Change of tack helps IT merger ride the waves

Paul Yandall discovers how the high seas have helped Nigel Perks navigate
staff through the largest IT merger in UK history

When it came to leading 23,000 workers through a £910m merger, HR director
Nigel Perks sought help from the sea.

The sailing enthusiast was part of patchwork team stitched together at short
notice for last year’s Fastnet Sailing Challenge on the Irish Sea.

"It made me realise what sort of stuff goes on during mergers where you
throw people together and say: ‘there, that’s your objective’," said the
45-year-old Welshman. "You had your highs and lows and stress. It’s a
pretty tough race, you know – people have lost their lives."

Fortunately, things weren’t so drastic during the merger of competing IT
service providers Logica and CMG, which became LogicaCMG on 1 January 2003.
However, there was blood on the floor – figuratively speaking.

"We shed about 10 per cent, around 2,500 workers," said Perks.
former HR director of Logica and now the group HR director of LogicaCMG.
"Most of those were in overlapping jobs, where there was duplication [in
areas] such as administration or management."

It’s been a year-and-a-half since the merger – one of the biggest in the
UK’s IT industry – and just enough time for Perks to have developed some
perspective on the massive change.

"Traditionally, mergers and acquisitions aren’t very successful, and
it’s usually the human factor that makes them unsuccessful," he said.

"One of the key points for us was speed. It was really important to
give people clarity as quickly as possible because they were being put into a
position of uncertainty."

The merger was announced on 5 November 2002. It was formally completed in
less than two months, allowing the new entity to take its first steps onto the
world stage on New Year’s Day.

"Right from day one a lot of effort was put into communication,"
said Perks.

"We had to get news of job losses out straight away, but we also had to
have the branding of the new company complete and the systems in place ready to

For Perks, who has also held senior HR posts with Equifax, Prudential and
Digital Equipment, the merger was the biggest professional challenge he had
faced. "It could have been very easy for me to throw my toys out saying
‘this is not something I came here to do’. But actually, the challenge has been
a huge opportunity," he said.

Among the challenges were the peculiarities of managing a merger of truly
international scale. The combined company would have staff in 34 countries,
meaning hundreds of regulations in different jurisdictions had to be complied

"We couldn’t move at the pace of one country because regulations in
another meant things would take longer," he said. "We had our
targets, but we also had to take a staggered approach."

Managing the merger of the two different cultures was also a challenge.
Although Logica and CMG were both technology companies founded in the UK in the
1960s, their management systems were markedly different. Logica was a more
centralised and yet more internationally-focused business, while the
Anglo-Dutch CMG was a much more decentralised entity.

"Certainly from an HR perspective there were differences," said
Perks. "But it was a great opportunity to take the best of both worlds –
to ask what have you got and what have we got? – and then create something that
was cutting edge."

It also gave Perks, who was appointed to his current role in March this
year, the opportunity to focus on systems he felt were inadequate and start
from scratch. New appraisal, succession and induction systems have all been

Although there was still work to be done in areas such as diversity –
attracting more women to the IT industry has been a problem – there was a
general mood shift within the company away from the merger and towards the
challenges ahead.

"We’ve tried to strike a balance between creating something new,
exciting and competitive, as well as trying to honour the past," said
Perks. "In some places, there’s a real echo of the old companies, and why
not? They were something to be proud of."

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