CSC splits off US operations

CSC, the global technology company that markets the electronic patient record Lorenzo, has announced it is splitting into two separate businesses.

The company’s UK health operations will come under the newly created CSC Global Commercial, which houses all of CSC’s commercial business and its public sector work outside the US. These operations have annual revenues of around $8 billion.

The other firm will be known as CSC US Public Sector and will focus on IT, infrastructure and business services for public services in the US, including federal, state and defence agencies. 

The split comes at a crucial time for CSC in the UK, as it is looking to retain the business that it secured for Lorenzo and other iSoft products during the National Programme for IT, and to extend their use as its contracts come to an end.

When asked by Digital Health News if the move would impact the company’s UK operations, a spokesperson for the company said: “It remains business as usual for our UK business.”

CSC’s chief executive, Mike Lawrie, said in a statement that the decision to split is part of a restructuring process for the company that began three years ago.

This ‘get fit’ period has seen CSC introduce a common operating model and streamline its cost structure, making a significant number of redundancies, not least in the UK.

However, the company added that its markets have “evolved rapidly”, with clients looking for partners with a “deep understanding of their business who can help lead their digital transformations”.

This led the board of directors to conclude that two businesses functioning as “pure plays” was the way to go.

“We expect this change to enable both businesses to enhance innovation and improve delivery, in ways that are consistent with the rate and pace of the markets they serve,” said Lawrie.

According to CRN, he added during a conference call: "There's a big difference between turning a company around and transforming a company. This next step will allow us to transform these businesses faster than if they were together."

Details of the separation, such who will be in charge of each operation and where respective headquarters will be situated, are still to be finalised.

The split is expected to complete by the end of October 2015. CSC’s announcement follows a similar decision by Hewlett Packard, which said in October last year it planned to separate into two companies.

Hewlett-Packard Enterprise is intended to focus on developing the “next generation of technology infrastructure, software and services”, whereas HP Inc. will produce personal computers and printers.

Digital Health chief executive and editor Jon Hoeksma spoke recently to Philippe Houssiau about CSC's UK ambitions. Read the interview in Insight.