MCN Direct Newswire
Vol. 4 No. 9, 11 April 2005
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According to an independent market survey commissioned by PSA software specialist Maconomy, 79% of consultancies believe that implementing operational efficiencies can improve profitability; yet 65% do not use automated processes to support project management.
Accenture has reported a sparkling performance in the second quarter, with both consulting and outsourcing revenue rising and all of its three geographic and five operating groups showing growth.
Accenture's net profit for the quarter rose 70% to $209.8 million (£111.1 million) compared to last year's comparable quarter with operating profit up 54% to $472 million. Revenue rose 15% to $3.8 billion, ahead of expectations. Consulting increased 14% to $2.3 billion - 60% of total - and outsourcing rose 18% to $1.5 billion - 40% of total.
Accenture's financial services and products operating groups showed the best revenue growth through the quarter, while the EMEA region showed the largest gain among Accenture's geographies. EMEA reported a revenue rise of 27% to $2 billion, the Americas rose 3% to $1.5 billion and Asia-Pacific gained 22% to reach $275 million.
Accenture CEO William Green said: "We had strong top and bottom-line performance this quarter. In addition, we made great progress on the operational challenges that we identified in the first quarter, including our free cashflow, client balances and attrition. We remain focused on making further operational improvements and are confident in our ability to achieve our financial objectives for the fiscal year."
For the full year of fiscal 2005, Accenture is forecasting revenue growth of 13-16%.
Axon Group has made good its promise to move into the US through the acquisition of Feanix Corporation, a New Jersey-based SAP specialist that works mainly in the US aerospace and defence industry.
Axon signalled its intent to expand in the US in March, when it reported its 2004 financial results (MCN Direct 4-4), and Feanix could not be a better fit. Feanix was formed in February 2004 through a management buyout of Xansa's SAP practice in the US - and Axon acquired the management buyout of Xansa SE Asia last year.
Feanix has 65 permanent consultants and 20 long-term associates working on SAP programmes at corporations including Sikorsky Aircraft, Pratt & Whitney and Goodrich. In its first 12 months, it showed profits of $2.4 million (£1.3 million) on revenues of $12.2 million. Axon will pay a total of $23.5 million for Feanix, $12 million in cash plus 2.8 million newly issued Axon shares that will be distributed among 13 key people within Feanix.
Axon has dabbled in the US for 10 years, initially working on strategic business consulting contracts, but more recently on a number of small SAP assignments that have broadened the nature of its US business. Annual revenues from the US have never exceeded £2.1 million, however, underlining the need to build the business through acquisition.
Axon chairman and CEO Mark Hunter said: "In the past three years, we have established the leading European business transformation consultancy focused on the needs of large corporations that have chosen SAP as their strategic enterprise platform. We now see an opportunity to repeat our success in the US."
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Detica has strengthened its customer relationship management business through the acquisition of CRM consultancy and systems integrator Extraprise UK.
IT security and CRM specialist Detica, which works in both government and commercial sectors, has bought Extraprise UK for just £200,000 after the company's US parent put it into administration as part of a financial restructuring.
Detica will take on Extraprise's 35 staff, its UK client list and selected assets. It also hopes to transfer certain ongoing contracts.
The acquisition will be a relief to Extraprise staff, who will strengthen Detica's business intelligence and analytical CRM skills, and add expertise on CRM packages such as Siebel that are heavily used across Detica's client base. The acquisition also adds an established change management practice, allowing Detica to offer more business strategy and organisational change services.
Detica chief executive Tom Black said the move would increase the skills available to the commercial side of Detica as well as introduce new skills.
"In today's competitive recruitment market, this transaction represents a rare opportunity to strengthen our team with an outstanding group of consultants. I am also optimistic that we can develop strong relationships with Extraprise UK's client base, increasing our own footprint in the commercial market," he added.
Charteris has made a good start to fiscal 2005 as it builds on last year's return to profit (MCN Direct 3-35).
The business and IT consultancy said its pre-tax profit for the six months to 31 January rose to £438,000 up from £34,000 a year ago. Total revenue for the six months rose 50% to £8.9 million, with Cedalion, the Edinburgh-based technical consultancy acquired last October, contributing £600,000 (MCN Direct 3-39).
Charteris said actions to broaden its base over recent years are delivering results, with revenue balanced across its three practices: retail, manufacturing and services accounted for 31% of the interim total; financial services and media 34%; and government, legal, utilities and energy 35%.
Cedalion - which lifted Charteris' staff number up from 99 to 135 - is classed as a fourth division within the company, based on its business in Scotland and the technical skills it delivers to the rest of the group.
Discussing recent contract wins, Charteris broke its silence on a contract with the NHS' £6 billion National Programme for IT in which a team of Charteris consultants has been providing independent commercial and technical advice to senior management of the programme since last October.
Looking forward, Charteris chairman David Mann said: "Charteris has made a good start to the year. Overall, growth rates in our industry remain modest, but there are significant opportunities in specialised areas and we are well placed to benefit from these. They include both consulting and technology services in business intelligence, information and knowledge management, enterprise integration and service management."
Performance improvement consultancy Boxwood took first prize at this year's Management Consultancies Association (MCA) awards for best management practice.
The consultancy received the platinum award - as well as gold in the operational performance category - for its work with Metronet, which praised the company for "setting the benchmark for rapidly transforming business performance and providing value for money".
Other category winners included Atos Origin for both electronic trading in a project with Transport Direct and HR in a project with the Defence Logistics Organisation.
Capgemini predictably took the gold for outsourcing consultancy for its work with the Inland Revenue, while the business strategy accolade went to RSM Robson Rhodes for a project with P&O Ferries. The change management gold went to Capita Consulting for its work with the Department for Work and Pensions.
Best small firm was Rossmore Group working on a project at Network Rail, with the top marketing award going to Charter Solutions at the Welsh Development Agency. Technology exploitation was awarded to TranSys Consortium for work at Transport for London.
Conspicuous by its absence among the winners was PA Consulting, which in the past couple of years has scooped a number of MCA awards.
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