MCN Direct Newswire

Vol. 3 No. 12, 22 March 2004

This issue is sponsored by:

SPSS and Annual Consultants' Forum - 27 April 2004

This issue news

1. HP competes in BPO market
2. LogicaCMG adds 750 jobs at outsourcing centre
3. EDS unloads UGS PLM Solutions
4. Parity ready for growth
5. MCA elects Lynton Barker as president
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

SPSS

The leading provider of predictive analytics technology now offers real-time closed loop predictive analytics.

SPSS PredictiveMarketing and SPSS PredictiveCallCenter are proven business solutions offering even more exciting opportunities for consultants and systems integrators to work with SPSS.

Download your free case study to see how Spaarbeleg generates $30 million in additional sales through its call centre. Click here.

1. HP COMPETES IN BPO MARKET

HP is taking its first major step into the business process outsourcing (BPO) market through an agreement in principle to take over Procter & Gamble's global accounts payable services.

The deal is expected to be signed next month and builds on an existing $3 billion, 10-year IT outsourcing contract signed last May.

Procter & Gamble said it selected HP after "a comprehensive and competitive process that included major BPO and IT service providers". From HP's point of view, this win pitches it into a financial and accounting BPO market led by Accenture with usual suspects such as IBM, EDS and Cap Gemini Ernst & Young also in the game.

In support of the move, HP has hired Marc Schwarz, formerly director of global outsourcing at Deloitte Consulting, to lead a new BPO finance and administration function that is expected to lean on HP's facilities in India, which already handle its own accounts processing.

Commenting on the planned contract, Procter & Gamble global business services officer Filippo Passerini said: "During the past 10 months of our partnership, HP has exhibited a deep understanding of our business, culture and values. Its own business operations are similar in scope and scale, and we are confident that HP can effectively leverage its own experience to help Procter & Gamble innovate and drive value for consumers and shareholders."

2. LOGICACMG ADDS 750 JOBS AT OUTSOURCING CENTRE

LogicaCMG plans to extend its IT outsourcing centre in South Wales and add a further sourcing hub dedicated to business process outsourcing.

A late starter in the IT outsourcing and BPO race, LogicaCMG has worked hard to catch up and claims the expansion will provide "increased scale to further support the increased demand from customers for outsourced solutions".

The company's investment programme in South Wales is being backed by the Welsh Assembly and the Welsh Development Agency and will be rolled out in two phases. The initial phase will add 350 new jobs to its 200-strong IT outsourcing base in Bridgend, which serves a number of large companies and public organisations. The second phase will create 400 plus jobs at a new sourcing hub that will be built in Waterton will deliver BPO services for companies in sectors such as utilities and financial services.

LogicaCMG chief executive for the UK and Ireland Jim McKenna said: "In the past three years we have achieved substantial growth in our outsourcing business, built around our Bridgend service centre. The availability of highly qualified staff produced by the education system in South Wales was a key factor in deciding where to establish a central sourcing hub for LogicaCMG."

Sponsor

Annual Consultants' Forum - 27 April 2004

PMP in association with the Management Consultancies Association are pleased to announce the 4th Annual Consultants' Forum on 27 April 2004 at Olympia Conference Centre, London.

"Captivating Clients" is this year's theme, reflecting the critical issues facing the consulting industry of how to develop new business whilst retaining existing clients.

For more information and to register for a FREE place visit: click here.

3. EDS UNLOADS UGS PLM SOLUTIONS

EDS has reached agreement to sell its product lifecycle management business to three private equity firms for $2.05 billion - a higher price than even EDS hoped to achieve at 2.3 times annual revenues.

The IT services giant flagged its intention to sell UGS PLM Solutions last October after a strategic review excluded the business from a plan to promote its core IT and BPO business (MDN Direct 2.39).

EDS found significant interest among potential buyers (MDN Direct 3.7) and has now reached a deal with Bain Capital, Silver Lake Partners and Warburg Pincus, due to be completed within 90 days.

While UGS PLM Solutions was deemed a drag on core business, EDS will miss its financial contribution. Last year, the unit generated net profit of $104 million, on revenues of $897 million.

EDS Chairman and CEO Mike Jordan said: "The transaction is another tangible step in the strategic plan we laid out for investors in June 2003. We said our ongoing focus will be strengthening our core IT and BPO operations, and our balance sheet. This transaction supports both priorities and further enhances our competitive position."

4. PARITY READY FOR GROWTH

Parity Group is putting a few difficult years in the IT services and resourcing market behind it, saying it has cut overhead costs by 35% and is focusing on growth.

Reporting its 2003 financial results, Parity cut its net losses from £24.2 million in 2002 to £15.6 million in 2003. But its turnover fell 2% year-on-year to £174 million.

Parity was hit by the closure of its Dutch subsidiary in 2003 after the discovery of financial irregularities (MDN Direct 2.18), as well as falling revenues in its Americas business and slow markets for business solutions and resourcing.

But the company is taking a more positive stance following an upturn in the second half of 2003, improved performance in its three European business units and a strategic move towards more stable revenue sources - its outsourcing and managed service contracts increased form £3 million in 2001 to £24 million in 2003.

"It appears that markets in the UK, mainland Europe and the US are stabilising. Our sales pipeline is stronger than it has been at any time over the past three years and this has given us the confidence to invest in additional sales resources," said Bill Cockburn, Parity non-executive chairman. "We go into 2004 with better prospects than for some time - our focus is on growth."

5. MCA ELECTS LYNTON BARKER AS PRESIDENT

The Management Consultancies Association (MCA) has chosen Lynton Barker, executive chairman of public sector management and IT consultancy Hedra, as its new president.

Barker takes over from Ian Watmore, managing director of Accenture's UK operations. He will be supported by three vice presidents - David Bailey of Impact Plus, Mary Cockcroft from Pagoda and Alan Russell of Atos Origin.

Commenting on his appointment, Barker said: "I am looking forward to playing a pivotal role in the continued growth and development of the UK consulting industry. My public sector experience and contacts will stand me in good stead at a time when both central and local government are making increasing use of consultants. 2004 promises to be an interesting year with growth and innovation returning to the consulting market."

Barker was appointed executive chairman of Hedra in January 2003. He was previously UK head of consulting at PricewaterhouseCoopers and is a member of the Public Services Productivity Panel.

Among his charges at the MCA is new member Boxwood, a Leeds-based consultancy specialising in transforming company performance through the provision of services covering process, people, technology, strategy and learning .

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.