MCN Direct Newswire

Vol. 7 No. 8, 2 June 2008

This issue is sponsored by:

COA Solutions and The UK Consulting Industry Report 2008

This issue news

1. Five suppliers chosen for ID card scheme
2. MCA reveals slowdown in consulting growth
3. NHS terminates £896m contract with Fujitsu
4. CSC achieves record results
5. Logica brings intelligence to the Post Office
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

COA Solutions

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1. FIVE SUPPLIERS CHOSEN FOR ID CARD SCHEME

The Government's Identity and Passport Service (IPS) has selected CSC, EDS, Fujitsu, IBM and Thales to deliver the controversial new national ID card scheme.

The five suppliers have been whittled down from eight companies who were invited to enter competitive dialogue with the IPS last October. Those who did not make the final cut were Accenture, BAE Systems and Steria.

The five contract winners will sign framework contracts this month and form a strategic supplier group for the scheme, which is known as the National Identity Scheme (NIS). The group will compete in a series of mini-competitions to win specific contracts for various projects that will deliver the NIS over the next five to 10 years.

The first projects will replace contracts that are due to expire and include services for issuing UK passports and immigration and asylum fingerprint processing for the UK Border Agency, which has also said it will use the strategic supplier group to procure services.

IPS executive director Bill Crothers commented: "I am confident our chosen suppliers have the capability to help deliver a solution that will create a universal and simple proof of identity that brings real benefits. This contract is both innovative and protective of the public purse and all five suppliers have agreed to provide a co-operative working environment."

Compulsory identity cards will be introduced for foreign nationals in November, with cards being issued to those employed in sensitive roles or locations, such as air-side workers, from late 2009. From 2010, identity cards will be available on a voluntary basis to young people, with the enrolment of British citizens in high volumes from 2011 or 2012, when everyone will have the choice of receiving a separate identity card, passport or both.

2. MCA REVEALS SLOWDOWN IN CONSULTING GROWTH

The Management Consultancies Association (MCA) has reported that its members' 2007 consultancy fees rose 10% to nearly £6 billion, which was a lower rate of growth than in the two previous years.

The financial services sector - the largest market for consulting at £1.4 billion in 2007 - remained strong with a 20% revenue increase, while banking grew just 5%. The telecoms & high-tech sector also climbed 19% compared to 2006 to £625 million. Energy, utilities & mining rose 14% to £623 million.

IT consulting increased 16% on 2006 to reach £1.7 billion, making it the leading consulting service in monetary terms, ahead of programme & project management, up 8% at £1.2 billion. Economic & environmental studies rose 186%, albeit from a small base, as companies challenged environmental issues.

The MCA's findings are published in The UK Consulting Industry 2007/2008 report, which is produced in conjunction with MCND publisher PMP and IRN Research.

Author of the report and director of the MCA Think Tank, Fiona Czerniawska, commented: "Most firms report more caution among clients so far as spending on consulting is concerned, rather than a dramatic fall, but it is not yet clear how the industry will perform in 2008. Budgets are unquestionably tighter, but clients are still prepared to spend money on external help, especially where it is tied into improving efficiency and reducing costs."

Sponsor

The UK Consulting Industry Report 2008

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To find out more about the report, published jointly by the MCA and PMP, please visit http://www.pmp.co.uk/mcareport.asp, email reports@pmp.co.uk or telephone 01494 732830.

The Consulting Industry Report 2008 is sponsored by CODA.

3. NHS TERMINATES £896m CONTRACT WITH FUJITSU

Connecting for Health, the agency in charge of the NHS' £12.7 billion National Programme for IT, has ended its £896 million, 10-year contract with Fujitsu Services to supply electronic patient records in the south and west of England.

The tie was severed after lengthy renegotiation of the contract failed. The talks centred on the NHS demanding more flexibility in service delivery and Fujitsu demanding more money for the task.

While Connecting for Health has yet to reallocate the south and west of England contract, BT is one option, as it is using the same Cerner software that Fujitsu was installing. Another route is for the agency to select a supplier from the Additional Supply Capability and Capacity framework it set up earlier this year to allow a group of selected suppliers to bid for NHS IT services, hardware and infrastructure contracts (MCND 7-4).

Fujitsu is expected to lose about £300 million on the NHS contract, which will be a blow not only to its finances, but also its aspirations to build business in the health sector. Its exodus from the NHS IT programme follows the 2006 departure of Accenture and leaves just BT and CSC - which picked up Accenture's contract - in the game.

Separately, Fujitsu has announced two contract wins: a £4.2 million, two-year extension to a deal covering the Environment Agency's Floodline Warnings Direct system; and a £2.1 million, three-year project with Centrica to provide applications management for British Gas.

4. CSC ACHIEVES RECORD RESULTS

IT services firm CSC has returned to financial form, reporting record fiscal 2008 results and diversifying away from dependence on the North American public sector market.

CSC's net profit rose 37% to $544.6 million (£277.5 million) in the year to 28 March. Revenue grew 11% year-on-year to $16.5 billion. European operations, one of the dull spots that triggered a restructuring programme in 2006, pushed revenue up 17% to $4.1 billion in the year.

CSC chairman and CEO Michael Laphen commented: "On the strength of fiscal 2008 results, we continue to advance toward our strategic goal of diversifying our services portfolio. Our business mix is now 35% North American public sector, 41% global outsourcing and 24% business solutions and services. As a result of our portfolio diversification efforts we anticipate future improvements in growth, profitability and cashflow."

The company is particularly ambitious for its business solutions and services business, which it hopes will provide higher revenue growth rates and operating margins in the future.

5. LOGICA BRINGS INTELLIGENCE TO THE POST OFFICE

Logica has won a five-year contract with Post Office Ltd, part of the Royal Mail Group, to install two information management products designed to promote modernisation and lower support costs.

Replacing life-expired systems, Logica will implement Kalido's master data management and dynamic information warehouse products. It will also offer applications management services for five years after the systems go live early next year.

The Kalido applications will replace disparate systems and are expected to provide management with better business visibility, a more efficient way of working and increased sales. The project is part of an overall systems transformation programme being undertaken by Royal Mail Group.

The Post Office commented: "Working with Logica will help us meet the challenging targets we have for growth, service and cost-effectiveness. The new business intelligence system will deliver major improvements in consistency, efficiency and access to information."

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

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Written by Sarah Underwood. Copyright 2008 PMP (UK) Ltd.

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