Friday, 23 August 2013

CSC Cash Cow Running Out Of Milk

The CSC solution sold to the UK's National Health Service comes under fire once again for not delivering on its promises and costing the tax payer billions in fees. These fees to CSC will dry up soon. Hence the comparison with cow's milk. That being the case what is the future of CSC looking like without this cash cow? 

The Register reports: The shambolic nationwide NHS patient record computer system, abandoned by Whitehall in 2011, will ultimately cost UK taxpayers a staggering £10.1bn.
It also goes on to report that Last year, CSC and the UK government finally reached a truce over the company's central patient database cock-up with both sides agreeing to a more flexible contract until 2016 and to shelve any potential litigation.


The question for the CSC board, and for the Wall Street analysts, who seem soft on CSC by avoiding asking the hard questions; is where is the replacement business and profits to come from? It is certainly not coming from the UK or Europe, which leaves just Federal US business.

To drive home the point in June of this year it was reported by eHealth Insider that after nearly ten years of work; 
Ninety-eight per cent of the estimated benefits of several high-profile National Programme for IT in the NHS programmes are yet to be realised, according to the National Audit Office.
That is to say the tax payer has over the years paid out billions for a non-functioning solution while CSC has booked large profits from them.
No wonder ANYTHING BUT CSC seems to be the UK public sector mantra as local health groups commission new and replacement services from other companies. See these three as examples: (copyright eHealth Insider)

 Coventry and Warwickshire invest in VNA
University Hospitals Coventry and Warwickshire NHS Trust has signed a five-year contract with Visbion for a vendor neutral archive, which will store images and scanned patient notes.
Six Surrey clinical commissioning groups are deploying a managed telehealth service, commissioned by Surrey County Council.

Cambridge University Hospitals NHS Foundation Trust is taking a ‘big bang’ approach to its Epic electronic patient record implementation, on a scale rarely seen in the NHS.

All the above supports our previously published views that CSC is being hollowed out to drive out short term costs yet is not able to sign up meaningful new business because of its poor sales performance and inability to deliver. Does it have a future? 

19 comments:

Anonymous said...

One senior CSC person is certainly wary of the CSC future as he sells stock in CSC and pockets $737,000
http://utahpeoplespost.com/2013/08/insider-selling-stephen-baum-unloads-14100-shares-of-computer-sciences-corp-stock-csc/

Anonymous said...

No, everything is fine, I mean the well known independent research company Gartner says CSC is only second to Amazon for cloud services...

http://www.theregister.co.uk/2013/08/19/amazon_gartner_magic_quadrant/

The actual report:

http://www.gartner.com/technology/reprints.do?id=1-1I5JDYG&ct=130805&st=sb

Oh and European Life Insurance too:

http://finance.yahoo.com/news/gartner-names-csc-leader-european-123000095.html;_ylt=A2KJ3CVSfRhSnUIAwiWTmYlQ

And datacentre outsourcing:

http://finance.yahoo.com/news/gartner-names-csc-leader-data-123000521.html;_ylt=A2KJ3CVSfRhSnUIAwyWTmYlQ

Surely the wider industry must realise by now how much of a damned fiddle these reports are...

Anonymous said...

Baum was a non-executive director who retired after the FY2013 AGM having reached the age of 70, the mandatory retirement age for such a position.

He is obliged to exercise any remaining stock options within a few months of retiring, otherwise they lapse.

So I see nothing unusual in his cashing in his remaining stock options. Only a fool would have just allowed them to lapse.

Anonymous said...

The mind boggles how much in bed CSC must be with Gartner....

2nd only to Amazon. That gave me a good laugh. Even the most unbiased of commentators must realise that CSC would be very lucky to be listed in the TOP TEN of Cloud Providers, given that they only started rolling out Cloud nodes in late 2011, with few complete by end of 2012.

Anonymous said...

While I share your scepticism/cynicism of the Gartner result, it has to be said that Gartner and their ilk are assessing the strategy/vision and technical capability etc etc, its not a ranking on installed base per se (or on Cloudwashing, where I suspect they really would be ranked highly).

Anonymous said...

Fair point about the vision thing. I have a vision that I want to play golf as well as Tiger Woods and build my muscles to Schwarzeneger size. Sadly I look like Woody Allen.

Anonymous said...

Anyone can talk "Blue-Sky" and come up with strategic visions.

Yet the proof is in execution and delivery of the vision, which is where CSC sadly deceives and seriously lacks credibility, despite the efforts of their many hardworking employees.

Anonymous said...

Very true...CSC sadly does lack in execution and delivery of many of its vision. And it is not because they do not have knowledgeable, smart and hardworking employees...it it because many of those that make decisions on how to execute/implement, are not listening to the hardworking and knowledgeable employees !! Not only are they not listening to them (the people who know how to implement the best way), but one by one they are starting to let them go from the company as part of the so called GET FIT program.

Anonymous said...

Seems like the bloodbath could be at an end... I'm sure the hugely experienced and successful CEO won't be able to resist the dangle of this one:

http://www.cnbc.com/id/101020928?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=101020928%7CMicrosoft+urged+to+put+Mu

Good luck Microsoft if that happens, you'll be screwed.

Anonymous said...

Reuters had reported that: "At least three of the top 20 investors in Microsoft Corp want a turnaround expert to succeed Steve Ballmer as chief executive and have urged the technology giant's board to consider.........Computer Sciences Corp CEO Mike Lawrie for the job".

I don't know whether to laugh or cry. Can these people not see that Lawrie is destroying CSC, not turning it round? As the previous commentator rightly said, that would screw Microsoft, but why should Lawrie care, there are potentially tens of millions of dollars to be put into his bank account by moving to Microsoft.

Anonymous said...

CSC has just released its Annual Corporate Responsibility Report. In this report it says that in FY 2013 the Company's employees completed over 600,000 hours of professional development training.

Wonderful? Not quite. With 87000 employees, it means that CSC provided each employee with 6.9 hours, just under one day, of professional development training in a whole year.

What an investment in its most critical asset, its people skills.

Anonymous said...

CSC policies are: cheap workers and no training; some smoke and fireworks about values, and empty quotes that on the short term may convince a large number of people, but that for the long run will have a terrible effect in morale globally.

Anonymous said...

Hello everyone,
Rumours are growing around the buyout of CSC consulting business (GBS) by the canadian CGI (has already bought UK owned consulting company Logica in 2012).
A position paper on this potential takeover has been shared during last week french CGI works council...
Anybody aware of such possibility?

Anonymous said...

Training! in the last 7 years I have had to undertake all training in my own time and all of it was either CBT or book reading. It would be interesting to see how much of thetraining was supplied by instructor led courses as opposed to CBT.

Anonymous said...

CSC's behaviour in recent history, shows that the reality is when results aren't up to scratch the last thing to go is shareholder's dividends. All the talk of investing for the future, "Get Fit" programs, and other related smooth talk, has proven to be total BS.

The agenda is perfectly clear, and has been for the last 18 months, which is why I left. Lawrie is incentivised to either sell or break up CSC, ensuring maximum shareholder value and big bonuses for him and the executive team.

Who cares if thousands of peoples' lives are ruined in the process, and dozens of customers are left with contracts in tatters that CSC is unable to properly service, because what's left will be a shadow of what went before and Lawrie & co will have walzed off into the Microsoft sunset, their bank accounts stuffed to the brim.

Disgusting, unethical, and damn I do wish somewhere a senior person in CSC would spill the beans and launch a class-action lawsuit supporting the mistreatment of employees and deception of the market.

It's about time this less savoury aspect of parts of "corporate America" got a wake up call. This behaviour is barely different from the behaviour that got the banking system into trouble. Executive & shareholder profits at all costs, screw the customer & employee.

Anonymous said...

Casandra - you have gone quiet.
Is this worth mentioning? http://www.channelregister.co.uk/2013/09/10/microsoft_turn_around_ceos/

Mike Lawrie has destroyed culture in CSC and cashed in... now potential to jump ship... the rat

Anonymous said...

Training - could be an induction day, a conference call or powerpoint presentation on the company, HEY just worked it out - every loser at CSC has to do the CSC ETHICS course - think when I did it (as I am a loser) was a few hours - times that by all the people as global and ha ha - the stats look good.

Anonymous said...

in the UK I have seen some good managers leave whilst the dross parastie freeloaders keep on going... I know who they - they know who they are!

Anonymous said...

fgg