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Atos Healthcare opens new sectors with Co-operative Group

Samad Masood | Aug. 7, 2009
Its recent win with the Co-operative Group moves it further into new market sectors, but does it threaten to spread Atos Origins BPO aspirations too thinly?

A less obvious but more strategically significant synergy is with Atos Origins work on the NHS Choose and Book system with US software partner Cerner. While this is predominately an IT implementation project, it is managed by Atos Healthcare, and benefits from expertise and its association with the clinical industry as one of the countrys largest clinical recruiters. Of Atos Healthcares 2,500 employees, 1,900 have medical qualifications, providing a significant opportunity for building a highly focused healthcare IT services practice (at least in the UK).

The need for transparency

Overall though, Atos Healthcare remains a significantly different business from Atos Origin, especially when compared to the companys other transaction-focused IT-led BPO businesses such as payments provider Atos Worldline. In theory, Atos Origin is doing the right thing. Like many of its peers, it is investing in balancing its project-focused IT services with long-term recurring revenues from outsourcing, including BPO. However, there is concern that with healthcare Atos Origin may be stretching itself too far from its core markets.

This is an issue facing most large IT service providers involved in BPO not least because, like Atos Healthcare, there is scant availability of financial metrics revealing how successful these BPO operations have been. It is key for clients, investors and partners to understand the value (or lack thereof) of BPO to an IT services company particularly as BPO often requires the provider to invest heavily upfront.

If IT vendors continue to hide their BPO lights under a bushel, at best they risk obscuring a strong and valuable part of their business, and at worse they only heighten suspicion that these BPO operations are dragging back the rest of the business.

Samad Masood is an analyst in Ovum's UK software and IT services practice, and specialises in IT services, outsourcing and offshore services.  


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