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January 29, 1989


By CBR Staff Writer

Dun & Bradstreet Corp’s McCormack & Dodge has sold product rights for its Pios Manufacturing Resource Planning System to Andersen Consulting, the consultancy arm of Arthur Andersen & Co. A McCormack spokesman claimed that both parties believed Andersen was better equipped to provide the degree of post-consultancy support required by McCormack’s manufacturing customer base. Financial terms of the deal were not disclosed. In the UK, maintenance for Pios users will now be provided by Andersen Consulting subsidiary, Andersen Software, which confirmed that positions will be offered to Pios-based staff at McCormack. The Pios system, something of a low volume sales generator in McCormack terms, currently has around 100 customers drawn from aerospace and defence markets worldwide. McCormack says it will now focus on providing software and services to expand its financial customer base, and the strategic development of software for IBM’s Systems Application Architecture, ICL and DEC VAX computers – but the two companies have also signed a joint marketing agreement which bundles McCormack’s Millennium software with Andersen’s Mac-Pac family to provide a total solution for the manufacturing industry.

For Andersen Consultancy, the deal on Pios represents the latest move in the Chicago-based firm’s active attempts to expand its slice of the computer systems integration market. Systems integration currently generates $1,300m or some 50% of the company’s consulting revenues, and is expected to contribute around $5,000m by the mid-1990s. Although Andersen is acknowledged to hold the lion’s share, the last 15 years have seen a number of other accountancy firms move into the systems integration market. Major players now include Price Waterhouse, Peat Marwick, and Arthur Young. According to the Wall Street Journal, however, accountancy firms are fast discovering that lucrative gains can be can be offset by costly mistakes. A recent survey of 600 big Peat Marwick clients found that some 35% had experienced cost overruns on integration projects, while in 1986, Price Waterhouse was forced to pay $3m to correct problems on a $6.5m project. A different gripe, voiced by the ex-Andersen London-based consultants, Information Consulting Group, is that an accounting partnership simply can not raise enough capital to buy the kind of hardware and software required by any aspiring prime contractor. Consequently, des-pite claims of being vendor independent, account-ing firms tend to develop software on their existing hardware, and, as a result, transfer in-built hardware limitations from contract to contract.

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