CSC to continue iSoft cost-cutting plans

Summary:IT services provider CSC today said it will continue to consolidate and restructure healthcare software company iSoft after the acquisition is completed.

IT services provider CSC today said it will continue to consolidate and restructure healthcare software company iSoft after the acquisition is completed.

iSoft's chief executive officer Andrea Fiumicelli announced last September that the company would be trimming the fat around the business by "reducing procedural duplication and simplifying internal processes". A source said that the job losses would affect 800 of the company's then around 4500 global staff. The company said on the call today that current staff numbers were around 3300.

In a conference call today, CSC Australia's national director for health services Lisa Pettigrew said that CSC intends to continue on with the plans put in motion by iSoft last year.

"iSoft has already put into place over the last year ... a range of plans to address some of their financial issues. We would plan to continue with those activities that they've already announced," Pettigrew said.

"They've already made a lot of their changes in that regard, and as I said, we'll continue to look at the plans they have in place," she added.

When pressed to give an indication of numbers, Pettigrew said that the acquisition was great news for iSoft employees, and declined to comment further.

Pettigrew did say, however, that CSC sees the iSoft staff base as a particularly attractive aspect of the takeover bid, singling out iSoft's research and development arm as particularly interesting.

"We're interested in the research and development program iSoft has, we're interested in the R&D professionals, the 200 clinicians [and] all the other staff, and the complementary nature of their client and revenue base with our services and outsourcing practices," she said.

CSC Australia chief Gavin Larkings said that the company had not commenced discussions with any of iSoft's large shareholders, only speaking with the e-health company's management staff, which backed the buyout.

Pettigrew said she wasn't surprised to hear speculation in the press over the past few days that former iSoft chief Gary Cohen, who still retains a large stake in the business, could impact the proposed buyout, given what she described as his "emotional" history in the company.

CSC would "expect further commentary" along those lines, she said.

It was also "too early to comment" on whether the iSoft branding will be retained under CSC's ownership, although Pettigrew confirmed it was CSC's plan to delist iSoft from the Australian Stock Exchange if the acquisition went ahead.

CSC has spoken to its own major e-health customers about the deal, but Pettigrew said it would be "inappropriate" to speak with iSoft customers. In addition, CSC was unwilling to comment on any implications for the UK Government's NHS contract, other than that the company didn't see any risk to the deal from the acquisition.

CSC did say, however, that it would honour iSoft's existing contracts

Asked why CSC had moved to acquire iSoft now, and not back in 2007 when the company was on the market prior to its merger with Australia's IBA Health, Pettigrew said CSC knew iSoft well and had "run the ruler" over it a number of times.

There were a number of aspects to the current timing that made it a good deal for CSC, she said, including some of iSoft's own recent acquisitions. Larkings said CSC now had a bigger focus on the health industry, part of which had come about due to having Pettigrew herself on board.

In terms of reversing iSoft's financial decline, Pettrigrew said iSoft itself had already put in place a range of plans to address the company's issues, and CSC would advance those.

Topics: IT Employment, Health, Outsourcing

About

A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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