Executive Dossier: Peter Deacon - People & Management: Financial Recruitment

CommunicationsWeek International, April 1, 2002

Name Peter Deacon Position managing director, Telindus UK, a systems integrator with operations in 18 countries

Based in Odiham, Hampshire Deacon previously was client director at Unisys, then ran his own network integration company, Environet Ltd.

Q Your client base used to be service providers. Why has that changed?

A Partly because the service provider business has gone so badly, a year ago we made the decision to build our enterprise and public sector client teams. Ironically, there was a lot of talk 18 months ago about whether we should go fully into the service provider market. But my decision was we should strengthen the enterprise and public sector teams, and we invested a lot into building them up again. In 2000, service providers accounted for about 60% of total revenues. Last year, it was 40%, and I see it going down further.

Q What does the future hold?

A I think there is going to be massive consolidation. As companies continue to go down, the market is going to keep dragging. Take Enron, for example: to suddenly dump $350 million of Cisco equipment on the market has to have an impact.

Q How has Telindus been affected by the downturn?

A We provided all the implementation and equipment for the axis backbone, and so we lost a lot of money. We had put in $16 million of equipment and services, putting in POPs around the U.S. and major European countries, and we were supporting them. There's an element of risk in working in the services provider market. We've been bitten a couple of times in addition to laxis. I think it sent shock waves through the corporate organization, which deals with the long-term funding.

Q What has your change of focus meant for your work force?

A We've spent a lot of money in reskilling, but we've also hired new people. There has also been a fair amount of churn to meet market demand. There's still a lot of growing pains associated with the past two years.

Q Has the shift paid off?

A We're doing very well out of the public sector. We have a team working on surveillance projects, for the London Underground with Marconi; another one working on local government projects; another one for the [U.K.] highways agency. But we've had some disappointments with long-standing clients where we were let down by one of our partners who reneged on agreements and then went on to win the business without us.

Q Is being let down by partners a persistent problem?

A Some partners are very ethical in the way they do business, but then there is also a rat race among the bandwidth providers. It's cut-throat partly because there's so much capacity at the moment--they're all vying for not very much business, It makes it very difficult for us if we have one area that is unpredictable in the way that the partner is working with you. Take BT, for instance. We work with them, but we also compete against them for business.

Q What difficulties do you face when bidding for business now?

A For managed services, the bid times can go on for a year. The construction industry got it right, in that there's this almost unwritten agreement that certain companies would not bid against each other in order to keep the bidding costs down. But it gets more difficult as the number of opportunities are going down with the number of people wanting to get involved going up. Sometimes, the actual costs to make bids render the contracts won worthless. This is why we started to implement a bid management function a year ago. If the managers deem it's not cost effective to bid--we don't have a relationship, or the incumbent's already there--then we don't.

Q How much of a client-facing role do you have as an MD?

A Quite a lot. I've been around for a while, and if we're trying to get into a particular business or sector I can usually help us gain entry. I'm a member of the team just like anyone else.