MCN Direct Newswire

Vol. 3 No. 26, 5 July 2004

This issue is sponsored by:

McGuffieBrunton and The Management Consultants Association

This issue news

1. ITNet loses £83m Cabinet Office contract
2. Liberata extends in HR market
3. Capgemini steps into Inland Revenue
4. BearingPoint elects new European boss
5. CSC secures $71m deal in Denmark
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

McGuffie Brunton

McGuffie Brunton provide business solutions to UK manufacturing and distribution companies. Encompassing ERP, CRM, HR, e-business, Warehouse Management and supply chain, our solutions are installed in some 6000 sites worldwide, 600 of these in the UK. McGuffie Brunton have worked with numerous consultants in our 22 year history, from initial ITT completion through to implementations. Cutting edge technology coupled with a sound implementation and support methodology have made us a prime choice for many consultants working in the SME marketplace.

To find out more about recent projects where McGuffie Brunton have worked closely with consultants, please click here or click here.

1. ITNet LOSES £83m CABINET OFFICE CONTRACT

ITNet has suffered a major blow with the termination of an £83 million contract at the Cabinet Office - shattering the company's hopes of building its business in central government and damaging its reputation in the wider market.

The contract - ITNet's first in central government and its biggest ever when it was signed last July - covered the Cabinet Office's data centre hosting project and required ITNet to provide a managed service for three government data services.

But a Cabinet Office executive slammed the company's performance, saying: "None of the services under the remit of ITNet's data centre hosting contract have either been delivered or accepted and the project is several months behind schedule and was forecast to be considerably over-budget if continued.

"This termination demonstrates the government taking a proactive approach to avoid non-delivery of this IT project and to prevent unacceptable and unplanned over-expenditure against contractually agreed costs."

ITNet said it was "extremely disappointed" by the Cabinet Office decision. It has already spent £15.2 million on the fixed assets of the data centre - for which it had received pre-payment of £5 million - and approximately £10 million on implementation.

The contract provides for reimbursement by the Cabinet Office of any expenditure incurred and committed, but ITNet may have to take legal action to recoup the money.

The company said it did not expect the contract loss to damage its revenue expectations for the full year, but admitted that its profit margins will be reduced.

The Cabinet Office is hiring alternative suppliers and said the change will have no impact on the data services or their users.

2. LIBERATA EXTENDS IN HR MARKET

Liberata has flexed its muscles in the HR market by signing a business process outsourcing (BPO) partnership deal with employee benefits advisory firm Gissings.

Liberata will take over the back-office functions delivering Gissings' pension and flexible benefits administration business in a contract that could be worth over £100 million over 15 years and will involve the transfer of 100 Gissings employees to Liberata.

The firms also plan to jointly develop an HR-based BPO business, operating and managing employee benefits and HR programmes.

With the main part of Liberata's business in the local government sector, the new contract gives it more strength in both HR outsourcing and the private sector market.

Liberata administers over 3 million pension records and policies for UK clients including Deloitte, AXA and Save & Prosper, as well as employee pension plans for local authorities including Windsor & Maidenhead and the London boroughs of Ealing, Bromley and Croydon.

Sponsor

The Management Consultancies Association

"Sixty per cent of NHS managers believe there has not been enough consultation on the national programme for IT, according to new research" Computer Weekly, 15 June 2004.

The new report 'More than technology; key management issues in the NHS' published by the Management Consultancies Association underlines the importance of attention to both people and process in the successful implementation of the NPfIT.

The report, priced £100, is available from the MCA on 020 7321 3990.

3. CAPGEMINI STEPS INTO INLAND REVENUE

Capgemini took over the Inland Revenue's IT systems one minute after midnight on 1 July, claiming that the transition from incumbent EDS was "outstandingly smooth" - and no doubt hoping it will avoid the many problems EDS experienced during its tenure.

The £3 billion, 10-year contract, with an optional eight-year extension, was wrested from EDS last December by the Capgemini-led Aspire consortium which also includes Fujitsu Services and BT Global Services.

After a six-month transition, Aspire has taken over all the Revenue's IT systems. It is also tasked with introducing new technology that enables the department to improve its efficiency, provide a better service and expand its e-services for taxpayers - all at a lower cost than previously achieved.

As part of the deal, 2,800 employees have transferred to Capgemini or one of its partners, a total of about 96% of those offered the chance to move. The contract also involved the handover of 600 applications running on 1,500 network servers, used by 80,000 staff at 600 Revenue offices across the UK.

Capgemini's CEO for the Inland Revenue business Martin Cook said: "This was one of the largest and most complex transitions ever undertaken. Our collaborative approach with the client and our partners ensured that the transition was outstandingly smooth and successful, with all key targets and deadlines met as planned."

Aspire's next major task at the Revenue will be to take over the NIRS 2 national insurance systems, which will continue to be run by Accenture until they are transferred to the consortium early next year.

4. BEARINGPOINT ELECTS NEW EUROPEAN BOSS

BearingPoint has chosen European financial services practice leader Steffen Seeger as its new head of Europe.

Seeger - who joined BearingPoint as part of its 2002 acquisition of KPMG Consulting AG in Germany, Austria and Switzerland - takes over management of the company's 3,800 employees in EMEA from Mike Donahue, who has gone back to the US to focus on his role as chief financial officer of BearingPoint.

At KPMG, Seeger led the consultancy's regional financial services practice and has since become global co-leader and European leader of BearingPoint's financial services industry practice.

BearingPoint chairman and CEO Rand Blazer commented: "Our EMEA operations have demonstrated significant progress, integrating 14 country practices into a strong pan-European region and aligning it into a single global firm. Steffen Seeger is uniquely qualified to execute on the next step of our strategy - capturing market share and expanding our growth in this important global region."

5. CSC SECURES $71m DEAL IN DENMARK

CSC is continuing to build its European portfolio with a $71 million, six-year contract at BEC, a Danish provider of IT solutions to the financial services sector.

CSC will offer IT infrastructure services to BEC, which develops IT systems for companies in the banking, investment, mortgage, insurance and pensions markets. The contract builds on a June 2000 arrangement under which CSC provides BEC with bulk print services.

CSC European president George Bell said: "This relationship expands CSC's client base in the financial sector in the Nordic region. Our experience working with financial organisations and our track record of delivering operational and financial results makes us an ideal fit to support BEC."

BEC chief technology officer Adam Harhoff said: "BEC has gained a competitive advantage with this agreement, enabling the company and its customers to pursue business goals more effectively."

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