Wednesday, 13 January 2010

Will IT Services Giants Ever Get-IT ?

We're back:

Since we've been gone NPfIT has been reined in a bit after spending £6bln, it will almost certainly be killed off by the Conservatives when they get into government. Meanwhile BT Global Services' problems continue. All are worth commenting on.

So the musical chairs between IT Services companies continues with the new assignments of staff to BT Global Services and CSC UK NHS account. It seems the talent pool in IT Services in the UK is so small that only by poaching from one another can these companies continue in business, unlike most other major corporations who are able to provide sustainable careers and opportunities, along with staff development, and long range planning guided by a healthy HR department (CSC's for instance is said to be very constrained). These last two points are probably the most crucial since most IT services companies are known for slashing training budgets and treating people development as an overhead. Which is in turn probably a response to over ambitious bid models to win business, see the root of BT GS's problems in previous posts. But anyway, that doesn't help poor old Hanif Lalani who gave a up good assignment in BT and got the hospital pass to clear up the financial mess at BT GS. He's obviously had enough and is now moving on. This time BT are trying out a yank from Texas. That well known location for creating globally focused management teams. All that crowd can normally do is invade and divide, and leave a mess. Let's hope this guy is the one in million exception.

Just look at CSC which made some lamentable decisions to assign US nationals to run Europe because of their 'success' in the culturally very narrow field of Federal and US Defense work - they think the skills can be transported across the pond. Unfortunately for CSC during these assignments the local management of CSC across Europe (the management that led years of growth) resigned, the resignations also included every Finance lead for every country. Thus CSC in Europe has gone nowhere and appears still to be going nowhere. However, the US based appointees are now back home in key roles, and guess what since their return CSC has done little to impress. Just look at the share price. The word is that senior figures are waiting for the venture capitalists to become active again and buy them. Note that several VC's did sniff around the bait trailed before them a few years ago but walked away or were frightened off by what they found. Meanwhile CSC top management are biding their time and hoping a takeover offer will come in so they can retire rather than do anything too difficult like grow the company with quality business.
Anyway, back to BT and Global Services, our comments in earlier postings about BT management never-getting-it about IT Services are proving to be true as all that has happened in the last year is that the financial mess in the books of GS has been cleared up by a good Finance lead, Hanif Lalani, but crucially he has not got to the real issue about the operations and ethos of GS where the fundamentals have not been fixed. What did the BT expect from someone untrained and inexperienced in global services and IT? Why didn;t the BT board sort this out earlier?

I guess Jeff Kelly, the new appointee, is meant to be able to fix the fundamentals. Given his north american pedigree I am taking bets that he'll manage the anglo saxon business well but will not 'get-it' in the rest of Europe. Thus BT GS will remain a niche player beholden to UK government largesse, and BT will have a parasite known as Global Services theatening its life as an independant company.
Meanwhile all these traditional IT Services companies need to look at the growth and business model of Capita and Serco and Computacenter if they want to see how to do it properly. Isn't it strange how none of the staff poaching is from these winners. It is all from the has-beens?


Anonymous said...

There are different opinions of what was going on within BT. Global Services had for a vey long time (more than 6 years) been signing up poor contracts or double counting BT Retail Revenue with thin wrap deals. Hanif would have signed off a lot of this as did Tony Chanmugam when he worked in GS! Chanmugam is unbelievably now CFO. I expect was put in that job to sort the mess and it's hard to believe by choice. YHou state he got fed up and left, I think he may have been pushed.

Cassandra said...

Thanks for the additional information. Every little bit helps.