone International Winner: Quest Worldwide/TMD Friction Group Business Strategy Winner: Ernst & Young/Sony PSE Change Management Winner: Corpra/Association of Accounting Technicians (AAT) Innovation Winner: Sagentia/Vodafone Human Resources Winner: Deloitte/T-Mobile UK Marketing Winner: Propaganda/The Car People |
| Roland Berger opens office in Istanbul | |
| 27 May 2008 | Roland Berger Strategy Consultants is opening an office in Istanbul, Turkey. This expands the
company's presence to 35 offices in 24 countries
in Europe, Asia, the Middle East and North and South America. Dr. Burkhard Schwenker, CEO of Roland Berger Strategy Consultants, explains: "With our office in Istanbul, we are expanding our presence in the growth regions of Central and Eastern Europe and in the Middle East. Increasing globalisation is driving the demand for strategy consulting." The company has been actively working on projects in Turkey since the 1970s. This new office will provide Turkey and the surrounding regions with consulting services. "Our clients are found across a wide range of different industries such as financial services, tourism, textiles, consumer goods, pharmaceuticals and transportation," says Roland Berger partner Erkut Uludag, managing partner of the Istanbul office. |
| Bain & Co expands Middle East presence with Dubai office | |
| 27 May 2008 | Bain & Company, the global business consulting firm, has opened its 38th office, in Dubai. The Dubai office will be the operating nexus for Bain's operations in the Middle East. The opening is in response to the firm's growing roster of clients in that market, including local companies, multinational corporations, family-owned conglomerates and private equity funds. "Opening an office in the Middle East is a natural step in our continuing expansion in the GCC and Egypt," said Steve Ellis, Bain & Company worldwide managing director. "We have been working with companies in the region since the mid-1990s and have a strong client base and local knowledge. Opening our office in Dubai is an important milestone in our commitment to the region." Bain & Company Middle East will be under the leadership of Jean-Marie Péan, who after several years of working closely with clients in the region becomes managing director for Bain in the Middle East. A veteran Bain & Company partner and leader in the firm's Global Organisation Practice, Péan brings both an established track record of leading successful Bain teams and of successfully launching new offices for the firm, having opened the Bain Brussels office in 1990 and leading the Paris office until 2001. Péan is joined by two senior partners, Julien Faye, head of the Middle East Financial Services and Private Equity Practices and Naji Sourati, head of the Middle East Telecommunications, Media and Technology Practice. |
| Axon acquires EnterSys Group | |
| 27 May 2008 | Axon Americas has acquired EnterSys Group L.P., a leading provider of SAP consulting services to the oil, gas & chemical sectors. Texas-based EnterSys Group has a proven track record in the delivery of complex SAP solutions for clients across the oil & gas value chain. With deep industry knowledge and experience around SAP's Oil & Gas Industry Solution (SAP IS-Oil), the EnterSys Group represents an excellent addition both in terms of culture and capability to Axon Americas. Steve Cardell, Chief Executive of Axon Global, said: "Axon is already the largest dedicated SAP consultancy in the world. We have driven significant growth in the Americas by leveraging our deep expertise in industries such as Aerospace & Defense, Utilities, Transportation and Public Sector. The acquisition of EnterSys Group is consistent with Axon's strategic growth goals and further extends our leadership position with expansion into the Energy sector." |
| Atos Origin confirms 2008 financial goals | |
| 27 May 2008 | Atos Origin reported first quarter revenues of 1.424 billion euros ($2.22 billion), a 0.8% decrease from a year earlier, and confirmed its 2008 financial goals. Organic growth was 5.3%, excluding the Italian operation that was sold in January and AEMS Exchange, whose sale is expected to be finalised in September 2008. Atos Origin reiterated its 2008 goals of reaching organic sales growth of 4%; an improvement in operating margin to 5.6%, after operating costs of the group's transformation plan; and a net debt reduction of 100 million euros after dividends, cash out for the pensions in the UK and proceeds from disposals Italy and AEMS Exchange. During the quarter, the total order entries reached 1.432 billion euros, an 11% growth compared to the first quarter 2007. The Q1 2008 order intakes represented a book to bill ratio of 101% compared to 90% in Q1 2007. The Group won several key contracts in France including MMA insurance company and with a large French oil company, in the United Kingdom, Carbon Trust, Go North East as well as contracts in the Public sector were signed, in The Netherlands, Nuon, in North America, Fenwal and in China, Bank of China. In France, Q1 2008 revenue was up by 7.5% organic growth, at EUR 426 million, compared to the first quarter of 2007. Consulting grew by 10.8% organic growth confirming the positive trend observed at the end of last year benefiting from strong actions from the new management team. Managed Operations achieved a 9% organic growth with an increasing level of up-selling business with existing customers. The Systems Integration was up by 5.4% mainly in the telecom and industry sectors. In the United Kingdom, organic growth was up 1.1% in the first quarter 2008 affected by the performance of the AEMS Exchange business. Without this activity, expected to be transferred to NYSE Euronext in September 2008, the organic growth was 5.5%. This performance was reached with a 14.3% organic growth in Managed Operations confirming the full effect of the large contracts delivered last year. In Systems Integration, revenue organic growth was stable compared to last year and in Consulting the activity remained low, as expected, with new management needing a few months to implement all the necessary actions to achieve a full turnaround. In The Netherlands, as forecasted, revenue was stable at -0.7% due to the re-insourcing by KPN of the desktop services contract and the implementation of the new three-year outsourcing contracts. Systems Integration was flat compared to last year and has implemented actions to recover a shortage of staff in the SAP environment. In Consulting, Financial services sector over-performed compensating lower sales in Public sector and Industry. In Germany and Central Europe, organic growth of 9.2% was mainly driven by a strong performance in Systems Integration at 24% organic growth thanks to the Dresdner Bank contract signed in 2007 and new business coming from existing customers in the telecom sector. Within Rest of EMEA, Iberia had a strong organic growth at 10.8% with double digit growth in Consulting and in Managed Operations and Belux grew by 12% organically; Mediterranean countries and Africa grew by 39% with strong telecom business development. Asia Pacific posted a solid 36% organic growth with new business development in China and with strong additional business from the Standard Chartered Bank in Hong Kong. As planned, Americas revenue decreased by 12 million euros due to a base effect from the Panamerican Games in Brazil which contributed for the same amount in Q1 2007. |
| Capgemini: Q1 results in line with objectives | |
| 27 May 2008 | Capgemini said consolidated revenue for the first quarter of 2008 was €2.19 billion, a 3.7% increase against the first quarter of 2007 (€2.21 billion) at constant rates and perimeter. At current rates and perimeter, revenue declined by 1.4%. Capgemini blamed the steep depreciation of the US dollar (-13.9%) and the British pound (-11.5%) against the Euro, saying that North America and the United Kingdom account in total for more than 41% of the group's revenues. Outsourcing Services grew by 2.9%. The other disciplines recorded growth of 4.1% on average, Local Professional Services registering the best performance with 9.0%; North America has published sustained growth of 6.1%. In Europe, Benelux grew by 7.6% and France by 5.3%, while the United Kingdom registered an anticipated decrease of 4.5% linked to the expected reduction in revenues realized with the client HMRC. Growth in the rest of Europe is led by the Nordic countries and Southern Europe (Italy, Spain, Portugal) which registered growth of over 10%. Bookings for the first quarter 2008 amounted to €2.17 billion, compared to €2.2 billion in the first quarter 2007 (at comparable rates and perimeter). Capgemini said they are particularly strong for Consulting, Technology and Local Professional Services where growth is at 10% and for which the book-to-bill ratio is 113% on average. |
| Gartner’s vision | |
| 8 May 2008 | Research firm Gartner has ‘pinpointed’ six areas of focus that will be the grand challenges over the next 25 years. These include self-recharging devices, parallel programming, long-term storage, the user interface, reusable software and improved value visibility in respect of IT investment. Given that 25 years in the IT industry is likely to span several ‘geological eras’, such a prediction is at best guesswork. Many of these are issues today and are being addressed today. Organisations that wait 25 years to get a handle on the return on their IT investment are unlikely to be in business in 2033. |
| Bullish CIOs | |
| 8 May 2008 | According to Merrill Lynch’s quarterly survey of CIOs, despite a slight dip most CIOs remain positive about the future. The credit crunch does not seem to have dented their plans, but half believe a recession is on the cards. German and English respondents were less positive than their CIO colleagues in France and Spain. |
| NHS trusts opt for one log-in | |
| 8 May 2008 | More than 50 NHS trusts have installed single sign-on software on top of systems provided by the National Programme for IT (NPfIT), to improve security and speed up access to applications. The trusts have funded the systems from internal budgets, after concerns that clinicians were becoming agitated at having to log in and out of various NHS applications. A single sign-on system will help persuade medical staff that IT can help rather than hinder them, said Dianne Nixon, head of IT programme management at Addenbrooke’s hospital. “It helps us show clinicians that IT is beneficial and helps them do their jobs,” she said. Addenbrooke’s has cut the number of log-ins on its system, used by 5,000 staff, from 29 down to nine. Nixon says although the NPfIT provides a single sign-on service to all national applications such as Choose and Book, it doesn’t cover local hospital systems clinicians often need to switch quickly between the two. “We are absolutely supportive of the national programme, but it doesn’t deliver what we want at the moment,” she said. IT managers in other trusts were less positive one told Computing that single sign-on raised important security issues. “The National Programme has missed a trick here. If staff have to remember multiple passwords they will write them down or leave themselves logged in,” he said. “The importance of patient confidentiality to us meant we had to put this system in.” Michael Moore, IT manager at Papworth NHS Trust, said that as well as addressing concerns over the security of patient records, the single sign-on system helps solve a business continuity issue. “The helpdesk was being continually bombarded,” he said. “We weren’t expecting to have to put a system over the top but staff seem glad that we have.” Papworth’s Imprivata single sign-on appliance comes from supplier Enline. “We have not indicated that using smartcards for single sign-on is a requirement, although we believe it is desirable, and many organisations believe that this will improve ownership and data security,” said a spokeswoman for NHS Connecting for Health. |
| Royal Mail delivers changes | |
| 8 May 2008 | Royal Mail has reskilled half its IT department and retooled its 10-year outsourcing deal with supplier CSC to get a stronger focus on software development. Central to the postal service’s £1.2bn change agenda is the rollout of a Siemens-supplied automatic mail sorting system scheduled to go live at its mail centres and delivery offices in September. The platform is the backbone of Royal Mail’s service overhaul, which will be followed by a number of customer-focused initiatives such as minute-by-minute parcel and letter-tracking, and projects aimed at internal optimisation, such as telemetry and scheduling of staff, trucks and aircraft. To support the demand prompted by the service overhaul and the legacy systems yet to be replaced, chief information officer Robin Dargue launched a business capability review which shed almost half the 300-strong permanent IT workforce but created about 100 new core IT roles. “The goal is transform to survive - it is that stark,” he said. “After establishing what we needed to do with technology, I asked myself whether we had the right mix of skills and capability to undertake this transformation. “During the review, it emerged we needed roles we did not have because we had never done anything this large such as software architects, programme managers, security experts and business analysts. “We identified some people to retrain and they are moving forward. Others perhaps were not up for it, so their career choices had to lie elsewhere. But if the core material is there, I will invest in the right talent.” Royal Mail is five years into its 10-year outsourcing contract with CSC, which was reviewed late last year in relation to “monies Royal Mail wanted to pay for extra services and some services that were no longer required”. Earlier this year, Computing revealed Royal Mail was tendering for up to £40m-worth of consultancy contracts to support its outsourcing deal with CSC. The move was triggered by “simpler consultancy framework agreements”, expected to reduce project timelines. “We will see more activity around application development and CSC knows that,” said Dargue. “I like to have competition to ensure we have a range of great capability and partners. It is just sensible, and there is a lot to be done.” |
| Ian Powell elected chairman and senior partner of PwC | |
| 8 May 2008 | PricewaterhouseCoopers LLP has elected Ian Powell as chairman and senior partner for a four year term, with effect from 1 July 2008. Ian Powell commented: "The opportunity to lead our thriving business is hugely exciting and I look forward to building on the great work done by Kieran Poynter in developing trust and confidence in our firm. Powell is head of advisory and has been a partner in the UK firm for 17 years, he has also held a number of leadership roles over this time including head of business recovery services. The senior partner is responsible for leading more than 16,000 partners and staff in the UK and for establishing the vision and strategic direction of the firm. Powell spent the early part of his career in the assurance business working on a wide variety of clients. From 1986 to 2006 he worked in corporate restructuring and has extensive experience in advising stakeholders on high profile restructurings including Marconi, ntl and Drax. Ian was administrator to MG Rover in 2005. |
| TPI Index reveals healthy market momentum in 2008 for global outsourcing industry | |
| 8 May 2008 | TPI, the sourcing data and advisory firm, has released the findings from its quarterly analysis of the global commercial outsourcing industry for the first quarter of 2008, as well as the previous six months. According to the latest TPI Index, which tracks commercial contracts valued greater than $25 million, the first quarter was within the range of other recent quarters in terms of number of contracts awarded and total contract value (TCV). Additionally, the quarter had a tremendous year over year increase of nearly 20 percent in annualized contract value (ACV) -- the value of a contract divided by its duration. The first quarter of this year saw 122 contracts awarded valued at nearly $21 billion in TCV, and more than $4 billion in ACV. The quarter ranks as the second best first-quarter performance ever for ACV, pointing toward underlying muscle in the global outsourcing marketplace. With several mega deals (contracts exceeding $1 billion in TCV), Europe, the Middle East and Africa (EMEA) continues to lead in outsourcing adoption, with more than 65 percent of the global contract TCV and ACV coming from this region. EMEA's percentage of the global contract TCV and ACV is more of an indication of softness in the Americas than any absolute increase in EMEA. The Americas -- while still growing in annualized revenues, are experiencing smaller contract values and shorter contract durations. The first quarter of 2008 experienced the most "new scope added" contracts, which accounts for contract awards minus restructurings. And, for the past six months, their value topped all previous six-month measures -- an important signal of general satisfaction with existing outsourcing relationships. An analysis of the global broader market for the prior six months yielded some noteworthy landmarks. The TCV awarded during the recent six-month stretch -- nearly $50 billion -- was one of the highest in recent years; only one other comparable six-month period in the past five years had more TCV. ACV also saw an unusual level of activity during the six months, with more than $10 billion in ACV. By comparison, ACV for the same period one year ago was just under $8 billion. Finally, the 27 mega relationships awarded in the past two quarters represent an all-time high for any previous six-month period. Overall, the last six months got the year off to a very healthy start and lifted the historical trajectory -- due to greater TCV, ACV and mega relationships -- suggesting that 2008 is likely to achieve the TCV levels of the past two years. "Since 2007 ended with the signing of a significant number of global commercial outsourcing contracts, we added a view of the prior six months to this quarter's TPI Index to determine if there was a true trend of vitality moving into 2008," said Peter Allen, partner and managing director, TPI. "All and all, the picture of the prior six months was very robust and indicates momentum in the broader market that we haven't seen in years. Looking forward, we anticipate near double-digit growth by annualized revenue measures of active contracts during the remainder of 2008." |
| Ernst & Young to integrate 102 country operations | |
| 8 May 2008 | Ernst & Young said that its Global Executive and the Global Advisory Council have approved the proposed integration of all of its 87 country practices in Western and Eastern Europe, the Middle East, India and Africa into a new EMEIA Area. It also confirmed that more than 700 partners in the Far East had supported a similar integration across 15 countries and territories. The EMEIA Area will operate as a single unit, led by a single executive team and, where allowed by laws and regulations, be underscored by formal combinations of practices. The new Area will be a US$11.2 billion organization with more than 60,000 people. The 3,300 partners of EMEIA will vote on the integration by the end of May. The new EMEIA Area will be effective from 1 July 2008. The integration of the Far East Area creates a US$1.2 billion organization, with more than 20,000 people. The new structure will also be effective from 1 July 2008. Mark Otty, currently the head of our UK practice, has been nominated to be the EMEIA Area Managing Partner, while David Sun and Jim Hassett were confirmed as Far East co-Area Managing Partners. Chairman and CEO Jim Turley said: "Ernst & Young has for years had the most comprehensive and implemented global integration of its practices. The combinations we are announcing today are bold and exciting developments that dramatically further this integration. We are setting a new standard for professional services. Together with the integration of the 29 countries of our Americas practices, which we announced in 2006, we remain the most globally integrated professional services firm." He added: "At Ernst & Young, our thinking always starts externally -- about the world around us -- and about all the potential that exists everywhere. The moves we announced today reflect the increasingly global nature of our borderless business environment, which is changing the expectations of both our clients and our people, and which requires nothing less than a truly global approach from our organization. With these changes, I am confident we will provide greater opportunities for our people to achieve their potential as well as superior service to our many clients. We will also strengthen our unique, diverse international culture." Chief Operating Officer John Ferraro said: "We committed ourselves to the effective global integration of our business several years ago, and we have created the structures necessary to achieve this. Feedback from our clients and the market tells us that this is the right approach. These latest developments in Europe, the Middle East, India and Africa, and in the Far East, will significantly strengthen our business, and allow us to best serve our clients in the global economy." "These are significant developments that reflect the fact that our world is changing rapidly and increasingly acts without boundaries," concluded Jim Turley. |
| KPMG announces global initiative to reduce carbon emissions by 25% | |
| 8 May 2008 | KPMG, the global network of professional service firms providing Audit, Tax and Advisory services, has announced a three tiered global approach to help address the challenges of climate change named KPMG's Global Green Initiative. "KPMG's Global Green Initiativeis a global commitment by KPMG member firms on a very serious issue," said Timothy P. Flynn, Chairman, KPMG International. "Climate change is now widely regarded as one of the most serious challenges the world faces. It has reached a tipping point in global awareness and demands a global response." "The principal ambition of KPMG's Global Green Initiative will be to reduce our member firms' combined carbon footprint by 25 percent by the year 2010 from a 2007 baseline, through emission reduction schemes and the use of renewable energy in our member firms," Flynn said. "In addition, we will provide our member firms' employees with the information and tools that they need to improve their own climate impacts both in the workplace and at home." "KPMG's Global Green Initiative is centered on three commitments," Flynn said, "first, measuring, reducing and reporting KPMG's carbon footprint; second, supporting environmental projects to help address the challenges of climate change within our wider commitment to our communities, and third, working with our employees, suppliers and clients to help them improve their climate change impacts. "Many KPMG member firms around the world have already set out ambitious climate change programs -- from reducing our energy consumption through energy-efficient buildings and finding alternatives to business travel, to working with our business partners and selected not-for-profit organizations on verifiable and credible environmental program," he added. Lord Michael Hastings, KPMG International's global head of citizenship and diversity, added, "We are committed to addressing climate change by acting as good corporate citizens, and KPMG's Global Green Initiative is a vital part of KPMG's global corporate citizenship, sustainability and social responsibility programs. "We observe among our firms' clients around the world that the subject is steadily moving up their agendas. They recognize that climate change has strategic and financial implications for their businesses, presenting both risks and opportunities. Business can, and should, be part of the solution," he said. "KPMG's Global Green Initiative represents a realistic and attainable set of goals. We have utilized the experience of KPMG's Global Sustainability Services network, which has more than 15 years sustainability experience and provides services to our firms' clients on meeting, managing, and reporting their carbon emissions, and of many of our member firms who have already made impressive reductions themselves," Lord Hastings said. |
| Infosys gives upbeat forecast despite US slowdown | |
| 8 May 2008 | Infosys Technologies Ltd, India's No.2 software services exporter, reported a near-10 percent rise in profit, the slowest profit growth in at least eight years, and gave a confident medium-term outlook despite a slowing US economy. The company just missed market forecasts for its March quarter profit and sounded cautious on its short-term outlook, as the US economic slowdown hit the budgets of clients in its biggest market. Net profit rose 9.2 percent to 12.49 billion rupees (315.04 million dollars) in the fourth quarter ended March, from 11.45 billion rupees. Analysts were expecting profits of 12.6 billion rupees. Revenue rose by a fifth to 1.136 billion dollars and Infosys added 40 clients during the quarter. The company, the first in the sector to report results, remains confident and is forecasting that revenue for the year to end-March 2009 would grow 19-21 percent to $4.97-$5.05 billion and earnings per share to rise by up to 18.3 percent. That compares with growth rates of 20.1 percent and 18 percent, respectively, in the year just ended. Infosys also said it would increase its dividend payout ratio to as much as 30 percent of net profit, from 20 percent, starting this fiscal year. For the year ended March 31, Infosys will pay a final dividend of 7.25 rupees per share amounting to 4.15 billion rupees and a special dividend of 20 rupees per share, adding up to 11.44 billion rupees. |
| More councils miss key child welfare IT deadline | |
| 18 April 2008 | Delays to the Integrated Children’s System (ICS) at the heart of the government’s Every Child Matters policy are worse than first feared, and councils have been told that a key deadline has been put back by six months. A circular sent to senior executives and ICS project leaders at local authorities by the Department for Children, Schools and Families (DCSF) on 27 March showed that 95 councils were expected to miss the 31 March deadline for going live with vital Phase 1B ICS requirements. Computing initially revealed last month that at least 30 councils would fail to hit this milestone. The memo, seen by Computing, puts back the deadline to 30 September and warns that councils that still miss the new date will be expected to return unused funding provided for ICS rollout. DCSF said it might also “seek to recover the capital assets that the used funding has provided”. DCSF has allocated a total of £20m in grants to help implement the system, but just 55 authorities achieved Phase 1B compliance in time. Some councils could still find the later target difficult, said Colin Gunner, a consultant at local government user group Socitm. “There are varying degrees of missing the March target. Some may only have missed by one to three months and will see the September deadline as achievable,” he said. “But a percentage of the councils have either not yet started any ICS implementation, are still awaiting their software supplier’s Phase 1B compliance release, or have yet to contract for any system. These are nearer to 30 or 40 councils, and they may find even September 2008 a real challenge.” It has also emerged that DCSF failed to fully publish a government-commissioned report by the University of York in May 2007 which expressed concern that ICS “has yet to demonstrate the degree to which and how it is fit for purpose.” DCSF released its own version of the findings, omitting the ICS criticisms and focusing on the importance of training social workers to adequately use the system, according to Terri Dowty, director of pressure group Action on Rights for Children. “It is a top-down system given to social workers and they are finding it difficult. It is taking time away from working with children,” she said. DCSF said it is considering the future development of ICS and will notify authorities of developments in the next few weeks. |
| UBS scraps £1bn outsourcing plan | |
| 18 April 2008 | Investment bank UBS has scrapped plans for a business process outsourcing deal worth up to £1bn covering its entire global training and human resource (HR) operations. The planned contract was due to encompass the provision and administration of internal and external training and core HR functions including pension administration, payroll and workforce records, according to sources close to the project. Had it gone ahead, the deal would have been one of the worlds largest business and HR outsourcing projects. But UBSs chief learning officer Michelle Blieberg told Computing there are now no plans to proceed with any such initiative. Europes second-largest bank decided to continue developing its learning programme in-house and only use a third party for administration projects, she said. UBSs main learning and development plan caters for three different audiences. An entry-level scheme prepares graduates with the business and technical skills they need to start work, followed by two further programmes focused on mid-level executives and managing directors. Other career development programmes include a 90-minute e-learning course for trading floor staff and IT personnel who cannot spare a day out of the office. UBS plans to introduce new and continuing talent initiatives, despite reports that it could cut up to 3,000 jobs across its investment banking division. Earlier this month, the bank was forced to write off nearly $38bn (£19.1bn) as a result of the US sub-prime mortgage crisis, causing chairman Marcel Ospel to quit the firm. In the current climate, some firms will revisit outsourcing deals as agreed business volumes prove to be different to what they are now experiencing, said National Outsourcing Association director Mark Kobayashi-Hillary. Even though outsourcing functions such as learning and HR may have a positive impact and improve efficiency in the long run, it would certainly be a disruptive and expensive process in the short term, he said. But the biggest opportunity is more on the positive side, as there is normally a cost advantage to outsourcing, even if it is just to create certainty. And that is what businesses want in an environment such as this. |
| Capgemini acquires Unilever's service centres in Chile and Brazil | |
| 18 April 2008 | Capgemini has signed an agreement with Unilever, the global consumer goods company, to acquire and manage the company's financial shared service centres in Santiago, Chile, and Sao Paulo, Brazil. The integration and management of the centres will begin in early May. In addition, Capgemini and Unilever will enter into a seven-year agreement to deliver a full range of BPO financial shared services to Unilever's businesses in Latin America, including specific transactional tax services for Unilever Brazil. Financial details of the agreements were not disclosed. "This decision is consistent with Unilever's strategy to seek efficiencies in its ways of working by reducing complexity and leveraging the scale and best practices of outsourcing providers," said John Bird, SVP Finance & IT, Unilever Americas. This agreement is built upon an existing relationship between Unilever and Capgemini. In October 2006, a similar agreement to provide BPO financial shared services in Asia, Africa and the Middle East was signed in which Capgemini acquired a majority stake of Unilever's shared service centres in Bangalore and Chennai in India. Following the integration of Unilever's Santiago and Sao Paulo service centres, approximately 400 professionals from Unilever will join Capgemini, further strengthening its presence in Latin America, which was established at the end of 2007. In total more than 1,100 Capgemini BPO professionals will be delivering financial shared services for Unilever in Asia, Middle East and Latin America. "This agreement is an important milestone for Capgemini BPO, as we continue to expand our global excellence delivery footprint and strengthen our leadership position in BPO financial shared services," said Hubert Giraud, Head of Capgemini BPO. |
| Systems integrators lead growth in European IT | |
| 18 April 2008 | A growing desire amongst both private and public sector organisations to outsource responsibility for the implementation and support of IT has enabled Europe's leading System Integrators to post growth rates well above the industry average over the last year. The top 700 European Systems Integrators, which between them employ 1.29 million people, posted average growth rates of 11.27% in generating combined sales of $169.96 billion (€107.57bn) last year. These are amongst the findings of Systems Integrators in Europe - The Top 700, the latest database report from industry watcher IT Europa. The database report, which provides detailed business profiles of each of the top 700 European Systems Integrators, provides further evidence that Europe's IT industry is increasingly being driven by applications and service based sales. In terms of geography, the highest growth rates were achieved in Germany (average 18.45%) followed by Italy (16.98%) and Poland (16.35%). Norway was at the bottom of the growth league with just 4.58% growth. Amongst the leading companies, major winners included Dimension Data (23.5% growth) Accenture (19.8%) and IBM (18%). "What we are seeing here is mainly geographic growth as companies set up operations in other regions, particularly Eastern Europe, by a combination of organic growth and acquisition," explains Christine Bardwell, IT Europa Research Manager. "Companies such as Ness, Logica CMG, CIBER Novasoft, S&T CZ and Sigma AB have all benefitted from significant acquisitions over the last 2 years." IT Europa's Managing Director, Alan Norman, adds: "The considerable growth we are seeing in this sector underlines the transition we have been observing for some time towards more application and service lead sales. Put simply, organisations are increasingly averse to the risk of deploying and managing large scale IT systems and infrastructures themselves. They want Systems Integrators to take responsibility for managing the increasing complexity for them and to do that on an international basis involves having a local presence, which is one reason why we are seeing so much geographic expansion. There is also a growing desire to harness lower cost near-shore resources from the developing Central and Eastern European markets." European systems integrators by sales Company Total Sales($m) IBM Global Services EMEA 19,001 BT Global Services Limited 16,351 T-Systems International GmbH 15,840 Capgemini SA 9,546 Accenture EMEA 9,534 Atos Origin S.A 7,631 EDS EMEA 6,849 HP Services EMEA 6,825 Logica Plc (EMEA) 6,131 Siemens IT Solutions and Services GmbH & Co. OHG 6,050 Fujitsu Services Holdings plc 4,918 CSC Europe Limited 4,225 Source: Systems Integrators in Europe - The Top 700, IT Europa |
| Mouchel reports 49% increase in half-year revenue | |
| 9 April 2008 | Mouchel, a consulting and business services group, reported a 49% increase in the group's half-year revenue to £308 million and a strong organic revenue growth of 17%. Underlying operating profit for the period rose 28% to £18 million, while operating margins dipped only slightly to 5.9% from 6.9% following the group's acquisition of business process outsourcing company HBS in August 2007. During the six-month period, Mouchel increasing the forward-order book to a record level of £2.3 billion. Significant wins include the appointment, through the AccordMP joint venture, to undertake the HA "super agency" maintenance and network management commission in south-east England (Area 3); and extensions of the group's highways contract with Hertfordshire County Council and its bundled services contract with Lincolnshire County Council. In addition, Mouchel has been appointed preferred bidder for its first Building Schools for the Future commission in the London Borough of Hackney. Earlier in the month, Mouchel acquired public sector management consultancy business Hedra, extending the group's strategic consulting and transformation expertise in local and central government sectors and regulated industries. Richard Cuthbert commented: "The first half of the year has seen another period of strong growth for Mouchel. We continue to reap the rewards of a strategy that is focused on working closely with UK public sector organisations and with industries regulated by Government to transform public services. All of our clients want to reduce the cost of service delivery while at the same time improving the quality of those services - with the extended reach provided by the complementary acquisitions of HBS and Hedra, Mouchel is better placed than ever to assist them with this challenge. The general market outlook for our services remains good and we continue to be confident about our future prospects." In a separate announcement the company said it has appointed Lynton Barker as a non-executive director with effect from 1 April 2008. Lynton Barker, 60, was formerly a director of Hedra Limited (formerly Hedra plc) from 2003 to 2008, and latterly Hedra's Chairman before it was acquired by Mouchel on 5 March 2008. Prior to joining Hedra, Lynton was Head of UK Consultancy for PricewaterhouseCoopers and a member of their UK Main Board and of their European Consultancy Board. He was Member of Public Services Productivity Panel from 2002 to 2007 and Chairman of the Scientific Services Agencies Board from 2004 to 2007. |
| KPMG appoints new London Chairman | |
| 9 April 2008 | KPMG has announced the appointment of Richard Reid as its London Chairman, as of 1st April 2008. He will take over from Ian Barlow, who is retiring having held the role since January 2002. Reid, who joined KPMG in 1980, will continue to build on Barlow’s work in increasing links with business leaders and communities across London. He takes on the role at a time when KPMG is preparing to move 4,000 of its 6,000 London staff to new, purpose built headquarters in Canary Wharf, due to be completed in 2010. A third of staff will remain in two of KPMG’s current offices in the City of London. His term will also see the opening of the City of London KPMG Academy in Hackney in 2009. Reid, who is currently UK Vice Chairman and Chairman of the UK Firm’s Consumer and Industrial Markets Group, said: “I am taking on this role at a very exciting time, not just in KPMG’s history. This is a key role within the firm as KPMG, and its people have an immensely important role to play within the diverse business and social communities that operate in London. Thanks to Ian’s hard work and consistent efforts, I am taking on this role at a time when KPMG’s reputation for being a community and business leader is stronger than it has ever been.” During his term in the role, Barlow has been heavily involved in London’s business community, chairing the London Business Board, Think London and the 2012 London Business Network. This reflects his view that as a leading employer in London KPMG should pay its full part in supporting the growth and prosperity of London. He is also a Board member of London First. He is the founder Chairman of the Safer London Foundation, the charitable arm of the Metropolitan Police, of which KPMG have been an important supporter and has championed the joint sponsorship with the Corporation of London of a new City Academy in Hackney. John Griffith-Jones, Co-Chairman of KPMG Europe LLP, said: “I would like to thank Ian for his immense contribution to the firm - and to the City - over the last 35 years. I look forward to working with Richard in the years to come.” Barlow will continue as an adviser to KPMG and plans to remain involved in London’s business community through his external chairmanships. |
| EMC to acquire Conchango | |
| 9 April 2008 | EMC Corporation, a world leader in information infrastructure solutions, has made an offer to acquire UK-based Conchango plc., a growing technology consulting firm specializing in the design, development and delivery of custom applications and digital experiences. The acquisition of Conchango will enhance EMC's ability to provide technology consulting services to customers in the United Kingdom and across Europe, and builds upon the focused investments EMC has been making to expand its information infrastructure consulting services around the world. EMC has offered 23.1 pence per Conchango share, which values Conchango at approximately £42.0 million, or US$84.0 million. The Conchango board has unanimously recommended the offer to Conchango shareholders. The transaction, which already has the support of Conchango shareholders holding approximately 80% of its issued share capital, is expected to close in April. The acquisition is not expected to have a material impact on EMC revenue or on EPS for 2008. With headquarters in London, Conchango is one of the largest European IT consultancies with a high degree of focus and experience in Microsoft application consulting services, serving many of the largest companies throughout the United Kingdom. As a Microsoft Gold Certified Partner, and with more than 300 professionals, Conchango's business and technology consulting expertise will broaden EMC's overall service and solution portfolio, enhancing the end-to-end business value of EMC's information infrastructure offering for customers. Howard Elias, President, EMC Global Services and Resource Management Software Group, said, "The addition of Conchango will mark another key milestone in the evolution of EMC's rapidly growing consulting services organization, significantly expanding our global capabilities to design, build and deliver tightly integrated solutions for our customers' most critical business applications." Upon close, Conchango will become the foundation of EMC's expanding European Microsoft consulting practice within EMC's Consulting & Solutions Integration Services (CSIS) organization. Mike Altendorf and Richard Thwaite, Conchango's co-founders and joint managing directors will co-lead this European consulting practice. With more than 12,000 technology experts globally, EMC's Global Services Division brings a unique mix of information infrastructure experience and strategic business focus to give customers a full range of consulting, design, implementation and support services. |
| Oliver Wyman acquires Hemeria | |
| 9 April 2008 | Oliver Wyman, the international management consulting firm, has acquired Hemeria, a Paris-based management consultancy with specialized expertise in improving the productivity and competitiveness of industrial and service companies through the application of specialized consulting skills and capabilities in performance improvement, supply chain design and performance optimization, restructuring programs, purchasing, and structural cost rationalization. Hemeria's more than 80 employees will join Oliver Wyman's global practice groups serving companies in the automotive, manufacturing, aviation, aerospace, consumer goods and retail, defence, process, and surface transportation industries. With this acquisition, the Paris office of Oliver Wyman will welcome six Hemeria partners, bringing the total number of Paris-based Oliver Wyman partners to 48. "This acquisition further deepens our ability to bring a wide range of specialized knowledge and capabilities to serving our clients on their most pressing and intractable problems related to operations and manufacturing excellence," said John Drzik, Chief Executive of Oliver Wyman Group. "It not only deepens our footprint in France and Europe, but also offers our partners and clients around the world the opportunity to tap into a deep reserve of highly differentiated and specialized expertise that Hemeria has developed over the years." Gilles Roucolle, a Partner in Oliver Wyman's Paris Office leading the integration of Hemeria, said: "Hemeria's strengths and relationships will reinforce our operations management expertise at a particularly critical time for value creation in industrial and service companies worldwide and further establish our position as a multi-specialist firm among leading international consulting firms in the world. We look forward to welcoming our new colleagues on board." Hemeria was founded in 2002 and is led by Bernard Birchler. The firm's people and capabilities significantly broaden Oliver Wyman's client offerings, which reach across the manufacturing, process industries, financial services, packaged consumer goods, retail, telecommunications, information technologies, media, tourism, and utilities industries. |
| Deloitte to sponsor cultural festival | |
| 9 April 2008 | Deloitte has begun a 5-year partnership with the Royal Opera House, under which Deloitte's £1.75 million sponsorship will enable the ROH to stage Deloitte Ignite, an annual three day cultural festival targeted at young professionals. The festival has been designed to widen access to the ROH. John Connolly, Deloitte senior partner and chief executive, said: "This five year relationship will allow the ROH to stage a range of new and innovative performances and reach a more diverse audience. It will also give Deloitte's clients, staff and partners some unique entertainment opportunities and experiences at what is undoubtedly one of the UK's leading arts and culture venues." |
| Capgemini awarded four-year framework contract by NHS Connecting for Health | |
| 9 April 2008 | NHS Connecting for Health, on behalf of the NHS, has awarded a four-year framework contract covering the period 2008-2012 to Capgemini UK plc through open competition to provide additional capacity and capability in the supply of IT products and services to the NHS. The framework contract, one of a number awarded to national and international vendors, will enable the streamlined procurement of IT systems and services from suppliers who have demonstrated experience in the health sector and can be used to support both National Programme for IT (NPfIT) related work and wider IT related projects. The contract is intended to supplement the existing supply capacity and to enable new requirements to be met through a readily available approved framework. Capgemini successfully bid for business lots covering ICT services, consultancy and hardware and infrastructure services. Capgemini was the only bidder to be successful in all seven sub-categories in the Information and Communications Technology category and in all five sub-categories in the Hardware, Infrastructure and Associated Services category. |
| Ernst & Young leads UK training and development | |
| 31 March 2008 | For the second year in succession, Ernst & Young was placed among the top five big companies in the highly prestigious Best Companies to Work For Awards, picking up a special prize for training and development. The firm was also one of only two accountancy firms to receive the prestigious 3 star accolade. Ernst & Young Chairman Mark Otty said: "As well as being recognised as one of the leading employers in the UK, we are delighted to receive this special Training & Development Award. We actively work with individuals to identify which learning experiences and rewarding on the job challenges they need to take them forward in their career, and each individual is coached throughout their time at Ernst & Young." Otty, personally, recorded the highest score amongst the bosses of the UK's biggest companies to the "inspiring leader" question in the survey. As well as his strong internal profile, he is a regular commentator on business and economic issues such as social mobility and foreign direct investment into the UK, and he recently accompanied the Prime Minister on his business trip to India and China. |
| Credit crunch fails to dampen consultants' enthusiasm for changing jobs in 2008 | |
| 31 March 2008 | More than 1150 responses were received this year to the candidate survey from consultants at all the major consulting firms and niche consulting firms, as well as from candidates looking to make a move into consulting from industry. Complemented by responses to a separate consultancy recruiters' survey, the full report details the trends, changes and challenges faced by candidates and recruiters in the UK management consultancy market. In what is undoubtedly a tougher recruiting climate following several months of uncertainty and fallout from the global credit crunch, the report reveals much more optimism and drive for growth than it hoped to find. What it didn't expect to find was such an appetite among consultants to venture out into the recruitment market. A staggering 64% of the 1150 candidate respondents reported that they were either more or much more likely to change jobs in 2008 than in 2007 - and 2007 was widely recognized as an exceptionally buoyant recruitment year. Of course, looking at this another way, candidate intentions suggest that staff attrition will actually worsen over the coming year and, interestingly, this puts candidates at odds with recruiters on the matter. Recruiters, and over 150 responded to the survey this year, indicated that their expectation overall is that the staff attrition problem will ease slightly overall in 2008. 38% of them expect attrition rates to improve while only 26% expect rates to worsen. Only time will tell whose view is most accurate, of course, but there is no doubt that retention will continue to be a key challenge for consulting firms through the next 12 months. Candidates and recruiters do agree, however, on the most popular destination for consultants leaving their firms - another consulting firm. Recruiters were asked where consultants were moving on to when they left their firms this year and the industry can take some comfort at least in the fact that the majority intends to remain within consulting. Looking at the rest of the data and comparing it with last year's, there is an increase in the attraction to consultants of moving into industry and, perhaps unsurprisingly given the credit crunch, there is a decreased attraction among consultants to seek a job in the City - until recently a popular destination for consultants looking to hang up their laptops and improve their remuneration. These recruiter findings are accurately corroborated by the candidate poll results. "We shall see a lot of poaching from other consultancies again this year," says Bryan Hickson, Sales Director of Top-Consultant.com and author of the report. "The report also separately shows that the appeal to recruiters of experienced-hires has increased while at the same time the appeal of university leavers and MBA finalists has fallen - there's no way round it. We may see an increased willingness among consultancies to bring in talent from outside the industry as the supply of experienced consultants fails to meet demand but poaching will remain the most likely source of hires in 2008." |
| Google’s revenues soar | |
| 12 March 2008 | Google reported a 51% increase in revenues for its recent fourth quarter. However the associated income ‘only’ climbed from $1.03bn to $1.21bn. This is the first time Google’s profit has grown less than 25% since it went public. Possibly it’s a little too early to suggest the writing is on the wall for the pay per click giant? But there will come a time when Google has to modify its lavish approach to investing in its staff’s weird and wonderful ideas. Google’s available ‘sandbox’ cash is likely to diminish as the rate of business growth decreases. Google’s strength has been its ability to innovate without concern for cash. Constraining this innovation by controlling the funds available is likely to further contribute to a slow down in growth. |
| Green is the new gold | |
| 12 March 2008 | Technology providers with a strong green message are heading for boom time, as customers choose ethical suppliers over less environmentally friendly competitors. Some 40% of the tech execs in a PricewaterhouseCoopers survey said that growing demand from customers for green products and services is creating significant market opportunities. Wouldn’t it be great if the hardware vendors adopted bio-fuels that in some way enhanced their branding? So for example the iMac would be fuelled by Apples? Though this might be a bit of a branding disaster in the case of IBM’s eye-series. |
| Sun says – It’s mySQL now | |
| 12 March 2008 | Sun Microsystems has successfully acquired open source database vendor MySQL for $1bn. It’s a princely sum for a company that has revenue of circa $55m. However MySQL’s MySQL database is a major player in the web application development space, so this situation can only improve. The move may well irritate partners Oracle and IBM who are both major database vendors. Sun already has a database footprint with its support for open source PostgreSQL. Both Google and Yahoo use MySQL. So expect Sun to top the search results, regardless of the keywords. |
| Microsoft | |
| 12 March 2008 | Organic growth in the pay per click market will not enable Microsoft to take on the mighty Google. Thus it intends to acquire Yahoo! to achieve an instantaneous growth spurt. Microsoft values the search engine player at $44.6bn, which is a substantial premium on Yahoo!’s share price. The various competition authorities will have a view on this, as will Yahoo!’s board. Some might argue that the takeover would be good for competition because it would provide customers with a viable alternative to Google. It’s a sign of changing times if it is in the market’s interest to support Microsoft’s strategy. |
| Axon doubles annual revenues | |
| 12 March 2008 | Axon Group plc, the business transformation consultancy, said revenues grew by 49% to £204.5m (2006: £137.5m) for the year ended 31 December 2007, giving the group a three year compound annual growth rate of 53%. Adjusted operating profit increased by 65% to £36.5m (2006: £22.1m), translating in a 49% rise in adjusted diluted earnings per share to 38.4p (2006: 25.7p), as Axon increased margins for the year. Business consulting revenues grew by 60% from £25.0m in 2006 to £39.9m in 2007, which represents 19% of turnover (2006: 18%). Looking ahead to 2008, Axon said the increased economic uncertainty has not had effect on its order pipeline and it remain comfortable that it will continue to grow faster than underlying market rates. EMEA revenues increased by 22% to £129.3m (2006: £105.8m), which Axon attributed to the delivery of pan-European transformation programmes and its continued success in the local government sector. Revenues in North America increased by 130% to £73.6m (2006: £32m), achieving an organic growth of 41%. North America represented 36% of total revenues in the year (2006: 23%). In October 2007 Axon completed the acquisition of JSPC, a publicly quoted Malaysian provider of SAP services. The consideration was £6.2m (net of £3m of cash balances which came with the acquisition). This deal increased the scale of Axon's Malaysian operations with an office in Penang and provided a small base in China, further diversifying the company's off shore capabilities. |
| Mouchel acquires Hedra | |
| 12 March 2008 | In a deal valued at £50 million, consulting and business services provider Mouchel has today strengthened its position in the public-sector market through the acquisition of Hedra, a consultancy, solutions and services business that provides advice and implementation support to clients in the UK public sector. The acquisition more than doubles the size of Mouchel's management consultancy business. It represents the largest single transaction for the group since the merger of Mouchel and Parkman in 2003 and marks a decisive step in its transition from an engineering focused consultancy to a multi-disciplinary consulting and business services group. Mouchel operates predominantly in the public and regulated sectors, working with central and local government, utility companies, and transport operators on infrastructure projects. The group has more than 11,000 employees and a turnover of £450 million. Hedra is one of the UK's largest independent management consultancies. Its clients are predominantly in central and local government, but also in those industries regulated by government and a wide range of public service agencies. It is a privately owned business and has more than 200 employees, together with more than 400 active associates throughout the UK. In the financial year ended 31 December 2007 Hedra generated profits before tax of £4 million on gross revenues of £47.5 million. Mouchel's management consultancy business was expanded through the acquisition of Hornagold and Hills in November 2006 and currently employs around 250 staff. The new business will therefore employ nearly 500 staff. It will be led by Hedra chief executive Mark Campbell, who will join Mouchel's Group Management Board. Lynton Barker, chairman of Hedra, will also be joining Mouchel in a strategic role. Richard Cuthbert, Mouchel chief executive, comments: "The acquisition gives scale and breadth to Mouchel's position in the public sector and complements the acquisition of HBS last August. By merging Hedra with our existing management consultancy and project management practice, we move directly into the premier league in this area and strengthen our in-house capacity to deliver and transform single and multi-service outsourced contracts." Mark Campbell adds: "We are very excited to become a part of Mouchel at this exciting stage in its growth. The fit between our two businesses is excellent in terms of market focus and commitment to excellence in client delivery. There is also a strong cultural alignment. The combination of Mouchel and Hedra will create an organisation that can contribute significantly to the continuing transformation of public services organisations in the UK." 83.4 per cent of the acquisition price will be settled in cash and the remainder in new Mouchel shares. Mouchel expects that the combined effect of this acquisition will enhance earnings per share (before exceptional costs, including amortisation of intangible assets arising from business combinations) in the first year of ownership. The group is forecasting that the combined business to deliver annualised cost savings of at least £1 million. |
| Capgemini: Kanbay integration a success | |
| 12 March 2008 | Capgemini said its celebrating the one year anniversary of its successful integration with Kanbay International, Inc., formerly a global IT services firm focused on the financial services industry. Together, Capgemini and Kanbay, formed Capgemini’s Financial Services Strategic Business Unit (FS SBU), integrating operations in India, Europe, North America and Asia-Pacific. “We have created a focused, financial services group with a single face and highly flexible and scaleable solutions that can not only support evolving business strategies, but also rapidly adapt to changing market conditions,” said Paul Hermelin, CEO, Capgemini Group. “We are pleased with the pace of the Kanbay integration into the Capgemini family,” he added. The integration process officially began in February 2007. In a rapid progression of events, the structure of Capgemini’s newly augmented financial services capabilities was unveiled in April and the integration was completed by year end. “Together, we have deeper domain experience and strengthened global scope that enables us to deliver high-value solutions with tremendous efficiencies,” said Raymond Spencer, CEO, Capgemini FS SBU. “The formation of the FS SBU has enabled us to leverage our synergies and grow the business even further.” With an enhanced ability to offer clients end-to-end solutions that address the full spectrum of financial services–client needs, the close of 2007 saw significant synergistic wins for the FS SBU. “A key contributor to the success of the merger was total client focus of the leadership teams, powered by a disciplined project management approach with a well-planned change management program. By leveraging the combined relationships, expertise and experience of the current team, in 2007, we gained over thirty clients in several different continents,” added Spencer. “And as even further proof of the integration’s success, attrition returned to pre-acquisition levels within three months of the closing, with 80% of Kanbay’s leadership team still at the helm.” |
| Towers Perrin study debunks common workforce myths | |
| 12 March 2008 | Some of the most pervasive beliefs about the workforce have recently been challenged by findings from Towers Perrin’s 2007 Global Workforce Study -- among them, that workers are highly stressed, that they resent the demands of new technologies and that they dislike their bosses. To understand what drives employees to perform and succeed, Towers Perrin recently surveyed nearly 90,000 employees in 18 countries. The survey, which explored the drivers of workforce engagement -- employees’ willingness to go the extra mile to help their companies succeed -- also exploded many of the myths that surround today’s workforce. “Good Stress” Has Its Place in the Workforce Concerns about the negative effects of a “stressed out” workforce appear to be overstated, according to the Towers Perrin findings. In fact, 68% of those surveyed reported being neutral to energized by on-the-job stress. “The number of employees who indicated a level of comfort and even positive energy in response to work-related stress confirms that challenging work helps employees remain focused and interested throughout their daily routines, and more eager to contribute,” said Max Caldwell, Managing Principal of the firm’s global Workforce Effectiveness practice. “At the same time, our respondents do want more work/life balance, and they are looking to their employers, and especially their managers, to help them achieve that balance in ways that support both their own career aspirations and the company’s needs.” Technology Is Not the Enemy One of the ways to achieve balance is through increased use of technology, which is viewed as a positive factor in the work experience and not as the 24/7 “virtual prison” it’s often made out to be. “The near-ubiquitous presence of cell phones, laptops and personal electronic devices means that employees can now access e-mail, voicemail, calendars, documents and presentations from virtually anywhere, anytime,” said Caldwell. “Far from being a problem, the vast majority of our survey respondents (86%) feel this is actually helping them achieve some level of balance between their personal and professional lives. “This positive response not only contradicts the common belief that technology keeps employees chained to their jobs and dominates their time away from the office, but also signals that employees are realistic about the demands of today’s global business environment, and they’re willing to do what’s necessary to achieve work/life balance in a world that operates literally around the clock.” Working to Live Yet another prevalent myth is that today’s workforce is “living to work,” choosing to put work at the centre of their lives. While people are working hard -- putting in, on average, almost 45 hours per week, with almost a fifth working 51 hours or more routinely -- few employees actually share that view. More than half the respondents (59%) reported that they work to support their lives and the needs of their families, versus 18% who agreed that work actually is the most important aspect of their lives. The distinction was more apparent in the U.S., despite a common view that “workaholism” has spread outward from the U.S. Among the U.S. respondents, almost three-quarters (72%) agreed that they essentially work to live, with only 9% putting work at the centre of their lives. “Globally, we found that the ability to balance personal and professional life is the fifth most critical factor in employee retention,” said Caldwell. “With work/life balance playing a major role in organizations’ ability to retain employees, it makes sense for employers to take an active role in helping the workforce achieve the right combination of personal and professional satisfaction.” In fact, 42% of the respondents agreed that their organization had policies and programs to help them balance work and personal life responsibilities; only 24% disagreed. And 51% said their manager was fair and consistent in enabling work/life flexibility. In the U.S., this percentage was even higher, at 63%. Globally, however, 59% also noted they were sometimes or frequently frustrated by their own efforts to balance work and personal life, suggesting that a disconnect remains in how employers and employees perceive the “deal” and their respective responsibilities in this area. Workers Have a Positive Outlook on the Company and Themselves While comic strips and television shows make light of workforce negativity and malaise, the Towers Perrin survey found that most workers are satisfied, with a positive outlook about themselves and their organizations. Some key points: * Nearly two-thirds of the respondents (63%) were confident that they would be successful, and a full 60% were optimistic about their future. Among U.S. respondents, the picture was even brighter, with 75% believing they would succeed and 67% optimistic about the future. * The majority of respondents (69%) indicated that work was completely energizing (16%) or lifted their spirits somewhat (53%). * An overwhelming 86% of employees worldwide liked or loved their job; 77% liked or loved their company, and 73% liked or loved their boss. In the U.S., this optimism was even greater, with 82% of respondents saying they liked or loved their company and 83% saying they liked or loved their boss. At the same time, the research shows that employers are not fully harnessing employees’ confidence and energy. Globally, the study found a substantial “engagement gap,” with only 21% of the workforce fully engaged at work and 38% disenchanted or disengaged. While the gap in the U.S. was somewhat smaller -- with 29% of U.S. workers engaged and 28% disenchanted or disengaged -- it remains substantial enough to concern U.S. employers, particularly as they focus on sustaining and enhancing performance in a more challenging market environment. Manager Relationships Are Important, but the Company Has More Impact Finally, the study debunks a widely entrenched view that the first-line manager is the single most important factor in employees’ engagement and performance. While a good relationship with one’s direct manager remains very important, the actions of senior leadership and overall workplace programs and policies hold even greater weight. Indeed, the organization itself is one of the most powerful influences on employee engagement. Senior leadership’s decisions and visibility, along with learning and advancement opportunities, ranked higher than the direct manager relationship as a driver of higher employee engagement. “We’ve found that a company’s reputation and its senior leadership wield enormous influence over employee attitudes,” said Caldwell. “When these factors combine with positive direct-manager relationships, organizations can cultivate even more positive environments for their workforce -- leading to greater productivity, engagement and success.” |
| Kline strengthens management consulting capabilities in Europe | |
| 4 February 2008 | Consulting and research firm Kline & Company said that Luca Raffellini has joined the Oxford, UK office to further develop and support the firm's management consulting client base located throughout Europe, Russia, and the Middle East. Raffellini most recently was the head of global marketing for the Infineum Group, a joint-venture of ExxonMobil and Shell specializing in petroleum additives. In his role as Director with Kline Europe, Raffellini will lead client service teams providing chemical and energy industry clients with strategy development, technology management, and merger and acquisition support. "Luca's expertise in corporate and business strategy development for multinational clients and on M&A assistance will be invaluable to our clients," says Fred du Plessis, senior vice president, Kline Europe. "His commercial industry and consulting experience with companies doing business in polymers, specialties, and particularly across the lubricant industry value chain complements Kline's legacy serving these industry segments." "Kline has an outstanding reputation, spanning nearly half a century, helping companies to address business challenges, capitalize on global market opportunities, and grow profitably," Says Raffellini. "I'm excited to be part of the team and I look forward to working with our clients to help them achieve their goals." Prior to his position with Infineum, Raffellini was a senior manager in the chemicals practice at Arthur D. Little in London and has held R&D and commercial positions with EniChem in Italy. Raffellini earned a doctorate in chemistry from Bologna University in Italy and holds a Master’s in Business Administration from Cranfield University in the United Kingdom. Raffellini currently serves on the Harvard Business Review Advisory Council, on the Communication Directors Business Board, and has been on the Business Competition Judging Panel of Oxford University. |
| Rise of Indian IT services vendors faces new UK challenges | |
| 4 February 2008 | The top five Indian IT services suppliers will double their share of the UK software and IT services market by 2011, but they will face some new challenges as they bid for larger and more complex contracts. India's top five services companies: TCS, Infosys, Wipro, HCL and Satyam; are on course to grow their share of the fragmented UK software and IT services sector from under to 3% to 7% over the next three years, according to a new report from consulting group Pierre Audoin Consultants (PAC), a European market research and strategic consulting firm for the software and IT services industry. During this time, at least one of the leading Indian vendors will have surpassed £1 billion in annual revenue from the UK, and in doing so, will have become one of the country’s top ten SITS suppliers. In the last 18 months, UK companies including Carphone Warehouse, DSG and Skandia have all committed to £100+ million contracts with Indian service providers. However, in order to continue to secure deals of this magnitude, the vendors will have to demonstrate that they can execute staff transfer deals, manage sub-contractor and local partner networks, as well as combat the steady erosion of their price advantage by rising domestic labour costs. Nick Mayes, senior consultant at PAC, said: 2Low prices are no longer the only weapons in the armoury of the Indian services vendors, and they are winning business against Western suppliers on the quality and depth of their offerings. "But if they are to become major players in areas such as infrastructure outsourcing, they will need to prove their ability to successfully handle the TUPE transfer of staff from the client, which is an area where the likes of IBM and EDS carry far greater experience." |
| LogicaCMG creates outsourcing division | |
| 4 February 2008 | LogicaCMG is creating a new Outsourcing Services division that will take end-to-end responsibility for outsourcing services and will become operational in key European geographies from Q1 2008 and will be in place across the whole organisation by 2009. Jim McKenna, currently Chief Operating Officer, will lead the creation of the new division. In a separate announcement, the company said McKenna has decided to leave the company during the second half of 2008 to pursue a portfolio of interests. McKenna has performed a number of senior roles in his 14 year career at LogicaCMG and he acted as interim CEO before Andy Green was hired. LogicaCMG said its board had asked Jim to remain with the company until the latter part of the year in order to lead the creation of a new outsourcing division. The new division will provide outsourcing sales and design specialists to all LogicaCMG's customers via our local organisations. It will accelerate the standardisation of tools and processes and drive efficiencies across the organisation. This division will incorporate around 9,000 LogicaCMG employees working today in our onshore, nearshore and offshore centres across the globe. Outsourcing services currently represent around a third of LogicaCMG's revenue. The company has centres in India, Morocco, the Philippines and the Czech Republic. |
| Capgemini denies takeover rumours | |
| 28 January 2008 | India's Hindustan Times ran a story which quoted unnamed 'investment banking sources', suggesting Wipro was to make a bid for Capgemini. The story was widely picked up by local and international media outlets. Subsequently, both Capgemini and Wipro have denied that they are in takeover talks. Industry watchers were sceptical and called the takeover a highly unlikely scenario, pointing to the difficulties associated in integrating an 80,000-employee global business, especially given the disparity in profit margins at the two companies. |
| Investment in training and development set to grow in 2008 | |
| 28 January 2008 | Investment in training and career development is set to grow in 2008 as companies devote more resources to non-pay related strategies to keep their staff motivated and engaged, according to findings from Mercer's 2007 European Total Rewards Survey. Sixty three percent of respondents intend to keep investment in base salary steady, while 8 percent would actually reduce it. Respondents also noted that attracting and retaining employees will remain the most significant rewards challenge facing businesses. |
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