MCN Direct Newswire

Vol. 5 No. 17, 5 June 2006

This issue is sponsored by:

TeleWare and The UK Consulting Industry Report 2005/6

This issue news

1. NHS hits back at IT project criticism
2. Cornwell flags profit problem
3. Accenture adds two offshore centres
4. Unisys hires IBM services head as MD
5. Xansa banks a further £75m at Barclays
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. NHS HITS BACK AT IT PROJECT CRITICISM

The National Health Service has responded to critics of its Connecting for Health national IT programme, insisting that it is not over budget and that "it is important to get the programme right rather than sticking rigidly to a timetable".

Concerns about escalating costs and project delays have been circulating for months, but came to a head last week when health minister Lord Warner, challenged by a Conservative call for an independent review of the programme, admitted that the project was experiencing difficulties. Crucially, he conceded that the electronic patient record, a core element of the system that was due for first deployment last year, would not now be rolled out until late 2007 or early 2008.

He also agreed that overall costs over the next 10 years are likely to be nearer £20 billion than the £6.2 billion spent on original spine and regional contracts with companies including BT, Accenture, Fujitsu Services and CSC.

Responding to critical media reports and clarifying Lord Warner's admissions, NHS Connecting for Health stated: "This programme is about patient and clinician benefit and improved safety. Some areas of the programme are going well and are ahead of target, but some areas are going more slowly than we would otherwise like. However, we should not be overly concerned about missed targets because we set ambitious targets to drive the programme."

Addressing the issue of cost, Connecting for Health agreed that total spend over 10 years would be close to £20 billion, but insisted that costs had not escalated. It said the core contract costs of £6.2 billion have not risen, but noted that the NHS already spends over £1 billion a year on IT, making the 10-year spend close to £20 billion.

It added: "This is an entirely reasonable spend on IT and is proportionately less than other industry norms. This does not mean the programme will cost more than expected, but reflects the full expense of switching existing IT spending from outdated systems to new ones."

While ministerial argument is likely to continue, the programme still faces immense internal problems as the medical profession fails to agree on whether patient information should be uploaded automatically to the patient record system or whether patient approval should be sought.

2. CORNWELL FLAGS PROFIT PROBLEM

Cornwell Management Consultants is struggling to maintain momentum and has warned that its 2006 profits are likely to be significantly lower than expected.

After recording a 14th year of sustained turnover and profit growth in 2005 (MCN Direct 5-8), and making a good start to this year, Cornwell has hit a number of trouble spots, including low staff utilisation in April and May, and the failure of Quantum Plus, the outsourcing consultancy it acquired in August 2005, to reach its budgeted profit in the year to date. The managing director of Quantum Plus resigned late last month.

Cornwell is also coping with a mix of recently won work that requires the use of more bought-in associates, causing lower use of its own staff.

In a trading update, the company said: "The board has already commenced a strategic review - including a greater focus on improving utilisation - and is continuing its search for a new managing director for the Cornwell group."

Cornwell's former managing director, Jonathan Broadhurst, left the company in April due to ill health. He originally joined in 1996 and was appointed MD at the time of the company's flotation in 2004.

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3. ACCENTURE ADDS TWO OFFSHORE CENTRES

Accenture has extended its offshore operations with a BPO delivery base in Warsaw, Poland, and a software outsourcing and systems integration centre in Pune, India.

The site in Warsaw will offer BPO services in finance & accounting, supply chain management and human resources. When fully staffed, it will employ 1,000 professionals speaking more than a dozen European languages.

Accenture chose Warsaw from a number of potential locations because of its large population of professionals, its modern infrastructure and Poland's economic and political stability. Among its 40 worldwide delivery centres, Accenture numbers not only Warsaw in Eastern Europe, but also Prague, Bratislava and Riga.

Jo Deblaere, head of Accenture's BPO global delivery network, said: "By adding a new centre, we believe we can provide critical business process - be it customer support, or accounts payable and receivable, or corporate learning, or HR - anywhere that service is required, at any time and in any language our customers use."

The consultancy's delivery centre in Pune, its ninth in India, will provide software outsourcing and systems integration services. It is planned to have a capacity of 1,600 seats by August. In total, Accenture has grown its headcount in India from less than 4,000 in 2003 to more than 17,500.

4. UNISYS HIRES IBM SERVICES HEAD AS MD

Unisys has named Nick Wilson, former UK general manager of IBM's global services business, as managing director of its UK, Middle East and Africa regions.

Wilson replaces Cap Gemini veteran Alwyn Welch, who left Unisys three months ago for Parity after just over a year in the job. Wilson, who also acted as vice president of IBM's strategic outsourcing business, will report to Peter Blackmore, Unisys' president of worldwide sales, marketing and technology.

Blackmore said: "Nick Wilson brings to Unisys a proven track record of growth, an intense focus on outsourcing and a talent for creating a single, disciplined sales culture around a defined set of growth priorities. His knowledge of the customer base and track record of closing large, corporate deals mirrors our goals for dramatically increasing sales momentum in the UK, Middle East and Africa."

During a decade at IBM, Wilson led and closed more than $3 billion worth of business and was responsible for $2 billion in annual revenue and 12,000 employees within IBM's global services business in the UK, Ireland and South Africa. He previously held sales positions at Data Sciences, which was acquired by IBM in 1996, FI Group, NCR and DEC.

5. XANSA BANKS A FURTHER £75m AT BARCLAYS

Xansa has strengthened its relationship with long-term client Barclays through a contract expected to generate revenues of £75 million over five years.

The new business will be delivered through the companies' existing joint venture, which is 51% held by Barclays and 49% by Xansa. Under the contract terms, the joint venture will continue to supply applications management and major change programmes to Barclaycard, but will also take on some of the services provided to the wider Barclays Group by Xansa.

Xansa has been working with Barclays for over 15 years and became the bank's first major IT outsourcing partner when the Barclaycard joint venture was established with the bank in 2002.

Commenting on the contract extension, Barclaycard senior technology officer Gary Edwards said: "In Xansa we have a flexible and responsive partner that understands our business and works closely with us to ensure we deliver quality products and services to our customers as quickly and cost-effectively as possible."

From Xansa's point of view, the deal underlines its ability to win contract renewals and extensions, as well as its ability to cross-sell in large organisations.

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