DEBUG: PAGE=domain, TITLE=sson,ID=1513,TEMPLATE=neat-widget
You are not logged in...

Report information:

CGI - Application Outsourcing 2014

Vendor Analysis

by Dominique Raviart

published on Mar 24, 2014

Access to this report is restricted to logged in clients with access. Login to get full access

Report Overview:

CGI was founded in 1976. The company had revenues of CDN $10.1bn in FY 2013, ending September 30, 2013. Adjusted EBIT margin was 10.7% (FY 2012 11.5%). Net debt at the end of FY 2013 was CDN $2.7bn (down from CDN $3.1bn).

Who is this Report for:

NelsonHall's Application Outsourcing Vendor Assessment for CGI is a comprehensive assessment of CGI's application outsourcing offerings and capabilities designed for:

  • Sourcing managers monitoring the capabilities of existing suppliers of IT services and identifying vendor suitability for application outsourcing services
  • Vendor marketing, sales and business managers looking to benchmark themselves against their peers
  • Financial analysts and investors specializing in the application services, application support and maintenance sectors.

Scope of this Report:

The report provides a comprehensive and objective analysis of CGI's application outsourcing offerings, capabilities, and market and financial strength, including:

  • Analysis of the company's offerings and key service components
  • Revenue estimates
  • Identification of the company's strategy, emphasis and new developments
  • Analysis of the profile of the company's customer base including the company's targeting strategy and examples of current contracts
  • Analysis of the company's strengths, weaknesses and outlook.




Key Findings & Highlights:

CGI has a global headcount of ~68k, of which 18k is in its delivery network.

The September 2012 acquisition of Logica was a major step for CGI; it more than doubled the scale of the company from CDN$4.7bn to ~CDN$10.1bn. It also increased:

  • Presence in Europe, mostly through professional services
  • More than doubled CGI's application outsourcing business, in terms of revenues and headcount, to a NelsonHall estimated ~CDN$3.2bn in FY 2013. See sub-section on Logica below.

CGI considers IT outsourcing as a means to increase its share of resilient revenues. Within IT outsourcing, CGI looks positively at application outsourcing and to a lesser extent at IT infrastructure management, the latter being described as a "difficult market" by Mr. Roach.

Within application outsourcing, CGI has taken several steps to transform the former Logica's revenue mix (45% from outsourcing, 55% from professional services) to be closer to CGI's mix (66% from outsourcing in Q3 FY 2012, before the acquisition of Logica). There is a clear focus on large contracts and CGI has been looking to proactively develop proposals to drive client discussions and avoid competitive tenders. This is a major change in emphasis from the former Logica.

Steps taken include:

  • Identifying opportunities to turn professional services engagements into multi-year contracts. In the short-term, CGI is building a pipeline of short term contracts with the intention of transforming them into multi-year ones
  • An emphasis on CGI's proprietary software ("CGI IP") away from license sales to multi-year contracts, whether AM, bundled AM and hosting, or even BPO contracts.

Login to get full access:

go to NEAT reports