Tuesday, October 20, 2015

Unexpectedly low price for Volvo IT – New Technology

       

– It was cheaper than I thought. I had expected almost double that, says Johan Hallberg, analyst at IDC.

2 600 people at Volvo of which 800 are consultants involved and will be offered to change employers.

Speculation that Volvo should sell Volvo IT has been going on for many years, but has intensified during the past year in connection with the large savings program of SEK 10 billion Volvo has gone out with.

The press has also been great from the owner to sell the IT business.

– I do not believe that Volvo is the most efficient provider of IT services. There are examples of activities that complicate focusing on core business, said the major shareholder Cevian Capital’s manager Christer Gardell Dagens Industri in January last year.

After a thorough investigation has also Volvo has concluded that the operations belonging to the brand Volvo IT is not part of the Group’s core.

– Now we can work more cost-effectively and concentrate on our own processes. The IT activities related to the core business, we maintain, says Karin Wik, communications manager at the Volvo Group.

Only last week wrote Computer Sweden that IBM and HCL would make up for the final battle.

– We have never commented on what we have negotiated with, says Karin Wik who neither want to confirm or deny that IBM has been involved in the bidding war.

HCL is today a relatively small company in Sweden , however, large international with a turnover of 6.1 billion dollars. Johan Hallberg, IDC has previously been in talks with Digital Technology speculated that an Indian candidate would be likely. He mainly talked about Tech Mahindra and TCS (Tata).

Tech Mahindra has in the past year also hired several hundred people in Gothenburg in his office in Volvo’s industrial Torslanda. The company has a global agreement with Volvo Cars of IT infrastructure and services.

– Volvo Cars is one of Volvo IT’s largest customers. Both Tata and Tech Mahindra has more activity around cars, so they should have been in the final stages, says Johan Hallberg.

– I is still far from surprised that it was precisely HCL who took the deal. They have long been on the market and worked with large industrial customers in the Nordic region. I am thinking particularly of business in Norway and Husqvarna.

Of the Indian consultants are Tata / TCS more known in Sweden. They peaked as late as last spring, the annual major customer satisfaction survey among outsourcing clients from White Lane and PA Consulting Group. A leading IT consulting company in Sweden, according to IDC’s compilation of last year Canadian CGI (the Swedish base in the old WM-data) with 10.5 percent of the market. IBM has second place at 7.7%. HCL is not even in the top 20, however, Volvo IT in place 11th

– Now I would think that HCL will to get in somewhere between position seven and nine, says Johan Hallberg.

The picture is that HCL is now attacking the Swedish market aggressively with risk taking. Several of the other companies seen as more cautious and several have also had problems with the high turnover of chief page.

Volvo IT has a number major customers, including the City of Stockholm, Volvo Cars, SCA, Assa Abloy, Ica and SJ. The unit, which until 2012 was managed as a separate company, employs around 8000 people including consultants and has a turnover of many billions. Approximately one-third leave, Volvo in connection with the deal.

The real jewel in this context is considered to be the infrastructure part of Volvo AB, HCL will now commissioned to run it for Volvo.

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