In many ways, the highs and lows of the Computer Sciences Corporation cycling
team over the various stages of the Tour de France mirror that of the dotcom, IT
and consulting industries over the past seven years.
Think back to the initial wave of excitement as the dawn of a new online age
emerged (team CSC sets off on one of the toughest sporting endurance events in
the world). Then the world discovers that successful IT and outsourcing can
bring spectacular bottom line results (one of team CSC’s top riders David
Zabriskie spectacularly leads Le Tour and wears the yellow jersey).
A period of inflated prices, over confidence and dipping markets makes
businesses realise that they may have handed over too many blank IT upgrade
cheques (Zabriskie crashes during the team time-trial fourth stage).
But then things begin to look bright again as markets pick up and business
begins to regain confidence (Team CSC riders avoid a pile-up in the rain during
the final kilometre and Ivan Basso, a predicted winner of next year’s Tour
claims second place overall).
He may not have taken part in the tour, but CSC finance director Martin
Coombs has been in the financial saddle of a booming US consulting, IT and
outsourcing firm since he stepped into the role in 2003. It’s a place where he
can face clients, analyse the business and its figures and, at the same time,
experience strong, renewed company growth first-hand.
‘I was fortunate in coming when I did. We won a number of major contracts
just prior to my arrival including some more work with BAE Systems, the Royal
Mail Group and National Grid Transco, as well as being chosen as the principal
NHS local service provider contract in the northwest and midlands. Those three
major contracts boosted growth in the UK, which went into double-digits last
year and will do the same this year.’
Coombs is keen to take all of CSC’s contracts forward during his time as FD,
particularly the NHS. ‘It [the NHS] should be in a position to leverage its
buying power from the big drug companies so we’re working on its procurement
process. The NHS is such an exciting project because it’s dragging a huge
organisation from a backwater situation into the 21st century.’
CSC is one of the world’s largest IT and business service providers and has a
40-year track record with clients across all sectors of government and commerce.
As Coombs insists, in US-style business speak, talking about CSC means ‘talking
about results’. And he’s not wrong.
The firm’s fourth-quarter and full-year results to 1 April 2005 showed
revenue growth of 18.9% to $1.28bn (£737m) and growth of 17.5% to $4.33bn for
the year. All this despite some bits of ‘bad luck’, as Coombs calls it – CSC is
still the IT support and services provider for a radically downsized retailer
and a now Chinese-owned fallen car giant.
‘We’ve had a bit of bad luck this year because of MG Rover and Allders, but
this is one of the perils of doing business. We are still the IT provider for
both companies and the administrators are still customers of ours, so we await
‘Allders is a success story for us because most of the stores and
infrastructure have been taken over by other stores. The administration has been
fairly well handled. The MG Rover situation is not in the same boat but the IT
systems are core to anything that gets done.’
The impressive array of figures doesn’t end there. Coombs is in charge of
around £2.6bn worth of accounts in northern Europe as well as CSC’s Europe,
Middle East and Africa arm that includes contracts with Motorola, Nortel and
Zurich Financial Services.
CIMA-qualified Coombs, who previously worked at rival Japanese firm Fujitsu,
doesn’t class himself as an ordinary FD, but first and foremost as a ‘business
professional’, a consultant and then an accountant.
‘What I’m really talking about is deals and the external world and working
with our customer and supplier bases to get the right result out of any
particular contract. More of my work is externally faced than internal and this
is why I like to do it.
‘At Fujitsu I was in more of a business development, almost marketing role,
and that helped. I feel that customers are often forgotten and can be the poor
relations of an FD’s role. Within my area of responsibility I’ve got the
commercial organisation in terms of our existing customer base helping design
competitive commercial frameworks as well as taking new business, and I’ve also
got the CSC procurement function in the UK spending $800m or $900m.’
The consulting experience Coombs gained mainly stems from his time working
with management consultants at Fujitsu who taught him the guiding principle that
it is often better to observe and assess the situation than to immediately rush
in and scan the figures.
‘It [Fujitsu] stood me in good stead for CSC. When I first took the job I
purposefully didn’t fill my day with stuff and instead tried to spend as much
time as possible in the early months just observing and understanding the
situation I felt we were in before making changes.
‘Consultants have the advantage of being able to pitch up to a situation and
take enough time to assess it from an analytical perspective by interviewing
people and formulating their particular thoughts and emotions. Perhaps more FDs
should follow this example.’
Coombs assures me that transferring consulting skills to an accountancy role
is one of the most natural things he has done since he began his career, but
once we move onto the subject of regulation, the atmosphere changes. If there’s
one subject that’s sensitive it is Sarbanes-Oxley.
‘The biggest change has been Sarbox, which is something I was unfamiliar with
from my days at Fujitsu. The implementation has gone ok,’ says Coombs
hesitantly. ‘We’ve got through the test so there’s no problem there but I wonder
about the business value of it. Obviously it was used at the height of the Enron
and WorldCom scandals, but I think it was a knee-jerk reaction in trying to
paper over those particular cracks.
‘Now we’ve done that, I think industry needs to think about what it really
needs to do to reassure itself that it has got something robust in place as
opposed to the mantra of “let’s look at every single procedure, process and
Coombs calls the legislation ‘overly bureaucratic’ and that ‘results and
outputs’ should be examined instead of the ‘spurious amounts of paperwork’
needed to prove your business is being run in the proper fashion.
‘What we’re trying to do is reassure shareholders that whatever level of
internal controls are in place there’s a better way of looking at what the
outputs are and how you can test those outputs.’
Just like most things in consultancy, Coombs says that process ‘works best if
it is simple’ and that this should be something regulators along with businesses
should strive for.
But if you want to discuss something that Coombs likes, then you only have to
mention the accountancy institute he qualified from. As he says, he is CIMA’s
number one ‘fan’.
‘I’m very passionate about the training. We run a scheme at CSC for young
finance staff that was in place before I arrived but had waned and I have
‘This is very important on two points – from a CSC perspective to have talent
coming through and building on that but also from a wider viewpoint it’s very
important we have the right emphasis on accountancy training in this country. As
a large employer, CSC should do its bit to be a net provider of training.’
Coombs says that CIMA offers a more ‘rounded business view’, citing the
business strategy module as particularly useful, giving trainees the ‘bigger
picture’ alongside a commercial and large corporate focus.
‘It just fits with what we’re all about, how large corporates do business in
But will the looming merger between the ICAEW, CIPFA and – possibly – Coombs’
own CIMA spoil these plans? Coombs says he would like to see a merger happen but
only if CIMA is careful not to ‘throw its baby out with the bath water’. ‘It’s
important to guard what’s there and make it easier for the man in the street to
understand the profession, but it is difficult to work through the various
cultures of each institute,’ adds Coombs.
Perhaps cycling 250km every day really is easier than merging three