MCN Direct Newswire

Vol. 3 No. 27, 12 July 2004

This issue is sponsored by:

InterSystems

This issue news

1. Siemens beats Accenture to $2bn BBC deal
2. Accenture notes rising attrition rate
3. CSC kicked out of major German contract talks
4. IBM rings up $400m deal with Sprint
5. Atos Origin wins out in Amsterdam and Paris
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

InterSystems

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1. SIEMENS BEATS ACCENTURE TO $2bn BBC DEAL

Siemens Business Services (SBS) has beaten Accenture to a £2 billion contract to provide a technology framework for the BBC and become the new owner of BBC Technology.

SBS' selection as final preferred bidder for the deal follows a procurement process in which it initially declined to be named as a contender.

The BBC said: "SBS has demonstrated its ability and commitment to invest in technology services and innovation to meet the BBC's future technology requirements, with significant projected annual cost savings. The company was also singled out for its scale, cultural fit, commitment to innovation and ability to realise best value for BBC Technology.

But SBS' initiation at BBC Technology faces difficulties after members of the broadcasting and entertainment union Bectu voted for industrial action over terms and conditions. SBS is reported to have refused union demands for a three-year guarantee of no changes in terms and conditions, and pay increases of inflation plus 2.5% over the same period.

The decision to outsource the BBC's technology requirements and sell BBC Technology was made after an internal review identified potential annual savings of £20-30 million if technology services were outsourced.

The contract remains subject to the approval of BBC governors, the Secretary of State for Culture, Media and Sport, and the European Commission, but is expected to be finalised this autumn.

2. ACCENTURE NOTES RISING ATTRITION RATE

Accenture has seen its employee attrition rate rise in the third fiscal quarter - a sign of greater movement in the consultancy market and a return to the problems of recruitment and retention.

Accenture said its attrition was about 18%, up from 12% in the year-ago quarter. The company also confirmed its operating profit rose 42% compared with last year's comparable period to $573 million (£309 million), on revenues up 21% to $3.7 billion (MCN Direct 3-24).

Accenture is now focusing on career planning and compensation for its employees, in a bid to attract and retain the best consultants. Chairman and CEO Joe Forehand said the company was not "overly concerned" about the attrition level, but would review its benefits packages to make sure they remained competitive.

Commenting on the financial results, he said: "We achieved record performance in the third quarter, thanks to the efforts of our 95,000 people globally and the economic recovery we continue to see in many parts of the world. We posted our highest quarterly net revenues ever and we turned in significant growth in earnings per share."

New bookings for the third quarter were down from $5.2 billion a year ago to $3.4 billion, but Accenture said bookings for the first nine months of the year were up 30% at $16.1 million and that it continues to target full-year bookings of $18-20 billion.

3. CSC KICKED OUT OF MAJOR GERMAN CONTRACT TALKS

A consortium led by CSC has been dropped at the last minute from negotiations for a 6.7 billion euros (£4.4 billion), 10-year outsourcing contract aimed at upgrading the German army's IT and communications systems.

The CSC-led consortium, called ISIC21, included European aerospace company EADS and German telecoms firm MobilCom. In June 2002 it beat off six other bidders to gain exclusive rights to enter a due diligence phase that, if successful, was expected to lead to formal contract negotiations.

But negotiations with the German Defence Ministry have now collapsed, leaving the ministry to turn to a consortium comprising IBM, Siemens and Deutsche Telekom in the hope of getting the proposed Bundeswehr Herkules project off the ground.

CSC confirmed that talks on the project had ended "with the parties unable to reach a mutually satisfactory agreement". According to reports, the sticking points included how many of the ministry's 5,000 IT staff would transfer to ISIC21 and the frequency with which information systems would be upgraded.

4. IBM RINGS UP $400m DEAL WITH SPRINT

IBM has signed a $400 million (£216 million), five-year outsourcing deal with global communications provider Sprint.

The contract builds on an initial agreement between IBM Global Services and Sprint last September, when IBM and EDS were both appointed to develop and maintain selected applications used by Sprint. Over the five-year term of the contracts, Sprint hoped to reduce the costs involved by $150 million.

Under the new agreement, IBM will outsource additional Sprint software systems and establish accelerated software applications delivery services - allowing Sprint to deliver new and differentiated products to its customers while decreasing costs. As part of the arrangement, 1,000 Sprint employees will transfer to IBM to support the selected applications.

Sprint's chief information officer Michael Stout said: "This is the latest in a series of projects we have undertaken with IBM Global Services, drawing on its consultants' expertise in business processes and project management."

Sprint expects the improved IT application development and maintenance processes to reduce costs and increase its flexibility, as it seeks to cut annual operating expenses by more than $1 billion over the next two years.

5. ATOS ORIGIN WINS OUT IN AMSTERDAM AND PARIS

Atos Origin has won financial services contracts in both Amsterdam and Paris.

The contract in Amsterdam is an outsourcing deal with Achmea, a financial services provider within the Eureko Group, and is worth 30 million euros (£20 million) over five years. Under the terms of the deal, 10 employees with transfer from Achmea to Atos Origin, with the outsourcer supporting the company's IBM mainframe infrastructure.

In Paris, Atos Origin has cut a three-year deal with equities broker Exane, part of BNP Paribas. This covers what Atos Origin describes as 'insourcing', with its staff taking over onsite management of Exane's information systems, including over 100 servers, but leaving the company in control of systems and their development. Financial details of the contract were not disclosed.

* Also in Europe, IBM Business Consulting Services, LogicaCMG and SAP have been selected by the Port of Rotterdam to provide new information systems and optimise business processes. Implementation of mySAP business software will start later this year, with IBM advising on business transformation and LogicaCMG bringing its SAP expertise to bear. The port hopes to recover the cost of the implementation within four years.

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