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For UK consultants and systems integrators (CSI’s)

Vol. 4 No. 6, 21 March 2005

This issue is sponsored by:

This issue news

MCA president predicts year of hiring
Atos Origin builds on Sema merger
BearingPoint names You as CEO
Computacenter increases focus on IT services
Accenture accelerates healthcare activity
Further information - feedback/pass on to a colleague/remove from mailing list

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1. MCA PRESIDENT PREDICTS YEAR OF HIRING

David Bailey, newly elected president of the Management Consultancies Association (MCA), is forecasting "a year of hiring" as the consultancy industry looks forward to strong growth.

Bailey, who is joint managing director of financial services and public sector consultancy Impact Plus, suggests the pressure this year will be on finding consultants with vertical market skills rather than more generalist horizontal skills.

He also notes a shift in the overall consultant recruitment market as new joiners eschew the idea of a career for life in favour of a better work-life balance. "The people we are recruiting these days have a different concept of a consultancy career. They want a work-life balance and we want people with the right aspirations. The days of heady salaries and bonuses have gone," says Bailey. Bailey points to the return of consultants' careers fairs as evidence of the return to growth.

He replaces Hedra chairman Lynton Barker as president of the MCA, and will be supported by three vice presidents: Alan Russell of LogicaCMG; Andrew Crowley of CSC; and Nick Owen of Deloitte.

The MCA is predicting a year of growth following revenue gains of 15% in the fourth quarter of 2004 to £1.5 billion. Outsourcing led the way, with a 23% rise on last year's comparable figure to £508 million, ahead of IT consultancy rising 17% to £343 million and management consulting rising 9% to £685 million.

• David Bailey's Impact Plus is a key partner of MCN Direct publisher PMP on our newly launched IT information website, Evaluation Centre (www.evaluationcentre.com).

2. ATOS ORIGIN BUILDS ON SEMA MERGER

Atos Origin increased its headcount by 75% last year as a result of its merger with Sema Group - and intends to keep the recruitment momentum going through 2005.

Atos Origin said its worldwide employee numbers rose from 26,473 in 2003 to 46,584 at the close of 2004. Most of the extra staff joined from Sema when the firms merged in January 2004, but the organisation also made some new hires particularly in its consulting business.

Going forward, Atos Origin UK, which has a total of 6,700 employees, is planning to add over 1,000 recruits this year across its three business lines of consulting, managed operations and systems integration. Other country markets are expected to follow suit depending on local customer demand.

Atos Origin's 2004 revenue gain matched the headcount increase with a 75% rise to €5.3 billion (£3.7 billion). Net profit of €11 million reversed a loss of €169 million in the previous year, with operating margins dropping from 8.2% in 2003 to 7.3% in 2004.

Atos Origin CEO Bernard Bourigeaud commented: "In the third and fourth quarters of 2004 the group reported a return to organic growth for the first time in more than three years. Based on a clear recovery in the market, a steady flow of new orders since the start of the second half of 2004 and an increase in our pipeline of order opportunities, the group expects to be able to achieve organic revenue growth of at least 5% in 2005."

3. BEARINGPOINT NAMES YOU AS CEO

BearingPoint has recruited Oracle chief financial officer and former Accenture finance boss Harry You as its chief executive officer.

He takes up the CEO's role this week, following the abrupt departure of Rand Blazer from BearingPoint last November (MCN Direct 3-40) and his temporary replacement by Rod McGeary as chairman and CEO. Blazer gave no reasons for stepping down and was followed soon after by chief financial officer Robert Falcone (MCN Direct 3-42).

McGeary will continue as company chairman. He said: "We have worked to improve our financial position, grow revenues, strengthen client relationships and refocus on our people. The addition of Harry You will accelerate these efforts. His background in corporate finance will be invaluable as he takes the reins of the management team under the board's directive to put issues of control and transparency to rest once and for all."

You agreed: "Our first order of business will be to re-establish financial credibility and consistency with an unswerving commitment to transparency in disclosure and rigorous financial processes."

Chief financial officer of Oracle from July 2004, You previously held the same title for three years at Accenture.

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4. COMPUTACENTER INCREASES FOCUS ON IT SERVICES

Computacenter's 2004 results show an increase in managed services work in the UK, an improved performance in Germany - and a disaster in France.

The European IT infrastructure service provider said its total pre-tax profit in 2004 rose 3.2% to £67.3 million, on revenue unchanged at £2.5 billion. Its UK operation achieved a 16.6% rise in managed services revenue, mitigating the impact of price competition in the technology supply market, to turn in revenue down slightly at £1.4 billion and operating profit up 4.2% at £64.4 million.

Revenue in Germany rose 3.2% to £655.5 million on the strength of increasing outsourcing and managed services orders, with operating profit up 3% at £9 million.

France was the company's problem child showing an operating loss more than doubling to £6.2 million, on turnover falling 7.4% to £300.4 million. Computacenter invested in transformation through 2004 and has installed a new management from the UK in an attempt to get the French business back on track.

Looking ahead, company chairman Ron Sandler said: "In response to market developments, we have intensified our efforts to accelerate the growth of the services side of our business and to broaden the range of our services activities. The group is well positioned to deliver attractive levels of earnings growth in the years ahead."

Despite this confidence, Computacenter faces a further hurdle this year following its annual renegotiation with principal trading partner HP, which is likely to dent its profits by £10 million in 2005.

5. ACCENTURE ACCELERATES HEALTHCARE ACTIVITY

Accenture and Adobe Systems have won a contract to develop an online portal that will form the central point of interaction between the UK Government and the pharmaceutical industry.

The portal, which will be launched in the autumn and is based on Adobe's Intelligent Document Platform, will link the Government's Medicines and Healthcare products Regulatory Agency (MHRA) with drugs companies - allowing the agency to electronically manage tens of thousands of applications and requests for information each year. The aim is to speed up the time-to-market for drugs and medical technologies.

Accenture is also working with the MHRA to replace a paper-based system with electronic systems using Adobe's PDF technology. This initiative will help the agency process applications and requests and ensure safe and effective products are available to patients.

Doreen Hepburn, director of information management at the MHRA, said: "The agency believes that electronic submission technologies and the accompanying process changes will improve the efficiency of our interaction with industry."

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