20/08/2008 - 22:00

Contract losses for Unisys

20/08/2008 - 22:00

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There has been a dramatic changing of the guard in Western Australia's IT consulting sector, with one-time industry heavyweight Unisys suffering a big loss of contracts and staff over the past year.

Contract losses for Unisys

There has been a dramatic changing of the guard in Western Australia's IT consulting sector, with one-time industry heavyweight Unisys suffering a big loss of contracts and staff over the past year.

The winners in the sector include the state's largest IT consulting firm CSC Australia as well as Kinetic IT, listed company ASG Group and Ajilon.

Smaller firms like Empired, L7 Solutions and TSA Corporation have also enjoyed solid growth over the past year, according to data compiled for WA Business News Book of Lists (see page 23).

The bad news for Unisys started last year when BankWest-parent HBOS Australia pulled out of a long-running joint venture.

This was a considerable blow for Unisys, as HBOS was the firm's single largest IT client.

WA Business News has learnt that Unisys has since lost a succession of major contracts with the Department of Education and Training, Landgate and the Department of the Attorney General.

At its peak in 2007, Unisys was the second largest IT consultancy in WA with 450 staff, according to the Book of Lists.

Sources in the IT industry have suggested the current number of staff has shrunk to approximately 50, but Unisys declined to comment on staff numbers.

Unisys acting chief executive Tony Henshaw issued a statement saying that: "Unisys still has a significant business in Western Australia where our customers include the Department of Child Protection, Department of Education and Training and the Australian Department of Defence".

But, DET chief information officer Bevan Doyle told WA Business News that the department has scaled down its links with Unisys.

"Unisys has only one arrangement left with the department following the loss of key staff and there was a novation of the application support contract to ASG," Mr Doyle said.

"Unisys lacked the capability and was unable to recruit or convince us they had the necessary skills...it's certainly been a downside for their operations in WA."

CSC Australia says it is the fastest growing IT services organisation in Australia and recorded $170 million in revenue in the year to June 2008.

CSC has been in WA since 1992 and has grown from 80 to approximately 900 staff, operating in both the public and private sectors.

CSC WA managing director Michael Horton said he had seen no negative effects from the ongoing global credit crisis.

"Government business remains strong and most of our private sector work is in the resources sector where there is definitely no slowdown," Mr Horton said.

He sees the two main challenges for the IT industry in WA as keeping staff when there is a downturn in the number of undergraduates at the universities, as well as finding office space.

Another IT consultancy performing well despite shaky economic conditions is ASG Group, which last week reported a full-year net profit of $9 million, an increase of 28 per cent on the previous year.

ASG chief executive officer Geoff Lewis attributed the result to securing a number of government and business contracts.

"With approximately 70 per cent of each year's revenue coming from rolling, multi-year contracts, we essentially have a large chunk of earnings 'locked in' year on year," Mr Lewis said.

He said the nature of the IT services industry means that despite the uncertain economic environment, growth was certain in the mid-term.

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