Capgemini launches invasion on public sector

New Canberra office will demonstrate off-shoring benefits to government departments

Capgemini Australia is preparing an assault on the Canberra and the public sector, according to chief executive officer Paul Thorley.

The consulting, technology and outsourcing services group has recently accelerated the rate of local hires as it looks to double its Australian staff over two years. Thorley is constantly on the look out for potential acquisitions too, all in an attempt to raise Capgemini's profile locally and make it a Top 3 player in the software testing, business intelligence and lifecycle services markets.

Though Thorley is confident the company is on its way to reaching that goal, he told Computerworld Australia that state and federal governments were his next big target.

"There are a lot of long term arrangements that can be made in the public sector and frameworks," he said. "Certainly that's one of the key criteria, looking to reinforce our position both in Federal and State [government]. We still see the likelihood for a lot of transformational technologies in government."

Capgemini Australia already counts the NSW government-owned Roads and Traffic Authority (RTA) and Sydney Water Corporation among its clients in this arena, both of which it gained when it acquired software testing company Nu Solutions last year.

The next step, according to Thorley, is Canberra, where he plans to launch one of his expert teams - or "centres of excellence" - in coming weeks. Thorley said he hopes to demonstrate the benefits of the company's software testing and business intelligence solutions to traditionally reluctant government departments.

"It takes quite a lot of effort from the service provider and [government] agencies to collaborate, but we believe testing is one area that they could get quite a lot of [savings]," he said.

Business intelligence is another area, with Thorley pointing to the depth and amount of data that various agencies have to deal with.

"You only need to look at Customs and Borders, the amount of data they're trying to handle so that they can use it in terms of anti-terrorist approaches and borderland security," he said. "The conversations I'm having is that they really do need serious business intelligence skills sets within a number of those agencies."

Though the Nu Solutions acquisition didn't provide many public sector clients, Thorley said the intellectual property and software testing methodology gained from the smaller company would prove vital to Capgemini Australia's move into Canberra.

The new centre of excellence will utilise new local hires as well as existing staff from Sydney and Melbourne offices. Though Thorley wouldn't say how big the Canberra office would be, he said the company would start with a "handful of people who will then grow and develop."

One point of contention regarding the public sector move has been Capgemini's mixed use of on-shore and off-shore talent for its services. Dubbed "Rightshore," the delivery platform leverages the company's global expertise in provide consulting, software testing, business intelligence and, increasingly, cloud-based services. Both Thorley and global sales chief Olivier Picard defended the delivery platform as something that provided greater value than competition.

"We will never off-shore 100 per cent of activities in India," Picard said. "This is not the objective. What we try to do is really to offer the best solution."

While Capgemini do provide a different mix of talent for public sector than financial institutions, Picard conceded that the public sector "is the most reluctant about off-shoring for political reasons, but also for security reasons. It's quite impossible in the Ministry of Defence, for example, to off-shore part of the sensitive data."

One of Capgemini's competitors, K.J. and Ross, attracts half of its income from government departments. While it has offered and off-shoring model for its financial clients like ANZ, chief executive officer Kelvin Ross said he thought Australian government agencies would remain reluctant about off-shore testing for some time.

"We've surveyed that in our industry, and the feedback we've got from the government is they're not off-shoring at all," he said. "It's just not seen as politically the right thing to do for a government department."

"They don't want to have bad news stories in the press."

Nevertheless, with public sector clients making up 29 per cent of Capgemini global profits, the company has had some success overseas. According to Picard, the Rightshore platform is an inevitable choice even for government departments.

"In some countries, they are now more and more tempted to [use these services]... because of the financial crisis," he said. "I wouldn't be surprised if, after the elections in some European countries, that there will be a massive move to off-shoring."

"Emotion gets mixed up with real risk analysis," Thorley said. A fact-based risk assessment of the service would, according to Thorley, likely persuade government departments. However, the viability of off-shoring certain services would ultimately come down to a negotiation between Capgemini and the agencies.

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