ICN Direct Newswire

April 2003

INTERNATIONAL CONSULTANTS' NEWS DIRECT IS SPONSORED BY:

IBM

** LATEST NEWS IN THIS WIRE **

1. Deloitte Consulting names new CEO
2. IBM makes strong start in 2003
3. Accenture ahead in second quarter
4. UK air traffic control contract going to Spanish outsider
5. Europe lags North America in e-government development
6. Further information - feedback/forward to a colleague/unsubscribe

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1. DELOITTE CONSULTING NAMES NEW CEO

Deloitte Consulting has chosen its global public sector practice leader Paul Robinson as its new chief executive designate.

Robinson, who is 50 and based in Toronto, replaces Doug McCracken, who announced his resignation after the failure of Deloitte Consulting to split from audit parent Deloitte Touche Tohmatsu through a management buyout last month.

Robinson's appointment is subject to a vote by partners worldwide, but he is unlikely to be unseated as a 20-year veteran of Deloitte Consulting and a member of the consultancy's global operations management committee.

Robinson said: "This is a pivotal moment for Deloitte Consulting. We have many decisions to make in the coming weeks, but I am very excited about what lies ahead of us - we have a great organisation. As we develop our strategy, I am confident the marketplace will continue to recognise Deloitte Consulting as a leader.

"By choosing to remain a part of Deloitte Touche Tohmatsu, we will have the financial strength needed to develop new products and services, and greater global scale in an environment where size increasingly matters."

Deloitte Touche Tohmatsu and Deloitte Consulting have yet to reach a final decision on how the relationships between the consultancy, audit business and business consultancy activities within the audit company will be maintained in individual country practices and on a global scale.

But whatever their decision, they are expected to lose clients fearful of breaching auditor independence rules. To date, General Motors and US car dealer AutoNation are reported to have parted company with the consultancy because of the failure to separate.

2. IBM MAKES STRONG START IN 2003

IBM has reported first-quarter net profit up 16% at $1.4 billion, on revenues rising 11% to $20.1 billion. IBM Global Services led the way, showing revenues - including maintenance and "aided by the addition of the former PwC Consulting" - up 24% at $10.2 billion.

Revenues excluding maintenance rose 27%, while the gross profit margin on services dropped from 26% in last year's first quarter to 24.9%. IBM says it signed services contracts worth $12 billion in the quarter and ended the period with an estimated order backlog of $113 billion.

Software revenues rose 8% in the quarter to $3.1 billion, including a one-month contribution from Rational Software, which IBM bought for $2.1 billion in February to support its middleware products. Total hardware revenues fell 1% to $5.8 billion.

On a geographic basis, revenue rose 5% to $8.6 billion in the Americas. In Europe, the Middle East and Africa, revenue was up 23% at $6.3 billion, while Asia-Pacific pushed up 14% to $4.5 billion. OEM revenues fell 15% to $690 million.

IBM chairman and CEO Sam Palmisano said: "In the face of an ongoing difficult environment, we delivered another strong quarter and continued to gain share across our strategic businesses. Going forward, we are well positioned to set the agenda and help customers transform their enterprises to realise the benefits, efficiencies and productivity gains of e-business on demand."

3. ACCENTURE AHEAD IN SECOND QUARTER

Accenture has exceeded analysts' estimates for the second quarter, reporting net profit of $118.8 million on revenues down 3% at $2.8 billion. This compares to net profit of $10.6 million - after significant restructuring costs - on revenues of $2.9 billion in last year's comparable quarter.

Outsourcing revenues rose 33% on last year's comparable figure to $828 million, representing 29% of total revenues. But consulting revenues fell 15% to $2 billion. Accenture said outsourcing "continues to be an area that the company is targeting for growth".

Revenues rose by 5% and 12% respectively in its communications & high tech and government operating groups, but were down 5% in financial services, 10% in the products group and 12% in resources. Revenues rose 2% across Accenture's Europe, Middle East and Africa region and 7% in Asia-Pacific, but fell 9% in the Americas.

Commenting on the results, Accenture chairman and CEO Joe Forehand said: "We are pleased with Accenture's solid performance in the second quarter, especially taking into account the challenging economic and geopolitical environment in which we continue to operate. We had strong contract bookings in the quarter of $4.75 billion, the second-highest in our company's history."

Looking forward, Accenture expects third-quarter revenue growth to be in the range of plus or minus 2% and continues to forecast a full-year gain of 0-2%.

4. UK AIR TRAFFIC CONTROL CONTRACT GOING TO SPANISH OUTSIDER

The UK's National Air Traffic Services (NATS) agency is set to choose Spanish IT services group Indra Sistemas to supply its new air traffic management system - spurning the world's four leading suppliers.

The about-face is a severe blow to Lockheed-Martin and Raytheon of the US, Thales of France and the AMS Anglo-Italian joint venture of BAE Systems and Finmeccanica, which had hoped to bid for NATS' new generation of IT systems. These systems will form the core of a $1.6 billion, 10-year capital spending programme at the recently refunded air traffic controller.

Ignoring these vendors' claims, NATS is instead conducting a detailed study of the IT systems developed for the Spanish and German air traffic control services by Indra - with a view to teaming up with Germany and Spain in the proposed ITEC project to develop a common flight data processing system for the participants.

NATS is expected to contribute an initial $6 million to the system design phase of ITEC, which will ultimately cover more than 40% of all flights in the European Union.

A final decision in Indra's favour would give the Spanish company a leading position in the European air traffic control market and add weight to the European Union's plans for a so-called Single European Sky, aimed at overcoming the fragmentation of European airspace.

5. EUROPE LAGS NORTH AMERICA IN E-GOVERNMENT DEVELOPMENT

Europe is trailing behind North America in the development and maturity of e-government services, according to research by Accenture.

The consultancy's third annual e-government study - based on interviews with 140 senior government agency executives in 22 countries - says Canada is leading the way globally, followed by the US, the UK, Germany, France, Australia and Hong Kong.

Only Canada has reached the top level of e-government maturity specified by Accenture, offering a customer service vision, methods for measuring the success of services, an integrated approach to offering services through multiple delivery channels, and a cross-agency approach to online services.

Behind Canada, the UK, France and Germany have reached the fourth out of five levels of online government maturity. To achieve this level, Accenture says governments must establish customer service objectives and develop portals that offer valuable, convenient online services to their customers.

Spain, Italy, The Netherlands, Norway, Japan and Malaysia languish on the third level - they offer basic portals built to make as many services available online as quickly as possible, broad electronic service adoption targets, some sophisticated transaction capabilities and a degree of concentration on customers.

The Accenture study - eGovernment Leadership: Engaging the Customer - found 93% of government executives felt improved citizen satisfaction was driving online development.

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