Tag: Capgemini

Francis Maude claims IT disasters will not be tolerated

Cabinet Secretary Francis Maude is meeting with a list of big IT suppliers as he promises to make tighter spending controls permanent and threatens not to tolerate poor performance.

Maude is set to meet with 20 of the firms which have traditionally landed the large government IT contracts to discuss the next steps in efficiency savings.  

These include familiar faces such as Capgemini, HP, IBM, Accenture, Atos and Capita, and represent around £15 billion worth of business.

Maude is keen to be seen as cracking the whip over costs, and said that those which do not play by the new spendthift rules of public sector procurement will get the boot.

“I want Whitehall procurement to become as sharp as the best businesses,” Maude said in a statement. “Today, I will tell companies that we won’t tolerate poor performance and that to work with us you will have to offer the best value for money.”

Clearly Maude wants to put an end to the long list of high profile public debacles, such as the NHS cock-up which Computer Sciences Corporation presided over.

Since the Coalition was elected there has been an attempt to reduce enormous IT spending, and the Cabinet Office has claimed that £3.75 billion worth of savings were made in 2011/12.  This figure is expected to top £5 billion this year.

This has also meant opening the door for smaller firms to tender for work, to break the cycle of lengthy and costly contracts being handed to the big name supplier cartel.

The government has been derided by select committees and industry experts over the lack of expertise in negotiating contracts.   

Such steps show a willingness to at least attempt to learn from harsh lessons in the past. But can we finally expect to see the government become an ‘intelligent’ customer – as one MP recently put it?

Microsoft and SAP have already had £65 million and £3 million contract reductions negotiated this week, so it does seem that the government means business.  How far the government is willing to push austerity onto big business global contractors will be interesting.

With endemic problems in the way Whitehall has procured IT before, there is plenty of work to be done before the government can really claim to be the efficient “business” that it aims to be.

Government reveals G-Cloud suppliers

The Cabinet Office has launched its CloudStore service with the aim of bringing flexible, on demand IT procurement to government departments.

As part of the government’s G-Cloud strategy, a list of suppliers has been made available to departments to get their hands on a range of cloud-based services.

Cabinet Office Minister Francis Maude heralded the CloudStore as “an important milestone in the Government’s ICT strategy to deliver savings and an IT system fit for the 21st century”.  Following its launch he also claimed the cloud service would allow for “quicker, easier, cheaper and more transparent” IT procurement.

It is widely hoped that the store will help avoid some of the fiascos which have dogged government IT.   By providing a more flexible approach to  “pay-as-you-go” IT services, as the Cabinet Office puts it, there is optimism that the ‘cartel’ of big firms landing hefty contracts could be broken up.

As part of the government’s cloud strategy it wants to bring about a “level playing field” for smaller business. Whether this will happen remains to be seen.

With the first wave of bids a total of 1,700 services are now on offer through the CloudStore catalogue, with 257 accredited suppliers.  These include Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).

While the service has sought to increase the presence of SMEs, many of the big names of government IT supply are still present.

CapGemini, one of the big players in government IT supply, is among the companies which will form part of the catalogue of suppliers and services.

Also present is Computer Sciences Corporation, days after chalking up a massive $1.49 billion contract write-off following its high-profile bungling of the NHS electronic patient’s record project.

Other big names on the list were Google, Microsoft, BT and Atos.   Open source firms such as Red Hat were also present on the list of potential suppliers.  Click here for a full list of suppliers.

Prior to the launch, one of the suppliers, ElasticHosts, told TechEye of the potential of the GCloud to strategy to shake up the government IT industry – just as long as departments are willing to actually use the services.

If all goes to plan, then the cloud strategy should allow the government to save a load of cash that would otherwise be splashed on hefty contracts.

Business growth hit hard by late payments

Businesses in the US are suffering a cash flow crisis because of late payments, and there’s a real worry it could get worse in some quarters.

A survey from Capgemini, looking at Fortune 1000 companies, revealed that many are letting outstanding IOUs pile up.

29 percent of those surveyed said delayed cash flow was putting the brakes on growing a business. 27 percent said that also hampered their ability to hire more staff, while 20 percent said revenues are directly affected.

Unsurprisingly, late payments have become more noticeable over the past 12 months along with  the global belt-tightening.  Almost half of those surveyed said there were more late payments in the last year.

Wages took a hit too. Because contracts were paid late, companies surveyed said they couldn’t afford to give staff the bonuses they deserved. 

The problem isn’t isolated. Bailiffs are doing a roaring trade in the UK, too – according to a survey of small to medium firms by industry payment body BACS, the UK saw late payments reach an all time high of £33.6 billion since it began recording information in 2007.

This figure also represents a swift increase in the amount owed to businesses over the past 12 months.   Further UK companies are likely to have to wait even longer than usual to get their hands on overdue payments as the average owed to each increased to £39,000.

HMRC blames tax fiasco on internal blunders

Around a million Brits will be told that they will have to cough up around £600 following yet another HMRC tax fiasco.

Carrying out a check on changing tax codes over a number of years, an IT system has shown that many people have been paying too much or too little tax to the government up to 2008.

An HRMC representative told us that there were indeed problems with the merger affecting the interoperability of systems, and the Department had worked hard alongside Capgemini to resolve these. Last year we reported that Capgemini was paid £1.75 billion by the British government.

Some individuals will receive a letter over the next few months telling them they’ve got an extra 300 quid on the way. Others face more unwelcome news, in these austere times which we’re all in together, as the economy dips and inflation creeps up.

Of course, it is not the first time that HMRC has called on the citizens of the UK to reach into their pockets to find some extra cash.  A similar situation happened last year with 1.4 million people flagged as having paid too little.

The palaver follows HMRC’s new IT system, which it tells TechEye was up to 12 independent systems that had been working on their own for an age. 

The new computer system aims to bring all records into one database, making it easier to monitor tax status changes.

Speaking to TechEye, an HMRC spokesperson claimed that reports in the press are inaccurate, and that the IT system isn’t at fault for the latest debacle.

“The problem has been when people change their tax code as they move around after school, for example, and take up different jobs,” the spokesperson said. “With the number of systems before, sometimes cases fall between the cracks. The new system aims to bring this all up to date.

“The IT system itself is working exactly as it should.  This is not an IT fault”

Problems that resulted in cases “falling between the cracks” are not likely to go away, despite assurances that the new system is getting records up to date.

TechEye was told that serious problems affected the computer systems of HMRC when Gordon Brown oversaw the merger between the Inland Revenue and Customs.

However the HMRC spokesperson denied that this had any impact on current discrepancies.

He told us that there were indeed problems with the merger affecting the interoperability of systems, and the Department had worked hard alongside CapGemini to resolve them. However, these did not contribute to the current tax rebate problems as it’s an in-house Inland Revenue concern. 

Ultimately, taxpayers are at the mercy of HMRC staff and human folly, ensuring that cases are dealt with appropriately.

The spokesperson continued: “Sometimes we get it wrong and don’t always act with enough haste, and there will always be some discrepancies if we fail to act quickly, or employers fail to notify us.

“We hope to limit these cases, but we recognise that mistakes are made on both sides.”

Not good news, then, for the winners of the Unlucky Lottery who will be forking out. Evidently, there’s cause to believe such discrepancies will pop up in the future.

According to the Taxpayers’ Alliance, the public will fear for similar demands in the future.

“These errors are occurring with alarming frequenc,y so of course taxpayers will be worried that it’ll happen again, and that next time they’ll be liable,” John O’Connell, Research Director of the TaxPayers’ Alliance, told TechEye.

“New IT systems seem to be causing more confusion rather than solving problems – they are blamed on one hand but praised for rooting out errors on the other,” Connell said. “The result is that taxpayers are forced to hand over a large amount of cash that they didn’t expect to, which adds to the woes of high inflation, spiralling fuel costs and eye-watering utility bills.”

Connell calls for a simpler approach, or the public as a whole risks paying for HMRC’s faults again and again : “The tax system needs to be drastically simplified to make it easier to administer and reduce the burden on hard-working families, but until then HMRC must work a lot harder to stamp these errors out and end the misery that they cause.”

Capgemini buys Prosodie

Capgemini is once again splashing its cash.

The services company, which has been raking in the dosh from big contracts from BAA and EDF, has announced it’s discussing money with Apax Partners and the Prosodie management team.

It wants to buy Prosodie. It believes that by getting the multi-channel services operator on side and into its worldwide empire, it can offer its bigwig clients a more detailed IT operating business model.

Basically, the company would form part of Capgemini’s New Business Model service line, which is a range of services based on proprietary features and invoiced on a pay-as-you-go basis.

But it won’t be buying Prosodie at a loss as the company made some serious wonga despite the recession. It has seen increasing profits over the past four years, which has led to Capgemini forking out around £336 million (€382 million or $552 million). The buy will see Prosodie throwing in two recently-announced acquisitions, Internet-Fr in France and LevelIP in Italy.

In this case Capgemini claims that it will buy the company in cash from its net cash balance – well, it’s got enough.

Authorisation will be sought from the French competition authorities but if they say yes then the  transaction is expected to be finalised by the end of July.

Capgemini will continue to get richer, with research showing that the IT services market will return to healthy growth to reach revenues of $756 billion in 2015.

That’s the latest from Ovum, which predicts that the global market will grow by 4.4 percent during the next four years.

This comes as a result of pent-up demand and a slowly improving economy. However, growth for 2011 is still not back to pre-recession levels.

That doesn’t seem to have affected the likes of IBM, which continued to be the world’s number one provider of IT services, followed by HP and Fujitsu in 2010, despite all facing negative growth last year.  

Ovum adds that most vendors which improved their market share and their ranking were Indian-heritage firms such as Infosys, Wipro and TCS, which moved one place to be ranked 13th. Japanese firms such as NEC, Hitachi and Otsuka Shokai also made gains.

Of the all the IT service lines, business process outsourcing is said to experience the strongest growth from 2010 to 2015, followed by infrastructure-led outsourcing and support services.  

Capgemini buys Artesys and Avantias for some millions

Huge services company Capgemini has bought two dull-as-dishwater French companies, probably before the rival En Francais, Atos Origin, got the chance.

The companies, Artesys and Avantias, will complement Capgemini’s Infrastructure Transformation Services, which deals with helping the public and private sector streamline costs through adoption of the cloud. The market for infrastructure services in France is high in the billions with a growth penned in for five percent from 2010 to 2014.

They will also help with Business Information Management, BIM not IBM, which in marketing bullshit terms is “to manage and optimise the information assets of organisations [sic] to help them achieve their strategic objectives.” Basically looking at data and beancounting.

Artesys is all about Clown Computing, so the acquisition will see Capgemini wedge its foot firmly in the door of infrastructure, while Avantias is in the thrilling business of documentary management and editing. Information analysis and looking at data.

Both companies will be taken over by Capgemini completely. The combined total of the acquisition is €40 million or about $56.65 million.

It certainly has some money to spend after its recent long-term contract wins with EDF and with BAA.

Capgemini wins £100 million BAA contract – including passenger tracking

Outsourcing firm Capgemini has laid claim to another £100 million contract with a deal that will see the firm takeover “core IT services” from airport company BAA.

Not long after the firm was handed a similarly sized contract from EDF Energy, Capgemini is quids in again after it was announced that it has been awarded a five year contract as the head of a consortium that will include SITA, Atkins, Computacenter and Amor Group.

The deal is expected to help BAA “drive improvements and savings” at Heathrow and its five other airports in the UK by handing over certain responsibilities for core IT services for 10,000 users.

Speaking to Steve Sutton, head of infrastructure services at Capgemini, TechEye was informed that this would include “infrastructure, applications, and networks with a number of transformation projects which will improve BAA services.”

Air transport communications specialist SITA will be tasked with delivering telecoms and radio services, Computacenter will deliver elements of desktop and server support, while Amor Group will “support niche applications” according to a statement today.

Meanwhile BAA will keep hold of responsibility for some areas such as IT strategy and ensuring the quality of delivery of outsourced work, with around 200 employees switching to Capgemini and the consortium.

Sutton states however the moving of staff and a drive for efficiencies will not mean that the overall number of jobs will be reduced.

“All employees are able to apply for jobs as part of the TUPE conditions and I expect that the majority of people will apply, whether this means continuing to work at the BAA or in other areas,” he said.

Sutton added that IT contractors would in many cases be able to continue to work with BAA as planned, though at this early stage of the deal it is “difficult to say to what extent changes will need to be made until more discussions have been had by both companies and staff.”

According to BAA the main reason behind the use of a company such as Capgemini is to allow it to focus more on keeping planes in the sky rather than maintaining servers.

“Because our focus is on running airports, it makes sense for specialist IT functions to be outsourced,” said Philip Langsdale, chief information officer at BAA, “which is also much more cost effective.”

Capgemini is aiming to provide improved real time information which will help BAA keep better informed about their flights, as well as aiming to allow for quicker turnaround of planes and better recovery from problems “as they arise”.

This will mean real time tracking of passengers as well as aircraft according to BAA, along with providing more detailed information about flights and indeed the passengers on them.

Other airports which will be affected are Stansted, Southampton, Aberdeen, Glasgow and Edinburgh.

The deal comes ahead of the Chancellor’s Budget in which it is thought that multi-sourcing, where work is sourced to a number of smaller firms, is expected to increase.

“The government’s recent focus on encouraging smaller businesses to bid for public sector contracts,” read a statement from the National Outsourcing Association today, “means that we are likely to see a rise in multi-sourcing in the public sector, with a number of smaller suppliers providing a range of different services, instead of just one large single source supplier. 

According to Sutton, Capgemini is not concerned with the move towards outsourcing to smaller firms.

“Multi-sourcing is already reasonably prevalent in both the public and private sector, so for us it is just business as usual.”

Capgemini grabs huge contract with EDF Energy

There doesn’t seem to be any credit crunching for energy companies who are shelling out for IT deals left, right and centre.

Earlier this week HP scooped a nice and expensive outsourcing services agreement with UK based utilities company Centrica, worth over $400 million, and today Capgemini has announced that it too is in the money thanks to a £100 million (approximately $163 million) deal with EDF Energy.

We suppose that they can afford such contracts as a result of pushing our gas prices up.

As part of the deal, which will run from now until  2015 with an option to extend to a further two years, will primarily focus on providing consistent and standardised services for all users across the company’s UK business.

Capgemini will provide service desk, procurement and managed desktop services. This will include support for email, instant messaging and file sharing for the 15,000 EDF Energy IT users.

Some of the services provided by the company will also be performed by “specialist subcontractors” working with Capgemini.

And of course Capgemini couldn’t release a statement without having someone patting it on the back. This time the praise comes from Bob Barker, head of client computing & telecoms for EDF Energy.

He said: ‘Capgemini demonstrated a clear understanding of our business needs and offered convincing proposals that will add value to our IT users and to our business. We are confident that working with them will maximise the return on our investment in desktop IT while minimising risk, and we look forward to an excellent relationship with them. Capgemini clearly have great strengths as a people company and we are sure that their teams will work effectively with ours.’

Capgemini in turn paid back the compliment claiming that it was a  “privilege to be chosen to provide such a crucial service to one of the UK’s largest and most forward-looking energy companies.”

Will the jobs land in the British market where they are desperately needed? It’s doubtful.

Capgemini announces audited 2010 results

Capgemini, the services and IT company, looks set to turn a profit on the back of public sector cuts. While cuts are not yet fully in effect, it has secured plenty of contracts including with Transport For London – as TFL plans to cut workers amidst a flurry of strikes – and saw a return to growth in the second half of 2010. 

Total revenues for 2010 were $11,792 million (€8,697 million), up 3.9 percent on published revenues compared with 2009. They were down slightly, says Capgemini, on a like-for-like basis – so that’s constant group structure and exchange rates. The fourth quarter was up 16.2 percent year-on-year for published figures, 10.5 up following the acquisition of Brazil’s CPM Braxis, and 5.8 percent like for likes.

Booking totalled roughly $13,372 million (€9,863 million), up nine percent from 2009. Book-to-bill ratios for consulting, technology and loca professional services was 1.14 for the year and 1.21 for the fourth quarter.  Outsourcing saw the highest growth of all Capgemini’s businesses, up 16 percent on 2009. Five late-launch 2009 service lines, beginning operations in 2010, accounted for 37 of total bookings according to Capgemini. 

Total group profit for the year was roughly $379.7 million, or €280 million. That’s up an impressive 57 percent on the year before. Outlooks from Capgemini’s finance team reckons that it will see growth of between nine and 10 percent in revenue. Operating margin improvements are expected to be between 0.5 points and 1 point. 

Capgemini recently signed a £10.4 million IT outsourcing contract leading on until 2013 with Tube Lines, owned by Transport for London. It’s a contractor under management by London Underground, which maintains trains, tracks and stations for the Jubilee, Northern and Piccadilly Lines. Capgemini has taken over all IT support and applications at Tube Lines.

Capgemini is worth keeping an eye on. It’s a gigantic company that wins lucrative IT contracts in the public sector including an early signing with the Metropolitan police. It wields influence and as it returns to growth will likely continue to handle applications behind the scenes. Over in India, late last year we reported that along with rivals it has been locking in employees to stop them from jumping ship.

IBM, Accenture, Capgemini lock up employees to stop attrition

Major IT companies in India are thinking hard about how they can retain employees – as the high attrition rate is back to a serious concern. Bigwigs like IBM, Accenture, Cognizant, and Capgemini are adopting a strategy of asking employees to serve a three months notice period. This policy has historically been taken up by these companies before to address attrition issues.

An IBM insider says, “This is like a trap. No company would hire an employee who has to serve three months notice period in the last company. This way, the present employer will end up retaining employees and attrition rate would be addressed to certain extent.”

It gets easier for employees to jump from one company to the other with a one month notice period.

An employee working with Accenture says, “No employee would even think of changing companies as it might get little tricky for them. If anyone gets an offer letter with a condition of 1-2 months of notice period, it’s fine. But failing that, the employee might lose on both ends. So, this is a well-thought out strategy but prospective candidates will definitely back out if such conditions are laid out in the offer letter.”

Placement consultancies and poachers will find it tough as the only option left with them would be to buy-out the notice period and pay a hefty amount equalling the notice period salary. It will put the boot into Sapient which has based its entire recruitment drive and marketing on poaching.

Ranjay Sharma, a multinational recruitment firm executive, thinks this policy might have a backlash on these companies as they are the biggest poachers themselves.

Sharma says, “It’s a cycle. If A company wants to poach from B company, A wouldn’t be concerned with attrition of the employees poached but it will realize when C company would do the same with them.”

The only good outcome that this policy indicates is that Indian IT professionals are back in demand.