otp.investis.com/clients/uk/cap… > important point from this Crapita statement: breaking up centralised sales function and giving sales back to the operating divisions 1/a few
This implies a classic "salesmen in charge of the biz" problem. Remote from people who will have to deliver whatever they agree with customers.. 2/a few
and highly compensated for revenue growth, they tend to either promise the moon on a stick, or else bite the customer's hand off on price 3/n
...then they chuck it over the wall to the operating division to deliver it and run off after the next hustle 4/n
This is a similar problem to Carillion, just rather than being essentially a central sales group for a lot of subcontractors, Crapita internalised this inside the firm 5/n
You can see this in the statement. They also say they need to invest in their own internal IT, which is embarrassing as hell for an IT consulting shop, but makes a lot of sense if you see it as a prime contractor with no real specialisation other than sales
Whether they make it or not will depend on how big the pile of undeliverable promises is and how much technical debt the internal systems built up
To sign off the thread, we're looking at the crisis of the prime contractor business model. Where it came from - the US DoD - the next major aircraft after the F-35 is being built very differently. Largely in a government plant with a single development contract
