Cap Gemini SA, the French systems integrator, has reported provisional non-audited net income for the first six months of 1999 up 59.4% at FF 874m ($136.1m) on revenue that rose 16.1% to FF 14.4bn ($2.2bn). The rosy glow on the European side was dissipated however by disappointing figures from the firm’s US operations, where revenue dropped by 6%.
The European side of the company recorded 21% revenue growth. But in the US, Cap Gemini’s decision to restructure operations last December appears to have caused confusion, and hampered results. Previously, the company had concentrated its staff by region and according to specific vertical sectors. The decision to disperse consultants to other parts of the US appears to have backfired. People seem to have been lost in this reorganization, said a source close to the company. The US represents 40% of the group’s total revenue, with Europe making up the bulk of the business, so it’s not an area that Cap Gemini can easily ignore.
The group’s European successes, especially the high profits, are due to Cap Gemini’s increasing move towards higher-margin services. In customer relationship management and supply chain management, Cap Gemini has tried to expand its consulting role in contracts, and to save money by bringing its Gemini Consulting arm closer to the IT services division of Cap Gemini.
