Misys’ Loss is CSC’s Gain? Mike Lawrie sings Outsourcing’s “Times are a-Changing”

Misys’ Loss is CSC’s Gain? Mike Lawrie sings Outsourcing’s “Times are a-Changing”

2012 sees the premier league of leadership in USA, Russia and China under varying forms of re-election. Even tier two player Sarkozy may fall. In the parallel dimension of “Outsourcing world” there are new CEO’s for ALL tier one players – IBM, CSC (Mike Lawrie elected this very morning) and HP. And tier two players are lining up to change the top people too.

But let’s talk about the appointment today of Mike Lawrie to head “the fifth Beatle” company of CSC – that huge global IT and outsourcing company that most people have never heard of, unless of course you take an active interest in the machinations of UK plc’s failed NHS contract.

CSC like all its competitors, lacks a steady supply of new large-scale deals; managed service contracts have gotten way shorter; differentiation of services and approaches have become almost impossible; fierce competition erodes the margins, cloud propositions cannibalise the existing revenues and service delivery fails to keep up with or implement the latest approaches – automation, software, and work practices that would drop straight to the bottom line.

So what does Mike Lawrie bring to CSC? Lawrie hasn’t got any experience in the sheer scale or complexity of a company CSC’s size.

  • CSC tackles most industries and has a multitude of IT and Business process service offerings – Misys is a single focus Financial Systems, software and service
  • CSC has a turnover of $16Bn pa and Misys $1.7Bn … does not compute
  • CSC Staff number 95,000 whilst Misys is a mere 6,000 … warning mis-match!
  • True Lawrie is an ex-shareholder activist specializing in turning around companies, but this is for $1Bn -$2Bn companies

The more searching question for Mr Lawrie is, “having almost, but not quite, secured the acquisition of Temenos, to create a Misys super global banking software leader, how could you choose to leave without actually concluding and consummating the deal? Is the timing crisis at CSC or Misys? Is there something we do not know?”

One highly respected industry watcher suggested to me that smashing CSC, Misys and Tremenos together and selling off of CSC’s outsourcing services arm would make CSC one of the most powerful Financial Services solution houses in the world. The margins enjoyed by Financial Services would be much better than those of the outsourcing arm, but who would take with it the potential damages of losing various pending class actions. Is Mr Lawrie that canny and that ambitious? Does he have a plan?

Michael Laphen, the outgoing CEO at CSC, announced his retirement in October 2011 and the markets have been praying for his replacement to be announced ever since. Yesterday CSC shares soared 18.5% on the basis that something had finally happened at CSC. Today those calls are muted, people are assessing Mr Lawrie and at least a few people are reciting that old adage “be careful what you wish for!”

Posted in Suppliers Comments: 3 comments


3 Responses to Misys’ Loss is CSC’s Gain? Mike Lawrie sings Outsourcing’s “Times are a-Changing”

  1. Sir Roger of Aldershot says:

    As with most very large and complex organisations, CSC is not exactly “fleet of foot”.

    For (too) many years the CSC focus has been on contracts where the deliverable has been, within limits, fairly constant over the term.

    For sure the notorious “change control procedures” have enabled either supplier or customer propose and implement change but often at a disproportionate cost to one or other – or in many cases, to both parties.

    There have been many significant disputes arising form the misunderstanding (let us be polite) of what was asked for and what was actually delivered.

    Indeed at the core of the problems with the NHS contract (and many other large deals in the public and private sectors) has been how to manage change effectively and efficiently.

    In today’s financial and commercial climate, long term planning is honoured more in the breach than the observance and genuine strategic thinking rather mythical.

    Thus the customer demand from its board is to be “fleet of foot”, reactive to change in their markets as well as implementing change quickly to enter a new market.

    This may be an area where the new CEO of CSC can help his company focus to the benefit of shareholders, customers and employees – the latter would prefer to focus on service delivery rather than dispute resolution.

    Let us hope that Mike is able to breather fresh life and energy into a slumbering giant that has promised so much over the decades but seems to have fallen short on delivering against those expectations.

    PS Mike: Though I live in Aldershot and can see the Royal Pavilion, I am not an employee of CSC.

  2. RamTheSkiver says:

    I worked with Mike Lawrie at Misys.

    Mike says one thing but does another.

    Mike Lawrie is like a parasite that goes into a company and strangles the life out it then runs out with this million dollar bonuses and exit fees.

    Look at what Mike Lawrie did to Siebel, Misys and, now, CSC.

    See for the parody.

  3. I appreciate you taking the time to talk about them with people.

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