CGI arrives in Salford while joining growing Northern Powerhouse
Global IT consultancy CGI has opened a new office in Manchester, in order to meet the growing digital demands of the city’s businesses. The move comes as the firm joins the UK’s Northern Powerhouse Partners Programme, which aims to bring prosperity to the North of England.
Founded in 1976, CGI Group is the fifth largest independent information technology and business process services firm in the world. Originating from Canada, the firm now hosts approximately 74,000 professionals, who serve thousands of global clients from offices and delivery centres across the Americas, Europe and Asia Pacific. With its British headquarters in London, CGI also has taken its tally of offices across the UK to 20, with the launch of a new presence at the former Soapworks in Salford.
CGI’s Salford office opened its doors in the first week of March 2019, launching with a ceremony attended by City Mayor Paul Dennett and Salford City Council Chief Executive Jim Taylor. The news comes as the IT and business consulting firm joins the UK Government-backed Northern Powerhouse Partners Programme – a network of almost 200 businesses in the region – which works collaboratively with local leaders and the Central Government to promote business, technology and community growth in the North – something which CGI President Tara McGeehan believes will lead to the firm rapidly making a name for itself in the region.
McGeehan joined in CGI when it acquired Logica in 2012, first working at the firm as a Principal Business Consultant. Following the surprise standing down of UK President Steve Thorn, who stood aside to "to pursue different career opportunities" after 25 years with the firm, McGeehan took up the reins at the start of 2018. After her first year at the helm of CGI’s UK wing, the firm is currently running at 6% revenue growth, while its headcount is holding firm at around 5,000 employees across the country.
Looking to the future, McGeehan told Consultancy.uk that she expects the firm’s arrival in the North West will play a key role in driving further growth on both fronts. The company aims to bring 1,000 people this year, and has currently managed around 250. By diversifying its geography, McGeehan explained she hopes to “fit more high quality people into the company from different parts of the country”, while bringing its services closer to clients, and people’s work closer to their homes – a marked shift in the IT sector, which is notorious for seeing its staff going out of their way for work.
Commenting on the office’s launch, McGeehan said, “We have traditionally had some work in the North West… Then, just about 18 months ago, we bid and won on a IT system services contract for [UK telecom firm] Talktalk, a major employer and key strategic partner in the North West. We thought, with them as an anchor client, now was the right time to expand our business in the region by opening up an office in Salford Quays, and joining the Northern Powerhouse.”
Northern Powerhouse
Originally proposed by the 2010 Coalition Government, the Northern Powerhouse scheme aims to bolster historically neglected regional economies beyond London, particularly in the "Core Cities" of Manchester, Liverpool, Leeds, Sheffield, Hull and Newcastle. However, as the project closes in on its 10th year, its results remain fiercely debated. With the addition of firms like CGI to its network, however, the Northern Powerhouse will hope it can improve the opportunities for both education and work on offer across the region.
Exploring what CGI hopes to bring to the project, McGeehan said, “We have a great global reputation for running STEM camps. These are events aimed at introducing young people who hadn’t necessarily thought of a career in STEM before and offer them the opportunity to do some coding, even building computers, how to put components together, and we do this in a structured way working with the Northern Powerhouse and local schools. We’re running a series of those, helping advise people how their kids might make a career in IT too, what subjects they’ll need to take.”
CGI’s UK President was quick to note that this by no means constitutes altruism on the firm’s part, but rather fosters a symbiotic relationship with the community its new office must become part of. After all, the firm is hoping to recruit people, but it is therefore in CGI’s interest to help skill the local workforce in that case. This represents a wider change in which the public and private sectors now collaborate in the North West, however.
Recently it was announced that the North West would receive £281 million from the Government’s ‘Stronger Towns Fund’. While Salford Mayor Paul Dennett recognised the injection of funding was badly needed, though, he also noted that his district alone had seen more than £200 million cut from its Central Government grant during the last decade of austerity, making the funds it would receive “a drop in the ocean” by comparison. This leaves a significant void – and it is one which McGeehan believes the private sector can already see the value of filling.
“I do think the private sector has a role to play,” McGeehan stated. “I think local councils working with companies like CGI could start to fill that gap. We’re used to investing, comfortable training people, investing in the local community in order to have good people who work for us, properly trained and skilled-up. It makes a lot of sense to us to work with local authorities and universities to shape degree courses and apprenticeships to fit vacancies we have, and we do a lot of this around the globe, and even with the armed forces – when people leave the military we often work with the Ministry of Defence to help them find a new career in IT.”
One of the areas of the North Western economy that CGI will eventually hope to find work in, then, is the public sector. With an anchor client, the network of the Northern Powerhouse, and the 200 people now based in CGI’s Salford office, it seems the company has a solid base from which to build out from to do just that – though McGeehan was clear that she expects such a relationship to take time to develop.
She concluded, “We haven’t done any work with the local council yet, although we’d love to, and I’m sure we will be talking about that in the future. We do a lot of council work, we help clients with IT work in Edinburgh and Glasgow, as well as the Scottish Border Councils, so we’ve shared lots of best practices with councils across the country and hopefully that will be the same in Salford in time. First, it’s best to demonstrate our abilities by picking up smaller local contracts though.”
Digital Salford
According to Jon Corner, Salford is a city ready-made for digital investment. As the first ever Chief Digital Officer for the City of Salford, he is better placed than most to see just why. Corner told Consultancy.uk that his own job came as the result of a drive in the region to marry digital business with social progress.
He explained, “Salford’s got some strong assets. It’s got a world-leading hospital in the Salford Royal Foundation Trust, an amazing University campus which is leading in robotics and energy while being famous for connecting with business and finally, it has Media City UK. When you look at those assets together, Salford has a full innovation ecosystem, and the city was asking how it could leverage these amazing assets for the benefit of the people of Salford. How can we translate the rapid growth of our local economy into a wider, more inclusive agenda for citizens? It was felt that a digital officer could be that glue between the two.”
Commenting on CGI’s arrival in Salford, “We’ve already invited CGI to look around and we’ve connected with them. They are already starting to understand the depth of innovation culture, the SME powerhouse that we have here, and that’s exciting for a larger company like CGI to know, that they have this larger eco-system around them… I would see them as being an important part of the digital Salford story over the next couple of years for sure.”
With regards to the North in general, Corner stated he felt that the Northern Powerhouse project was beginning to have an effect on how the region’s key cities collaborate on innovation – something that is key to addressing the long-standing North/South divide in England. Citing a “rich innovation culture” present throughout the North, he suggested that looking at the core cities of Manchester, Leeds, Sheffield, Liverpool, Newcastle, while each one of these locations has its own unique regeneration culture, there is now a cross-fertilisation of agendas around SME development, around investments, and a more cohesive working approach across the board – something the Northern Powerhouse project has played a major role in.
Dan Storer, Director of Business Development for Manchester's Inward Investment Agency, MIDAS – a group which is collaborating with the City of Salford to draw investment to the area – was also keen to point out that the North has a competitive advantage on London, going forward, which may help address the North/South divide. While London retains a reputation for leading in all areas of the UK’s business scene, Storer echoed a number of recent studies which have found that the capital is lagging when it comes to fostering new digital businesses, thanks to its high cost of living and spiralling business rates.
“There is a highly competitive digital sector in London, of course,” Storer conceded. “However, problems of wage inflation and a lack of stability in the workforce for digital companies at the moment mean what we are seeing increasingly, is that companies are focusing on the Greater Manchester area, relocating due to the strength and depth of talent here. Talktalk was one of those.”
As seen with the arrival of CGI, once one key-stone company arrives, other members of its ecosystem often follow suit, so the outlook does look bright for Salford, as well as the rest of the Northern Powerhouse project to that end, even with storm clouds reportedly on the horizon. According to a new report from Big Four firm KPMG, venture capital funding fell by 30% in the North West in 2018. The haul was worth £122.2 million, down from £173.4 million in 2017, while the North as a whole saw the same 30% venture capital drop. Despite this, Storer insisted that his experience suggests the Salford will continue to perform strongly.
He concluded, “One thing that is happening here is that there is a large growth of small, fast growing businesses in Manchester, financial support were no longer available for them it would be problematic. I’m not sure how well founded that is, though, as what we are seeing is something different. We had more ecommerce start-ups in Manchester last year than any other place in the UK, more than seven ‘unicorns’ in that sector… so the story we are seeing is small digital businesses prospering in and around Manchester.”
