Revenue drops at IT giant CSC... 'Good progress' says chief Revenue at CSC fell by 3.4 per cent to $3.08bn for the firm's second quarter as "transformation efforts" took hold at the IT giant. Meanwhile, operating income fell 3.3 per cent compared to the same period last year – to $340m. Half-year net income fell by $112m to $307m, compared with the first six months of 2013. Sales were …
How do they get repeat business you ask? The cynic in me says it must involve a large number of trips to golf courses, strip clubs, fancy restaurants and resort properties for the decision makers. Unfortunately I'm not high enough on the ladder to receive said kickbacks.
Actually, I've worked for outsourcers and outsourcees.The tricks of the trade appear to be:
- Be as cheap as possible on any rates you quote the customer, but leave the contract so open that anything can be classed as "time and materials". Any service that is not written directly into the contract will then be changed at much higher rates. Idiot MBAs only see the Excel sheet showing that Number X is less than Number Y, plus they figure they'll be gone with performance bonus in hand once the contractor stops performing.
- Promise that your company will make every possible IT problem disappear. This makes the CIO and above happy, since they feel they'll be off the hook for any IT worry once they hand the outsourcer their money.
- Promise the A Team, then swap in the D Team when the customer isn't looking. (I've been on the A Team, and also had to deal with the D Team when I've worked on the customer side. It's a mess.)
- Get Gartner to say you're in the Magic Quadrant of IT Service Providers. If Gartner says something, there is a 100% chance that any CIO will believe it.
- Become ISO9001/ITIL/whatever certified. This is a big deal for whatever reason.
You're right though - I don't know how anyone who's worked with any of the big outsourcers (HP, IBM, Accenture, CSC, Verizon, Infosys, Tata, etc.) could recommend them in another position unless they really had no clue how much damage some of these large contracts can do.
"Promise the A Team, then swap in the D Team"
This. CSC likes to think of itself as the FBI of computing consulting - the guys and girls with the sharp suits; the best training; know-how and equipment. But they are just increasingly a front for the absolute barrel-scrapings of offshoring.
By finding the cheapest labor possible, whether they're qualified or not.
Gross underbidding, followed by little gotcha's later.
CSC wouldn't be a bad company if they just got rid of at least 8 layers of management and payed people appropriately for their skills.
Also, and I think this one might not go over so well, but take the stock options, gifts, bonuses and ungodly allowances for the upper management. They'd probably be, dare I say, somewhere in the black, if they cut out some of the goodies they pay their executives.
I recall being told by one of the money girls there and she told me how they actually payed mortgages for certain level "vice presidents". Really? Yet they slash & burn the rank & file employee's benefits and a raise is somewhere in the range of 1% IF you're lucky. And for the life of me, how would you expect to be profitable if you sold of your network staff, corporate wide?
I have nothing but abject hatred for Mike Lawrie, and the rest of the clowns in the upper echelon.
"I recall being told by one of the money girls there and she told me how they actually payed mortgages for certain level "vice presidents". Really? "
Actually, it's pretty common for VPs and above of large companies to negotiate stuff like that into their employment contracts. This is where those occasional job postings for "driver," "ATP-rated pilot," and "personal security guard" come from. Both public and private sector organizations tend to pay for most personal expenses of at least the top level of executives.
I'd love to be in a position someday to say, "Gee, I'd love to work here, but you have to pay for my house and my kid's college tuition or the deal is off."
"How do they do it?" someone asks.
Here is an answer.
The Ins of new business purchases,, new deals and contracts, along with the Outs of selling businesses, and closing real estate along with lay offs , allows for lots of flexibility in how the financial are presented. All within the law I am sure but analysts need to dig and find out just how the reported numbers came to be. Sadly it seems to be that few analysts bother, probably because they have bigger fish to fry as what was once the CSC Global Whale gradually becomes a CSC US Only Minnow.
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