But while you may not know about CGI, CGI knows about you.
CGI compiles Bell customers’ bundled telecommunications services bills. It handles payroll at large corporations such as National Bank of Canada. It helps manage electronic medical records for hospitals. It provides cybersecurity and surveillance services to businesses, and IT services to the governments of Canada, California and New York City. It serves six of the top 10 global telecom providers, nine of the top 10 European utilities and three of the world’s top six oil companies. All told, CGI touches the lives of hundreds of millions of people across North America, Europe and Asia.
But the company’s influence extends even farther. Through a multitude of contracts with the RCMP, Canada’s Department of National Defence, the U.S. Department of Homeland Defense and all three branches of the U.S. military, CGI has become deeply embedded in the overt and covert activities that governments direct against enemies throughout the world.
The company’s ubiquity mirrors the onward march of computing, and in particular outsourced computing. When CGI was launched in 1976, the personal computer was in its infancy (the Apple-1 was introduced that year). And the expansion is far from over. In 2003, one billion gigabytes of data were in storage. That number is expected to increase 35,000-fold by 2020. All that data itself represents a vast new resource that its owners can market—to, for instance, creators of digital advertising, an industry that is expected to outgrow TV advertising. For companies like CGI and its many competitors—including IBM, Fujitsu, HP, Accenture and Deloitte—there has indeed been, as Godin says, almost “no limit” to growth.
And it hasn’t been a bad investment either. “Let me put it this way,” says Stephen Jarislowsky, the venerated founder and chairman of Montreal-based Jarislowsky, Fraser Ltd., which has assets of more than $30 billion under management. “I should have bought it.’’ In the first five months of this year alone, CGI’s shares have risen 37%.
Jarislowsky has been watching CGI for almost its entire lifespan, and can briskly distill its essence: “It’s basically to be able to look after the biggest companies in the world.” The beauty of CGI, he says, is that it occupies a low-risk niche within a high-risk industry. “This is not really an IT stock as such,” he says. “It’s a services company. It’s like IBM. It’s a defensive stock.” Godin gets a similarly succinct sketch: “He’s an excellent businessman and an excellent strategist. It’s an extremely intelligently run company.” The secret of CGI’s success? That’s easy, too: “My great admiration for Serge is based on how he’s been able to choose great people everywhere.”
Many of those people came on board via acquisitions. The company’s current CEO, Mike Roach, and its CFO, David Anderson, arrived when CGI purchased Bell Sygma from Bell Canada in 1998. George Schindler, president of CGI’s Canadian and American operations, and Jame Cofran, chief marketing officer, came to CGI with its 2004 purchase of American Management Systems.
More recently, João Baptista, president of CGI’s operations in the Nordics, Southern Europe and South America, and Colin Holgate, president of CGI’s Asia Pacific operations, arrived with the purchase of Logica.
Godin also fishes for talent among CGI’s government clients: Dr. James Peake, senior vice-president of CGI’s Global Healthcare Practice, is a former U.S. Army Surgeon General and Bush cabinet member. Barbara Fast, who leads CGI’s Army & Defense Intelligence Business Unit within its CGI Federal subsidiary, is a retired U.S. Army intelligence officer who joined the company in 2011 after 32 years of service and a stint at Boeing.
Almost the only member of CGI’s current management team not drawn from an acquisition or recruited from a client is the HR head. Should anything happen to her father, Julie Godin is in line to take over her father’s CGI stock. Thanks to the company’s dual-share structure, the family and co-founder André Imbeau are ensured control even though they own a minority of shares. “If I get hit by a truck,” Godin said with a chuckle at the Marriott, “we’ve made the decision to transfer the shares to Julie.”
The history of CGI is intertwined with that of Bell Canada Enterprises, which has relied on CGI to manage huge swaths of its business, from data management in the background to customer billing in the foreground. Until 2006, BCE also owned millions of CGI shares thanks to the 1998 Bell Sygma sale.Report Typo/Error
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