MCN Direct Newswire

Vol. 5 No. 31, 30 October 2006

This issue is sponsored by:

Deloitte, TeleWare and The UK Consulting Industry Report 2005/6

This issue news

1. Capgemini plans Kanbay acquisition
2. Ernst & Young back in consultancy mainstream
3. Xansa finds favour at the BBC
4. Consulting creeps up at Deloitte
5. Northgate ends sales talks
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

Deloitte

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1. CAPGEMINI PLANS KANBAY ACQUISITION

Capgemini is to buy IT services firm Kanbay International for $1.25 billion (£659 million), making it Europe's largest player in India. The merged company will have 12,000 employees in India by the end of 2006, almost double Capgemini's current presence.

As well as the Far East, Kanbay has offices in London, Australia and North America - strengthening Capgemini's position in the US, where it has struggled to achieve positive performance, and adding to its financial services expertise.

Capgemini CEO Paul Hermelin said: "The acquisition of Kanbay supports our growth strategy and significantly enhances our global banking, financial services and insurance practice, particularly in North America and India, where Kanbay has over 5,000 associates. The acquisition also gives us valuable capabilities in consumer and industrial products, telecoms, media, life sciences and travel and leisure."

Kanbay, which is headquartered in Chicago, is forecasting 2006 revenues of around $400 million. The acquisition is expected to close early next year.

Capgemini announced the purchase along with third-quarter revenues showing a 12% year-on-year gain, for a total of €1.9 million (£1.3 million).

Outsourcing services recorded the strongest growth in the quarter to 30 September, up 20%, while bookings rose nearly 20% over last year's comparable quarter to reach €1.5 million.

2. ERNST & YOUNG BACK IN CONSULTANCY MAINSTREAM

Ernst & Young has joined the Management Consultancies Association (MCA), six years after it sold its consulting business to Capgemini in the break-up of the Big Four accountancy firms.

Commenting on the move, Steve Varley, managing partner of business advisory services at Ernst & Young, said: "We are delighted to be joining the MCA, confirming our commitment to the industry and the high standards within which it operates. Our consultancy practice is excited at the prospect of helping to shape the industry based on the evolving needs of our clients."

MCA chief executive Peter Hill added: "We are delighted to welcome Ernst & Young into the MCA. The presence of firms like Ernst & Young in the MCA further enhances our representation of strategic consultancy firms in the UK."

E&Y has openly stated its intent to rebuild consultancy services within the firm, but says it will not be re-creating a large implementation and operational practice. Instead, its 200-strong UK business advisory services practice is working closer to the strategy end of the spectrum, with IT involvement restricted to disciplines such as project management.

E&Y claims to compete with strategy firms such as McKinsey and Booz Allen, as well as with Accenture and PA Consulting at the top end of their businesses.

Sponsor

TeleWare

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3. XANSA FINDS FAVOUR AT THE BBC

Xansa has beaten Capita, Infosys and incumbent EDS to become the BBC's preferred supplier of outsourced finance and accounting services.

In a contract worth £85 million over 10 years, the BBC is making its first foray into offshore business process outsourcing (BPO). Xansa will provide F&A services across the corporation, using its locations in both the UK and India. Voice services will remain in the UK, with transaction processing being carried out at Xansa's F&A shared services centre in Chennai, India. Xansa will also work with sub-contractor Siemens Business Services to provide infrastructure, applications support and customer service facilities.

BBC group finance director Zarin Patel said: "I believe this is an excellent deal for the BBC and I am confident that Xansa will help us further to transform our finance and business processes. By moving our transaction processing to India we are demonstrating that we are prepared to take bold and imaginative decisions that offer the licence fee payer greater value for money, while still maintaining the highest quality of service delivery."

The contract is expected to be signed in November, with Xansa taking responsibility for services next July.

• A consortium led by Lockheed Martin UK and including Xansa has been shortlisted to run against T-Systems for the contract to run the UK Census 2011 programme. The shortlisted teams selected by the Office for National Statistics will take part in a field test project next year ahead of the final contract award.

4. CONSULTING CREEPS UP AT DELOITTE

Deloitte Touche Tohmatsu has achieved fiscal 2006 revenues of $20 billion (£10.5 billion), with consulting moving up 1% on the previous year to represent 24% of turnover.

Overall, the global federation of companies achieved year-on-year growth of 12%, for a fourth consecutive year of double-digit growth.

In Europe, the revenues of Deloitte Touche Tohmatsu member firms increased 10%, while growth was 13% in North America. The financial services sector, consumer business and manufacturing were the strongest business sectors.

Looking forward, Deloitte global CEO William Parrett said: "The plan is to grow aggregate member firm revenues 12.5% next fiscal year, but on the basis of a continued strong global economy they should exceed this." He said Deloitte was on track to meet target growth, with consulting and financial advisory already exceeding targets, rising 17% and 20% respectively.

Sponsor

The UK Consulting Industry Report 2005/6

We are delighted to announce that the latest UK Consulting Industry Report from the Management Consultancies Association is now available. It is based on unique data and performance metrics unavailable elsewhere.

As a consultant, you need to understand which sectors represent the best consultancy opportunities, which service lines are growing, how operational metrics are changing and the outlook for your industry – this report will provide all of this information and more.

To purchase the report, published jointly by the MCA and PMP, or to obtain further information please click here, email: reports@pmp.co.uk or telephone 01494 732830.

Sponsored by Maconomy.

5. NORTHGATE ENDS SALES TALKS

Northgate Information Solutions has broken off talks with potential purchasers, just weeks after announcing it was in discussions that could lead to a formal offer for the company.

Northgate is believed to have been negotiating with private equity investors who wanted to increase the IT holdings in their portfolios - making it likely that the terms of an offer for all or part of the company could not be agreed.

Announcing the termination of discussions, Northgate said its trading is in line with expectations and it will publish interim results on 11 December. In its last full financial year to 30 April 2006, the company reported a 100% gain in group operating profit to £44.7 million, on revenue rising 62% to £332.7 million.

• While Northgate has quit sales talks, Cornwell Management Consultants remains an acquisition target after announcing that it may seek a buyer for the business (MCND 5-28) and is expecting to make a loss this financial year.

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