AGM speaking notes - Part 2
Jean Brassard, Vice-Chairman, President and COO
Thank you, Serge.
Through the dynamism of our CGI team, this past year was one of tremendous internal growth and progress for GGI.
- In 1997, 50% of our growth was from existing operations and 50% from acquisitions. We are now proposing, and bidding on, more and larger contracts.
- We increased our market share in each of our targeted industry sectors. In each of these sectors, we provide both industry expertise and business solutions as well as our IT technical expertise.
- We successfully integrated the operations of CDSL and began integration of TIS, doubling the number of CGI members to 4,000. The merger of the Bell Sygma operations will increase our members by an additional 3,000, to a total of 7,000.
- We also successfully integrated the infrastructure of CDSL, and now have data centres and call centres coast to coast.
Internal growth was driven by a number of major new systems integration and outsourcing contracts and a 100% renewal rate for existing outsourcing contracts.
I will highlight some of our strategic contracts and then explain how our quality program driven by strong values enables us to effectively manage our rapid growth.
Our April 1997 acquisition of CDSL enabled us to secure a five-year, $100 million contract to provide IT services to The Go-operators' Group, renewable for an additional five years.
In May 1997, we concluded a 10-year, $250 million contract with the distribution giant Westburne to manage the delivery of all their IT services.
This past year, we also signed a five-year $25 million partnership with Spar Aerospace, through which we will handle this technology leader's IT functions.
We concluded a strategic, $10 million agreement with the Interac Association for the management of its Central Network Management Facility. This project enables us to showcase our leading financial switching and transaction processing capabilities to Canada's major financial institutions.
In December, we announced a memorandum of understanding with the Mouvement Desjardins. Through this $150 million agreement over 10 years, we will partner with Desjardins to build a major pay services operation serving their client base.
Throughout fiscal 1997, we continued to build on our strategic alliance with Bell Canada. The important role telecommunications plays in most IT organizations, representing 15% to 25% of a company's IT budget, makes this alliance a major competitive advantage with strong benefits for both parties, and for our clients.
We also made excellent progress with our business solutions which we market as a value added service leading to large scale systems integration and outsourcing contracts.
Year 2000 IT conversions are gaining priority worldwide and we have exclusive rights to one of the leading business solutions. We are focusing on our main target markets and currently are working with 25 of our major clients.
In December we announced a $4.4 million Year 2000 contract with Public Works
Government Services Canada. We expect Year 2000 contracts will represent about 10% of CGI's revenue in the next few years.
CGI's AMICUS business solution is recognized as one of the world's most advanced software solutions for managing large collections, initially targeted at libraries. In July 1997, the British Library acquired AMICUS for its new Corporate Bibliographic System. Just last week, the National Library of Australia also acquired AMICUS.
In financial services, we now have the leading software used for personal banking by credit unions and some banks. Importantly, our software integrates the functionality of home banking and via the Internet. We also have the leading software for property and casualty insurance companies for reducing costs, improving service and re-engineering business processes.
We are able to successfully manage our rapid growth through our absolute commitment to a quality vision. Our vision is to be a total quality company, providing quality in all aspects of our relationship with our three primary stakeholders - our clients, our members and our shareholders.
This vision is supported by a deeply rooted corporate culture and strong values.
We benefit from clear methodologies, which spell out how to conduct business activities at the strategic level, and at the project management level. In 1994, we became the first IT services company in North America to receive ISO 9001 certification for our project management framework and we have since introduced our IT management framework for outsourcing activities, and our member management framework.
Our certified quality approach forms the basis of a continuous improvement process which is embedded into all of our management processes. Certification helps to improve performance by formalizing processes and documenting their various steps. It is supported by a rigorous assessment process which allows us to evaluate the satisfaction level of our target stakeholder groups.
This quality approach has contributed significantly to our ability to manage growth.
First, the ISO 9001 certified management framework has been an important factor supporting the integration of new members following an acquisition or the start-up of a new outsourcing contract.
The framework defines our approach to doing business and ensures that everyone operates in the same ISO-certified manner. Our ISO standards are a source of pride for our members, and we find that one of the first questions asked by employees of the company or IT department being integrated is when they will become ISO certified.
I should add that the high proportion of new outsourcing contracts has been a big factor in our ability to gain qualified IT people. We hire the client's IT people and this immediately provides qualified staff with the knowledge of the particular systems.
Second, to attract and retain people, we strive to be recognized as the best employer in the industry. We have established a series of policies to ensure the satisfaction of our members within the work environment. These include training, recognition and communications. Part of remuneration of managers is tied to member satisfaction, which is measured through surveys.
Our strong growth and leadership in the industry are important factors in attracting highly qualified and dedicated candidates. We hire a specific type of professional who identifies with CGI's values and is comfortable in an environment characterized by ongoing training, professional development and team spirit.
The efficiencies resulting from application of the ISO certified management framework have been an important factor in our ability to steadily increase profit margins.
All of our strategic business units are managed by dedicated CGI members, many of whom have more than 15 years' experience with our company. These individuals have a full understanding of our corporate culture and in-depth knowledge of our business environment. The presence of this stable management team helps explain the success of both our large outsourcing and systems integration contracts and our recent acquisitions.
In summary, we enter 1998 excited about the new business and growth opportunities, and highly confident in our ability to deliver.
Andre will now review our financial performance. |
