MCN Direct Newswire

Vol. 5 No. 2, 30 January 2006

This issue is sponsored by:

Maconomy and PMP Research

This issue news

1. Capgemini takes advice from Lord Birt
2. IBM's IT services business dips
3. Keith Burgess leads BearingPoint in EMEA
4. Xansa wins £70m utilities contract
5. LogicaCMG sustains financial growth
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. CAPGEMINI TAKES ADVICE FROM LORD BIRT

Lord Birt, former director general of the BBC and until last month strategy adviser to the Prime Minister, has been appointed adviser to the board of directors of Capgemini UK.

Lord Birt will advise Capgemini on strategic issues, especially its efforts in the public sector, and will also focus on developing the company's telecom, media and entertainment practice in Europe.

Capgemini UK CEO Mark Porter explained: "Lord Birt's top-level experience will be of immense value to a business such as ours in which quality and originality of thinking are key to commercial success. His strategic insights and leadership skills will be of great value to our clients facing the challenges of transformation - challenges that he has faced in many contexts and at the highest levels."

Didier Bonnet, managing director of Capgemini's global telecom, media and entertainment practice, commended Lord Birt's positioning of the BBC for the digital era, saying it would be invaluable experience for the company's clients.

Lord Birt's appointment at Capgemini has been approved by Cabinet Secretary Gus O'Donnell. Following advice from the Independent Committee on Business Appointments, he will not start public sector work for Capgemini until July - six months after he left the role of strategy advisor to the Prime Minister.

• Capgemini has lost Sean Kenny, the leader of its north American sales and marketing organisation, to EDS where he becomes vice president of business transformation outsourcing services. Before joining EDS, Kenny spent 20 years in executive roles at Capgemini and was a partner with Ernst & Young before it was acquired by the consultancy.

2. IBM'S IT SERVICES BUSINESS DIPS

Revenue from IBM's Global Services business dropped by 5% to $12 billion (£6.8 billion) in the final quarter of 2005 - although the division's full-year revenue rose 3% to reach $47.4 billion.

IBM also recorded full-year growth of 28% in its revenues from business performance transformation services, and said that in the final quarter Global Services signed contracts worth $11.5 billion. Its year-end services backlog - including strategy outsourcing, business consulting services, integrated technology services and maintenance - matched that of 2004 at $111 billion.

Despite the downturn, IBM chairman and CEO Sam Palmisano commented: "IBM finished the year with another strong quarter. Gross profit margin improvement in the quarter of more than five points demonstrates the benefit of our strategic focus on more profitable, high-value segments of the IT industry, as well as our continued emphasis on productivity and global integration.

"IBM's business model is much more balanced and profitable than it was just a few years ago. The company is ready for 2006 as we continue to deliver on our agenda of driving innovation and transformation for our clients and their businesses."

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3. KEITH BURGESS LEADS BEARINGPOINT IN EMEA

Accenture veteran Keith Burgess has been appointed to the newly created post of chairman of Europe, the Middle East and Africa (EMEA) at BearingPoint.

Burgess will be based at the consultancy's London office and will work closely with Peter Mockler, a former member of BearingPoint's management board for Germany, Austria and Switzerland, who has been promoted to the post of executive vice president of EMEA.

Burgess has 35 years' experience in the strategy and management consulting industry and spent most of his career at Accenture as worldwide managing partner, where he built the success of the firm's outsourcing business. At BearingPoint, he will provide strategic leadership and build key client relationships across the EMEA region.

Despite BearingPoint's failure to report financial results for the past two years, and ensuing investigations by the US Securities and Exchange Commission, Burgess remains bullish about the firm's prospects: "BearingPoint is headed in the right direction under CEO Harry You and I am excited by the opportunity to be part of this effort. I look forward to contributing to the company's success."

Peter Mockler joined BearingPoint in 1989 and was promoted to partner in 1997. As head of EMEA he replaces Steffen Seeger who, according to BearingPoint, has left the firm for personal reasons after more than 20 years with the company and its predecessors.

4. XANSA WINS £70m UTILITIES CONTRACT

IT services firm Xansa has secured a £70 million contract with the Northern Ireland Water Service to head an alliance providing customer billing and contacts systems.

The contract is Xansa's largest in the utilities sector and takes it into the Belfast area, where its Crystal alliance will immediately implement a customer billing and collections system, before setting up a new customer relations centre and creating 180 jobs in April 2007.

Within the alliance, Xansa will be responsible for managing the relationship with the Northern Ireland Water Service and will run the overall service, from implementation to operational delivery. It will also provide back-office billing processes. Under a subcontract, Echo Managed Services will be responsible for customer billing and debt collection and will manage the customer contact centre, while AMT-Sybex will provide a mobile work management solution.

Northern Ireland Water Service chief executive Katharine Bryan commented: "Xansa's technology and experience will directly benefit our customers, through a faster response to call-outs and a seven-day-a-week personalised customer service. The new customer management service will also provide a key element of the government strategy for water reform in Northern Ireland. The cost savings made by outsourcing this part of the business will be reinvested in upgrading the water infrastructure in Northern Ireland to the benefit of all our customers."

As well as winning this new client in the utilities sector, Xansa has renewed its existing business process outsourcing agreement contract with Thames Water, covering back-office billing and customer correspondence processes, for an additional 22 months.

5. LOGICACMG SUSTAINS FINANCIAL GROWTH

LogicaCMG expects to report a significant improvement in profitability, and revenue growth of 5%, when it makes its financial report for 2005 on 1 March.

After three years of operating losses, the company turned in an operating profit (but a net loss) in 2004 and expects to show a return to net profit for 2005. IT services performed well in the UK and the Netherlands, particularly in the second half of the year, while LogicaCMG's IT services business in France benefited from improving market conditions and completion of a planned rationalisation.

LogicaCMG's acquisition of French services firm Unilog, completed earlier this month, is expected to add significant capabilities and revenue going forward, with the companies already bidding jointly to customers in France.

Elsewhere, LogicaCMG's IT services business in Germany remained difficult and in Iberia the Edinfor business - acquired early in 2005 - developed well through the second half.

Commenting on the full-year trading update, LogicaCMG group chief executive Martin Read said: "We are very pleased to have achieved a significant improvement in operating profit in 2005. At the same time, we have taken two important strategic steps forward this year. With Edinfor we have shown we can win a major outsourcing contract against the largest international competition. With the acquisition of Unilog we have significantly increased our scale and geographical balance, thereby creating an even stronger platform for the future development of the business."

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