BT Global Services - Part 5 - What the Papers Say

(By Richard Holway) Following on from BT Global Services Part 4 post yesterday, I thought I’d today bring you a collection of quotes from other media.

In the FT, Ian Livingston joined the hoards of bankers this week that queued up to utter the ‘S’ (or in this case the ‘A’) word. “He said 2008/09 had to be the year that the group cleaned up Global Services. He added: “I wish we had done it quicker . . . frankly. I apologise.”

The Times was the first to put some scale to the problem “Writedowns relating to Global Services could eventually top £1.7 billion and would probably not be less than £800 million, sources close to the company indicated.”

There seems to be confusion over which is the second contract, other than the NHS, which is the subject to renegotiation. The Guardian says “one is believed to be a five-year outsourcing deal with Credit Suisse” whereas The Telegraph suggests it’s “ a contract with Thomson Reuters, the global financial data provider, and will be even greater than the £336m charge.”

In Forbes, "Michael Armitage of Blue Oar Securities said that, in spite of years of restructuring, BT was a big, lumbering organization, and Global Services was the "last uncontrollable monster" in the group."

Richard Mahony from Ovum in BT Global Services grapples with demons produced (inadvertantly?) The News Quiz quote of the week “The operations review, which BTGS chief executive Hanif Lalani said three months ago would take 90 days to reach step-change, is ongoing.”

Finally, here’s one from me from a recent private conversation with an “extremely high source at BT” who said “Our current problems have the fingerprints of previous management all over them”.

It’s interesting, isn’t it, that the only BT Global Services ‘previous management’ ever quoted in the press in connection with the current problems is Francois Barrault. But surely it is testing the ability even of a Frenchman to wreak such havoc in such a short period of time?

So I’ll end with a rare quote on HotViews from the Daily Mail.

“Under Livingston's predecessor, Ben Verwaayen, business boomed as BT snaffled a series of huge contracts from under the nose of IBM and other technology giants. But it appears that the Dutchman and sidekick Andy Green - now chief executive at IT group Logica - allowed the thirst for deals distract them from the bottom line.
Insiders say Verwaayen valued some of the big contracts, notably a landmark deal with consumer products giant Unilever, using assumptions that proved wildly over-optimistic.
The rationale had been that after signing up scores of multinational companies, economies of scale would kick in, sending profits soaring. However, Verwaayen and Green promised tailor-made services to too many clients, which were extremely expensive to deliver, according to sources”