LogicaCMG, the Anglo-Dutch IT outsourcer, finally has a new chief executive — the BT veteran Andy Green.

Mr Green, who had been regarded as a potential successor to Ben Verwaayen, the present BT chief executive, was only recently appointed as BT's head of group strategy — previously he headed BT's international operations and worked on transforming the telecommunication giant's technology division.

He replaces the long-serving Martin Read, who stepped down from LogicaCMG in May at an emergency board meeting, called after a profit warning and a share price plunge.

For the most part, the City looks to have welcomed the appointment of a heavyweight “new broom” — a long-awaited move that many hope can prompt a rerating of the sluggish LogicaCMG stock. The shares were up more than 10 per cent in afternoon trade today (though still well below their levels at the start of the year).

“Green, has a wealth of transformational expertise — this is a key requirement for the job,” George O'Connor, the Panmure analyst, said.

So what will be at the top of Mr Green’s in-tray?

In Mr O’Connor’s view, LogicaCMG is “not a balanced business”. It is weak in financial services “and so missing the spend hike there — instead moving headlong into the government sector,” he said.

Analysts also believe that LogicaCMG has to beef up its offshore facilities.

In India, for example, LogicaCMG is expected to have about 4,000 staff at most by the end of the year. That is not enough. By contrast, Cap Gemini has 12,000 staff in India and CSC 7,000. Accenture has 30,000.

Mr Green — who has plenty of offshoring experience — has already confirmed this is an issue that he will look at.

But throwing up the offshore isssue leads to another big question: does LogicaCMG have a future as an independent company?

Investment bankers are willing for an Indian outsourcing giant — a TCS or an Infosys — to pounce on a Western rival. LogicaCMG and Cap Gemini are two names firmly in the frame.

There are questions over whether a deal is really imminent. Talk to Indian industry players and they ask what is to gain for an Indian company from bolting on a group such as LogicaCMG — itself under pressure from Indian business models that operate from lower (if escalating) cost bases and have proven themselves hugely scalable and therefore eminently suitable for organic growth.

Moreover, Indian IT companies have shown themselves to be more interested — so far — in smaller, cheap deals.

The counterargument in favour of an Indian takeover of a Western group such as LogicaCMG turns on the Indians’ ambitions to get closer to their Western clients — and to move from low-cost grunt work to more valuable, sophisticated contracts.

Taking over a Western group would give an Indian firm essential insight into, say, the UK Government’s attitude on benefit payment systems, or Tesco’s desire to refine its supply chain, the deal cheerleaders say.

With Indian companies eager to ascend the value chain, that logic seems to be sound. A company such as LogicaCMG, with its clients in non-English speaking territories such as the Netherlands, France and Norway, looks especially valuable in these terms — it would give an Indian company such as TCS a foothold beyond its current core English-speaking market .

Mr Green will have a short grace period in which to outline his vision for the future of LogicaCMG. A host of potential Indian suitors will be watching his progress with interest.

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