MCN Direct Newswire

Vol. 9 No. 5, 12 July 2010

This issue is sponsored by:

COA Solutions, National Computing Centre and IRIS Project Solutions

This issue's news

1. Booz and AT Kearney drop merger talks
2. PwC adds new consultancy partners
3. MCA puts case for government consultancy spend
4. Accenture forecasts fall in revenue
5. Capgemini on road to Morocco
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

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1. BOOZ AND AT KEARNEY DROP MERGER TALKS

Merger discussions between management consultancies Booz & Co and AT Kearney have collapsed, leaving both strategy specialists exposed to predators and the loss of leading partners and staff.

Talks between the firms were revealed in June, but ceased early last week with a joint statement saying: "AT Kearney and Booz & Co confirm that they have ended discussions about a possible merger of the two partnerships. While the two firms greatly respect each other's legacy and capabilities, they have determined that their future aspirations will be best realised as separate partnerships."

In a market dominated by large, global consultancies and characterised by a fall in pure strategy consulting in favour of a broader approach, the collapse of merger talks may make both firms' positions more precarious, with competitors keen to poach talented employees and partners who are worried about their future, and large consultancies perhaps playing the acquisition card.

The merger was set to create the third largest independent strategy consultancy in revenue terms behind McKinsey and Boston Consulting Group. In 2009, AT Kearney reported revenue of $786 million (£519 million), down from about $900 million in the previous year. Booz & Co achieved revenue of about $1 billion last year.

Joining forces would also have created strength in numbers through the combination of AT Kearney's 2,500 employees and 240 partners, and Booz & Co's 3,300 staff and 200 partners.

2. PwC ADDS NEW CONSULTANCY PARTNERS

PricewaterhouseCoopers has named 19 new partners in its UK consulting business, adding to the 110 already in post, and is promising to build the total to 200 over the next few years.

The consultancy newcomers are among a total of 38 staff who were promoted to partner status on 1 July. Most of the consulting partners will specialise in the government & public sector or in financial services, with some dedicated to enterprise performance management.

Commenting on the promotions, PwC UK chairman Ian Powell said: "We continue to recruit and promote talent focused on delivering outstanding service based on our clients' needs. As market leader, we believe that we must invest for the long-term success of the business and the wider economy. Alongside these partner admissions we remain committed to recruiting over 1,000 graduate entrants over the coming year."

• PwC is not alone in this recruitment ambition with Deloitte planning to hire over 1,100 graduates across its audit, tax, corporate finance and consulting businesses in the next 12 months.

Sponsor

National Computing Centre

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3. MCA PUTS CASE FOR GOVERNMENT CONSULTANCY SPEND

The Management Consultancies Association (MCA) has estimated that management consultants delivered £3.2 billion worth of benefits to central government in 2009.

In a report based on research among its members, '21st Century Government: Adding value, cutting the deficit', the MCA says spending on management consulting totalled £640 million last year - below the Government's own figure on consultancy expenditure, which includes investment outside Whitehall and spending on other forms of consulting, such as legal and PR, as well as on the use of contractors and interim managers.

The MCA reports that around 75% of management consulting work in central government is commissioned because of a lack of specialist skills and that 40% of spending on consultants is for programme and project management, particularly complex, high-profile projects.

While most management consultancies say there has been a more intelligent approach to buying their services across government since the National Audit Office report on consultancy in 2006, they believe the use of consultancy should be measured on outcomes and value delivered, and that government statistics should distinguish management consulting from work by contractors and interim managers to cover staff vacancies.

Commenting on the research, MCA chief executive Alan Leaman said: "It makes economic as well as practical sense to draw on outside expertise whenever it is cost-effective to do so. The coalition government will need access to the best skills that are available outside government to achieve its ambitious objectives, particularly a step change in public sector productivity. Many of the best and most radical approaches to public service provision originate in the consulting industry."

Sponsor

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4. ACCENTURE FORECASTS FALL IN REVENUE

Accenture has reported positive financial results for its third quarter to 31 May, but warns that its net revenue for the full fiscal year may fall by up to 3%.

The firm's revenue rose 8% in the third quarter to $5.6 billion (£3.7 billion), but this followed falls of 11% in the first quarter and 2% in the second. Fourth-quarter revenue is expected to reach $5.2-5.4 billion, again narrowing the deficit, but failing to boost revenue growth significantly.

Accenture's consulting and outsourcing businesses both increased their net revenues in the third quarter, with consulting up 9% at $3.2 billion and outsourcing up 7% at 2.4 billion. The firm's five operating groups all achieved revenue growth, with Asia-Pacific delivering 16% growth, the Americas 11% and EMEA 4%.

Accenture CEO William Green commented: "We are delighted with our revenue growth, our momentum and our results in the third quarter, with growth led by strong performances from our products and financial services operating groups. While recovery in the economic environment remains uneven, we continue to see increasing demand for our services."

Accenture estimates that its net revenue for the current fiscal year will be "at the low end of its previously guided range of -3% to +1%".

5. CAPGEMINI ON ROAD TO MOROCCO

Capgemini plans to extend its presence in Morocco following the opening of new headquarters in Casablanca, agreements with local universities to develop talent, and a two-year plan to double headcount in the country.

Capgemini has had a base in Morocco since 2007 and now has a team of about 260 staff within its Rightshore global delivery business. The so-called Casanearshore centre in Casablanca is the company's first nearshore facility in Morocco and is working on IT systems development and maintenance projects for more than 10 French clients in the energy, financial services, telecoms and public sectors.

To ensure staff quality, Capgemini has signed agreements with three Moroccan universities to support occupational training and research projects.

Jean-Philippe Bol, chief executive of Capgemini Morocco and CEO of Capgemini France technology services, said: "We have big ambitions for Morocco, which is at the heart of our Rightshore strategy. Several major French-speaking companies have already been impressed by the quality of our teams and the excellence of our facilities at Casanearshore. We are creating a tight, sustainable collaboration with Morocco."

• Back in the UK, Capgemini is celebrating the extension of its contract with the Metropolitan Police until December 2015. The contract covers the provision of information and communications technology services to London's 55,000 police officers and auxiliary staff from 2012 to 2015 and follows an initial agreement made in 2005.

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

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

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