Capita launches own consultancy division: Capita Consulting

As the firm kicks on from a broadly successful turnaround – having reportedly been on the brink of collapse in late 2017 – Capita has announced plans to boost its profitability with the launch of a new consulting brand. Capita Consulting aims to hire a headcount of 450 consultants across the UK by the end of next year.

Since issuing a shock profit warning in early 2018, professional services firm Capita has been working to radically transform its business. Having even been touted as “the next Carillion” following that turbulent period, the company fortunately stabilised its operations via a year-long turnaround project led by new CEO Jon Lewis, announcing a return to profit in Spring 2019.

Capita and Lewis were both determined not to rest on their laurels, however, and resolved to kick on with sweeping changes in the coming year. In September, the outsourcing and consulting firm launched a new corporate brand, and declared it would pay all its 40,000 UK staff the real living wage as a minimum from April 2020. The firm has also pushed for a change in emphasis in its work, bolstering its banking consulting arm notably with the appointment of Michelle Prance in November.

Now, Capita has continued this shift in tack – from IT services toward an increase in higher end-margin consulting work – with the launch of a new IT consultancy. The strategy was unveiled by Lewis in December, and it is hoped that the new wing will see Capita consultants brought into executive suites, rather than its contractors taking orders from a client’s IT team, rebuilding the firm’s earnings and share price – which now sits at just one-tenth of its highs of 2015.

Speaking on how he believes Capita Consulting will tap into the previously neglected strengths of the firm, Lewis said, “We have a deep understanding of our customer’s digital needs and we have not taken advantage of that knowledge… Our new consulting business will challenge the established companies in this market, by offering practical, hands-on expertise drawn from 30 years of designing, building and running the processes of hundreds of organisations.”

He added that by spending less time on competing for tenders, Capita can improve its profitability. Competitive tenders currently command profit margins of over 30% at the firm, and Lewis believes that instead of undergoing this process, Capita Consulting can divert work to its IT practitioners from within executives’ offices.

Capita Consulting aims to compete with industry giants such as Accenture and Capgemini, and already has offices in London, Newcastle, Manchester and Edinburgh. It already has 30 partner-level consultants, supported by 270 analytical and technical consultants. By the end of 2020, Capita Consulting has plans to have a headcount of 450 consultants, while in the long-run, it is hoped that this will help Capita get reclassified in the London Stock Exchange’s indices, moving from support services into the more lucrative technology segment.

Ismail Amla, Chief Growth Officer of Capita, meanwhile commented, "Capita Consulting grew from our own clients asking us to provide them with consulting services, drawn from our longstanding experience of executing complex transformation programmes; so we’re meeting a real demand. We’re already excited about some of the high-profile hires we’ve made so far, who have been impressed with our vision and Capita’s ambition of becoming a truly responsible and innovative business.”