MCN Direct Newswire

Vol. 5 No. 14, 15 May 2006

This issue is sponsored by:

Systems Union and InterSystems

This issue news

1. IBM wins British Energy transformation deal
2. Europe lets down DiData
3. Somerset shortlists IT services suppliers
4. DiamondCluster scales down global ambition
5. LogicaCMG secures KPN contract
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

Systems Union

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1. IBM WINS BRITISH ENERGY TRANSFORMATION DEAL

IBM Global Services has signed a multi-year agreement with British Energy to implement an integrated supply chain strategy and extend the life of the company's nuclear power stations.

The agreement builds on a contract signed by the two firms in May 2004, under which IBM has started to implement a range of initiatives to create sustained business processes. During the contract, British Energy has restructured, moved into the FTSE 100 and kicked off an asset investment programme.

Financial details of the new contract were not disclosed, but it is likely to be more substantial than the first.

IBM will work with British Energy staff and its supply base to transform the company's relationships with strategic suppliers through innovative contracts, improving supplier quality and safety, and business process improvement.

2. EUROPE LETS DOWN DIDATA

Dimension Data is continuing to rebuild its financial strength following a collapse in 2003, but is being held back by poor performance in Europe.

The IT services and infrastructure solutions specialist increased net profit 200% in the six months to 31 March compared to last year's first half. Profits reached $37.9 million (£20 million) - including a $9 million tax bonus - on revenue rising 16% to $1.5 billion.

DiData achieved double-digit revenue growth in Africa, Asia, Australia and the US, but in Europe it slipped 1% to record revenues of $356.1 million. Describing Europe as 'a disappointment', the company said operating profit in the region was $0.1 million, compared to $8 million a year ago.

DiData combined the management of several of its UK and continental European businesses during the half-year and claimed it was beginning to see improved performances in Germany, Spain and Italy. But these were masked by continuing difficulties in France and a weak trading performance in the UK in the first quarter.

In terms of services and product revenue, DiData reported a 5% gain in managed services compared to last year's first half at $349.9 million, and a 43% gain in professional services at $226.3 million. Its products business rose 15% to $873.9 million.

Sponsor

InterSystems

Massimo Pezzini, Gartner, presents at InterSystems UK Symposium in September: "Innovation…. at the centre of your organisation!"

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3. SOMERSET SHORTLISTS IT SERVICES SUPPLIERS

Somerset County Council and Taunton Deane Borough Council have shortlisted BT, Capita and IBM as a potential partner for the provision of services including information communications technology.

The three suppliers have been whittled down from a long list of 10 companies, selected from 52 that responded to a Europe-wide advert for the project last December.

Capita is the only company bidding alone for the contract, which covers not only ICT, but also HR, finance and procurement, property, customer services, legal services, office services, and revenues and benefits. BT has called in IT services firm CGI and building and business services company Carillion to support its case, while IBM is heading a consortium including Serco, the services giant that last year acquired ITNet, and facilities manager Atkins.

The councils plan to announce a preferred bidder in November, with the contract due to start next spring - although nothing is certain until the ink is dry. According to Taunton Deane chief executive Penny James: "We will only proceed with this contract when we are satisfied that it can deliver the changes needed and provide improved job opportunities for our staff."

About 800 council jobs are involved in the overall Improving Services in Somerset (ISiS) programme. The work of the partner chosen to support ISiS could expand during the first part of the contract to provide similar services for other authorities in the South West that were polled last December, with 35 registering a potential interest in the partnership meeting their service needs.

4. DIAMONDCLUSTER SCALES DOWN GLOBAL AMBITION

Chicago-based management consultancy DiamondCluster is pruning its international operations as it seeks to improve profit margins by concentrating on its core businesses in the US, UK and India.

The decision reflects a financially embarrassing collapse in fourth-quarter and full-year profits, which led the consultancy to consider "strategic alternatives for portions of its international operations, including a potential sale". These operations include the company's businesses in France, Germany and Spain, as well as bases across South America and the Middle East.

Explaining the strategy, DiamondCluster CEO Adam Gutstein said: "We are sharpening our focus on our core markets in North America, the UK and India. This move will allow our most senior resources to direct their time and energy to the areas that represent the best opportunities for growth and should improve our margins and cashflow."

Reporting annual results to 31 March, DiamondCluster made a net loss of $10.8 million (£5.7 million), reversing a profit of $33 million in the previous year, on revenues flat at $145.2 million. In the final quarter, net profits fell from $20.1 million a year ago to $190,000, on revenue down 1% at $38.8 million.

Gutstein commented: "Our business is strengthening in a positive business climate. We made significant progress during the fourth quarter on improving our key metrics and driving margin expansion."

5.LOGICACMG SECURES KPN CONTRACT

LogicaCMG has beaten competitors to a four-year salary administration and HR system management outsourcing contract with Dutch telecoms company KPN.

Financial details of the deal were not disclosed, but it will be a welcome addition to LogicaCMG's HR & payroll outsourcing services business, which is supported by 1,300 employees worldwide and processes more than €90 billion (£61 billion) worth of salaries a year.

LogicaCMG will replace a custom-made payroll system with a standard salary system for 20,000 KPN employees, before moving on to handle all salary administration for the firm. It will also take over the operational and technical management of KPN's HR system based on Oracle and PeopleSoft applications and integrate this within its own service organisation.

KPN board chairman Ad Scheepbouwer said: "After a comprehensive selection process in which six parties were involved, KPN opted for LogicaCMG. We chose LogicaCMG because it was one of the few parties able to offer a fully integrated solution. In addition, it has been a reliable partner in the technical management of our custom-made payroll application for years."

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