Wednesday 18 February 2009

Atos Origin update

(By Anthony Miller). This morning’s extended concall put some more flesh on the bones of Atos’ ‘TOP’ strategy but I still can’t quite see how all the limbs fit together.

On the global delivery front, management talked about increasing ‘offshore and nearshore’ headcount from 4,500 to 5,500 this year. They also aim to double the offshore delivery mix in their SI business (which includes application management, AM) to 25%. I think that’s still light, particularly as AM is one of the most ‘offshoreable’ service lines and most players would want to be doing around 70% of it offshore. Now, Atos gets 40% of group revenues from the UK, Americas and Netherlands, the markets most amenable to offshoring. Even if Atos gets offshore/nearshore headcount to 5,500 (and, by the way, they don’t give country splits for this, so we don’t know how many are in ‘real’ low-cost locations) that’s only 11% of group headcount. Just doesn’t seem enough to me.

The other aspect of Atos’ strategy that confuses me is the new organisational structure. In its push to construct a more global organisation, they have chosen to separate out Consulting from other IT service lines and have put the new Global Consulting Group reporting in to the VP, Global Functions – that’s the guy also looking after Global Sales & Markets, plus IT and back office stuff like HR. The rest of Atos’ delivery sits in its Global SI and Global Managed Operations (MO) units, each reporting to the VP for Global Operations, who also ‘owns’ the country markets (now called Group Business Units). Most other IT services outfits that have tried running segregated Consulting practices found it just doesn’t work ‘end-to-end’. At a local level, this also worries me because Atos UK CEO, Keith Wilman, has done a really grand job turning around the UK consulting practice – will all his good work be undone in the new organisation? And in any event, lumping Consulting and Sales & Markets with ‘back office’ functions sounds weird to me. Anyway, the organisation chart looks really pretty and I guess that’s what counts.

No comments:

Post a Comment