MCN Direct Newswire

Vol. 4 No. 25, 14 November 2005

This issue is sponsored by:

InterSystems

This issue news

1. EDS abandons AT Kearney in pursuit of growth
2. Accenture bolsters marketing practice
3. Management guru Peter Drucker dies
4. Serco secures £125m government contract
5. LogicaCMG wins multi-million care work deal
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

InterSystems

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1. EDS ABANDONS AT KEARNEY IN PURSUIT OF GROWTH

EDS has turned full circle and reached an agreement to sell its consultancy business AT Kearney to a management buyout team.

EDS refused an earlier attempt by ATK executives to buy the business because the price was too low, but when an external bidder for ATK pulled out, EDS was left with little choice but to reconsider a management buyout.

The terms of the deal have not been disclosed, but it is expected to close in the fourth quarter. EDS said the companies would continue to work together in the market.

The ATK about-turn was highlighted in EDS' third-quarter financial results, which showed a significant improvement despite continued losses at the consultancy. EDS made a net profit of $8 million (£4.6 million) in the third quarter, reversing a net loss of $153 million in last year's comparable period. Revenue rose 3% - excluding ATK - to $4.9 billion.

EDS said the EMEA region led revenue growth, up 6% at $1.5 billion, driven primarily by a UK Ministry of Defence contract started earlier in the year. Revenue from the Americas was flat at $2.3 billion, with Asia-Pacific up 1% at $347 million.

EDS chairman and CEO Mike Jordan said: "Our results demonstrate continued progress. The investments in our technology platform, our differentiated point of view on the future of IT services and our strong balance sheet are contributing to a healthy business poised for growth."

EDS increased the value of contract signings in the third quarter by 83% to $5.3 billion and is forecasting full-year revenues of around $20 billion.

2. ACCENTURE BOLSTERS MARKETING PRACTICE

Accenture will more than double the number of employees in its marketing sciences practice through a proposed acquisition of Media Audits, a London-based consultancy that measures return on advertising investment. The companies declined to put a value on the deal, which is expected to close within 60 days.

The acquisition will add 150 Media Audits employees to Accenture's 75 existing marketing sciences staff. Jeffery Merrihue, leader of Accenture's marketing sciences practice, will become CEO of the extended group, while Julian Spooner, CEO of Media Audits, will become its chief operating officer.

The enlarged practice, which forms part of Accenture's customer relationship management business, will offer web-enabled services to help clients measure and optimise their marketing and media investments globally. To date, the company's activity in the advertising sector has been through consultancy, managed services and the implementation of technologies such as data warehouses.

Commenting on the acquisition, Merrihue said: "Our expanded practice will offer an industry-strength service to clients that want to accelerate growth and ensure greater transparency of their marketing investments in an increasingly cross-border world."

Media Audits' clients include top advertisers in the automotive, leisure, telecoms and consumer goods sectors.

• J Sainsbury has pulled out of the £1.7 billion, 10-year outsourcing deal it signed with Accenture in 2000. The retailer said the services provided by Accenture will be brought back inhouse, together with a number of Accenture employees. On terminating the contract, the companies declared that Accenture had improved the IT capability of Sainsbury's business, but, as part of the 'Making Sainsbury's Great Again' campaign, the retailer said it had decided to rebuild inhouse expertise. Accenture does not expect the termination to have a material impact on results in fiscal 2006.

3. MANAGEMENT GURU PETER DRUCKER DIES

Peter Drucker, regarded by many as the father of modern management and management consultancy, has died at the age of 95.

A spokesman for the Claremont Graduate University in California, where he worked and consulted till the end, said he died peacefully last Friday morning after a short illness.

Drucker was a consultant for more than 50 years, numbering many of the world's top business and government organisations among his clients. He is credited with being the first person to view 'management' as a distinct function and he expounded his management theory in a number of books, including the Practice of Management, written in 1954. He saw management as a central necessity of society in the 20th century.

In the 1990s, he founded the Peter F Drucker foundation for non-profit management to help improve performance in the public sector.

Drucker was born in Vienna in 1909 and went to university in Hamburg and Frankfurt in Germany. He moved to London after the Nazis burned his book on 19th century Jewish politician Julius Stahl in 1933, then subsequently left for the US.

He taught business management at New York University until 1971, when he moved to Claremont Graduate School, which was later named the Drucker Graduate University in his honour.

Feted to the last, earlier this year he received the McKinsey Award for the best article published in the Harvard Business Review during 2004.

4. SERCO SECURES £125m GOVERNMENT CONTRACT

Services group Serco - which acquired ITNet in February - has won a contract from the Department of Trade and Industry to build and run web-based information services for the UK's small businesses.

The contract is Serco's first major government IT services deal since its ITNet acquisition. ITNet became an acquisition target after Serco lost an £83 million Cabinet Office contract and subsequently made interim pre-tax losses of £16.6 million (MCN Direct 3-26 and 3-41).

The DTI contract will run over five years with up to four additional one-year renewals and could be worth more than £125 million over the extended period.

Serco will be responsible for developing and delivering the DTI's Small Business Service 'business.gov' programme. The work with the Small Business Service will involve government departments including the DTI, Treasury, Companies House, the Cabinet Office and HM Revenue and Customs. Services provided will include the www.businesslink.gov.uk portal, which makes advice available to small businesses from across local, regional and national government.

Serco group chief executive Christopher Hyman said: "The business.gov programme has achieved a great deal to improve UK enterprise and benefit the nation's economic health. We will support the growth of this programme through continuous innovation and multi-dimensional marketing."

5. LOGICACMG WINS MULTI-MILLION CARE WORK DEAL

LogicaCMG has won a multi-million pound, five-year contract to work with the regulatory councils responsible for registering social care workers, as numbers rise from 80,000 to more than 1 million over the next decade.

The four regulatory councils in England, Northern Ireland, Scotland and Wales will work with LogicaCMG to develop, host and support an application that will handle the step-change in numbers as additional social care workers, such as managers of care homes and residential child care workers, need to be registered.

As well as turning incoming paperwork into electronic documents, LogicaCMG will provide a secure online interface for applicants to submit and check on the progress of their applications. Those registered, employers and academic institutions will be able to view details of their records and submit updated information. LogicaCMG will deliver the services from its dedicated data centre in South Wales.

Lynne Berry, chief executive of the general social care council, explained: "The four UK social care regulatory councils are working to improve standards within the social care workforce and to increase protection of the public by registering social care workers in the four countries. The intention to expand registration over the next decade to cover more than 1 million social care workers represents a major challenge."

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