MCN Direct Newswire

Vol. 5 No. 28, 9 October 2006

This issue is sponsored by:

Maconomy, Agresso and The Annual Consultants' Forum 2006

This issue news

1. Cornwell considers selling up
2. Charteris sees profits plummet
3. IBM and EDS share honours at Vodafone
4. Atos headhunts senior consultants
5. LogicaCMG, Capgemini and TCS share £100m contract
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. CORNWELL CONSIDERS SELLING UP

Cornwell Management Consultants is reviewing its strategic options and may seek a buyer for the business. The move follows a poor financial first half in which Cornwell made a net loss of £406,000 and cut its consultant numbers to 75 (MCND 5-25).

In a statement to the London Stock Exchange, the company said: "Cornwell has commenced a review of the company's strategic options in order to consider the future of the business, with a view to delivering shareholder value. This may or may not involve the company seeking an offer to be made for the issued and to-be-issued share capital. However, there can be no certainty that this process will lead to an offer being made for the company."

When Cornwell reported its financial results last month, executive chairman Keith Cornwell said he was "confident" of an improved performance in the second half of the year, following a strategic review. The latest statement suggests this confidence has weakened.

• IT services provider Northgate Information Solutions has said in a Stock Exchange statement that following a number of unsolicited approaches, it is in talks that could lead to a formal offer being made for the company. The statement was prompted by share price movement after rumours of private equity interest in Northgate.

2. CHARTERIS SEES PROFITS PLUMMET

Charteris has reported full year pre-tax profit down 60% at £359,000, frustrating its three-year plan to move into the next tier of IT and business consultancy companies.

But although profits for the 12 months to 31 July fell dramatically, Charteris pushed its revenue up 4% to £20.1 million. The company's northern practice, resulting from the acquisition of Cedalion, increased revenues 21% on the previous year, while in the south, the government & legal practice raised revenue by 13%.

Charteris' other two practices were hit by the end of major projects, with retail, manufacturing & services showing no gain in revenue and financial services & media down 16%.

Charteris originally forecast a profits problem in July, saying it was taking longer than expected to build sales to replace major projects and that it was investing in a strategy to focus on the three service lines of customer centricity, intelligent integration and infrastructure optimisation (MCND 5-21).

Following its latest announcement, Charteris chairman David Mann admitted that sales in the company's traditional business remain slow. He forecast lower revenue in the current financial year than in the year to July 2006, but added: "We think it is important to see these short-term issues from a longer-term perspective. The company has established an outstanding reputation for the calibre of its professional work and we remain confident that Charteris can build on this for the next stage of its development."

Sponsor

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3. IBM AND EDS SHARE HONOURS AT VODAFONE

IBM and EDS have been selected by Vodafone for a global outsourcing deal worth up to £560 million.

The two suppliers were selected after 11 candidates were rigorously tested over eight months. They will manage the mobile phone company's application development and maintenance, with each outsourcer providing services to separate groups of Vodafone companies.

A number of staff will move to IBM and EDS as part of the deal, but Vodafone will retain strategic control of the initiative, which focuses on writing code for and maintaining systems such as billing and customer relationship management.

Vodafone spent £560 million on application development and maintenance in its last financial year and is outsourcing the work with a view to cutting costs and improving the quality and flexibility of its software.

The candidates for the outsourcing contract were assessed on their technical capability, outsourcing expertise, cost and cultural fit. The two winners are expected to rationalise the number of application and development suppliers used by Vodafone to achieve economies of scale.

Vodafone may let more outsourcing contracts as it continues a cost reduction strategy put in place in 2004. According to chief executive Arun Sarin: "This initiative is a good example of how Vodafone is finding new ways to deliver greater cost efficiencies across the business. We are exploring the possibility of outsourcing other non-core activities so that we can focus on our customers."

4. ATOS HEADHUNTS SENIOR CONSULTANTS

Atos Consulting has recruited three partners from leading IT services firms to strengthen its UK consulting business.

Peter Richardson has been headhunted from EDS' financial services practice to become a partner in Atos Origin's financial services team. He has 25 years' experience in the insurance sector and has worked in change management, strategy and marketing consultancy, and IT management.

Richard Love, formerly head of insurance at Detica, joins Richardson as a partner in the financial services practice. He has 15 years' consulting experience and will focus on driving new business and developing Atos Origin's financial services offering.

Lesley McLay has been hired from Hedra to become a partner in Atos Origin's healthcare business. She has 20 years' experience in healthcare, most recently delivering consultancy to national and local NHS organisations - work she will continue within Atos Origin.

Mike Hobday, head of Atos Consulting UK, commented: "The breadth and depth of experience of our new joiners, plus the credentials they bring with them, is testament to the calibre of consultants we are recruiting and retaining in the UK."

Further afield, Atos Origin intends to hire 9,000 people this year. The UK is not planning a major recruitment drive, but around 2,500 staff will be hired to bolster the French business and more will be employed across continental and central Europe and the Asia-Pacific region.

• Atos Origin has won a £30 million, 12-year business process outsourcing contract from the Association of Train Operating Companies' Rail Settlement Plan. Atos Origin will automate and manage a system that processes the payment of rail ticket sales to the UK's 25 train operating companies.

Sponsor

The Annual Consultants' Forum 2006

The speaker presentations for the 2006 Forum are now available.

To download all the PDFs please click here to visit the 'agenda' page on the event website.

5. LOGICACMG, CAPGEMINI AND TCS SHARE £100m CONTRACT

Welsh Water has chosen a triumvirate of IT services firms for a £100 million business transformation and service improvement programme.

The largest slice of the money goes to LogicaCMG. With a seven-year contract valued at £40 million, the company will build an IT and communications architecture that will be a platform for transformation at Welsh Water. LogicaCMG will also provide outsourced customer services and IT functions to the utility, building on an initial outsourcing deal signed in 2001.

Capgemini has been awarded a £29 million deal for the business transformation piece of the Welsh Water overhaul, as well as some outsourced services and the replacement of over 20,000 PCs used by the water company and its service partners.

TCS picks up the rest of the money, presumably for outsourced services, although it has declined to comment on the contract.

The three service providers will work with Welsh Water's IT centre in a so-called ICT Alliance that will take over the contract this month. After a three-month transition period, they will begin a year-long programme to replace the utility's existing network, data storage and desktop equipment, making way for business transformation.

Welsh Water finance director Chris Jones said: "The alliance has already brought creative and innovative thinking to the delivery of services and, over the next year and beyond, will bring efficiency and service benefits to the business and our customers."

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