MCN Direct Newswire

Vol. 7 No. 14, 22 September 2008

This issue is sponsored by:

CODA and The UK Consulting Industry Report 2008

This issue news

1. HP wields axe at EDS
2. Parity fails to profit in first half
3. Seven firms selected for road pricing pilot
4. Graduates favour PwC as first employer
5. IBM extends Dublin service centre
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

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1. HP WIELDS AXE AT EDS

HP is embarking on a restructuring programme following its acquisition of EDS that will cut about 24,600 employees - 7.5% of the global workforce - from the combined firm. It will then replace half the jobs lost to create new service delivery capabilities in response to client demand.

The restructuring programme, which includes a reorganisation of EDS to cut costs and align its services business with HP's operating model, will take place over three years. Nearly half the job losses will be in the US, with the remainder across the company's operations worldwide.

Claiming that HP with EDS is a leading, globally scaled service provider that combines innovation, a stronger product portfolio and expanded service delivery capabilities, HP chairman and CEO Mark Hurd said: "HP now has the broadest technology capabilities in the market to meet customer needs today and in the future. HP has a strong track record of making acquisitions and integrating them to capture leading market positions. We will deliver on the promise of HP and EDS for our customers and shareholders."

Once completed, the restructuring is expected to produce annual cost savings of $1.8 billion (£1 billion). The programme will be paid for through a $1.7 billion charge in the fourth quarter of fiscal 2008.

2. PARITY FAILS TO PROFIT IN FIRST HALF

IT services firm Parity has reported a 2008 first-half pre-tax loss of £100,000, compared to a profit of £1.1 million in the first half of 2007. Revenue fell 11% to £74.7 million - though chief executive Alwyn Welch believes measures taken during the six months to 30 June will deliver progress in the second half.

Parity's resources division did well in the first half by focusing on higher-margin business as opposed to volume. The solutions group saw some bids slip, but is expected to improve performance on the back of cost savings and a sales team refocus earlier this year.

Parity's training business fared badly in the first quarter, when clients delayed investment decisions, but improved in the second quarter, only to frustrate the company again when its expected sale to Xpertise fell through.

Having spent much of the first half of 2008 cutting costs and refocusing Parity's sales effort, Welch looked forward, saying: "We will continue to manage with prudence, maintaining tight cost control, focusing on areas where we can see demand and where we can differentiate in a volatile and generally weakening market.

"We will also invest carefully to take advantage of market opportunities and to improve the efficiency of our operations. Having made good progress in the second quarter, we expect to make continued progress during the second half."

Sponsor

The UK Consulting Industry Report 2008

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The Consulting Industry Report 2008 is sponsored by CODA.

3. SEVEN FIRMS SELECTED FOR ROAD PRICING PILOT

The Department for Transport (DfT) has included Serco and T-Systems among seven firms chosen to take part in a demonstration project on road pricing, while high-profile omissions include Capita, IBM and Logica.

Four of the chosen companies - T-Systems, Trafficmaster, Sanef Tolling and Intelligent Mechatronic Systems - will work with volunteer road users to design a system for time-distance-place charging that is accurate while safeguarding privacy.

The other three firms - Serco, Kapsch TrafficCom and Q-Free - will consider how to develop systems for both road users and the operators so they can be confident the system is operating fairly.

Omissions from the pilot include Capita, which set up London's congestion charging scheme, and IBM, which took over the contract last year. Logica, which has developed road pricing in the Netherlands is also missing - although all these companies could pick up operational projects if road pricing is introduced.

The DfT says the pilot demonstration project could help local authorities develop their ability to combine local congestion charging and investment in public transport.

4. GRADUATES FAVOUR PWC AS FIRST EMPLOYER

PricewaterhouseCoopers (PwC) has been named as the most popular graduate employer for the fifth year running, although Deloitte is closing in on the leader, coming just a handful of votes behind PwC.

Over 15,000 students who graduated this summer voted for their employer of choice and the results are published in The Times Top 100 Graduate Employers report.

Trailing PwC and Deloitte are KPMG, placed third, and Accenture, up to fourth position from seventh last year. The NHS, Civil Service and BBC follow. Ironically, Lehman Brothers, which collapsed in last week's financial fiasco, moved up three places to 56 in the ranking.

Sonja Stockton, UK head of student recruitment at PwC, said: "We are once again extremely pleased to be voted the top graduate employer. At PwC we continue to offer a great working environment through a variety of career opportunities, both in the UK and abroad, which help students grow into skilled business advisers."

At Deloitte, graduate recruitment partner Sarah Shillingford commented: "Each year we recruit over 1,400 graduates and undergraduates to roles in 21 UK offices. We are delighted to receive this recognition, which we believe reflects our continuous efforts to make Deloitte the country's top graduate employer."

5. IBM EXTENDS DUBLIN SERVICE CENTRE

IBM has won support from Ireland's Industrial Development Agency for a €30 million (£24 million) data centre that will provide IT services to the Irish market and act as a global hub for software delivery to clients worldwide.

The centre will be sited on IBM's Dublin technology campus and will use IBM energy-efficient green strategies and technology innovations to optimise its space, power cooling and resiliency, while reducing costs and supporting business growth.

Anne Fitzsimmons, head of integrated technology services for IBM Ireland, said: "We are hearing from our local clients that they have an increasing need to manage costs and improve operational efficiency, while not compromising the security and integrity of their systems. This new data centre expands our capability to deliver on these requirements."

The extended Dublin campus will also join the IBM Software Value chain, complementing the company's supply chain software operations in the US and delivering software worldwide based on individual needs.

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

• For more information or if you have any feedback on MCN Direct, please email editor@ncc.co.uk
• If you wish to unsubscribe please reply/send an email stating 'Remove !*FIELD1*! from MCNDirect' to: mcndirect@pmp.co.uk.

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

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