Capgemini (IT Consulting)

A winning combination

Capgemini is a global consultancy engaged in information technology, management consulting, outsourcing and professional services.  Headquartered in Paris, it employs over 92,000 people through offices in 33 countries.  The firm's clients are active in the automotive, consumer products, distribution, energy, chemicals, financial services, health care, life sciences, manufacturing, retail, media and telecom industries, as well as the public sector.

Capgemini was founded by Serge Kampf in 1967 as Sogeti, a boutique provider of IT services targeting only local French markets.  It was too successful to maintain a low profile for long, however, and by 1975, with the acquisitions of the larger companies CAP and Gemini Computer Systems, the firm had a presence in 21 countries.  Kampf toyed a bit with the corporate name, working for a while as Cap Gemini Sogeti, then opting for Cap Gemini.  In 2000, the firm merged with the consulting unit of Ernst & Young and, apparently abandoning the earlier lessons of superfluous nomenclature, became Cap Gemini Ernst & Young.  This was short lived, though, as a 2004 rebranding not only shortened, but compressed the name to Capgemini.  

The firm underwent a further shift in its identity in April 2009, creating a new strategic business unit known as Capgemini Consulting, a move that brought all of its worldwide consulting operations under one banner, and installed the firm as the largest European consulting outfit at a stroke.  Under the new banner, it seems to be business as usual, although the firm's existing operations are now grouped under three separate global practice networks: strategy and transformation, operations transformation, and technology transformation.  According to the firm, the new structure allows it to better utilize its global standing to benefit clients through sharing of best practices and experience across the firm.

Better late than never

Though it was a bit slower than most in the industry to make the trip, Capgemini opened up shop in India for the first time in October 2004 with a Bangalore IT center.  Additional facilities were subsequently added in Mumbai, Hyderabad, Pune, Kolkata and, most recently, Chennai.  The firm showed even further commitment to accelerating its offshore efforts, with the announcement in November 2007 that it would double its headcount in the country to over 41,000 staff (up from the current number of 13,000) by the end of 2010.  

Capgemini has also sought growth in India through acquisitions, in February 2007, it picked up Kanbay International for $1.25 billion.  Though based in Chicago, Kanbay enjoyed a significant presence in India, providing IT and consulting to the financial services, consumer, health care and media industries.  Capgemini additionally bought a 51 percent stake in Unilever India Shared Services, a unit of the Unilever Group engaged in finance and accounting BPO in India.  At the time of the acquisition, in 2006, Capgemini stated its intent to take full ownership of the company by 2008, but that deadline has since come and gone, and as of February 2009, there had been no word from the firm on the fate of the remaining stake, suggesting that Capgemini's plans for it may have been delayed by unfavorable economic conditions.

That's not the only sign that the firm is feeling the effects of the downturn.  In January 2008, contractors on the company's landmark Aspire project in the U.K. were told to accept to a pay cut of 15 percent or leave.  The company's thinking, according to U.K. IT publication The Register, was that market rates had dropped due to the recession, and the company would have been remiss not to take advantage of that.  No doubt the firm's client, the U.K. government, would have agreed with that approach as well.

If it works in India, it works in Holland

Capgemini takes a similar approach to strategic acquisition outside of the subcontinent.  In July 2008, it announced a deal to purchase Getronics PinkRoccade Business Application Services BV, a division of Getronics PinkRoccade, for â'¬255 million.  The company is one of the top IT services providers in the Dutch public sector, offering solutions that address the entire applications life cycle, from applications management consulting to project development, integration and implementation.  Its clients include planning agencies, state administrations and social security bodies, plus insurance and banking corporations outside of the public sector.

Capgemini also makes asset purchases on a smaller scale, where appropriate.  In May 2008, it bought, as intellectual property, the software assets of Advantage Consulting Group, a provider of data conversion services to the insurance industry.  The software suite offers a toolset designed for consolidating and migrating insurance policy data, which Capgemini intends to use as a profitable niche service.



Capgemini (IT Consulting)


Place de l'Étoile
11 rue de Tilsitt
Paris 75017
Phone: (0)1 47 54 50 00
Fax: (0)1 47 54 50 25
www.capgemini.com

STATS


  • Employer Type: Public
  • Stock Symbol: CAP.PA
  • Stock Exchange: Euronext Paris
  • CEO: Paul Hermelin
  • 2011 Employees: 112,000

Major Office Locations

  • Paris, France

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