MCN Direct Newswire

Vol. 3 No. 30, 6 September 2004

This issue is sponsored by:

Epicor and iGrafx

This issue news

1. Consultants stumble on road to higher revenues
2. LogicaCMG returns to profit at halfway mark
3. BT begins £26m ad campaign
4. NHS IT programme faces scrutiny
5. Eight make shortlist for e-government contract
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

Epicor

Drive Performance with Professional Services Productisation

Professional services clients seek solutions to problems, and the very nature of intangible services makes them difficult to comprehend. Epicor, the worlds' leading provider of software solutions to the mid-market, has commissioned research that uncovers how to make a service appear more quantifiable with "Service Productisation".

Please click here to find out more, receive the free white paper or register for the webinar on 15 September.

1. CONSULTANTS STUMBLE ON ROAD TO HIGHER REVENUES

IT and outsourcing continue to drive the UK consultancy market, despite a blip in outsourcing-related work in the second quarter of this year.

According to the Management Consultancies Association (MCA), UK consultancies generated total revenues of £1.4 billion in Q2, a fall of 2.7% on the previous quarter. While 73% of MCA members reported higher revenues in the quarter, the decline was due to a 9.6% fall in outsourcing-related revenues to £479 million. This was caused by the phasing of contracts at a small number of consultancies, leading the MCA to suggest a return to outsourcing growth in the next quarter.

Second-quarter management consultancy revenues rose 0.9% compared to the first quarter to £652 million, while IT consultancy was up 1.7% to £305 million.

Total quarterly revenues were 14% higher than the second quarter of 2003, with nearly 60% of new business coming from existing clients.

MCA president and chairman of Hedra, Lynton Barker, said: "While there was a small decline in revenue this quarter, when looking over a longer period there are definitely signs of a trend towards improvements in volume orders, the number of consultants employed and average fee rates."

The MCA has recently welcomed two new members - business process outsourcer Vertex and change management consultancy Quest Worldwide. MCA members generate more than half the UK's total consultancy fee income, estimated at £10 billion in 2003.

2. LOGICACMG RETURNS TO PROFIT AT HALFWAY MARK

LogicaCMG has reported a pre-tax profit for the first half of this year, despite falling revenues and continuing problems in its German and wireless networks operations.

In line with a previous trading update (MCN Direct 3-29), the company declared a pre-tax profit of £27.3 million for the first six months of 2004, reversing a loss of £58.2 million in last year's comparable period. Revenues at the interim were down 5% at £809.2 million.

LogicaCMG said its key IT services territories produced good results, with the UK - 42% of group revenues - performing strongly, particularly in government and outsourcing, while Benelux - 23% of group revenues - returned to revenue growth.

Outsourcing revenues rose 14% to 23% of total revenues, chasing a target of 30% for the full year.

Germany, one of LogicaCMG's weak spots and 6% of group revenues, is being restructured with a view to profitability in 2005, while costs have been cut in the wireless networks business in an effort to hit a full-year 2004 profit target.

Martin Read, LogicaCMG's group chief executive, said: "Across our IT services business, both the order intake and the prospect pipeline continue to strengthen. In IT services we achieved the highest book-to-bill ratio since the merger, providing us with a good platform for the second half. We anticipate margins in the second half will be ahead of those achieved in the first half and ahead of 8% for the year as a whole."

Recent contract wins at LogicaCMG include a £9.5 million deal with the Department for International Development to develop and support a document and records management system, and a 10-year outsourcing agreement with Aon UK to provide applications management and development for the insurance company's main business applications.

Sponsor

iGrafx

iGrafx enables consultants to deliver clients with high-quality, visible and sustained process improvement projects linking all aspects of a client's strategic goals through the medium of their business processes.

You will undoubtedly encounter iGrafx at work in almost every sector - from services to supply chain, manufacturing to healthcare. Across those sectors, iGrafx' extensive family of process modeling tools supports projects ranging from ISO 9000 to Six Sigma, Lean manufacturing to ERP, Outsourcing and Business Process Management. For more info: click here.

3. BT BEGINS £26m AD CAMPAIGN

BT has launched a £26 million advertising and marketing campaign intended to propel the company into the same orbit as IT services companies Accenture, IBM and HP.

The six-month worldwide campaign will use TV, print, outdoor media and online sites to position BT as "the ideal partner and guide to help enterprises negotiate an increasingly networked economy".

Fuelled by its success in securing a number of key contracts in the NHS' National Programme for IT and recent wins at Unilever, Abbey and National Air Traffic Control Services, BT wants better market recognition of its capabilities.

Tim Evans, BT's group marketing and brand director, explained: "BT has undergone a dramatic transformation in the kind of company it is and the services it provides to businesses and governments. The reality of the work we are doing is ahead of many executives' ideas about us. We want this campaign to challenge current perceptions of BT and move the company into a different category of their minds."

Reflecting this new approach, BT has handed over direction of the ad campaign to Joseph Khan, the director of music videos such as Britney's Toxic, Destiny's Child and Eminem, and given the computer graphics brief to the team that produced the graphics for The Matrix and X-Men 2.

Separately, BT has dropped the BT Syntegra brand name, instead describing the IT solutions division as BT's consulting and systems integration business.

PMP Research Study

…… just 8 minutes of your time and you will get a synopsis of the research results.

We are currently undertaking research that is seeking to understand your views concerning use of the internet and IT suppliers' websites when you are evaluating products or services.

All of our research is non attributable (you won't be named either personally or by company). To participate and receive a synopsis of the results, please visit / click here.

4. NHS IT PROGRAMME FACES SCRUTINY

The National Audit Office (NAO), the UK's public spending watchdog, has begun scrutinising the NHS' National Programme for IT (NPfIT) only months after final contracts in the £6.2 billion project were awarded.

The NAO insists the investigation has not been prompted by any specific concerns. An official said that given the scale and importance of the NPfIT, it was necessary to start a study now with a view to giving government a "stock take" of the situation as the programme progressed.

The first phase of implementation is due to be completed by mid-2005, about the time when the NAO expects to publish its report.

The NPfIT is set to create an IT information infrastructure for the NHS that will improve patient care by increasing the efficiency of clinicians and other NHS staff. The NAO said its study would examine the procurement processes used for placing the contracts, whether the contracts are likely to deliver good value for money, how the Department of Health is implementing the programme and the progress made.

5. EIGHT MAKE SHORTLIST FOR E-GOVERNMENT CONTRACT

The Office of Government Commerce (OGC) has shortlisted eight IT services suppliers for a project designed to improve e-procurement across government departments and save over £70 million in its first year.

Following the announcement of the contract in May, the OGC received 25 expressions of interest but has narrowed those down to a shortlist of BT, Capgemini, EGS, ITNet, Kellogg Brown & Root, Lloyds TSB, LogicaCMG and PA Consulting.

The eventual winner is expected to be announced in January and will put in place a framework for the so-called Zanzibar service, which will be delivered by a single service provider that has yet to be selected.

Describing Zanzibar as a "purchase-to-pay marketplace including the e-hub concept", the OGC said the service is aimed at maximising efficiencies in government procurement, accelerating e-procurement take-up in large departments and smaller public sector bodies, and making the government market more attractive to suppliers.

6. FURTHER INFORMATION - FEEDBACK/PASS ON TO A COLLEAGUE/REMOVE

• For more information or if you have any feedback on MCN Direct, please email editor@pmp.co.uk
• If you no longer wish to receive MCN Direct, simply send a reply to mcndirect@pmp.co.uk. In the BODY of the message please type MCN DIRECT REMOVE.

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 2012 PMP (UK) Ltd.