However, the times are changing. For example,HMRC’s flagship Aspire contract, which ran for more than ten years and saw HMRC outsource much of its capability to the likes of Capgemini and Fujitsu, cost more than £11 billion over its lifetime. It was broadly criticised, particularly by the Government Digital Service, for being inflexible and for not allowing any innovation to be introduced with the advance of internet-based technologies.
Recently, HMRC declared that “Aspire is dead”, as it bought much of the capability in-house and sought to make use of smaller, more agile contracts.
However, this shift is pushing Capgemini to look elsewhere for new deals and is also requiring it to grow its internal capabilities. For example, Earlier this month services giant Capgemini announced the acquisitions of LiquidHub, a “digital customer engagement firm”. The purchase brings 2,800 digital professionals under the Capgemini wing, ranging from designers and digital architects to platforms and analytics specialists.
It’s seen by the French firm as a way of accelerating its digital offerings in the US market, with LiquidHub boasting some impressive customer logos across the healthcare, life sciences and financial services sectors. Turning around Capgemini’s fortunes in North America has been an ongoing issue, but a 12% bump in US revenues in the firm’s most recent quarter suggests that things are progressing well.
But most of all, it’s about injecting ever more digital services and capabilties into the Capgemini corporate bloodstream, something that’s crucial as big ticket outsourcing deals morph or go away.
The future is digital, says CEO Paul Hermelin:
Digital is the obsession in the boardroom and the C-Suite. Some segments, like digital marketing, are more advanced than others and are already core to entire industries, while other are still in adoption more but growing fast, like digital manufacturing, where I think we are ahead of the world, the curve working with our clients.
Across 2017, customer bookings related to digital and cloud enjoyed a 20% year-on-year growth rate. The customer wins are growing, including the Norwegian pharmacy association, DIFA, which represents all 900 pharmacies in Norway and for which Capgemini is building a cloud-based solution for digital prescription service connecting pharmacies and patients in a different way. Other examples include the Peugeot-Citroën Group, where Capgemini is implementing a digital platform for latest cars and one of the top three US banks, where Capgemini is helping the bank in its robotic process automation efforts.
Digital and cloud
Hermelin argues that digital and cloud capabilities go hand-in-hand:
Development of digital has direct consequences on the fast adoption of cloud. As more replication is being developed and maintained directly in the cloud, we see greater demand for hybrid private/public cloud and cloud native skills where we excel, thanks to the breadth of our skill base. In parallel to this fast adoption, we continue to see good track traction for our cyber-security offerings. Our global team provides advanced on-premises/off-premises services to secure our clients infrastructure and systems. We’re growing at full speed only limited by the number of people we can onboard.
And of course there’s the now-inevitable AI pitch to be made:
Artificial Intelligence is a front of mind strategies opportunity for all clients and for us. We help our clients capture the benefit of these new trend in their business. We are expanding considerably our AI footprint, developing and deploying AI base and machine learning solution with our client.
These deployments include working with top tiered investment banks, consumer product and automotive companies in field like such as cementing content analyses for finance, intelligent image recognition or cognitive fraud detection. We also invest to develop our own AI-based platform and tool to ensure we stay ahead of the curve with solid communities of 10,000 experts in AI and automation.
For the coming year, Hemelin has a clear to-do list:
First, stay close and closer to our clients in even more strategic dialogs across the C-Suite. This relationship with C-Suite is at the core of our growth we deliver for our key client by being able to manage large and complex transformation projects in a competitive market. To sustain these discussion, our portfolio is evolving in close collaboration with our key partner to stay on top of market evolution. We will accelerate our efforts in AI and automation, and we will continue our policy to acquire digital and cloud specialist to expand our offerings and reinforce our leader status in a fast-growing market as we did in 2017.
There’s also a commitment to digital upskilling, not only within Capgemini, but in the wider world:
We continue to invest in our people, retain and train the best people in the industry and to offer leadership opportunities to our strong and diverse base of talents. In 2017, we launched an unprecedented investment to train our talents. We increased our training effort by around 40% this year with an addition of 2.5 million of training hours and we will continue in 2018.
In addition to promoting diversity and environmental sustainability, we have made strong commitments on what we called Digital Inclusion. As a responsible company, aware of the digital divide, we have decided to focus more and more on this topic. These are not just words – we are quantifying our efforts and our management, and I will be incentivized on Corporate Social Responsibility.
The Aspire transition period is going to continue to be a drag on Capgemini in the UK for most of 2018, but the firm is making some sensible investments in digital upskilling that bode well for the future.
I’m intrigued, given Capgemini’s European origins, by the lack of any referencing to Brexit and its likely impact. Given how many IT systems will need to be rebuilt, the more cynical among us predict it’s only a matter of time before a panic decision is made to offload the problem back to the big SIs. Perhaps Hemelin’s silence on the topic is savvy – let’s not rock the boat just yet.