MCN Direct Newswire

Previous Issue: Vol. 9 No. 4, 19 April 2010

This issue is sponsored by:

Freedom Communications, IRIS Project Solutions and NCC/Symantec

This issue's news

1. MCA leadership marks PwC return to the fold
2. Infosys set for 18% growth
3. CSC on course to beat recession
4. HP funds aid agencies in China
5. Parity's profit plunges in 2009
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. MCA LEADERSHIP MARKS PwC RETURN TO THE FOLD

The Management Consultancies Association (MCA) has named Pat Newberry of PricewaterhouseCoopers as its president, highlighting the return to the consulting market of the accounting firms that divested their consultancy business in the early 2000s.

Newberry, a PwC veteran of 32 years, is the firm's UK commercial lead of consulting with responsibility for building its consulting business.

At the MCA, he takes over from Jan Gower of IBM and will be supported by three vice presidents: David Cox, managing director of the business & technology division at Mott MacDonald; Steve Watmough, managing director of Xantus Consulting; and Paul Winter, chief executive of Corpra.

Newberry assumes the MCA presidency after a year of falling revenue in the consultancy market, with a particularly steep drop in the financial services sector, an area he has focused on for the past 20 years.

According to the latest MCA Industry Report, total consultancy revenue dropped 6% in 2009 to £8 billion. Spending on consulting in the public sector was flat, with demand in the financial services sector falling 12%.

Revenue from strategy consulting dropped about 25% in 2009, according to the report, with revenue growth coming from practices fuelled by recession - notably process re-engineering up 5% and HR consulting up 6%.

Overall, the number of people employed by MCA member firms fell 15% in 2009 to 40,000, although the number of senior people rose by 10%, suggesting a willingness to invest in expertise and experience.

MCA members also improved their own productivity, with the average consultant becoming 7% more productive by the end of 2009 than 12 months earlier.

2. INFOSYS SET FOR 18% GROWTH

Infosys Technologies, India's second largest IT services firm, has reported slow financial growth in 2010, but is predicting revenue growth of 16-18% in fiscal 2011 on the back of increased business momentum in last year's fourth quarter.

In the year to 31 March 2010, Infosys' net profit rose 2% to $1.3 billion (£846 million), on revenue also increasing 2% to $4.8 billion. But fourth-quarter net profit shot up 9%, on revenue rising 18%, leading the company to forecast similar revenue growth through fiscal 2011 for a total of around $5.6 billion.

Commenting on the results, Infosys CEO and managing director S Gopalakrishnan said: "We have been able to take advantage of the opportunities in the market and grow faster due to our investments in capacity and capability building even during the economic downturn. Although the economic environment continues to be challenging, businesses are investing in growth to build a better future."

One early win for Infosys in fiscal 2011 has been a three-year IT services contract with Microsoft. Infosys will manage Microsoft's internal IT services across 450 locations in 104 countries. The deal is based on an outcome-based pricing model, allowing Microsoft to manage IT costs in line with business variables and demand.

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3. CSC ON COURSE TO BEAT RECESSION

CSC has updated its financial guidance for the year to 2 April, showing significant increases in new business and profitability, despite an ongoing struggle to honour the contracts it holds as part of the £12 billion NHS IT overhaul.

Ahead of releasing its fourth-quarter and full year results on 20 May, CSC has reported that new business wins in the year to 2 April reached $19 billion (£12.4 billion), up from previous guidance of $17-18 billion. Earnings per share are expected to come in between $5.05 and $5.15, up from previous indications of $4.80-5.00.

The company is forecasting revenue of $16-16.5 billion, in line with previous guidance, and a respectable margin of 8.6-8.8%.

But although CSC's global forecast is good, the company appears to be struggling with its NHS contracts in the UK.

CSC is the largest supplier to the £12 billion NHS IT programme, having added regional contracts initially won by Accenture and Fujitsu Services to its own initial win. But according to a report in the Financial Times, its recent failure to meet a March deadline to get systems running smoothly in a large, acute hospital in the north-west may mean a review of CSC's work with hospitals or even cancellation of its contract to install such systems.

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4. HP FUNDS AID AGENCIES IN CHINA

HP has responded to the earthquake that has devastated China's Qinghai province by promising to give $250,000 (£163,000) to aid agencies including World Vision and the US fund for Unicef.

The Hewlett-Packard Company Foundation is also offering up to $150,000 more, to match contributions made by its staff to support earthquake relief efforts, bringing the total amount committed to $400,000.

HP China managing director Piau Phang Foo said: "We are pleased to be able to support organisations such as World Vision and the US fund for Unicef that are working hard to relieve the community of its suffering and return lives to some normalcy."

The funds donated by the foundation are intended to support short-term relief as well as help the longer-term reconstruction work needed to rebuild the country.

5. PARITY'S PROFIT PLUNGES IN 2009

IT resources and solutions company Parity Group has reported 2009 pre-tax profit of £250,000, down from £1.7 million the previous year. Revenue in the year fell 10% to £119 million.

Parity's profit was decimated by exceptional charges of £271,000 related to the closure of its Hemel Hempstead office, cancelled transaction costs of £63,000 and a restructuring charge of £200,000. Parity shed its training business in February 2009, but not before making a two-month loss on the business of £245,000.

Despite the downturn, Parity's resources business held up well, reporting revenue of £100.5 million, compared to £110.2 million in 2008. But solutions did not fare so well, with 2009 revenue of £18.5 million, down from £22.1 million in 2008.

Parity chief executive Alwyn Welch said: "As the recession deepened during 2009, Parity continued to experience difficult trading conditions. By acting quickly on both costs and operating systems, we have weathered the economic storm far better than the group has done in the past."

Looking forward, Welch said revenue visibility remained low and volatility high, and that 'prudence' and 'caution' would remain the company's watchwords for the year ahead.

An early highlight of this year has been a £1.4 million contract won by Parity's solutions business with NHS Direct. The contract covers the development and support of a health information search portal that is due for completion in March 2011 and will give NHS Direct call centre staff better access to information when dealing with public enquiries.

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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