MCN Direct Newswire

Vol. 4 No. 24, 18 October 2005

This issue is sponsored by:

TeleWare

This issue news

1. Capgemini ousts chief operating officer
2. Atos Origin supports sporting dreams
3. Government reviews IT strategy
4. BearingPoint forecasts return to profit
5. Infosys closes gap on TCS
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. CAPGEMINI OUSTS CHIEF OPERATING OFFICER

Capgemini has parted company with chief operating officer Pierre Danon after reports that he was pursuing the chairman's role at hotel group Accor (MCN Direct 4-23).

Danon only joined Capgemini in March from BT, where he was managing director of BT Retail. At Capgemini he was beginning to turn around the company's US business and helping set direction in some other divisions.

Following a report in French newspaper Le Figaro suggesting that Danon was a candidate for the job at Accor, Capgemini agreed with Danon that it would not "instantly react to this surprising announcement". But after a week of making no comment on the issue, Capgemini stated: "The group notes that the necessary conditions to maintain Danon's leadership position in the group could no longer be met, in spite of the wish expressed by Mr Pierre Danon to continue his work in the group."

Capgemini ousted Danon on the same day it said his leadership position could not be sustained, adding that it has no plans to replace him in the coming months.

2. ATOS ORIGIN SUPPORTS SPORTING DREAMS

Atos Origin has promised to provide financial support for young sporting talent in the run-up to the 2012 London Olympics.

The company, which has been the worldwide IT partner for the Olympic Games for some years, has set up a Champions and Challengers Bursary Scheme as part of its UK community relations programme. Working with the British Olympic Association, Atos Origin has selected seven Olympic champions - Linford Christie, Jason Queally, Georgina Harland, Danny Crates, Shirley Robertson, Konrad Bartelski and Steve Parry - to appoint a young challenger who they feel is particularly deserving of backing in their sport.

Funding will be made available to the challengers until the 2012 Games and will cover specific items such as coaching, equipment, medical services or training and preparation at one of the British Olympic Association's dedicated training centres.

Xavier Flinios, the Atos Origin board member responsible for the Olympic Games programme, explained: "The Champions and Challengers Scheme is a way for Atos Origin, its partners and customers to support the sporting talent of the future and help Team GB build on its success at the Athens 2004 Olympic Games."

• Also in sport, Xansa has secured a multi-year agreement to be the official supplier of consulting and software development to the winners of the 2005 Formula 1 championship, the Renault F1 team. The partners collaborated on a project through the 2005 season and have now struck a long-term deal that will require Xansa to deliver off-car data analysis systems aimed at improving on-track performance.

3. GOVERNMENT REVIEWS IT STRATEGY

The Government is planning to change its approach to IT and its suppliers in an attempt to curtail a long and embarrassing series of major systems failures.

Speaking at a London conference last week, Jim Murphy, the Cabinet Office Minister with responsibility for e-government, promised a "real step change in IT professionalism across the public sector" and said the Government would stop projects if they are not successful - rather than continuing to pour money into them as has happened in the past.

Murphy said: "The public sector is spending about £14 billion a year on IT. While IT can generate efficiencies, we must be vigilant that we are not wastefully duplicating infrastructure and applications." He explained that that the Government is "tackling the generic causes" of IT failure by transferring techniques and lessons from better management of public sector construction projects, while developing the skills of its workforce. "We will also put in better monitoring, better management of suppliers, controls at a portfolio level and capacity planning," he said.

The concept of 'portfolio management' is expected to be announced in a governmental IT strategy due to be published shortly and covering the next 7-10 years. This will introduce controls on suppliers across all the contracts they have with the Government, rather than every contract being managed individually.

4. BEARINGPOINT FORECASTS RETURN TO PROFIT

BearingPoint expects to return to profitability in fiscal 2006 after a rollercoaster ride since KPMG Consulting was separated from its audit parent, listed in 2001 and rebranded and expanded through acquisition in 2002.

The company has languished in financial loss since its formation, with the sole exception of 2003, but now claims to be back on track and close to concluding outstanding issues with the US Securities & Exchange Commission (SEC).

BearingPoint is forecasting a 2006 operating income of $180-250 million (£102-142 million), on revenue of $2.7-2.9 billion. Harry You, CEO of BearingPoint since March, said: "We continue to make progress across our business segments and expect to return to profitability in 2006. We will continue to focus on building strong client relationships, investing in our key capabilities and expanding our business sensibly, strategically and profitably, while at the same time carefully managing our expenses."

Yet despite You's upbeat forecast, BearingPoint is still struggling with its financial statements for fiscal 2004 and related SEC filings. In early September, it expected to have the work completed by the end of this month, but now says this is unlikely as several issues are still being addressed.

5. INFOSYS CLOSES GAP ON TCS

Indian IT services company Infosys is gaining ground on Tata Consultancy Services (TCS), the country's leading player.

Infosys made a second-quarter net profit of $138 million (£78.8 million) - 41% higher than last year's comparable period - on revenue rising 38% to $524 million. And while TCS turned in larger turnover and profit, it could not match Infosys' growth, with net profit in the quarter to 30 September up 22% and revenue up 27% on last year's comparable period.

Infosys grew first-half revenue to reach the $1 billion mark, while TCS made $1.3 billion.

Both companies also added employees in the second quarter, with Infosys reaching a total of 46,000 and TCS becoming the first Indian IT services company to employ 50,000 professionals. Both firms benefited from their scale to gain major deals, such as the shared £1.2 billion ABN Amro services arrangement (MCN Direct 4-20), and attracted custom in response to the range of IT services they offer.

Commenting on Infosys' development, CEO Nandan Nilekani said: "We have seen robust growth during the quarter due to our effective focus on offering a broad array of services to our clients. It took us the whole of fiscal 2004 to reach a revenue of $1 billion - we reached the same level in the first six months of this year."

Commenting on TCS' performance, CEO S Ramadorai said: "The significant client acquisitions we have had in the previous quarters have resulted in excellent ramp-up and growth in this quarter. TCS' global delivery, with a consulting-led growth strategy, has gained full market validation. Our ability to manage complex technology engagements on a global scale will continue to be a growth driver."

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Written by Sarah Underwood. Copyright 2012 PMP (UK) Ltd.