MCN Direct Newswire

Vol. 6 No. 3, 12 February 2007

This issue is sponsored by:

TeleWare, CIO Connect and NCC

This issue news

1. Atos Origin damaged by UK performance
2. KPMG hires ICE man
3. EDS reports strongest quarter in four years
4. Capgemini expands through US acquisition
5. LogicaCMG secures European orders
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. ATOS ORIGIN DAMAGED BY UK PERFORMANCE

Poor performance in the UK has severely weakened Atos Origin's 2006 revenue and sparked off a transformation programme aimed at getting the UK operation back to profitability and accelerating organic growth.

Atos Origin's full-year turnover fell 1% to €5.4 billion (£3.6 billion) - brought down by a 13% drop in UK revenues. The UK company suffered four major contract reductions, one in consulting and three in managed operations, which were not compensated for by new business. Excluding the UK, group revenue rose 5.4%. Atos Origin said that by the close of 2006 all major contracts in its UK pipeline had been signed and are expected to start contributing in 2007.

Operating profit was also hit by poor performance in the UK, where it fell by €91 million due to lower-than-expected revenue and extra costs of €47 million to complete difficult projects. Italy also had a negative impact with operating profit falling €25 million for a group total of €247 million - down from €399 million in 2005.

In an effort to address its troubles, Atos Origin has introduced a 3O3 (three objectives over three years) transformation programme aimed at accelerating organic growth, improving efficiency and operating as a global company.

CEO Bernard Bourigeaud said: "Our objectives are clear - to strengthen the management team, restore profitability in the UK, Italy and other low-performing countries, implement the new organisation and ensure that the transformation plan is effective. Our ambition is that by 2009 we will be able to double our operating income, assuming cautious top-line growth."

2. KPMG HIRES ICE MAN

KPMG has lured leading BBC strategy executive Lars Mouritzen to become head of media in its information, communication and entertainment (ICE) transaction services practice. Mouritzen joins the advisory firm from his role as head of strategy at Beyond Broadcast, where he co-led development of the BBC's convergence strategy.

At KPMG, Mouritzen will be a key member of the London-based media team, providing merger, acquisition and divestiture strategy advice and support to media companies on both the buy and sell sides. He will also work with telecoms clients as convergence matures.

He explained: "The media industry has become very fast moving, with more players and a greater variety of strategies being deployed. There has never been a greater premium on speed, in terms of identifying and acting on opportunity as it arises. My challenge is to help our clients get in shape for the converged competitive game, and I'm relishing it."

Before working on Beyond Broadcast, Mouritzen was head of the BBC's new media and technology strategy. Earlier in his career, he worked at McKinsey as well as in commercial television and co-founded a media technology start-up.

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3. EDS REPORTS STRONGEST QUARTER IN FOUR YEARS

EDS claims it is back on form and set for profitable growth following years of rebuilding since its collapse into financial losses in 2003.

EDS made its claim on the strength of improved fourth-quarter and full-year 2006 results. Net profit in Q4 more than doubled to $254 million (£130 million), on revenue up 11% at $5.7 billion. Full-year results showed a similar pattern, with net profit more than doubling to $522 million, on revenue up 7% at $21.3 billion.

A further sign of EDS' return to form are contract signings of $7.6 billion in the fourth quarter, up from $5.3 billion in the year-ago quarter. Total contract value for the year was up 32% at $26.5 billion, including $4.2 billion worth of contracts from new customers.

EDS chairman and CEO Mike Jordan said: "On balance, this was the strongest quarter EDS has had since I joined the company in 2003. The past four years have been all about setting a foundation to win and grow profitability in the future. We met those objectives in 2006."

On a regional basis, EDS achieved a 6% rise in fourth-quarter EMEA revenue to $1.7 billion, a 6% gain in the Americas to reach $2.6 billion and a 19% gain in Asia-Pacific, primarily due to Mphasis revenue, to reach $410 million.

4. CAPGEMINI EXPANDS THROUGH US ACQUISITION

Capgemini is to buy US IT consulting services firm Software Architects and has reorganised its management teams in the US, Europe and India.

Software Architects, an independent company with over 500 staff and 2006 revenues of $68 million (£35 million), specialises in project management, architecture, technology and business requirements definition. It will be integrated with Sogeti USA , extending its local branch network and offering high-value IT services.

Capgemini CEO Paul Hermelin commented: "After the announcement of the acquisition of Kanbay International, this new acquisition confirms the group's dynamism, and particularly that of its subsidiary Sogeti, and reaffirms our commitment to strengthening our position in the US market."

Lanny Cohen will be responsible for the enlarged US group as he takes over as US CEO for project and consulting services from Salil Parekh, who moves to India as executive chairman.

In Europe and Asia-Pacific, Hermelin has reorganised technology and consulting activities into two regional areas. Philippe Donche-Gay becomes head of the western Europe unit, which combines France, the UK and Ireland, while Henk Broeders heads up the rest of continental Europe and Asia-Pacific.

Sponsor

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5. LOGICACMG SECURES EUROPEAN ORDERS

LogicaCMG is reaping the rewards of its enlarged European footprint with contracts in Sweden and The Netherlands.

WM-data, the Nordic IT services firm acquired by LogicaCMG late last year, has signed a €9.7 million (£6.5 million), five-year outsourcing contract with BTJ, a supplier of media products and information services in the region, for IT operations, development and application management. BTJ's IT infrastructure is being transferred to WM-data along with 17 employees.

Meanwhile in the Netherlands, LogicaCMG has won a €30 million contract for application development and maintenance at the Dutch Centre for Work and Income (CWI) - the consultancy was selected for a similar role at the Dutch unemployment office last year.

Set up in 2002, the CWI has always outsourced its IT operations and selected LogicaCMG for the applications management contract to diversify from a single supplier. LogicaCMG will develop CWI applications at its Resu!t Dutch development factory, which it claims can develop software in a cheaper and faster way due to use of standard building blocks and continuity of knowledge.

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