MCN Direct Newswire

Vol. 5 No. 24, 4 September 2006

This issue is sponsored by:

InterSystems and Annual Consultants' Forum 2006

This issue news

1. Accenture replaces UK boss
2. LogicaCMG bids £882m for WM-data
3. CSC remains loyal to troubled iSoft
4. Xchanging secures £230m BPO deal
5. Deloitte consultants climb for charity
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. ACCENTURE REPLACES UK BOSS

Accenture has replaced Lis Astall as its UK managing director in a major reshuffle that includes new leaders for the firm's global business consulting and outsourcing practices, as well as new heads for four of its five operating groups.

Astall, who was UK and Ireland country manager for around two years, has been replaced by David Thomlinson, who was previously group chief executive of the resources operating group, serving clients in the utility, chemicals and energy industries. Accenture has not named a new post for Astall, but it is expected she will remain within the company.

Taking over as global business consulting chief executive is Mark Foster, formerly head of the products operating group and previously managing partner of products in Europe. Kevin Campbell, who left Accenture for Hewitt Associates in 1999 and rejoined in 2005, becomes group chief executive of outsourcing.

The four global operating groups with new leaders are products, communications & high-tech, government and resources. Accenture's chief financial officer is also moving on and will be replaced by senior vice president of finance, Pamela Craig.

The executives being replaced have been given other senior roles, with two taking on newly defined roles as international chairmen - essentially ambassadors who will represent Accenture at a high level to clients, governments and the public.

The appointments were made on the first day of Accenture's fiscal year, 1 September, and repeat previous shake-ups that have brought new blood into the leadership team. Accenture CEO William Green commented: "When you combine the expertise and fresh perspective that the newest members of our executive leadership bring to the table with the deep experience of our current leadership team, Accenture is poised for even greater success in the years ahead."

2. LOGICACMG BIDS £882m FOR WM-DATA

LogicaCMG has made an £882 million offer to acquire WM-data, a Nordic IT services firm based in Sweden.

LogicaCMG said the acquisition, which has the unanimous support of WM-data's board, would fulfil its ambition of having four significant profit generators in Europe, with the Nordics complementing its existing profit centres in the UK, France and the Netherlands.

Following its acquisitions of Edinfor in Portugal and Unilog in France last year, LogicaCMG said the WM-data deal will make it a global top 20 company in terms of IT services revenue and push its employee numbers up from 30,000 to nearly 40,000, with full-year combined revenues of £3 billion.

However, analysts responded with scepticism to the offer - acknowledging LogicaCMG would gain an extended geographical reach and additional customer base, but questioning whether it could fire up WM-data's low revenue growth.

The offer came shortly before LogicaCMG reported first-half results, with operating profit up 3% to £42 million, but net profit of £10.3 million decimated by tax and interest charges. Revenue for the six months to 30 June rose 39% to £1.2 billion, although pro forma revenue growth for the group - as if Unilog and Edinfor were consolidated from January 2005 - was just 5%.

Despite gloomy market sentiment about the WM-data offer and the mixed financial results, LogicaCMG remained upbeat, stating: "Demand for IT services continues to improve. We expect 2006 pro forma revenue growth to be ahead of last year's 5.3%. Unilog is performing well and the cost savings from the acquisition will largely benefit the second half. As previously indicated, improving market conditions are resulting in a tightening labour market with increased use of contract labour to satisfy demand. Overall, our expectations for the year remain unchanged."

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3. CSC REMAINS LOYAL TO TROUBLED iSOFT

CSC has reaffirmed its commitment to working with iSoft on its NHS Connecting for Health IT contract - despite the software provider's financial collapse and late delivery of its core Lorenzo application.

In a statement, CSC said: "We have seconded a substantial number of staff to work with iSoft on the further development of Lorenzo and enhance the end-to-end development process. That collaboration has been working extremely well and CSC has reaffirmed its commitment to working together with iSoft."

For its part, iSoft said it had reached agreement with CSC for delivery of its software into the NHS' North West and West Midlands regional cluster, where CSC holds the local service provider contract, and for CSC to undertake ongoing implementation of its software in seven hospitals in the Southern and London areas that are already iSoft users.

A memo of understanding signed by iSoft and CSC confirms a schedule under which iSoft will deliver products and services to CSC in the North West and West Midlands region. The agreement is worth up to £153 million to iSoft, subject to the satisfactory achievement of delivery milestones, but gives CSC the right to take over the management of the development team if iSoft fails to fulfil its development commitments.

iSoft chairman and acting CEO John Weston said he was pleased that CSC and the hospital trusts had demonstrated continuing confidence in the iSoft solution.

Accenture, which selected iSoft as an alliance partner for its NHS contract covering the North East and East of England region, is believed to be continuing to work with the software provider, but has not made a formal statement on its future commitment.

4. XCHANGING SECURES £230m BPO DEAL

Business process outsourcing supplier Xchanging has won one of the summer's biggest contracts, signing a £230 million, 10-year agreement with insurance broking and risk management specialist Aon.

The deal covers Aon's client operations division, which handles insurance claims administration, and will work alongside an existing, exclusive offshore partnership between Aon UK and Cambridge Solutions in India.

David Mead, Aon group operations director, said: "After an exhaustive selection process for the right partner, we decided that Xchanging's business servicing approach offered us the best proposition in terms of scope, ability and expertise. Our strategy is the realignment of our business more closely around our client needs and core areas of expertise."

More than 500 UK Aon employees will transfer to Xchanging as part of the deal.

5. DELOITTE CONSULTANTS CLIMB FOR CHARITY

While many of us relaxed over the summer holiday period, a team of 39 consultants from Deloitte UK climbed Africa's highest peak to raise money for charity.

The group, led by technology consulting partner Neville Howard, scaled Mount Kilimanjaro in Tanzania to raise money for the consultancy's charity partners, the British Heart Foundation and Leukaemia Research. Some £128,000 was raised after costs, the largest amount ever donated by the practice from a single event.

After the climb, Howard said: "We knew it was going to be tough and that is why training began 12 months before the trip. There is no doubt it was worth every aching muscle, dizzy spell and bad stomach pain because the experience was unforgettable and benefits good causes."

Out of the 39 climbers, 27 made it through five climate zones to reach the top of the world's tallest free-standing mountain, Gilman's Point.

• Deloitte has reported satisfactory UK revenue and profit growth for the year ended 31 May. Consulting revenues rose 22% to £381 million, ahead of audit up 17% to £487 million, tax up 10% to £426 million and corporate finance also up 10% to £265 million.

Deloitte chief executive John Connolly said: "Our consulting business goes from strength to strength and we are now recognised as the market's leading business consultancy. We are building on a strong, balanced portfolio and seeing a continuing demand for multi-disciplinary business drawing on our specialist skills in strategy, operations, technology and human capital."

Connolly warned of a tougher market ahead, however, with corporate confidence dented by oil prices, fear of inflation, a slowing US economy and UK interest rate rises.

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