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Hot on the heels of last week’s announcement that Geoff Unwin is to become Xchanging’s new chairman (see here), it has now got its hands on another IT industry ‘heavyweight’ in Bill Thomas, the former SVP EMEA at EDS (now HP). Thomas will become a non-exec director in Xchanging from 1st December, following the departure of Stephen Brenninkmeijer and Johannes Maret, who retired as non-execs in August. Thomas is also expected to join one or more of Xchanging’s board committees – so potentially a more hands on role.
Thomas is a very well respected IT services exec. My colleagues and I will have met him on numerous occasions during his time at EDS. Richard Holway meanwhile, who has known Thomas for many years, has nothing but good things to say about him (see his comment here following his announced departure from EDS in 2009). This is the first ‘sighting’ of Thomas that we’re aware of since he left EDS, so it seems he has spent the last couple of years considering his next move. Investors were certainly pleased to see him, helping send Xchanging’s shares up 8%.
Along with Thomas' appointment, Xchanging updated the market on current performance and its ‘Four Part Action Plan’, which CE Ken Lever instigated in March. The restructuring seems to be moving things in the right direction - cash flow is now ahead of expectations and should leave Xchanging in a net cash position at the year end. Most divisions (insurance, financial services, procurement and other BPO) are tracking along management’s expectations, except for technology services, which has been ‘disappointing’ all year. This is where Xchanging is now focusing its attention on restructuring, but it said it is ‘increasingly confident’ that the division will show improvements in 2012. We suspect Thomas' experience in charge of a $10bn IT services business may just come in handy when he joins next month.
Having attended their analyst and advisor day last week, it is clear that Xchanging still has much work to do. For instance there are some notable gaps in the strategy, not least in how the various horizontal and vertical offerings fit together, how Xchanging plans to turn around underperforming enterprise partnerships such as Kedrios in Italy, and most important of all, what clients are telling Xchanging. The new top team will need to give these issues more consideration over the coming months.
