Industry news

Prolonged austerity measures have given Britain’s local councils cause to think more innovatively about how to simultaneously provide services and save money, with outsourcing often at the heart of their strategies.

According to the FT, councils from Suffolk to Kent are positioning themselves as trading companies and commissioners, rather than direct providers of services. Research undertaken by Localis, the local government think-tank, has shown that the vast majority of councils share some services with their counterparts, over half own a trading company and, going by current trends, almost all will do so by 2020.

“Councils are setting the pace because they have faced tough finances for longer. They are more confident than central government in outsourcing, merging the back office and joining up front-line services,” commented Andrew Haldenby, director of pro-market think tank Reform.

Recent analysis conducted by the Local Government Association found that UK councils will have to find an extra £1 billion by 2020 in order to fund the new minimum wage proposed in the government’s summer Budget.

For weekly news updates, subscribe to our email newsletter.

Related: UNISON expresses concerns over Northamptonshire County Council’s extensive outsourcing

Tata Motors has hired Accenture to instigate an “organisational restructuring and performance improvement programme” in order to cut down on unnecessarily bureaucratic decision-making.

While Tata Motors is currently India’s largest vehicle manufacturer, competition along the lines of Mahindra & Mahindra Ltd and Maruti Suzuki India Ltd is gaining ground. It’s thought that a nimbler, streamlined operation would help Tata widen the gap between itself and those contenders.

Accenture is expected to increase the output of Tata Motors’ 28,000 employees, as well as achieve particular benchmarks involving sales across multiple divisions. Restructuring, performance management, leadership development and an HR systems overhaul have all be cited as responsibilities that will be part of Accenture’s remit.

For weekly news updates, subscribe to our email newsletter.

Related: TNT chooses Accenture for five-year back office deal

Capgemini and SSP, the global provider of insurance technology, have entered into a services agreement to help insurance companies replace legacy systems and “accelerate their digital ambition[s].”

Two leading UK insurers have already chosen SSP Select Insurance within the last three months. SSP’s work, which is already underway, involves the instigation of digital programmes focused on both UK households and automotive businesses. Capgemini is already actively supporting the work.

"In today's increasingly competitive market, flexibility and the ability to provide a consistent experience to customers across all channels is more important than ever,” said Stephen Lathrope, managing director of SSP’s Insurer division.

“We are delighted to be working with Capgemini to add to our ability to create innovative digital insurance solutions for our customers, and to accelerate the pace with which we are able to help them to realize these ambitions."

Nigel Walsh, vice president and head of UK insurance at Capgemini, commented: "Insurers are looking for cost-effective ways to create the capabilities that they need in order to drive profitable growth. Legacy platforms don't provide the flexibility or agility that insurers need in order to compete successfully, but implementing new platforms and achieving a smooth migration can be challenging.

“Capgemini has a strong record in working with insurers from digital strategy to design, implement, and run business critical systems. We are delighted to be working with SSP and the Select Insurance product."

For weekly news updates, subscribe to our email newsletter.

Related: Capgemini finalises acquisition of IGATE

Various sources have suggested that four Indian service providers – Infosys, Wipro, TCS and Tech Mahindra – as well as Microsoft, have all entered bids for the project to provide India with a new country-wide goods and services tax (GST) network.

The Indian government plans to implement a single rate GST to subsume central excise, service tax and other local levies across the nation. The programme was set in motion by an RFP on 21 April, with a closing date for bidding set for 6 July. The government wants the project to be completed and ready to go from 1 April 2016.

“We have received five bids for building the GSTN system. We will finalise [the decision] by the end of the month,” said GST Network chairman Navin Kumar. "For registration the target is to get it ready by January 31 so that there is two months’ time for testing. And payment and returns will follow months later, because the first return will be filed only in May.”

For weekly news updates, subscribe to our email newsletter.

Related: AstraZeneca move signifies big changes in Indian outsourcing market

Capita Asset Services has found that a total of £29.2 billion was paid out in dividends by UK companies in the second quarter of this year, the highest level of shareholder payments since 2008.

Underlying dividends accounted for roughly £28.3 billion of total pay-outs; this figure was subsequently pushed up to its full total by special dividend payments. Banks unsurprisingly contributed a great deal, with HSBC hiking its payments and Lloyds paying out a total of £595 million, in its first dividend payment since the close of 2008.

Capita now forecasts that total underlying dividends will reach £84.8 billion in 2015.

For weekly news updates, subscribe to our email newsletter.

Related: Soames says Serco in “good order” despite year-on-year profit decline

A contributor to Forbes has suggested that the progress of 3D printing will spark a revolution, tipping balances in favour of insourcing and localisation as opposed to outsourcing and globalisation.

Panos Mourdoukoutas suggests that the key drivers of outsourcing (and particularly offshoring), such as cutting costs, improving services and boosting efficiencies, will be negated once 3D printing is adopted on an industrial scale.

By allowing companies to keep their manufacturing processes in-house, he also claims that 3D printing will let businesses keep their supply chain as one “single integrated process,” rather than the “fragmented and disintegrated process” that is brought about by the use of numerous service providers.

You can find the full piece here.

For weekly news updates, subscribe to our email newsletter.

Related: Xchanging finds supply chain risk is the greatest external challenge for businesses

Despite the global annual contract value (ACV) for the first half of 2015 ($6.2 billion) declining seven per cent year-on-year, ISG’s latest global Outsourcing Index has revealed that numerous world-wide outsourcing records have been broken in the second quarter of this year.

A record 451 contracts valued at $5 million or more were signed in the second quarter of 2015, along with a high of 754 agreements in the first half of the year. These achievements were all managed despite a lacklustre first quarter – one of the slowest quarters of the last decade.

ISG noted that the sharp increase in activity has come as buyers continue to negotiate a higher number of deals at a lower value, opting to avoid getting locked into cumbersome, long term contracts at a time when a wave of new technologies and operating models are causing significant disruption in the ITO and BPO markets.

ISG president John Keppel commented that three of the past four halves have logged the highest outsourcing adoption counts ever: "We're seeing a clear and continuing trend towards more deals at lower value.

“From the start of the recession in 2008 until now, counts have nearly doubled, while ACV has risen only modestly. Technology has changed significantly during this period, which saw the beginning of the digital as-a-service revolution and its continuing pervasive impact on the global services market.

"It's particularly noteworthy that ACV rallied from a dismal first quarter to pass the $6 billion mark without any significant aid from mega-relationships this quarter. The second quarter had only two deals with ACV greater than $100 million, a low not seen in many years. Clearly, it's the size of the demand, not the size of the deal, that is driving this market."

You can access further information on the ISG Outsourcing Index here.

For weekly news updates, subscribe to our email newsletter.

Related: Every Service Provider Worth Knowing in the Global Outsourcing Market, According to ISG

ISON BPO, the BPO and call centre services firm, has brought nine more contact centres to the African region this year, requiring an additional 5,000 employees.

The company currently has over 7,000 employees across 12 countries, including 10 centres in sub-Saharan Africa with 4,500 individuals working there.

Four of ISON BPO’s new centres are being set up in Nigeria, requiring a further 4,000 employees. The firm currently employs 1,300 individuals in the country, 99 per cent of which are local Nigerians. Airtel and AIICO are two key clients of the Nigeria-based centre.

Pravin Kumar, CEO of ISON BPO, said: “Nigeria has a huge potential for growth and development, especially with the availability of strong, vibrant and talented workforce. One of our visions for Nigeria is to upskill the local human talent and develop it as an Offshore Call Center hub and also add significant value for our customers both internally and externally.

“It should not be difficult to create 25,000 jobs in one-to-two years in this space and generate export revenue of around 400 million dollars in this space. It can then grow from there.”

For weekly news updates, subscribe to our email newsletter.

Related: Why Saudi Arabia could be the Next Big ITO Market

arvato Systems has chosen Violin Memory to host its all-flash storage arrays, deciding against going with one of the “big six” storage suppliers such as HP or IBM.

arvato opted for Violin’s services after it identified the need to provide storage for customer services based on large external databases, owned by Oracle and SAP.

“We needed IOPS higher than 100,000 and believed we would need up to 500,000 IOPS and this was not possible with old fashioned spinning disk storage,” said Jesko Jacobs, senior data center manager at arvato Systems.

The huge IT service provider considered proposals from the likes of IBM, HP, Hitachi and EMC, but decided to concentrate on flash storage specialists instead, hence why Violin Memory was ultimately chosen.

For weekly news updates, subscribe to our email newsletter.

Related: Goldman Sachs Moves to Revolutionary IO Datacentre in Slough

Customer relationship management company Groupe Acticall has agreed to buy Sitel Worldwide Corporation for an undisclosed amount.

Through its acquisition of Sitel, Groupe Acticall will gain access to 61,100 employees, advanced technology solutions, a number of high profile customers and over 30 years of industry experience. The French-headquartered firm already has 7,500+ employees and over 65 million customer contacts managed annually.

Sitel will continue to operate as an independent brand, owned by Groupe Acticall, upon the closing of the acquisition, which is still subject to government and regulatory approvals.

Peter Ryan, principal analyst at Ovum, wrote on Ovum’s blog that the news was “of little surprise among watchers of the contact centre outsourcing space” and that Groupe Acticall “will clearly benefit from Sitel’s global presence, which counts 21 countries and 40 languages.”

He went on to speculate on how Groupe Acticall will facilitate Sitel’s revenue growth:

“Over the past two years, Sitel’s top line only grew one per cent annually, which was lower than most of its global competitors. That it will now be owned by a firm that has a legacy in CRM and that understands the nature of the contact center sector is a positive first step in improving its revenue performance.

“Groupe Acticall should provide Sitel with the flexibility and backing required to further expand into value-added solutions, explore new vertical market opportunities, and prospect for contracts in emerging demand centers.”

For weekly news updates, subscribe to our email newsletter.

Related: Wipro steps up digital offering with design firm acquisition