MCN Direct Newswire

Vol. 8 No. 9, 14 September 2009

This issue is sponsored by:

NCC Research and The UK Consulting Industry Report 2009

This issue news

1. Fujitsu opens talks on 1,200 job cuts
2. Managers buy BearingPoint EMEA
3. PwC continues push in consultancy
4. BP axes 35 IT services suppliers
5. DWP offers contracts worth £275m a year
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. FUJITSU OPENS TALKS ON 1,200 JOB CUTS

Fujitsu Services has entered a 90-day consultation period with elected employee representatives that will decide who will be made redundant in the company's plan to cut almost 10% of its 12,500-strong workforce.

The consultation process started late last week and will consider all the options available to eliminate 1,200 jobs from the company's payroll. Some employees are expected to take voluntary redundancy, but Fujitsu will not rule out compulsory redundancies and said some consultants will be among the casualties.

The cuts are being made in areas of over-capacity - including engineering services, essentially break/fix services, and HQ functions - following the integration of Fujitsu Siemens Computers and its 800 staff into Fujitsu Services in April.

Staff are expected to exit the company over the next few months, with the redundancy programme due to be completed by the end of this year.

Fujitsu Services blames the cuts on the economy, lower-than-anticipated revenues and a shortfall in its predicted order pipeline. Reduced revenues and orders are the result of the termination of the company's £896 million contract in the NHS IT programme and its failure to secure a role in the Government's National Identity Scheme, despite being one of three shortlisted suppliers.

Looking ahead, Fujitsu Services CEO Roger Gilbert forecast a 7% drop in revenue for fiscal 2010. This follows a positive fiscal 2009 in which the company grew revenue by 4% to £1.7 billion.

2. MANAGERS BUY BEARINGPOINT EMEA

The break-up of BearingPoint has continued with the sale of its Europe, Middle East and Africa practice to its European management team for $69 million (£41.4 million).

Following the transaction, the EMEA practice will operate as an independent private partnership, but continue under the BearingPoint brand. Peter Mockler, EMEA leader for BearingPoint since 2006, and his management team will continue to lead the organisation, which includes about 3,000 consultants.

Mockler said: "We are very pleased to finalise the purchase of BearingPoint EMEA and look forward to continuing to serve our valued clients for many years to come. The leadership team and consultants are dedicated to the success of our business and remain steadfast in their commitment to providing leading-edge management and technology consulting services.

"We are confident that this is the best path forward for our clients and employees, as many examples have shown that the private business model makes sense for a professional services firm."

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3. PwC CONTINUES PUSH IN CONSULTANCY

PricewaterhouseCoopers' advisory business grew by 5% to reach £741 million in the year to June. The company's audit and tax businesses performed less well, with audit down 1% at £826 million and tax down 4% at £681 million.

According to advisory head Kevin Ellis, PwC's consulting business grew by 10% during the year, and the advisory group also won the largest share of insolvencies by value, including the largest ever, Lehman Brothers.

Staff numbers within the advisory business rose above those of tax for the first time, with an average of 3,525 employees, compared to 3,465 in tax and 6,316 in audit.

Looking ahead, PwC said: "Our strategy for fiscal 2010 and beyond is designed to achieve transformational growth of our consulting market share and extend our lead in our core businesses of audit, tax, business recovery services and transactions."

In total, PwC reported revenue for the year up 7% at £2.3 billion, leading UK chairman Ian Powell to comment: "This year has been one of general economic turmoil and against this backdrop our results represent a solid financial performance as we held our nerve and stayed close to the market and our clients."

During the year, PwC acquired the executive remuneration business of Halliwell Consulting, adding 10 people to its mid-tier reward business. It also acquired Sustainable Finance and invested in the Middle East.

4. BP AXES 35 IT SERVICES SUPPLIERS

BP has whittled down its list of IT application development and support suppliers from 40 to five, choosing IBM, Accenture, Tata Consultancy Services (TCS), Infosys and Wipro as its favoured partners.

The oil & gas giant had previous relationships with all five suppliers except TCS, which has gained a contract covering refining, manufacturing and corporate IT maintenance work and the development of IT solutions for BP's upstream and trading businesses.

The consolidation and procurement programme has taken BP a year to complete and is aimed at simplifying processes, improving service quality and standardising its IT applications and maintenance worldwide.

BP said the consolidation is also expected to knock $500 million (£300 million) off the cost of work which would otherwise have totalled $2 billion over the next five years.

IBM won the largest contract, although no financial details have been declared, to manage and run BP's enterprise applications and integrated service desk responsibilities. Accenture will provide application development services, while Infosys will work for BP's integrated supply and trading, exploration and production business.

Wipro will deliver applications development and maintenance services for the company's fuels value change and its corporate businesses on a global basis.

5. DWP OFFERS CONTRACTS WORTH £275m A YEAR

The Department for Work and Pensions (DWP) has issued tenders for five IT outsourcing contracts worth up to £275 million a year. The contracts are expected to run over seven-year terms with an option for a further three years.

The contracts form part of an IT services framework agreement to upgrade and support the department's core benefits systems. They will deliver application services to the DWP and other government organisations in a shared services arrangement.

The contracts will replace existing agreements, covering over 100 applications, when they expire between 2010 and 2014. The five contracts, or lots, cover customer-facing systems, the core benefit system, business-facilitating systems, application deployment services and enterprise-level application support services.

Prospective suppliers must register interest in the contracts by the end of this month, after which a competitive procurement process will start with an expected three to six IT services suppliers.

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Written by Sarah Underwood. Copyright 2012 The National Computing Centre Ltd.

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