Capgemini Agrees New Government Cost-Cutting Deal

Capgemini UK Plc has become the second service provider in as many days to sign a new agreement with the government, dubbed a ‘memorandum of understanding’, as part of the fiscal belt-tightening by the coalition government.

On Monday it was revealed that Atos Origin signed a new deal with the government that entailed a ’single-client approach’ to engagement with central government. Essentially what this means is that the government will in future procure IT projects as a single customer, rather than as separate departments, which is the current practice.

The memorandum of understanding follows negotiations that were launched by the Minister for the Cabinet Office, Francis Maude, in July. These discussions saw Maude meeting with 19 of the biggest government IT suppliers and consulting firms, in an effort to discuss how they can cut the cost of the services they provide.

Capgemini Signs Up

And now Capgemini has also signed a new deal with the Cabinet Office “which builds on its outstanding track record of engagement and delivery to HMG.”

Capgemini said that all existing contracts remain and continue to be delivered as planned. It also said that it had presented a range of new business opportunities to enable the commitment of savings to HMG. In addition, it put together an “extensive menu of new innovative proposals, which would further improve the efficiency of HMG.”

“I am pleased to have agreed this MOU with Francis Maude, Minister for the Cabinet Office,” said Paul Hermelin, Capgemini CEO. “This signing continues our transformational journey with HM Government and enables us to bring the full capability of the Capgemini Group for the benefit of the UK Public Sector. I look forward to working together over the coming months and years to help the UK government achieve their wider reforms.”

“Capgemini has responded to the request to help government meet their short term challenge and we have also put forward cross-government solutions, which will help achieve an efficient joined-up government in future,” added Pierre-Yves Cros, Capgemini’s UK Country Board Chairman.

Supplier Guarantee

“From a supplier point of view, it is a move that they have to make,” said Nick Mayes, senior analyst at Pierre Audoin Consultants, speaking to eWEEK Europe UK. “What the government gets is an extension of existing relationships at a more competitive rate.”

“Suppliers get a guarantee that they won’t be kicked out of an account because of budget cuts, and the government gets a better price for some services and makes inroads to the cost cutting they have to do,” added Mayes. “However some suppliers may be disappointed that the government didn’t do something more radical such as looking at open standards. Look at what the Dutch government is doing regarding open source, and you will see that the UK government is nowhere near as mature in this regard as the Dutch.”

And Mayes feels that other suppliers will follow suit and sign similar deals.

“This is not going to to be the last deal, and all big IT suppliers to the government will be asked to cut a similar deal, which most will take to ensure future business,” said Mayes.