Ideal European marriage is forging ahead with IT

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The Independent Online
SEMA GROUP, its executives cheerfully admit, is one of the business world's best-kept secrets. The information systems company, created in 1988 by a merger of the British CAP Group and French Sema Metra, has always aimed at being a truly European business, as evidenced by its listing on both the London and Paris stock exchanges, and its strong presence not just in France and Britain but also in Scandinavia and other parts of the Continent.

Frank Jones, its executive vice-president, acknowledges, however, that this broad approach - allied with a low public profile - has perhaps resulted in the group's successes not receiving the attention that they might otherwise have earned.

Earlier this year, the group reported an 18 per cent rise in turnover to pounds 596m and a near 30 per cent increase in pre-tax profits to pounds 32m. For the third consecutive year, earnings per share grew by more than 20 per cent. Nor is it content with this. The company aims to see turn- over, which was pounds 200m seven years ago, double by 1998.

Mr Jones attributes some of this performance to the longer-term view taken by such significant French shareholders as Paribas and French Telecom, which together accounted for about 40 per cent of the shares at the time of the annual results. But he also points to the importance of spending "a lot of time on strategic planning".

In particular, the company has benefited from a focus on three main types of business - consulting, systems and outsourcing. At the same time, it has concentrated on such sectors as defence, financial services, tele- communications and the public sector. When looking to expand it has also targeted the Far East rather than North America, where it is wary of repeating the experience of other European organisations. The region is already well served by this sort of operation. Moreover, although the company does trade in the US via associates, the Paribas stake makes it subject to certain US restrictions.

"The Far East is more important, because it's growing faster and what we can offer is what they require there - things like telecoms," Mr Jones says.

As a company in the forefront of processing financial transactions, Sema has also noted, for instance, that India has 6 million people with an income above pounds 30,000 a year - more than the number in Britain.

But there still appears to be plenty to keep the group going in its home territories. In Britain, for instance, the departments of Health and Social Services and the Home Office are big customers of the company, while BP Oil has outsourced all its international information technology requirements to Sema.

In the defence arena, a joint venture with British Aerospace is developing command and control systems for Royal Navy frigates and auxiliary ships as well as submarines. In financial services, the group is developing treasury dealing systems for National Westminster Bank and has an outsourcing contract with Britannia Life.

It has also played a part in setting up the computer systems for the Barcelona Olympics and the 1994 World Cup.

With its 6,500 employees - 3,500 of them in Britain - being added to almost daily, Mr Jones is aware of the management strains imposed by more growth of the type envisaged.

One way Sema is hoping to deal with this is by moving towards industrial rather than geographical organisation of the business. But Mr Jones insists that this is being done gradually "to avoid the problems suffered by others".

He said Sema was also stepping up its efforts to learn about customers' concerns and to focus on their objectives.

This "collaborative" approach means that the type of person being hired is also changing.

"In IT, the requirement of the technical boffin is falling," Mr Jones says, adding that the business is becoming more people-oriented. It is accordingly difficult to recruit the right type of person, but that is what the company now has to do.

Nor is this just about having people that the customer can relate to; there is also a sound business case for such recruitment. Being able to understand the customer's business should help employees to instal systems more quickly - and so avoid some of the pitfalls of the past, when by the time the hardware was in place the problem had gone away or changed.

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