Friday, 12 November 2010

CSC Accounting 'Issues' in Nordics

So, the issues around Nordics have at last been reported by CSC to its shareholders and the markets. Cassandra's team reported them last August - see below. Why has it taken so long?
Also the Wall Street Journal's Barons is asking questions as are its commentators follow this link for details.
Finally, latest breaking news is that another business department lead, this time in CSC Germany, has resigned. The body count continues to rise.

Monday, 8 November 2010

Senior People Continue to exit CSC

Why have the CSC HR lead for Europe, and the Finance lead for the UK, and the CEO for Northern Europe recently left the company. Have they seen the light? Were they 'incompetant' just like all the other managers who have left? We don't think so! What's going on there?
The casualty rate is like the Battle Of The Somme. Are these 'Lions led by Donkeys'?
Ask Zacks.Com who will consult their spreadsheets and tell you that CSC has lots of cash and a depressed share price but nothing about the management practises. Are these items linked?

Zacks.Com Comments on CSC

According to Zacks.com CSC are on a business winning spree. What spree is this? They may have won some small business in the US, but they are losing Anglian Water in the UK due to poor service (see service rating index published a year ago in which CSC came bottom) and the business in Central Europe, that's Germany, & Austria is in decline as evidenced by latest cost reduction plans which include; banning use of company cars for personal travel, and banning the paying of tips on entertainment meals. This last item is almost illegal in the US. Thus CSC is showing that once again it is a Collection of Small Businesses.
Also the loss of senior management continues in Europe with more resignations from Scandinavia business team continues.
Zacks should try to truly understand the business by talking to clients and to stop using analysis by spreadsheet to decide Buy or Sell ratings.

Wednesday, 25 August 2010

CSC Management leaving in droves - again

I see that CSC is going through another round of senior management leaving. In Scandinavia the leadership left a few months ago - they were drafted in from the UK to help - but were lambasted when they couldn't achieve un-achievable goals set by the US. So much for sensitivy to management development and helping those that help you.
Also Northern Europe, sees yet another change as the old leader leaves for HP after a short time in CSC.
Guy Hains who did lead all Europe is now sidelined to 'International' which I think is the bits that the countries don't want, ie they are troublesome accounts.
There's new management in Oz (where did the old management go), and the lead for Europe HR has also left. Rumour is that we can expect more senior Europe leads to bail out soon.
On top of that, Ken Archer's successor, has not sold a single deal in two years. NOTE: KA was the head of European Development, one of the most succesful sales organisations that CSC had which managed 20%+ growth year on year. But he left for the usual 'personal reasons'.
And analysts wonder why CSC can't grow. The answer must be that they can't hang on to talented management and have no relaistic compelling vision with plans to achieve it - hence also the declining customer relationships reflected in recent a poll where CSC came bottom by a wide margin.
Questions must be asked if CSC Global Management is capable of managing. On this evidence it isn't.

Monday, 24 May 2010

Is Ian Livingston about to save BT?

Judging by the recent headlines, interviews and articles you would think that BT had returned to long term lasting success under the guidance of Ian Livingston, when what he has really done is a rescue job to temporarily halt the decline caused by Global Services old management failures, over ambitious technology service projects, and by not managing the costs of the core business. Journalists at the broadsheets take note.
Taking these one at a time; he has cleared out the management of GS - full marks for that - as the GS managers had signed up to services that BT is incapable of delivering or at the profit margins quoted in the business case. Thus they are probably guilty of misleading the board and hence the shareholders. In some cases this has been quoted by some observers as fraud by the old management who managed to get paid bonuses in the millions of pounds sterling while share holders saw their stock value slump. Thus these managers got off scot free leaving pension funds and shareholders to suffer. Will Mr Livingston be taking steps to amend this situation or is he waiting for class action law suits?
Sadly Mr Livingston still sees a future for GS which we have shown does not fit in BT and is incapable of being managed by BT. Indeed Mr Livingston sees GS as leading the BT thrust into Asia Pacific market. Since this same organsiation cannot deliver in Europe there is no chance of any growth or profit from APac. IL should sell GS asap. See previous posts which make this self same point.
As to the move into new services like media on demand - as the old sage once said "I'll believe it when I see it". This willtaker more media savvy and art skills than BT is capable allowing to exist in its old fashioned, and very worthy, business style.
Meanwhile the core business which was a world leader for while (that was the time when most PTT's were shackled to home country) has not been built up to make the killer tcomms infrastructure it is capable of being.
Sadly BT has got the global strategic calls wrong. But there is stil time to recover by A) getting rid of the Global Services Alabtross, B) Continuing to clear out costs of the core organisation, C) Building an owned global infrastructure (Local country rules allowing), and D) not being seduced by the siren song of the trendies who thinks there are mega bucks in media on demand. BT is not set up for it - and it detracts management attention from the real opportunities.
So; is Mr Livingston Superman? So far he's more like Batman who has cleaned up BT's Gotham City and is yet to go global. I do hope he can move from the batcave to the phone box.

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?