MCN Direct Newswire

Vol. 3 No. 29, 26 July 2004

This issue is sponsored by:

McGuffieBrunton and The Management Consultants Association

This issue news

1. EDS secures $1.1bn banking deal
2. Capita maintains financial momentum
3. Keane buys into UK SAP market
4. LogicaCMG faces tough climb
5. On your marks, get set, go
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 or visit click here.

1. EDS SECURES $1.1bn BANKING DEAL

EDS has won a $1.1 billion (£600 million) managed network services outsourcing contract to integrate the communications infrastructure of recently acquired FleetBoston Financial into Bank of America's network.

The eight-and-a-half-year contract adds to a $4.5 billion, 10-year deal signed in early 2003 to take responsibility for Bank of America's network.

The award is a fillip for EDS after its long-term credit rating was downgraded by Moody's Investors Service, raising concerns that the company would find it increasingly difficult to compete for new business (MCN Direct 3-28).

Bank of America technology services executive Don Obert said: "We have worked successfully with EDS and this agreement to integrate communications throughout our franchise will enable us to provide the best products and services to our expanding group of retail and commercial customers worldwide."

The integration of FleetBoston's communications infrastructure will create a voice and data network linking 180,000 employees, 5,700 US banking centres and more than 16,500 ATMs. About 150 former FleetBoston staff will move to EDS as part of the contract.

2. CAPITA MAINTAINS FINANCIAL MOMENTUM

Capita has reported significant financial gains for the half-year to 30 June and heads into its second half with four new contracts worth £293 million.

The services firm showed a 25% gain in first-half pre-tax profits to £63.6 million, on turnover rising 17% to £620 million. Operating margins for the six months reached 11.1%, up from 10.6% in last year's comparable quarter.

Commenting on another successful period, executive chairman Rod Aldridge said: "Capita operates a simple, sustainable business model in buoyant and expanding markets. The business is trading strongly, generating healthy profits and cashflow."

Capita won contracts worth a total of £1.1 billion in the first seven months of 2004, with four worth £293 million announced alongside the interims. The largest of these is a £250 million, 12-year deal with Salford City Council to form a joint venture delivering services to the council and selling services to external organisations.

The other three contracts are a £10 million, two-year deal to manage the run-off services of insurance broker Hill House Hammond; a £22 million, six-year contract that extends Capita's IT and business process transformation work at the Driving Standards Agency; and an £11 million, four-year extension to a contract with Derby City Council covering delivery of an e-government solution.

Capita is working on live bids worth a total of £2.5 billion and said the financial services sector is "generating opportunities at an exceptional rate". It noted that the Government's 2004 spending review and review of public sector efficiency will provide further stimulus in the public sector markets in which it operates.

The company intends to maintain its acquisition policy of focusing on small transactions and reported four acquisitions worth £31.4 million in the first half.

Sponsor

The Management Consultancies Association

UK Consulting Industry Report - last chance for early bird discount

This is your last chance to purchase the UK Consulting Industry Report at a discounted 'early bird' rate. The report, published jointly by PMP and the Management Consultancies Association (MCA), is based on unique data and performance metrics from MCA firms. The beginning of 2003 saw the UK consulting industry in the depths of an economic downturn, with many firms struggling to restructure in the face of shrinking markets and over-capacity. Yet, consulting firms ended the year with order books looking stronger than at any point since 2000. Confidence is on the rise - but is it justified? Recovery has so far been largely fuelled by pent-up demand, and the consulting industry still faces considerable challenges if it is to convert this into solid and sustainable growth.

"This is the definitive report on the UK management consultancy industry, making it essential reading for all who need a comprehensive understanding of the subject." Alan Russell, Consulting Director, Atos Origin.

The report introduces unique information and analysis based on data from UK consulting firms, interviews with industry leaders and award-wining case studies. Author of the report, industry expert Fiona Czerniawska, provides an authoritative analysis of the enormous changes over the past 12 months and an overview of the prospects for the industry over the coming year. To purchase the report or to obtain further information, please click here or email reports@pmp.co.uk. Tel: +44 (0)1494 732830.

3. KEANE BUYS INTO UK SAP MARKET

Boston-based IT consulting and outsourcing firm Keane has bought UK SAP specialist Fast Track Holdings in an attempt to build its ERP skills and strengthen its base in Britain.

Keane will pay an initial $3 million (£1.6 million) cash for the company, with a further $5 million payable dependent on hitting financial targets over the next two years.

Keane made its first major move into the UK in 1998 when it bought ICOM Solutions. With Fast Track, it is taking on a 50-strong team dedicated to the design and deployment of large-scale SAP implementations for the government, pharmaceutical and logistics markets.

Commenting on the deal, Keane's senior vice president of international operations Laurence Shaw said: "Many industry experts see application development and maintenance of ERP solutions as leading the next wave of outsourcing services. Fast Track brings Keane proven expertise in SAP environments. We see great opportunity to cross-sell Keane's portfolio of services to existing Fast Track customers as well as offer SAP services to Keane's existing customer base."

Set up in 1995, Fast Track claims to be the UK's leading external SAP trainer and gives Keane a local SAP integration, demonstration, training and support centre.

4. LOGICACMG FACES TOUGH CLIMB

LogicaCMG is struggling to make financial headway, held back by its IT consulting and services business in Germany and its wireless networks division.

In a trading update for the six months to 30 June, the company said its first-half performance was in line with guidance given at its AGM in May (MCN Direct 3-20).

Order intake in the IT services business was strong, with the highest book-to-bill ratio since the creation of the company. But revenues in the six months were sequentially down 1% due to a further fall in revenues in Germany. Noting that the German operation is unlikely to return to profitability in its current shape, LogicaCMG said it would spend £17 million to reduce headcount and overheads in a bid to reach profitability in 2005.

Elsewhere, the UK and Benelux both achieved sequential revenue growth in IT services, while France came into profit in the first half.

LogicaCMG's wireless networks business fared less well in the first half, with revenue down 10% against last year's comparable period. The company forecasts increased revenue in the second half, but will be reducing the business' cost base by £4 million in an effort to return to profitability for the year as a whole.

A key element of the cost reduction plan is to use skilled staff from the wireless networks division on projects in IT services.

Commenting on the half-year update, LogicaCMG chief executive Martin Read said: "We are pleased to report the continued strong performance for the UK and the return to growth in the Benelux. The actions we are taking in Germany will benefit the second half and underpin improved performance for the group in 2005."

5. ON YOUR MARKS, GET SET, GO

Atos Origin claims it has cleared the final hurdle in its long run-up to the Olympic Games. After two and a half years of systems development and integration testing, the IT services firm - a worldwide partner for the Athens 2004 Olympic Games - says the final technical rehearsal for the games has been successfully completed.

This tested every element of operational procedure, with 302 crisis scenarios played out during a one-week period. Under scrutiny were areas such as information security, uncontrolled access to IT systems and computer viruses, power failures, equipment crashes and rescheduled sporting events.

Further tests simulated the games' busiest days, with a 1,000-strong team led by Atos Origin and the Athens 2004 Organising Committee tackling problems across 16 venues and 25 sports.

Phillippe Verveer, technology director for the International Olympic Committee, said the preparation by Athens 2004 and Atos Origin for the rehearsal was "outstanding", adding: "The technical rehearsals are critical in the preparations for the games and we are delighted with how well the team performed, sometimes under extreme pressure."

Atos Origin will now be keen to go for gold as anything less will tarnish its contract with the International Olympic Committee to cover not only Athens 2004, but also the next winter and summer games in Turin in 2006 and Beijing in 2008.

MCN DIRECT

• MCN Direct is taking a break until we re-publish on Monday September 6th. We'd like to wish all our readers a very enjoyable summer holiday.

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.