MCN Direct Newswire

Vol. 8 No. 12, 27 October 2009

This issue is sponsored by:

CODA, 2009 UK Consulting Industry Half-Year Report and Symantec

This issue news

1. Consulting revenue collapses at Atos Origin
2. Indian firms report falling revenue
3. Capgemini offers shares to 98% of employees
4. MCA launches two awards
5. Accenture scores in UK and Finland
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

CODA

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1. CONSULTING REVENUE COLLAPSES AT ATOS ORIGIN

Atos Origin's third-quarter consulting revenue plummeted 34% to €54 million (£49 million), the largest drop in the company's service lines that together recorded a 6% fall in revenue to €1.2 billion.

Atos Origin's revenue will be hit again in its full-year results following the liquidation of its client Primando/Quelle, a German mail order company where around 250 Atos Origin employees are working.

Atos Origin said its work at Primando/Quelle represented revenue of €45 million in the first nine months of 2009, but it now expects to lose €5-10 million from its full-year revenue as a result of the company's demise.

Atos Origin is negotiating with working councils in Germany to reduce staff numbers and reach the lower level of resources now needed at Primando/Quelle.

Its third-quarter results show poor performance not only in consulting, but also in systems integration where revenue was down 14% at €435 million. Managed services, high-tech transactional services and medical BPO all achieved positive performance.

The UK led country revenue growth at 12% for a total of €234 million, supported by strong revenue from managed services.

Despite the setback at Primando/Quelle, Atos Origin chairman and CEO Thierry Breton said the company would reach its targets for this financial year, including a revenue decrease of about 3% on the previous fiscal year and a slight gain in operating margin to between 5.3% and 5.8%.

2. INDIAN FIRMS REPORT FALLING REVENUE

India's Tata Consultancy Services (TCS) and Wipro have both seen their second-quarter revenue fall, with TCS increasing its year-on-year net profit while Wipro slipped below last year's comparable period.

TCS, India's largest IT services firm, followed the recent pattern of US competitors IBM Global Services and Accenture in reporting a rise in net profit of 8% to $336 million (£203 million), but a fall in revenue of 2% to $1.5 billion.

Despite the drop in revenue, the company remains confident - noting strong demand for application development and maintenance services, and increasing demand for BPO and assurance services. Wins in the UK energy, retail and public sectors eased its weakness in Europe overall.

N Chandrasekaran, TCS' ex-chief operating officer who recently replaced S Ramadorai as CEO and managing director when he stepped down to become non-executive chairman, said: "TCS has delivered a sterling performance during the quarter. We are seeing an improvement in market conditions. With our client budgets still tightly managed, we continue to deliver higher value to customers, deepening our relationships and focusing on superior operational management."

Wipro's second-quarter results to 30 September showed a 1% fall in net profit to $317 million, on revenue down 5% to $1.2 billion. S Gopalakrishnan, Wipro's CEO, endorsed Chandrasekaran's view, saying: "In the second quarter the business climate improved. Clients are looking to invest in a few strategic initiatives and relationships to maximise value from opportunities when the economic downturn ends."

Sponsor

2009 UK Consulting Industry Half-Year Report

The UK Consulting Industry Half-Year Report is the shorter sister publication to the UK Consulting Industry Report, produced annually by the Management Consultancies Association and published jointly with MCN Direct (owned by NCC).

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3. CAPGEMINI OFFERS SHARES TO 98% OF EMPLOYEES

Capgemini has launched an offer of 6 million shares that are reserved for employees, part of a policy aimed at improving the company's development and performance.

Capgemini's board gave preliminary backing to an offer of shares in April to 98% of staff - the company employs 90,000 people worldwide. The board then pushed the button on a limited scheme to offer 1,200 group managers warrants that can neither be sold nor traded during their first four years, but will be listed from July 2013.

The offer to 'all' staff will be finalised on 16 November, with shares priced at a 15% discount on the reference price and a subscription period running from 17-19 November. Settlement and delivery is due by 16 December and there is a five-year lock-up period during which the shares cannot be traded.

Commenting on the offer to group managers, Capgemini said that by buying company shares managers could "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".

Sponsor

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4. MCA LAUNCHES TWO AWARDS

The Management Consultancies Association (MCA) has added two awards to the 12 already slated for its 2010 Management Awards. The new categories cover the 'most innovative' and 'most collaborative' firms and have been designed alongside the MCA's updated Code of Practice to recognise the high standards that the UK consulting industry upholds.

The most innovative award will be given to the management consultancy that demonstrates the most ground-breaking approach and business solutions for both its clients and its own business - examples could include business models, solutions, marketing programmes, contractual arrangements, or team leadership and management.

The most collaborative firm will demonstrate the strongest team relations and approach to tackling business challenges. Examples could include client relations, partner relations or supply chain relations.

The two awards add to existing MCA project awards covering environment, change management (public & private sector), customer engagement, operational performance (public & private sector), innovation, international, business strategy, human resources, outsourcing consultancy and technology.

Consultancies wanting to compete need to move quickly as the deadline for entries, which for the first time can be made online, is Friday 6 November. The awards shortlist will be announced on 18 January 2010, with finalists heading for the podium at an awards dinner in April next year.

5. ACCENTURE SCORES IN UK AND FINLAND

Accenture has won applications management and development contracts with Nokia Siemens Networks in Finland and QBE Europe in London.

Financial terms of the deals were not disclosed, but the Nokia Siemens contract runs for three years and includes the outsourcing of IT applications management services covering HR and finance functions, as well as corporate-wide tools and platforms.

Manfred Immitzer, chief information officer at Nokia Siemens Networks, said the deal would "help provide our IT capability with additional flexibility, greater agility and increased cost management".

Accenture's deal with QBE Europe, a subsidiary of Australia's QBE Insurance Group, lasts five years and covers application development and maintenance services that will accelerate a business transformation programme designed to improve QBE's service levels to brokers, customers and underwriters. Accenture will also run a change management programme to support QBE's rollout of core underwriting systems, improve its underwriting front-end and simplify its IT infrastructure.

Steven Burns, CEO of QBE European operations, commented: "Our decision to partner with Accenture will help fulfil our strategic need to rationalise the platforms supporting our underwriting and product delivery, and simplify our legacy IT estate for future growth and acquisitions."

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

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

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