Customers calm on CGEY management buyout

Customers don't expect sudden change following a management buyout of the New Zealand operation of Cap Gemini Ernst & Young.

Customers don’t expect sudden change following a management buyout of the New Zealand operation of Cap Gemini Ernst & Young.

The new owners of the company are former vice-presidents Paul Cook, Alan Sinclair and David Stewart, holding a third of the stock apiece. CGEY says the move was driven by directions from head office and the perceived benefits of local control.

Cook sees no change in lines of business, mode of operation or geographical dis-tribution for the new company.

“It will be very much business as usual. We do believe the company is in a sound and healthy state, and we have had a positive reaction from our clients.”

The company’s activities include “everything from strategy consulting to outsourced applications management”, Cook says. The company has 140 staff. Earlier in the year Alan Sinclair told Computerworld the company had 160 employees.

CGEY is handling the high-profile govern-ment e-procurement project GoProcure, in collaboration with Oracle. E-government unit boss Brendan Boyle sees no adverse impact from the change in structure.

“We’ve been kept informed throughout the process. David Stewart has been in charge of the project from their side and now he’s one of the owners of the company. And they may well be focusing more on the New Zealand market now, which I see as a positive move. It’s business as usual as far as we’re concerned.”

Kieran Devine, service delivery manager of Transpower, for which CGEY has been working with SolNet on security of the electricity distribution network, says the current phase two of that project is “a fairly clean package”, due to be finished soon, and Transpower will then let a tender for phase three.

Transpower has been satisfied with the company’s work on the first two phases, which have scoped the problem and identified “some of the building blocks that we need to add to our systems”.

It is certainly open to CGEY to bid for future phases, but in the event of any adverse effect on the consultancy’s operations “their continued involvement is not critical”.

One of the benefits the consultancy brought was its network of international contacts, and Transpower expects and hopes those links will continue in place, which will strengthen its hand in bidding for future phases, Devine says.

Cook confirms the organisation will have continued access to the knowledge and other resources of the international Cap Gemini organisation. Cap Gemini operations in several countries, including South Africa and Japan, are locally owned, he says.

The move was initiated by the international operation, which “believes this is a more appropriate way for the New Zealand company to operate”, he says.

CGEY internationally has been shedding thousands of staff, with more layoffs to come, but there have only been “a handful” of redundancies from the New Zealand operation as a result of the change, both from the Auckland and Wellington offices, Cook says. He declines to quantify “a handful” any more precisely.

He will not say how much was paid in the takeover.

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