Capita restructure comes too late - analyst
Outsourcing giant overhauls management and company structure in bid for future growth, months after its first profit warning
Capita has "reshaped and simplified" its company and management structure as it looks to secure future growth, but one analyst claims that if the moves were made earlier, it could have avoided its "shock profit warning" last month.
In a London Stock Exchange announcement, Capita said the business will be divided into six new sections, and its management structure will be much simpler. Each unit will have one executive officer who reports direct to CEO Andy Parker, rather than going through an additional layer of COOs as they did in the past.
The six divisions in the new-look Capita are: Private Sector Partnerships; Public Service Partnerships; Professional Services; Asset Services; Digital and Software Services; and IT Services. The latter two divisions have "important internal roles", Capita said, "adding valuable capability that helps to fuel the growth of the rest of the group".
Capita snapped up Trustmarque in the summer. In the new structure, Trustmarque sits in the new IT Services division, alongside other businesses the firm has grabbed: Capita Managed IT Solutions; Updata Infrastructure; Pervasive; Electranet and NTS.
Craig Rodgerson will be the IT Services division's executive officer, Capita confirmed to CRN.
Capita claims the new management structure will provide "greater management strength", and will enhance its focus on emerging technologies such as artificial intelligence, robotics and the Internet of Things.
As part of the overhaul, Capita has also made a number of changes to its board: Vic Gysin will become group operations and performance director - a newly created role with responsibility for the divisional executive officers. Dawn Marriot-Sims is stepping down from the board and leaving with immediate effect, while group business development director Maggi Bell will leave the board in January ahead of her planned retirement in the summer.
In September, Capita issued its first-ever profit warning, owing in part to its technology reseller business and its Workplace Services division.
TechMarketView analyst John O'Brien said that had the restructure occurred earlier on, such issues could have been avoided.
"A simplified structure is something that subscribers to our research services will know we have been advocating for some time. Unfortunately, the action here comes after the event. If management had taken steps ahead of time, perhaps Capita might have avoided the problems it now faces," he said.
"Alongside the obvious intended closer oversight of operational performance and management, this simplification process should help Parker follow progress on another critical front: the adoption of disruptive technologies.
"It's encouraging therefore to see that Parker wants to 'accelerate and enhance focus' on digital solutions, artificial intelligence, robotics, open data and the Internet of Things. There are examples of Capita quietly going about deploying some of these emerging technologies. But to win hearts and minds, it needs to be much more vocal and start embracing change. Many of its competitors are already making some bold moves. Capita now has to take a deep breath and do the same."