MCN Direct Newswire

Vol. 6 No. 17, 10 September 2007

This issue is sponsored by:

CODA, Annual Consultants' Forum 2007 and The UK Consulting Industry Report 2006/7

This issue news

1. LogicaCMG open to predators
2. Deloitte profits from consulting
3. Fujitsu Services fails in bid for GFI
4. Accenture and Xansa win at BT
5. Axon extends international reach
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. LOGICACMG OPEN TO PREDATORS

LogicaCMG has reported modest growth in the first half of its financial year and still lacks leadership - exposing its weaknesses and making it a potential takeover target.

No offers for the IT services company have been made public, but analysts say it could be an attractive proposition for a company seeking scale in the market.

Martin Read, chief executive of LogicaCMG, will leave the company this month, but no replacement has been named, with the company stating: "The board is pleased with the progress being made in the search for a new chief executive. We remain focused on securing the best possible candidate to take LogicaCMG forward."

The difficulty in finding a new CEO has not been helped by the pending retirement of chairman Cor Stutterheim, who will be replaced by recently-appointed joint deputy chairman David Tyler. Last month Didier Hermann, who joined the LogicaCMG board following its acquisition of Unilog in France, was asked to step down from the board with immediate effect after disagreeing with the board's approach.

LogicaCMG's instability is reflected in its first-half results which show revenue up 36% to £1.5 billion, but with organic growth of only 3%. An 8% drop in UK revenue, due to weakness in commercial sectors, was partly offset by revenue growth in France, Germany, the Nordics and Netherlands. Pre-tax profit in the first six months rose 9% to £29.2 million.

LogicaCMG chief operating officer Jim McKenna commented: "A key priority for the second half is improving the operational performance in the UK. We will also be working on recruiting the right people in the right places to grow the business."

2. DELOITTE PROFITS FROM CONSULTING

Deloitte UK's profit from consulting operations climbed 28% to £115 million in the year to 31 May 2007. The division led Deloitte's profit growth, ahead of its corporate finance, tax and audit operations. However revenue from the consulting division rose 13% to £430 million, the lowest percentage gain across the firm's four businesses.

Commenting on the consulting operation, Deloitte chief executive John Connolly said: "The focus continues to be on building a strong, balanced practice with a broad range of clients across the private and public sectors. We have seen continued strong demand from across the sectors for high-quality integrated business and technology services. Predictably, there continues to be strong demand for services that address performance improvement and operational effectiveness as organisations strive to become more competitive and successfully deliver major programmes."

Deloitte's average number of partners and staff reached 11,300 in 2007, an increase of 14% over previous years. It recruited its largest ever intake of 1,400 graduates and promoted or hired 80 new partners.

Looking ahead, Connolly noted: "The underlying economy remains strong and business levels in the early period of the current year are good. We are very strongly resourced in all our businesses and we look forward with confidence to the period ahead."

Sponsor

Annual Consultants' Forum 2007

Open for registrations

We are delighted to announce the date for this event is Thursday 27 September at One Great George Street. We are currently finalising the agenda and have decided to open the event to pre-registrations.

To review the event and pre-register please click here.

3. FUJITSU SERVICES FAILS IN BID FOR GFI

Fujitsu Services has been defeated at the last moment in its bid to acquire French IT services firm GFI Informatique.

Fujitsu Services made an initial approach to GFI in May, but was rebuffed by the company saying the offer price was too low (MCND 6-10). Fujitsu continued with a hostile bid but was finally denied the 66.7% of shareholder backing needed to complete the deal when private equity group Apax Partners increased its stake in GFI to 14.4% and said it would vote against Fujitsu Services' offer.

Fujitsu Services has responded to the failure stoically, thanking all the shareholders and other GFI stakeholders who expressed support for its offer. CEO David Courtley confirmed the company would pursue other opportunities in Europe, saying: "Our strategy continues to be based on both organic growth and acquisition in the principal European markets, including France."

4. ACCENTURE AND XANSA WIN AT BT

BT has awarded business process outsourcing contracts to Accenture and Xansa as it shifts its higher-level finance functions into the outsourcing arena.

BT's five-and-a-half year BPO deal with Accenture covers its UK management reporting, financial planning and analysis, month-end close and budgeting and forecasting activities. The services will be delivered through Accenture's global delivery network using centres in India. The financial details of the deal were not disclosed.

Andrew Kemp, BT's director of reporting, planning and analysis, commented: "Accenture's knowledge of our business and proven ability to support complex finance and accounting processes around the world were the key factors in our decision to forge this agreement."

BT's deal with Xansa is a £128 million, six-year extension to an existing BPO contract covering accounting transaction processing, ledger and payroll services. It will use a combination of Xansa's shared service centres in the UK and India. The contract builds on a 20-year relationship between the companies.

Accenture's contract adds to three existing BPO agreements with BT that cover finance processes for BT Global Services in the US, Europe and Asia, and global HR and learning services.

Sponsor

The UK Consulting Industry Report 2006/7

We are delighted to announce that the latest 'UK Consulting Industry Report' from the Management Consultancies Association (MCA) 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 in 2007 and beyond - this report will provide all of this information and more.

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The Consulting Industry Report 2006/7 is sponsored by Maconomy.

5. AXON EXTENDS INTERNATIONAL REACH

Axon has added four members to Axon International, the network of independent SAP consultancies created and run by the business transformation specialist.

The expansion includes a SAP consultancy in South America, another in Australia and two multinational firms dedicated to SAP software, bringing the network's membership to seven organisations with over 4,500 SAP consultants across 35 countries.

Axon CEO Steve Cardell explained: "Axon International is a key enabler to Axon becoming the world's leading SAP-enabled transformation consultancy. It allows us to expand the number of high-quality SAP consultants we can efficiently deliver into our major global programmes and opens up partnership opportunities in new markets."

The extension of Axon International complements Axon's recent expansion through acquisition in Asia-Pacific, where it has an offshore centre but in future will be better placed to pitch for new business.

Axon's first-half financial results confirm the company's strategic approach, showing a 93% gain in pre-tax profit to £13.4 million, on turnover up 56% to £96.7 million.

Cardell commented: "We are now the largest consultancy in the world that focuses exclusively on the delivery of SAP-enabled solutions. This focus provides us with an opportunity to increase our current 1-2% share of the buoyant $24 billion (£12 billion) global SAP services market. We will continue to drive growth in our Anglo-American business and leverage our Asia-Pacific offshore capability."

6. FURTHER INFORMATION - FEEDBACK/PASS ON TO A COLLEAGUE/REMOVE

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

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