MCN Direct Newswire

Vol. 8 No. 11, 19 October 2009

This issue is sponsored by:

Freedom Communications, Symantec and 2009 UK Consulting Industry Half-Year Report

This issue news

1. IBM pushes up services profit despite revenue fall
2. Perot to buy BearingPoint consultancy in China
3. Fujitsu and Atos Origin secure £430m Home Office deal
4. KPMG poaches partner from 3i
5. Logica to monitor MoD carbon emissions
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. IBM PUSHES UP SERVICES PROFIT DESPITE REVENUE FALL

IBM has lifted the pre-tax profit from its global services business by 11% in the third quarter, despite a 7% drop in revenue - a profit and revenue trend shown across the company.

Detailing its services revenue, IBM said global business services - including consulting - fell 11% to $4.3 billion (£2.6 billion) in the quarter to 30 September, while revenue from global technology services fell 4% to $9.4 billion.

In contrast, the company's profit margin on services rose 2.4 points to 14.9% in the quarter, though margins will continue to be under pressure with services contracts signed in the quarter down 7% at $11.8 billion. Consulting, systems integration and integration technology signings were down 16% at $5.1 billion, with outsourcing up 1% to $6.7 million.

Commenting on the results, IBM CEO Sam Palmisano said: "Our long-term strategic shift to higher-value businesses again enabled us to deliver outstanding margins, earnings and cashflow growth in the third quarter. We are optimistic about 2009 as we again raise our full-year expectation and we remain well ahead of the pace for our 2010 roadmap of $10 to $11 per share."

IBM now expects full-year 2009 earnings of at least $9.85 per share, compared to its previous forecast of $9.7 per share.

The first nine months of fiscal 2009 showed a similar pattern to the third quarter, with net profit up 9% at $8.6 billion, on revenue down 11% at $68.5 billion.

2. PEROT TO BUY BEARINGPOINT CONSULTANCY IN CHINA

Perot Systems, the IT services company recently acquired by Dell in a £2.4 billion deal, is planning to buy BearingPoint China Consulting, an award-winning management and IT consultancy with offices in Shanghai and Beijing.

Peter Altabef, president and CEO of Perot, said the combination of Perot, Dell and BearingPoint China Consulting will give clients in China access to a complete suite of IT, applications, business process and consulting services. He commented: "BearingPoint China Consulting is highly respected for its consultancy services. Unifying our service operations will significantly expand our reach and enhance our capabilities in China."

BearingPoint China Consulting was set up in 2001 and offers consultancy to clients in the energy, automotive, insurance and financial services industries. The consulting operations will become part of Perot's commercial solutions business unit. Perot confirmed its position in China in June 2009, when it won major contracts in the country's healthcare and manufacturing sectors.

Awards earned by BearingPoint China Consulting include the China Enterprise Confederation's most trusted consulting firm in 2007, and a place in the China Software Association's top 10 IT consulting firms.

The terms of the acquisition were not disclosed and the transaction remains subject to the approval of the US Bankruptcy Court, which is overseeing the break-up of BearingPoint, and the Chinese Government.

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3. FUJITSU AND ATOS ORIGIN SECURE £430m HOME OFFICE DEAL

The Home Office has signed extended IT services contracts worth £430 million with Fujitsu and Atos Origin. Fujitsu takes the largest slice with a £330 million deal, while Atos Origin picks up £100 million, as the Home Office aims to save £100 million over the life of the contracts to 2016.

The deals are part of the Home Office's Extend and Blend Project, a key element in its Next Generation Information, Systems and Technology Transformation programme. IT services to be provided include applications hosting, network & infrastructure support and desktop services for about 24,000 users across the Home Office and UK Border Agency community.

Home Office financial and commercial director general, Helen Kilpatrick, said: "The extended contracts are a great achievement, which will help the Home Office improve the service it provides to the public. By working collaboratively with Atos Origin and Fujitsu we have been able to re-engineer the existing contracts in record time. The result is a new approach to IT service provision in the Home Office, reducing costs by more than a quarter over the lifetime of the contracts."

Sponsor

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4. KPMG POACHES PARTNER FROM 3i

KPMG has appointed lean operations specialist Blair McCallum as a partner in its European operational strategy group, as it seeks to triple the size of the practice.

McCallum joins KPMG from 3i and was previously a partner at McKinsey, where he founded and led the consultancy's operations practice. He has pioneered the application of lean thinking across a number of sectors and co-authored the book 'Journey to Lean: Making Operational Change Stick'.

Martin Scott, leader of KPMG's European operational strategy group, said: "Blair McCallum's appointment is exciting for KPMG as he is one of the leading thinkers on lean management techniques in the market. At KPMG we are building a world-class operational strategy group that now comprises six partners and 70 dedicated staff. Our intention is to be the market-leading provider of operations strategy advice and to triple the size of the group over the next three years as market demand for our services continues to grow."

Separately, KPMG has promoted Alex Plavsic to lead its UK forensic practice. Plavsic has been with the firm for 18 years and replaces Adam Bates who remains as global chairman of forensic and has also become UK head of risk & compliance, a new division grouping KPMG's risk, forensic, actuarial and some IT capabilities.

5. LOGICA TO MONITOR MoD CARBON EMISSIONS

The Defence Estates agency, which manages the Ministry of Defence's 4,000 buildings, has chosen Logica to deliver a system that will support the reduction of carbon emissions across all MoD sites.

The system will be based on Logica's sustainability indicator reporting application and will capture real-time data on energy, using smart meters being installed in buildings across defence sites. Ultimately, it will be used to highlight sites and buildings that show irregular or excessive energy use, and enable comparisons to be made between sites to pinpoint best practice.

Vice admiral Tim Laurence, chief executive of Defence Estates, said: "This is an important piece of work that will make a significant contribution to government carbon targets. The provision of automated energy data will help us to act on excessive consumption and reduce spending on energy bills."

The MoD is one of the UK's largest landowners and spends over £300 million a year on energy. The Logica system is expected to be operational by April 2010, helping the MoD meet targets to reduce its carbon emissions by 12.5% by 2012 and 30% by 2020. The programme will later be extended to provide data on oil and liquid petroleum gas consumption.

• The Department of Energy and Climate Change has named Accenture as its strategic consulting partner for the planning and implementation of smart grids in the UK.

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

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