Third quarter results from both EVRY and Tieto both point to the growing importance of consulting and systems integration (C&SI) to the Nordic region’s domestic IT services providers.
The large infrastructure management deals won by the likes of HCL (e.g. with Statoil), IBM (Sandvik) and TCS (TDC) may have grabbed the headlines, they are also indicative of the growing commoditisation of this market segment. Instead, it is smaller, more focused C&SI engagements that offer the greatest return for the local players.
The two Nordic flag bearers EVRY and Tieto are side-stepping the bun-fight in the outsourcing space by maximising their vertical-specific expertise delivered through a strong local interface to provide more transformative support for the region’s businesses. This has seen the two providers perform well in C&SI in 2012.
Tieto placed expansion of its C&SI capabilities and revenue field front-and-centre of its new business strategy, announced back in March 2012. The aim is to extend its offering to provide ‘end-to-end, full life-cycle’ support for its existing clients by bridging the gap between its strengths in niche software IP and outsourcing. Tieto’s strategy contributed to 2% corporate revenue growth for Q3 2012 on a ‘year-on-year’ (YOY) basis, and an 8% increase in EBIT.
Although EVRY’s total sales slightly in Q3, and EBITA was down 8%, it can point to a strong performance from its consulting business. Here, revenue grew by 4%, while EBITA increased by 7%.
EVRY has also announced that it is re-organising its three divisions to reduce complexity by adopting a go-to-market approach that is more tightly focused on verticals, industry-specific solutions and local presence. Again, this demonstrates the importance for local providers of making the most of their differentiators against the global giants.
For further insight into the latest trends among the IT services industries in Denmark, Finland, Norway and Sweden, please contact PAC to find out more about the local Nordic IT Services reports that will be published during the next month.
Post by Dominic Trott