Converting to a holding company and separating the technology business (2024)

Splitting the vessels does not by itself split the economics

What this reorganization did was to put two jobs of different natures — proposing and implementing — onto separate legal entities and separate profit-and-loss accounts. Step into implementation while holding more than 4,000 people in a single segment and it becomes impossible to see where the high margin is being diluted. Keep them apart and at least it is visible. The way two receiving companies were readied from the outset and the move completed in eight months suggests a deliberate sequence: settle the shape of the organization first, then load the next business onto it.

Separating the entities and growing the separated business are, however, different things. Whether the technology business can be carried at consulting-level economics will be decided by how the contents are run, not by how the vessel is designed. Implementation earns by committing headcount over time — a different kind of management from the small-team, high-rate model the company has relied on. Whether the split works as groundwork, or becomes the entrance through which the parent’s margin is thinned, is left to the numbers still to come.