Services giant Logica baffled the outsourcing market by making twin announcements on 28th January. The strategic news is that it is creating a new outsourcing services division to handle applications management, infrastructure management, outsourcing of ERP implementation and testing across Europe. However, the second announcement is that the head of the new division, Logica chief operating officer Jim McKenna, plans to quit the company later this year to "pursue a portfolio of interests".
If nothing else, the timing of the two announcements has been badly handled, and undermines both the purpose and impact of the strategic move to the wider market.
Under McKenna's leadership, the company says that the new division will take end-to-end responsibility for outsourcing services, providing outsourcing sales and design specialists to all Logica’s customers via local organisations, incorporating the 9,000 or so Logica employees currently working in the company's onshore centres, nearshore locations such as the Czech Republic, and offshore centres such as India, Morocco and the Philippines.
CEO Andy Green said: “Our customers are clear. They want Logica to relate to them locally, while also delivering the best competencies from around the world in the most cost effective and efficient way. Our new Outsourcing Services division will have the scale, tools and methods to offer sales and delivery support to our local organisations so that they can help our customers to succeed.”
But what of the departing McKenna, who is managing the new entity for barely a few months? A Logica stalwart and COO since 2005 – in most companies a role synonymous with the efficiency of a company's day-to-day business, and often its rationalisation – he was also interim CEO before Andy Green clinched the role on January 1st this year.
David Tyler, Chairman, said: “Jim has been at the heart of building Logica over the last 14 years and has had an excellent track record at the company. On behalf of the Board, I would like to thank him for his outstanding contribution, particularly in the last few months as interim CEO when he showed great commitment and leadership. Jim will leave with our very best wishes for his future.”
New CEO Andy Green seemed rather more single-minded: “I am delighted that Jim has agreed to stay on for an interim period to help me lay the foundations for the next stage of the group’s development. Jim has been instrumental in building the global delivery capability and his experience will be invaluable to me and the rest of the team as we establish the new Outsourcing Services division, which will focus on meeting the growing demand from our customers for globally competitive outsourcing services.”
One lesson for the outsourcing industry as a whole, particularly in uncertain economic times, is that the PR implications of allowing forward-looking strategic announcements to become mixed up with boardroom news is that both need careful handling, and ideally, separation in the public mind.