By Andy McCue, 8 April 2005 17:10
NEWS Accenture is set to lose $150m on the first year of its massive NHS IT contracts due to missed deployment deadlines.
The revelation was the one black mark in a record set of financial results that saw revenues rise 10 per cent to $3.8bn in the last year on the back of strong growth in its consulting business.
But Accenture took a hit on its margins due to delays on two of its £2bn NHS IT contracts, which led to payment being withheld in line with NHS IT chief Richard Granger's hardball policy for dealing with suppliers.
Full-year losses on the NHS contracts are expected to come in between $110m and $150m with Accenture saying they will remain loss-making until financial year 2007.
Robert Morgan, director of outsourcing advisors Morgan Chambers, warned that Accenture is not the only IT supplier struggling to make money on the NHS contracts.
"The rumours in the market are that two or three suppliers are suffering losses on this. Accenture is just the first one to break cover on this. It is an indictment of the way Granger's contracts have been put together, with the terms and conditions remaining a very tight secret," he said.
Comments
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1. Roger Huffadine
Well done Richard Granger.
At last the companies that put in low bids in an attempt to screw extra money out of customers are getting a taste of Project Management and Contract enforcement.
I hope we see more of this
2. Jamie Bishop
What can you expect when facilities management companies replaced quality qualified staff with unqualified non English speaking low paid workers from Asia?
The UK govt allowed FM companies to write work permits for themselves and at the same time lost thousands of high paying tax payers to countries in the EU that won't stand for such nonsense.
This situation was so predictable it's laughable and the FM companies will likely end up having the last laugh, especially Accenture (think about the pronunciation of their name and you might thing they were easy targets for an NHS stiffing).
3. Ben
I feel Accenture will get the maximum it can from the contract over its 10 year term, the contract value is over the billion mark and if you do not have the expertise it will take time for them to deliver the programme properly, they are lucky they are not getting fined like other parts of the contract