CGI will complete the integration of Logica UK next month as it completes the migration of its acquisition’s HR...
to the CGI global system.
The Logica brand name will disappear next week.
Canadian IT and business process outsourcing company CGI acquired Anglo-Dutch Logica for £1.7bn last year.
Tim Gregory, president of CGI UK, said CGI has a global strategy and Europe is a key market. He said the Logica acquisition will enable it to expand on the continent.
“Europe is very large in IT spending terms,” he said.
Gregory, who was Lloyd's of London CIO in the 1990s, joined CGI 10 years ago. He said CGI and Logica are a good match because 90% of CGI’s business is in North America and 10% in Europe, while 90% of Logica’s business is in the UK and 10% in Europe.
“It has given us a global presence,” he said.
After acquiring Logica – which had 40,000 staff to its 35,000 – CGI now has 400 offices in 40 countries and the combined turnover exceeds £6bn. Following job cuts after the acquisition, CGI has about 71,000 staff worldwide.
The CGI and Logica services are complementary, said Gregory.
“Logica had a very strong technical background and had done a lot of pioneering of the design, build and run model,” he said. “We will continue to do that but we bring strong outsourcing capabilities, with IT and business process outsourcing making up 60% of the CGI business.”
He said CGI also has interest in sectors such as financial services, energy, healthcare, defence and government, which the Logica business will benefit from. For example, CGI’s North American business has over 200 local government customers using its Advantage ERP system. This is a purpose-built ERP system, highly tailored for the sector.
CGI has a decentralised approach to global spread where it gives a high level of autonomy to regional businesses but implements a management framework on its operations to ensure a standardised approach to staff, customers and shareholders.
Gregory said although the back-end integration and brand name changes are almost complete there is still work to be done, “to win hearts and minds”.
There are major challenges about integrating a company with an internal culture as strong as Logica’s. The problems experienced by HP integrating EDS and its internal culture are often cited as an example of contrasting cultures derailing acquisitions.
But Robert Morgan, director at sourcing consultancy Burnt Oak Partners, said that – in contrast to HP and EDS – the integration of CGI and Logica had appeared to go smoothly.
“I think this is a reflection of the Canadian culture and the fact that Logica has given CGI much more than it had. The integration is much easier because there is little overlap.”
Morgan believes that, as a result of the UK business being run by UK-based Gregory, the cultures will not clash. “He sees Logica as an extension,” said Morgan.
One way CGI endears itself to staff is its ownership model. The biggest group of shareholders are staff and Gregory said CGI is “the John Lewis of IT”.
“We take the view that people that own the business will take care of our business and customers,” he said.
The CGI staff share scheme will be introduced to Logica staff. The company also meets all staff personally to get their satisfaction feedback.