MCN Direct Newswire

Vol. 8 No. 6, 1 June 2009

This issue is sponsored by:

CODA, psaexpert.com and NCC

This issue news

1. Ousted BT Global Services boss left with £3.5m
2. Deloitte scoops top MCA award
3. Capgemini offers shares to all staff
4. TCS leader awarded CBE
5. CSC doubles its profit
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. OUSTED BT GLOBAL SERVICES BOSS LEFT WITH £3.5m

It has emerged that the ex-head of BT's Global Services consultancy and IT services arm, Francois Barrault, walked away with more than £3.5 million in his final year - despite presiding over a £2 billion loss which triggered 15,000 job cuts at the company.

Barrault was ousted last October but still received £1.25 million in salary, a £1.6 million termination payment and over £700,000 in shares-related earnings.

The scale of his division's problems has now become clear, with its £2 billion loss in fiscal 2009 forcing a restructure under new leader Hanif Lalani. Global Services will now operate three units: networked IT services for UK customers; networked IT services for multinational customers; and BT Global Services Enterprise, which will address other specific customer needs.

Its £2 billion operating loss was made on revenue rising 11% to £8.8 billion. The loss includes charges of £1.3 billion resulting from the completion of contract reviews - including the company's deal with the NHS National Programme for IT - and a charge of £280 million for restructuring. A further restructuring cost of about £420 million will be made over the next two financial years.

In the final quarter alone, BT Global Services made an operating loss of £1.5 billion, on revenue rising 6% to £2.4 billion. Its headcount was cut by 2,500 and contractor rates were slashed by up to 35%.

As a whole, BT Group finished the year to 31 March with a £134 million loss, on revenue rising 3% to £21.4 billion. It cut its headcount by 15,000 (5,000 full-time employees and 10,000 contractors) and said similar levels of staff reductions would be made next year.

Group chief executive Ian Livingston explained: "Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn. However, this achievement has been overshadowed by the unacceptable performance of BT Global Services and the resulting charges we have taken. During the year we have changed the leadership of BT Global Services and started to turn the division around."

2. DELOITTE SCOOPS TOP MCA AWARD

Deloitte has taken top honours at this year's Management Consultancies Association (MCA) awards, winning not only the platinum award for its work with Transport for London, but also the environment prize for the same project, the outsourcing award for work with Unilever, and the HR trophy for creating a 'company in a year' following the merger of Thomson and Reuters.

The overall best public sector project award went to Atos Consulting for its work with NHS South Central, while KPMG picked up the overall best private sector project from an engagement with Apacs. Propaganda was named the best small firm for its work with Seabrook Crisps.

Other winning consultancies and clients were Hay Group and the General Teaching Council; Trinity Horne and Eircom; Arup and BAA; CSC and the UK Border Agency; Navigant and Tesco Personal Finance; and Digital Public and the Department for Children, Schools and Families.

Commenting on the awards, which were also used to launch a new brand for the MCA, CEO Alan Leaman said: "These awards celebrate excellence in an extraordinary industry. As entries come jointly from consultancies and their clients, they underline which firms are key players in the modern economy."

The MCA rebrand was carried out by member firm Propaganda. The theme of the organisation's new identity is 'a positive force for the economy' and has been developed to reflect the MCA's commitment to working in an authoritative, collaborative and insightful way.

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3. CAPGEMINI OFFERS SHARES TO ALL STAFF

Capgemini plans to invite its 90,000 employees worldwide to buy shares in the company at a 15% discount before the end of this year.

The stock ownership plan for all staff is being preceded by a share offer to 1,200 group managers who can, according to Capgemini, "take the risk, if they so desire, of making a personal investment - allowing them to be more closely associated with the long-term stock market performance of the Capgemini share and, in so doing, affirm their confidence in the group's evolution".

The first stage of the Capgemini scheme covering group managers will make available warrants that cannot be sold or traded during the first four years, but will be listed from July 2013. Similar terms will tie in employee share owners for five years.

The scheme is being introduced following the announcement of Capgemini's first-quarter results which showed total revenue little changed from Q1 last year at €2.2 billion (£1.9 billion). The quarter was marked by a 10% drop in consulting services revenue and a 7% gain in UK revenue. Bookings were also flat at €2.2 billion, despite a 40% rise in outsourcing business.

Sponsor

NCC

The future of the IT Department

15 October, London.

Cloud computing, outsourcing and the recession are all having an impact on the IT department. What will the future of the IT department look like and why? What are the implications for IT departments and those who advise them?

This year's NCC Conference examines this critical issue in-depth through a mix of plenary and streamed sessions. Click here for full details You will also have the opportunity to network with IT decision-makers looking for ideas, inspiration and solutions.

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4. TCS LEADER AWARDED CBE

S Ramadorai, CEO and managing director of Tata Consultancy Services (TCS), has been awarded a CBE by the Queen for his contribution to Indo-British economic relations.

Commenting on the award, Ramadorai said: "The UK and India share a special economic, cultural and political relationship that continues to grow, and TCS is proud to have played a role in strengthening the ties. We have been present in the UK for over a quarter of a century and it continues to be a strategic region for TCS in terms of new opportunities and talented professionals."

Since Ramadorai became leader of TCS in 1996, the company has built its UK turnover to over $1 billion (£631 million), creating more than 4,200 jobs. Clients in the UK include Boots, BT, British Airways, Marks & Spencer, United Utilities and, most recently, public sector organisation the Child Maintenance and Enforcement Commission. TCS' parent, Tata Group, is the largest Indian investor in the UK.

This is not the first British accolade bestowed on Ramadorai, who was given the UK Trade & Investment Special Recognition Award for TCS' contribution to economic ties between India and the UK by then Prime Minister Tony Blair in 2005.

5. CSC DOUBLES ITS PROFIT

CSC is striding back to financial health after collapsing in 2007 and restructuring to reduce its dependence on the North American public sector market. The company's net profit for fiscal 2009 reached $1.1 billion (£693 million), up from $544.6 million the previous year. Revenue rose 2% to $16.7 billion in the year to 3 April.

CSC's consulting revenues grew 11% on 2008 to contribute $2 billion. In the fourth quarter, the company's net profit more than doubled to $382 million, although revenue slid 8% to $4.1 billion.

Commenting on the results, CSC chairman and CEO Michael Laphen said: "Fourth-quarter 2009 was another successful and important step in our march to consistent results and continuous improvement. Despite the challenging economic environment, CSC's achievements include exceptional cash generation, realisation of our goal of at least a 25 basis points margin rate improvement, and successful execution and delivery of the National Health Service milestones."

Looking forward, CSC forecast fiscal 2010 revenue of $16-16.5 billion based on stable revenue from its commercial business and single-digit growth in its North American public sector business.

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Written by Sarah Underwood. Copyright 2010 The National Computing Centre Ltd.

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