(By Anthony Miller – Friday, 27 Feb 2009 9:20am). How’s about this as a statement of confidence in your business: “With our substantial order book (and) excellent revenue visibility ... we are guiding to revenue and margin by the end of 2012”. Even the mighty Capita (see here and here) isn’t that bold! But in today’s prelims report (see here) Serco management are pretty clear that their 90% exposure to UK and international public sector markets is definitely ‘right place, right time’.Serco is a very different sort of BPO animal to Capita, with a much lower focus on back-office BPO. But this appears to be changing, with its first local authority partnership at Glasgow City Council (£265m/10 years) signalling encroachment on Capita’s prime stomping ground (20% of group revenues). You may recall that Serco acquired UK IT/BPO player, ITNET, back in 2005. ITNET was well entrenched in local government but it has to be said that there was little evidence that Serco knew what to do with it once it got it! That now seems to have changed, and it looks like Serco is learning how to drive a Capita-like multidiscipline services strategy to greater effect.
That being said, Serco has a long way to catch up with Capita in local government. Capita claims ‘relationships’ in a majority of the UK’s 468 local authorities, ten of which are ‘strategic partnerships’ (e.g. Birmingham). But with local government’s pressing requirement to drive 3% annual efficiency gains – and who knows what other recommendations from the forthcoming HM Treasury Operational Efficiency Programme report – there’s going to be lots more opportunity for both players. So, to answer the question in the title, we also think it’s the latter!
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