Vive la technologie! Capgemini North America oversees the US, Canadian, and Mexican operations of Paris-based consulting giant Cap Gemini. Like its parent, the subsidiary offers management and IT consulting services, systems integration, technology development design, and outsourcing services through nearly 30 offices in about a dozen US states, Puerto Rico, and Canada. Its consultants serve clients in a variety of industries, including automotive, energy and utilities, financial services, high-tech, manufacturing, and transportation. The unit was formed in 2000 after Capgemini acquired the consulting arm of accounting giant Ernst & Young. Capgemini North America represents almost 20% of its parent's annual sales.
In North America the company has won a number of outsourced IT contracts with state, local, and federal agencies in the public sector. Among its largest projects are a $100 million contract with the USDA and an $88 million contract with the US Army, both to verify and validate enterprise resource planning (ERP) projects. In mid-2010 it won a three-year, $28 million contract to upgrade software at the unemployment insurance division for the State of Nevada to Oracle's Enterprise Taxation Management.
In 2012 it scored one of its biggest government deals yet: a six-year, nearly $130 million contract with the Texas Department of Information Resources. Capgemini North America will oversee infrastructure services and improve standardization in the state department's data centers, mainframes, servers, networks, and printing and email.
In the corporate sector, the company landed a seven-year contract in late 2009 with Bunge Limited to provide finance and accounting services. In mid-2010 its contract with Canadian utility company Hydro One was extended through 2015 for more than $615 million (C$650 million).
Although the US market is relatively mature, Capgemini considers itself a medium-sized competitor in this region with room to grow. US operations posted nearly 12% revenue growth for 2011 and had an operating margin of 9%, an improvement of nearly four points from the previous year and representing the most profitable region for parent Cap Gemini for the year. Project and consulting revenues were the main drivers, increasing 17%, while outsourcing was more tepid at about 2% growth due to the lack of any big new contracts.
Acquisitions have happened at a slower pace here as the company has generally not found targeted companies to be suitably priced. It went four years without a US purchase before it bought the Order to Cash business (with about from Vengroff Williams & Associates in 2011. The acquisition built up the largest contributor to Capgemini's business process outsourcing (BPO) services (a major growth engine for the company), finance and accounting, at 60% of those sales. That year it also bought Minneapolis-based BI Consulting Group, which increased the firepower of its business intelligence management capabilities, with particular expertise in Oracle systems.
Also, although it continues to avoid the role of software vendor, parent Cap Gemini is morphing its business model to include proprietary software offerings, which it will sell as licenses or as cloud-driven software-as-a-service. It will pursue this new avenue through acquisitions, but so far has only made purchases in Europe.
Capgemini North America maintains partnerships and pursues development efforts with major business process systems providers such as SAP (it is one of only 10 certified hosting partners for SAP in the US), and Microsoft, and other technology leaders such as Adobe, Amazon Web Services, EMC (to develop IT-as-a-service), Informatica, IBM, and HP. – less