Friday, 31 October 2008

Atos Origin Q3 post script

(By Anthony Miller) We came away from our meeting with Atos UK CEO, Keith Wilman, with a positive view on the UK unit’s prospects, despite the difficult market conditions. While the UK consulting division is getting a lot more management attention, the core managed operations and BPO businesses are proving resilient, especially with a high exposure to the UK public sector and to transaction processing. We see little reason to doubt that Wilman’s firm hand on the tiller will steer the UK business towards a pleasing set of FY results.

At the group level, CEO Philippe Germond made some salient comments on the concall worthy of note. The first related to Atos’ decision to divest non-core businesses. Germond is keen to get out of geographical markets distant from Atos’ European heartland as these are difficult to control and do not have critical mass. I think this is sound judgement and should be food for thought for other European-headquartered SIs. Also, among the long list of cost-cutting actions was a reduction in training not directly related to revenue generation. No surprise, of course, but the hard reality of what businesses consider as ‘discretionary spend’ in a downturn.

Post-post script. I seem to recall seeing a full-page ad in the FT last week exhorting businesses to invest in training, on the basis that employees probably have more spare time on their hands (!) so why not invest in their future? It was signed by, among others, Sir Stuart Rose, Marks & Sparks executive chairman, though I don’t think I noticed any statement in the ad describing precisely what extra training M&S was going to invest in just now. Rather pointless, if not naïve, really.

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