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The acquisition of Logica by the Canadian company CGI in August 2012 is expected to have some of its most significant benefits within the Finance sector. The erstwhile Logica had built a strong position in many UK FS companies (although it could be said that it had lost its way a little in its final years). Now CGI brings a much wider portfolio, a global delivery model with an emphasis on client proximity and a strong balance sheet, alongside specific IP and a more rigorous and disciplined approach to project management and customer experience. CGI also sells to 23 of the top 25 banks in the Americas and 21 of the top 25 in Europe
Yesterday TMV met the head of UK Financial Services for CGI, Matthew Grisoni. Having earlier worked for both Logica and CGI (his company having been acquired by CGI) he is well placed to build the foundations for extracting potential synergies and providing UK-based customers with access to the wider capability set of the enlarged company. See here for more comment on the merger.
The timing of the deal is auspicious, particularly now that the initial transition phase is completed and the companies are largely aligned within the Group structure. Sector customers are facing significant changes and challenges in the areas where the enlarged Group can offer services, for example in payments as multiple channels and challenges are opened up and as the implications of the Retail Distribution Review ripple through the banking sector.
Major companies increasingly have to address the key issue of legacy renewal to adapt to change, remain competitive and to lower the cost base. Without the backing of CGI, the earlier Logica would probably not have had the wherewithal and financial strength to provide the larger customers with scale-advantaged and effective solutions. The additional intellectual and financial horsepower provided by CGI coupled with the established customer relationships in the UK could place the enlarged Group in a much stronger position as the sector evolves.
At TMV we will watch this progress with particular interest.
