A marvellously pragmatic observation from Stepan Breedveld, new CEO (see here) of troubled Netherlands IT services player, Ordina, on the outlook for 2012. “On the one hand, ICT is the engine which enables companies to reduce costs, improve customer interaction and innovation. Yet on the other hand, we are faced with (short-term) cost reduction programmes which also affect our clients’ ICT spending. As a result, development of revenue and financial results is difficult to predict.”
Well, there we have it! Another player with little clue as to what’s going on inside the business. Yes, Netherlands is a very difficult market – witness Ordina’s €16m net loss on €426m revenues in 2011. Indeed losses have more than doubled over 2010.
But most of Ordina’s problems stemmed from prior management sticking its head in the sand over all sorts of things, not the least of which was the impact that offshore delivery was going to have on the Benelux market. By missing the trend, Ordina has had to rely on partnerships with offshore and nearshore players to try to bridge the price gap – but that’s not much help when these self-same partners are playing in Ordina’s own market in their own right.
So what’s the future for Ordina? Well, on the one hand …