American Management Systems
Encyclopedia
American Management Systems (previous NASDAQ
symbol: AMSY) was a high technology and management consulting
firm, founded in 1970 by a group of five former Defense Department
officials who had worked under Robert McNamara
in the Kennedy
and Johnson administration. The company grew throughout the 1980s and 1990s, implementing key systems such as the accounting system for New York City
and The Standard Procurement System
for the United States Department of Defense
. The company was acquired by CGI Group
in 2004, with AMS's federal defense business being acquired by CACI
.
, Frank Nicolai, Patrick W. Gross, and Jan Lodal. The company's initial headquarters were in the Washington, D.C. suburb of Arlington, Virginia. From its inception, much of AMS's revenue was derived from contracts with federal agencies. The company grew quickly during the 1970s. During its first decade of operation, AMS focused its business on consulting and selling customized software to large government and corporate organizations.
The company grew to over nine thousand employees, with many offices in both the United States and other countries. At one point in the 1990s, one quarter of the company's revenue, albeit none of the profit, came from Europe. Much of its business centered on creating large computer systems for various government entities. It created a large accounting system for New York City during the city's recovery from its fiscal crisis
in the late 1970s, and won an award for the Defense Department's Standard Procurement System
in 1997.
operator PacTel Cellular, who later became AirTouch
. Following the expansion of the GSM standard in Europe, AirTouch International invested in a number of foreign GSM providers. This led to the expansion of the AMS billing solution, re-branded as Spectrum 2000, into Europe. In 1992 AMS was in a unique position as provider of the billing system to the emerging mobile telco
market in Europe, making AMS a major player in the European Market. AMS expanded into Portugal
, the UK
, Germany
, the Netherlands
, Belgium
, Spain
, and Poland
. Despite this success, the company did not develop sufficient service delivery and business development units. Instead, it decided to commit to a huge (over 100M$) investment in the development of the sophisticated Customer Care and Billing System Tapestry for German
fixed-wire telecom Arcor
. Lack of commitment to marketing of this system contributed to the problems that led to significant layoffs in Europe in 2002. Furthermore AMS lost prestige when D2 chose Amdocs
for its billing solution.
By 2002, AMS had approximately 6300 employees, 986 million in revenue and 21 million in income and 51 offices worldwide.
terminated an $11.2 million contract with AMS to modernize the state's tax system and sued the company for $985 million in damages. A jury awarded the state $474.5 million in actual and punitive damages in August 2000, causing a drop in stock price from 44 3/8 to 14. The company subsequently settled the suit for $185 million.
Another customer, the Federal Thrift Investment Board, cancelled a contract in 2000 for a system to make Thrift Savings Plan data available online. The subsequent lawsuit was settled for $5 million in June 2003. A subsequent United States Senate
investigation authored by senators Susan Collins
and Joe Lieberman
identified various reasons for four years of delays and cost overruns, including lack of formal agreement on a detailed design and problems with the structure of the contract.
In December 2002, AMS sold its Global Energy Group to Bangalore, India-based Wipro Technologies.
New CEO Alfred T. Mockett was hired by AMS in 2001 to grow the company's sales from $1.1 billion to $3 billion a year, with a goal of becoming a top tier system integrator through growth and acquisitions, with an eventual goal of a "big bang merger of equals." When this strategy proved unsuccessful, Mockett negotiated a sale of the firm. CGI
, a Canadian company, was the primary purchaser, paying $858 million for the commercial business and all government business not related to national defense. The defense portion of AMS could not be sold to a foreign-based company so CACI
purchased the defense and intelligence practice for $415 million. The AMS brand was retained by CGI for a time and the AMS website directed users to the CGI site. CGI's United States headquarters are in Fairfax, Virginia
.
with a commanding view of Washington DC. In the early 1990s, AMS moved its corporate headquarters to Fairfax, Virginia
.
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
symbol: AMSY) was a high technology and management consulting
Management consulting
Management consulting indicates both the industry and practice of helping organizations improve their performance primarily through the analysis of existing organizational problems and development of plans for improvement....
firm, founded in 1970 by a group of five former Defense Department
United States Department of Defense
The United States Department of Defense is the U.S...
officials who had worked under Robert McNamara
Robert McNamara
Robert Strange McNamara was an American business executive and the eighth Secretary of Defense, serving under Presidents John F. Kennedy and Lyndon B. Johnson from 1961 to 1968, during which time he played a large role in escalating the United States involvement in the Vietnam War...
in the Kennedy
John F. Kennedy
John Fitzgerald "Jack" Kennedy , often referred to by his initials JFK, was the 35th President of the United States, serving from 1961 until his assassination in 1963....
and Johnson administration. The company grew throughout the 1980s and 1990s, implementing key systems such as the accounting system for New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
and The Standard Procurement System
The Standard Procurement System
The Standard Procurement System is a software suite providing front-office business services to Acquisition professionals in the United States Department of Defense.- Program History :...
for the United States Department of Defense
United States Department of Defense
The United States Department of Defense is the U.S...
. The company was acquired by CGI Group
CGI Group
CGI Group Inc. is an information technology management and business process services company. Founded in 1976 and headquartered in Montreal, Canada, CGI employs approximately 31,000 professionals in over 125 offices in 16 countries. As of September 2010, CGI had an annual revenue of CA $3.7...
in 2004, with AMS's federal defense business being acquired by CACI
CACI
CACI International Inc is a professional services and information technology company headquartered in Arlington, Virginia. CACI is a member of the Fortune 1000 Largest Companies and the Russell 2000 index. The company has approximately 13,700 employees in over 120 offices in the U.S. and...
.
History
AMS was founded in 1970 by five former Defense Department "Whiz Kids": Charles Rossotti, Ivan SelinIvan Selin
Ivan Selin is an American businessman, and former Chairman of the Nuclear Regulatory Commission and Under Secretary of State for Management. Selin is a Fulbright Scholar and graduate of Yale University and University of Paris...
, Frank Nicolai, Patrick W. Gross, and Jan Lodal. The company's initial headquarters were in the Washington, D.C. suburb of Arlington, Virginia. From its inception, much of AMS's revenue was derived from contracts with federal agencies. The company grew quickly during the 1970s. During its first decade of operation, AMS focused its business on consulting and selling customized software to large government and corporate organizations.
The company grew to over nine thousand employees, with many offices in both the United States and other countries. At one point in the 1990s, one quarter of the company's revenue, albeit none of the profit, came from Europe. Much of its business centered on creating large computer systems for various government entities. It created a large accounting system for New York City during the city's recovery from its fiscal crisis
History of New York City (1946-1977)
The history of New York City saw the emergence of New York immediately after World War II as the unquestioned leader among major cities of the world...
in the late 1970s, and won an award for the Defense Department's Standard Procurement System
The Standard Procurement System
The Standard Procurement System is a software suite providing front-office business services to Acquisition professionals in the United States Department of Defense.- Program History :...
in 1997.
Telecom Practice
In the late 1990s and early 2000s, American Management Systems was among the main telecom consulting companies in the United States. The company grew aggressively because of professional talent in the emerging Competitive Local Exchange Companies. As a result, AMS was a market leader to offer its telecom client Kenan's Arbor-B/P, the award-winning convergence Billing Solution.AMS in Europe
At the beginning of the 1990s, AMS provided the PRISM billing solution for the American cellular networkCellular network
A cellular network is a radio network distributed over land areas called cells, each served by at least one fixed-location transceiver known as a cell site or base station. When joined together these cells provide radio coverage over a wide geographic area...
operator PacTel Cellular, who later became AirTouch
AirTouch
AirTouch Communications was a U.S.-based wireless telephone service provider, created as a spin-off on Pacific Telesis on April 1, 1994. Its headquarters were in One California in the Financial District, San Francisco, California...
. Following the expansion of the GSM standard in Europe, AirTouch International invested in a number of foreign GSM providers. This led to the expansion of the AMS billing solution, re-branded as Spectrum 2000, into Europe. In 1992 AMS was in a unique position as provider of the billing system to the emerging mobile telco
Telephone company
A telephone company is a service provider of telecommunications services such as telephony and data communications access. Many were at one time nationalized or state-regulated monopolies...
market in Europe, making AMS a major player in the European Market. AMS expanded into Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
, the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
, Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, and Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
. Despite this success, the company did not develop sufficient service delivery and business development units. Instead, it decided to commit to a huge (over 100M$) investment in the development of the sophisticated Customer Care and Billing System Tapestry for German
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
fixed-wire telecom Arcor
Arcor (Telecommunications)
Arcor is the second-largest fixed phone line provider in Germany. The company has been renamed to Vodafone AG & Co. KG on 8/1/2009. It is owned solely by Vodafone since May 2008, when Deutsche Bahn and Deutsche Bank sold their shares to Vodafone.# Its headquarters are in Eschborn near Frankfurt...
. Lack of commitment to marketing of this system contributed to the problems that led to significant layoffs in Europe in 2002. Furthermore AMS lost prestige when D2 chose Amdocs
Amdocs
Amdocs Limited is a provider of software and services for billing, customer relationship management , operations support systems...
for its billing solution.
By 2002, AMS had approximately 6300 employees, 986 million in revenue and 21 million in income and 51 offices worldwide.
Lawsuits, divestiture, and sale
In 1999, the state government of MississippiMississippi
Mississippi is a U.S. state located in the Southern United States. Jackson is the state capital and largest city. The name of the state derives from the Mississippi River, which flows along its western boundary, whose name comes from the Ojibwe word misi-ziibi...
terminated an $11.2 million contract with AMS to modernize the state's tax system and sued the company for $985 million in damages. A jury awarded the state $474.5 million in actual and punitive damages in August 2000, causing a drop in stock price from 44 3/8 to 14. The company subsequently settled the suit for $185 million.
Another customer, the Federal Thrift Investment Board, cancelled a contract in 2000 for a system to make Thrift Savings Plan data available online. The subsequent lawsuit was settled for $5 million in June 2003. A subsequent United States Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
investigation authored by senators Susan Collins
Susan Collins
Susan Margaret Collins is the junior United States Senator from Maine and a member of the Republican Party. First elected to the Senate in 1996, she is the ranking member of the Senate Committee on Homeland Security and Governmental Affairs...
and Joe Lieberman
Joe Lieberman
Joseph Isadore "Joe" Lieberman is the senior United States Senator from Connecticut. A former member of the Democratic Party, he was the party's nominee for Vice President in the 2000 election. Currently an independent, he remains closely affiliated with the party.Born in Stamford, Connecticut,...
identified various reasons for four years of delays and cost overruns, including lack of formal agreement on a detailed design and problems with the structure of the contract.
In December 2002, AMS sold its Global Energy Group to Bangalore, India-based Wipro Technologies.
New CEO Alfred T. Mockett was hired by AMS in 2001 to grow the company's sales from $1.1 billion to $3 billion a year, with a goal of becoming a top tier system integrator through growth and acquisitions, with an eventual goal of a "big bang merger of equals." When this strategy proved unsuccessful, Mockett negotiated a sale of the firm. CGI
CGI Group
CGI Group Inc. is an information technology management and business process services company. Founded in 1976 and headquartered in Montreal, Canada, CGI employs approximately 31,000 professionals in over 125 offices in 16 countries. As of September 2010, CGI had an annual revenue of CA $3.7...
, a Canadian company, was the primary purchaser, paying $858 million for the commercial business and all government business not related to national defense. The defense portion of AMS could not be sold to a foreign-based company so CACI
CACI
CACI International Inc is a professional services and information technology company headquartered in Arlington, Virginia. CACI is a member of the Fortune 1000 Largest Companies and the Russell 2000 index. The company has approximately 13,700 employees in over 120 offices in the U.S. and...
purchased the defense and intelligence practice for $415 million. The AMS brand was retained by CGI for a time and the AMS website directed users to the CGI site. CGI's United States headquarters are in Fairfax, Virginia
Fairfax, Virginia
The City of Fairfax is an independent city forming an enclave within the confines of Fairfax County, in the Commonwealth of Virginia in the United States. Although politically independent of the surrounding county, the City is nevertheless the county seat....
.
Location
For the first 20 or more years of its existence, the company was based in Arlington, Virginia on the banks of the Potomac RiverPotomac River
The Potomac River flows into the Chesapeake Bay, located along the mid-Atlantic coast of the United States. The river is approximately long, with a drainage area of about 14,700 square miles...
with a commanding view of Washington DC. In the early 1990s, AMS moved its corporate headquarters to Fairfax, Virginia
Fairfax, Virginia
The City of Fairfax is an independent city forming an enclave within the confines of Fairfax County, in the Commonwealth of Virginia in the United States. Although politically independent of the surrounding county, the City is nevertheless the county seat....
.
List of chief executive officers of AMS
- Ivan Selin - 1970 to late 1980s
- Charles O. Rossotti - Late 1980s to Mid 1990s
- Paul Brands - Mid 1990s to October 25, 2000
- Bill Purdy (Interim) - October 26, 2000 to November 30, 2001
- Alfred T. Mockett - December 1, 2001 to 2004