Still life with candle - Volodia Popov

Group presentation

Capgemini's disciplines

Consulting Services (CS)

In the stabilized market of 2004, clients continued to expect a high level of content and specialization, delivering tangible benefits. While growth only came back in the fourth quarter, the year saw good progress in operational profitability.

The Consulting Services discipline has benefited from earlier investments in capabilities, notably through specialized training, and in offerings. The different domains within the discipline (transformation consulting, customer relationship management, supply chain, finance and employee transformation) have pushed this specialization further. Supply chain, for example, maintains an end-to-end view, but specializes in procurement, transportation management and demand planning.

While business management consulting remains the mainstay of the discipline, technology management consulting is growing in importance. Clients making large investments in information management want to be sure that their IT strategies are well in tune with their business goals. By placing high level technologists in its consulting operations, Capgemini ensures that its immense practical experience in all forms of information technology is intimately connected to business issues.

In the coming year, many clients will once again focus on revenue growth, while still insisting on clear bottom line improvement. Consulting Services will launch new offerings for top line growth and for improved product lifecycle management. New types of shared services, developed in close cooperation with sister disciplines, will help improve client productivity and pave the way for business process outsourcing.

Technology Services (TS)

Following several extraordinarily difficult years of weak markets and price pressures, the first half of 2004 brought more of the same. In the second half, however, Technology Services succeeded in stabilizing revenue, returning to operational profit and building morale.

Stabilized prices, a higher utilization rate and lower costs did not happen by accident. Besides many operational improvements, TS concentrated on a few essential fields such as enterprise-wide platforms, notably SAP, and business intelligence applications. It provided industry-specific offerings in four selected industries - a sure way to differentiate and provide more value, which then translates into better prices. To give one example: Extended Retail Services based on radio-frequency identification (RFID) technologies have already been selected by some twenty clients, while a more systematic use of “Rightshore”™ delivery helped reduce delivery costs.

In 2005, with markets improving in most countries, Capgemini expects the lower costs of technology development and an increase in growth-related investment to generate higher demand for technology projects. Technology Services (systems integration, IT applications) will also benefit from ties to other disciplines as, for example, business transformation programs call for an IT systems overhaul; technical transformation is the way to draw maximum advantage from outsourcing. The trends observed during the second half of 2004 bode well for a continuing turnaround.

Outsourcing Services (OS)

In 2004, Capgemini grouped most European outsourcing activities into a single international organization with full profit and loss responsibility - and the benefits of this change are already obvious as the Group has become one of the world leaders in this field.

During the year, the unit known as Outsourcing Europe managed large deals more effectively, with a stronger focus on early deal profitability. Capabilities were optimized across borders and computing centers now employ common practices, an approach that has reduced the number of software tools in use by 75 percent in one year.

Even more importantly, the single organization brought a sharper focus to the Group’s outsourcing strategy. Higher margin services, like Applications Management and Business Process Outsourcing, now make up three quarters of the sales funnel. The various services are grouped in offerings driving innovation and client value, such as mobility or security. Major outsourcing contracts can be the basis for building platforms with deep competencies in specific market segments.

Entering 2005, this outsourcing organization is becoming truly global through the integration of the North American operations. One set of methods and standards will now drive Capgemini’s outsourcing centers and service offers worldwide. Large opportunities can be selected based on the Group’s - rather than an individual country’s - priorities and strengths. The emphasis will be on transformational outsourcing which unites the sector and transformational expertise of Consulting Services and the advanced competencies of Technology Services within the framework of an efficient global outsourcing capability - a real Capgemini trump card.

Local Professional Services (LPS)

From January 2002, Local Professional Services have been provided by one global entity, Sogeti, operating through national subsidiaries. After the acquisition of Transiciel by Capgemini at the end of 2003, the operational merger leading to the creation of Sogeti-Transiciel was completed during the first half of 2004 - creating a 15,000-person powerhouse in nine countries (Belgium, France, Germany, Luxembourg, the Netherlands, Spain, Sweden, Switzerland and the United States).

In the second half of 2004, Sogeti-Transiciel grew at twice the speed of a recovering market in some countries. This momentum is fueling the 2005 ambition to achieve double digit growth, coupled with an increase in operational profitability.

The business is focused on three areas: infrastructure services (management of client infrastructures at the client’s location), application services, and engineering services (high technology consulting). These services cover small- and mid-sized projects, provision of expertise and specific forms of outsourcing. Clients are offered strong individual know-how, with specific areas of collective expertise such as testing, security and systems management.

The organization is simple, clear and stable - branches are operated on an entrepreneurial basis, defining their own formula for business success, while line management ensures proper transfer of know-how and a solid sense of belonging. The whole approach builds on a strong emphasis on client satisfaction, enabling Sogeti-Transiciel to beat its competitors in many published industry rankings.

In 2005, while pursuing its general development in quality proximity services, Sogeti-Transiciel will take such major steps as the international development of its high technology services - providing not only engineering manpower and know-how for the industry, but also the outsourcing of specialized research and development functions.

Key Alliance Partnerships

To provide its clients with the best available services, Capgemini has developed technical and commercial alliances with several software companies: technical, to ensure maximum access to the laboratories operated by these software vendors; commercial, when it comes to building a common or joint offering.

Partnerships with specialized companies are targeted at precise client requirements; others have more general aims. In terms of revenue, the Group’s most important alliances, in alphabetical order, are: Cisco Systems, Hewlett-Packard, IBM, Intel, Microsoft, Oracle/ Peoplesoft, SAP, Siebel Systems, Sun Microsystems.