MCN Direct Newswire

Vol. 2 No. 36, 29 September 2003

This issue is sponsored by:

IBM, One4all, and IBM

This issue news

1. Atos Origin raises doubts about BPO business
2. LogicaCMG makes $116m hospital appointment
3. Anite predicts profitability
4. Parity plummets in first half
5. Accenture and SAP plan finance sector solutions
6. Further information - feedback/forward to a colleague/unsubscribe

Sponsor

IBM

IBM's Winning Streak expected to continue in the Intel Server market

A new report from independent IT Analyst firm Software Strategies reviews the development roadmap for IBM's eServer xSeries family for 2003/2004 and beyond. One recommendation from the report is that Intel server users who have traditionally purchased most of their servers from HP (Compaq) or Dell would now be well advised to carefully review and consider IBM eServer xSeries for their future Intel investments. Click here to find out more.

1. ATOS ORIGIN RAISES DOUBTS ABOUT BPO BUSINESS

Atos Origin - which last week agreed to buy SchlumbergerSema's IT services businesses for $1.5 billion - is scrutinising the business process outsourcing (BPO) contracts it will acquire as part of the deal before deciding whether to pursue or quit the BPO market.

Atos Origin claims the SchlumbergerSema acquisition will fulfil its strategy of creating an IT services firm with strength in every European market and a balance of consulting, systems integration and managed services revenues - but it questions the value of the BPO market in Europe and the US.

While it has a hugely profitable credit card processing business running in Germany and France, the Franco-Dutch IT services provider says BPO margins in the UK and US are low and it is difficult to build BPO market share in continental Europe because of inflexible labour laws that make job cuts time-consuming and expensive.

John White, corporate development director at Atos Origin, denied that it is about to abandon BPO but said: "Some of SchlumbergerSema's BPO work has below-average margins, so we need to look at these contracts to see if profitability can be improved and then decide what to do with the business."

Recent figures show that SchlumbergerSema's managed services and BPO business supports 5,000 customer sites and 90 data centres worldwide, with process outsourcing contracts in government and transportation covering 75 million people across Europe. Some of SchlumbergerSema's major BPO contracts are in the UK public sector, a market that Atos Origin is known to be targeting.

* KPMG member firms in the UK and Netherlands have sold the 1.9 million Atos Origin shares they acquired when they sold off their consulting activities to Atos Origin in August 2002. KPMG said the share sale was not connected to Atos Origin's proposed acquisition of SchlumbergerSema, but was in line with agreements made at the time the consultancy businesses were divested.

2. LOGICACMG MAKES $116M HOSPITAL APPOINTMENT

LogicaCMG has teamed up with electronic patient record system supplier IDX Systems to win a $116 million, 10-year contract at the University College London Hospitals NHS Trust (UCLH).

A dedicated team from LogicaCMG and IDX will build and operate an electronic patient records system based on IDX's LastWord software for the Trust's eight hospitals - including a $700 million, 18-storey hospital scheduled to open on the Euston Road in spring 2005 - as well as take on IT procurement, management and support for the Trust.

LogicaCMG is expected to earn $71 million from the contract through its initial implementation work and ongoing operation of a fully managed patient record service.

The project is one of the last patient record systems to be implemented before the NHS rolls out an integrated care records service as part of its National Programme for IT (NPfIT). The UCLH system will deliver similar functionality to the NPfIT one, but is needed before the national scheme is due to be up and running.

UCLH chief executive Robert Naylor said: "This project will deliver the essential IT for our 21st century hospital opening in 2005. It will provide the latest IT infrastructure and electronic patient record system that the Trust needs to run a world-class hospital. It will benefit patients by speeding up processes and eliminating human error, and for staff it will take the hassle out of paper work and allow more time to concentrate on patient care."

Sponsor

One4all

"One4all Technologies Launches Version 3"

Version 3 of one4all's Enterprise Information Integration and Delivery product set is now available. The new version extends the power of the virtual information server with the introduction of web services integration.

For further information please click here or click here.

3. ANITE PREDICTS PROFITABILITY

Anite is promising to deliver full-year profitability through restructuring, better cash management and cost reduction plans. In fiscal 2002, the IT services group collapsed with a pre-tax loss of $184 million resulting from charges against acquisitions.

The forecast recovery follows the dismissal of former chief executive John Hawkins last May (MCN Direct 2-20). Speaking at last week's company AGM, chairman Alec Daly said Anite had agreed a severance payment of $1.2 million with Hawkins and hopes to make an announcement on a new chief executive soon.

Other costs incurred in the first half of fiscal 2003 to 31 October include $3.5 million against 130 previously announced job cuts.

Looking forward, Daly said the financial year had started slowly, but in line with expectations, and that first-half profitability would be down on the previous half year.

Full-year expectations have not changed, however, with Daly commenting: "In the year to date, order intake has progressed well, although sales are slightly lower than the previous year. This, combined with continuing progress on cash management and cost reduction plans, means that profitability for the full year remains consistent with our expectations."

The group reported order intake of $90 million in the year to date, with the strongest performance in the public sector and also "some encouraging orders" in telecoms. Travel and consultancy remained weak.

Daly told the AGM that, with a new CEO in place and assuming continued progress through 2004, he will stand down from the post of chairman next year, after eight years. Succession plans will be announced at the 2004 meeting.

Sponsor

IBM

Unprecedented Value meets Unlimited Power The effect of Linux and Grid on the future of IT Consulting

PLEASE JOIN IBM at a seminar specifically addressing the "consulting opportunity" provided by Linux and Grid computing, at 17:00 15th October, Vinopolis, City of wine, London

For more information and to register visit the Website: click here.

4. PARITY PLUMMETS IN FIRST HALF

Parity has revealed a net loss of $23 million in the six months to 30 June - more than ten times the $2.2 million net loss it made in last year's comparable period. Revenues in the first half also fell 18% to $134.1 million.

The loss was exacerbated by a charge of $14.8 million against the closure of Parity's Dutch subsidiary (MCN Direct 2-24) and overshadows a 17% reduction in costs and revenue gains across the company's operating groups in business solutions, training and resourcing solutions.

Parity also halted a profitability decline in its Americas resourcing business in the second quarter, ahead of a return to profit in August.

Commenting on the results, Parity chief executive Ian Miller said: "We are continuing to make good progress in refocusing the group on higher-value business and selling longer-running contracts to our key accounts. A reduction in costs, coupled with enhanced sales effectiveness, has enabled us to improve performance in the UK and mainland Europe compared to the second half of last year. In addition, we are now seeing signs of increased activity in the US IT staffing market. In the second half we should benefit from our reduced cost base."

Further cost cuts are anticipated, however, following the announcement of a rights issue aimed at raising about $17 million.

Bill Cockburn, non-executive chairman of Parity, said: "In order to ensure our business is appropriately structured to take the group forward effectively, we are announcing a rights issue to strengthen the balance sheet, facilitate the extension of the group's restructuring programme to further reduce overheads, provide working capital to accommodate increased activity and fund limited capital investment required to extract further savings in back-office and support functions."

5. ACCENTURE AND SAP PLAN FINANCE SECTOR SOLUTIONS

Accenture and SAP have teamed up to develop IT solutions for banks and insurance companies worldwide.

The agreement makes Accenture SAP's largest development partner in financial services and will see the companies set up an 800-strong development capability in the US, Spain and Germany.

Initially, the firms will jointly market and support existing SAP and Accenture banking and insurance solutions. They will also establish an implementation team for the portfolio, and integrate their software solutions using SAP's NetWeaver, an open integration and application platform designed to drive down implementation costs and accelerate return on investment.

The agreement includes the joint implementation of SAP's cross-industry solutions for managing business processes such as financials and human capital management, while Accenture will offer business process outsourcing services based on the portfolio of financial services solutions.

SAP CEO Henning Kagermann said: "By expanding our relationship to jointly serve banking and insurance companies, SAP and Accenture will offer customers unparalleled industry expertise, combined with a broader range of solutions, greater implementation flexibility and lower risk."

6. FURTHER INFORMATION - FEEDBACK/FORWARD TO A COLLEAGUE/UNSUBSCRIBE

• For more information or if you have any feedback on MCN Direct, please email editor@pmp.co.uk
• To unsubscribe from MCN Direct, simply send a reply to mcndirect@pmp.co.uk. In the BODY of the message please type MCN DIRECT UNSUBSCRIBE

Please visit http://www.pmp.co.uk to view any of these publications, all of which are fully searchable and represent thousands of pages of information relevant to the consultant community.

Publications include:

Management Consultants' News

Consultants' Advisory

International Consultants' Guide

International Consultants' News

Copyright 2010 PMP (UK) Ltd.