MCN Direct Newswire

Vol. 5 No. 16, 30 May 2006

This issue is sponsored by:

TeleWare and The UK Consulting Industry Report 2005/6

This issue news

1. CSC loses financial momentum
2. IBM named global outsourcing leader
3. Consultants sleep out for charity
4. Sapient partners Google
5. Capgemini tech team joins the blogosphere
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. CSC LOSES FINANCIAL MOMENTUM

CSC has reported flagging financial results for fiscal 2006, just weeks after putting up a 'for sale' sign over the whole company.

CSC closed its financial year with net profit down 21% at $634 million (£338.7 million), on revenue up 4% at $14.6 billion. Its fourth-quarter results were even gloomier, with net profit down 51% at $199.4 million, on revenue flat at $3.9 billion.

The final quarter was shadowed by a fall in US and European commercial revenue, and raised by double-digit revenue from the company's US federal government activities, as well as its operations in Australia and Asia.

CSC said its North American consulting and systems integration business remained stable in the final quarter, but noted that the European market for similar shorter-term activities continued to be hit by soft demand in some countries.

It was mainly lacklustre performance in Europe that prompted last month's decision by CSC to restructure and cut 5,000 jobs, mainly across Europe, in order to streamline worldwide operations, access low-cost resources and improve cashflow and earnings.

2. IBM NAMED GLOBAL OUTSOURCING LEADER

IBM has been ranked number one in The Global Outsourcing 100, a league table compiled by the International Association of Outsourcing Professionals (IAOP).

In second place is Sodexho Alliance, a specialist provider of facility services, real-estate and capital asset management outsourcing, ahead of Accenture, Hewlett-Packard, Capgemini, Aramark - another facility services provider CGI Group, Unisys and India's Cognizant Technology Solutions.

The ranking, which notably does not include CSC or Atos Origin, was based on applications submitted to a panel of judges. The judges' decisions were qualitative rather than quantitative and based on factors such as depth and breadth of services, customer references, recognition and certification, talent, management systems and experience in providing services to global clients.

The IAOP reports that, in total, the top 100 firms generated revenues of $68.9 billion (£36.9 billion) in 2005 and employed 1.03 million people worldwide. Outsourcing revenue and employment grew 15% among the companies in 2005, with the average outsourcing supplier employing 10,000 people at production sites in eight countries and client-facing operations in 13 countries.

The US dominates ownership of the outsourcing industry with 63 of the top 100. Following at a distance is India with 14 companies, the UK with six - including IT outsourcers Xchanging, Vertex, Astron and BT Global Services - Canada and China with four each, Russia with three and France, Singapore and the Philippines with two each.

Commenting on the report, IAOP executive director Michael Corbett said: "To some, IBM may be a surprise leader as it is principally known as a technology innovator. Similarly, firms like Sodexho and Aramark, that play substantial roles in outsourcing, are not always associated with this industry. Although outsourcing generates a fair amount of emotion and media coverage, the Global 100 ranking is the first three-dimensional picture of this powerful and emerging industry."

The IAOP was formed last year by companies involved in outsourcing as customers, providers and advisors, and now includes 250 organisations in its global membership.

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3. CONSULTANTS SLEEP OUT FOR CHARITY

Management consultants and IT industry leaders are planning a sleep-out to raise money for children's charity NCH. This year's so-called Byte Night, the seventh since the event was founded, will be held on Friday 22 September in Victoria Tower Gardens, London and aims to beat the £250,000 raised last year.

The Byte Night management board includes Martin McPhee, a partner at Accenture, Anthony Harling, a consultant at Eric Salmon & Partners, and from Ernst & Young director James Bennet and E&Y partner Nick Powell. Other participants in the charity sleep-out include executives from IT suppliers, PR companies and recruitment agencies.

Liz Monks, NCH executive director of fundraising, commented: "The involvement of such high-profile figures in Byte Night is a tribute to how far the event has come. Byte Night highlights the compassion that exists in the IT industry. We are proud to see corporate social responsibility high on the agenda of all the companies involved."

4. SAPIENT PARTNERS GOOGLE

IT consultancy Sapient has partnered with Google to offer content management-based search solutions to enterprise customers.

The consultancy said it will use its business applications, enterprise integration and marketing expertise to help clients maximise the value of Google enterprise search technology.

Sapient executive vice president Alan Herrick said: "Companies want to find new ways to extract value from the massive amounts of information stored within their organisations. With Google's enterprise search technology, we are further strengthening our ability to help our clients unlock the value in their information and make decisions in a timely manner."

To work with Google, Sapient has joined the search supplier's enterprise professional programme. This includes consultants, developers and independent software vendors who provide value-added services for Google enterprise products. Among the first consultancies to sign up was BearingPoint.

5. CAPGEMINI TECH TEAM JOINS THE BLOGOSPHERE

Capgemini's chief technology officers have set up the first blog on the firm's website in an attempt to capture the hearts and minds of clients and prospects.

The team behind the blog includes the company's global CTO Andy Mulholland, northern Europe and Asia CTO Ron Tolido, and CTO of Capgemini Finland Juhana Juppo.

Mulholland explained: "Our business is all about interacting with people, sharing ideas, spreading knowledge, listening to what people have to say - this blog is an excellent way for us to do this in an informal and interactive way."

Capgemini intends to use the blog to discuss issues such as the relationship between business and IT, as well as technologies such as service oriented methodologies, business intelligence and RFID. "Whatever we feel like basically. It also gives our audience the opportunity to tell us what it thinks about these topics," added Mulholland.

Tolido described the blog as "nothing less than a personal challenge to attract our potential audience with new, inspiring and thought-provoking viewpoints".

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Written by Sarah Underwood. Copyright 2010 PMP (UK) Ltd.