Cap Gemini SA is trying to boost profits by de-emphasizing its information systems management (ISM) business, in favor of higher margin consulting and systems integration services such as enterprise resource planning expansion. Tony Kelly, Cap Gemini’s UK head of ERP, says that pressure from the company’s Paris head office to grow the margins will see the company grow its consulting business, which presently accounts for an estimated 25% of the company’s UK services revenue.
However, the new focus is not expected to force a cutback in the Cap Gemini’s ISM business, which employs 6,000 of the company’s 8,500 staff, and which last year generated roughly 50% of services revenue in the UK, with the remaining 25% derived from the company’s projects business.
Cap sees ERP related integration work as a particularly good opportunity, as the established ERP users look to extend the reach of their core ERP systems into new business process automation applications, such as customer relationship management and supply chain management. These applications are generally being sourced from third parties, and Cap Gemini wants to pocket the business of tying them tightly to core ERP systems.
Kelly said that Cap will not follow the major ERP players downmarket into the small and medium sized enterprise section. Instead, it is looking for implementation partnerships with enterprise application integration companies, to which end it is currently in talks with New Era of Networks Inc and data transformation company, Constellar Corp.
