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Technology nightmare

Atkins' bodged attempt at installing a computerised accounts and invoicing system has taken its toll.

At the end of last year a black hole began to open up in the accounts of Atkins, Britain's largest consulting engineer with a staff of 4,376 civil and structural engineers and a 14,000 total payroll.

It was then that it first became apparent that the company's new state of the art computerised accounts and billing system was failing to invoice clients properly.

Early teething problems began to surface when some staff found that their expenses were not being paid (NCE 21 February).

Then the company began to lose control over which clients had been invoiced for what. It appears that engineers had been filling in computerised time sheets, which would then become lost in the ether of the new computer network. As a result invoices did not go out. As the cheques stopped coming in cashflow started to deteriorate.

The plan to install the new system was one of the first to be approved by Robin Southwell when he became Atkins chief executive 18 months ago. Implementing it was the responsibility of finance director Ric Piper. Both have since left the company.

Southwell resigned a week ago last Monday as the company warned that its accounting system problems would contribute heavily to a loss of around £5M in the six months to 30 September.

It is thought Southwell, who has a sales background, clashed with other Atkins board members over his strategy of encouraging engineers to market the company more aggressively when dealing with clients.

Piper was due to move to Daily Mirror publisher Trinity Mirror last Wednesday, but this broke down after he and the Trinity board agreed it would be best if he did not take up the post.

The move was widely read as a decision by Trinity to distance itself from the man at the heart of the Atkins IT debacle.

Investors and stock market analysts were furious at the way news of the financial impact of Atkins IT disaster was handled.

The company had intimated that it was having problems in March and in its annual results announcement in July.

But analysts say these statements did not suggest any serious impact on the accounts.

The results announcement published in July also alluded to problems and highlighted a £6.1M 'restructuring cost' at the computerised invoicing and accounts centre in Worcester.

But it also claimed the firm was 'beginning to deliver to shareholders'.

This promise was dramatically undermined after last week's profit warning. Atkins shares plummeted from £1.38 to 51p, £2.74 below the price at flotation in 1997 and £6.50 down on the shares' 12 month peak. Since then the shares have recovered, reaching 91p on Monday.

This week Southwell's replacement and current chairman Mike Jeffries was working out how to placate angry investors and restore Atkins damaged stock market credibility, not to mention reassuring disgruntled employees.

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