Industry news

An article in the Financial Times has claimed that “international companies are piling into Poland’s historic city of Gdansk… as a way to cut costs while keeping expertise”.

According to the article, Deutsche Bank, Toshiba and State Street are all looking to outsource to Gdansk within the next two years, a series of moves that could bring 5,000 new jobs to the city.

In a study conducted by real estate consultant Cushman & Wakefield, Poland was ranked as the 18th best country for BPO and shared services, falling behind other European locations such as Romania, Bulgaria and Hungary.

Three Polish cities, Kraków (9th), Warsaw (30th) and Wroclaw (62nd), were listed among the top 100 global outsourcing destinations in a report released by Tholons, but Gdansk did not feature.

Nevertheless, those that work in Gdansk are convinced of the city’s growth. “Today you drive through the city and it is office after office after new development,” said Michał Gryglewski, managing director of Sony Pictures’ business services operation in Gdansk.

“It has been dynamic. We have tapped into the local market and developed it as well.”

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Related: Bangalore Crowned Top Outsourcing City – Philippines Slowly Closes the Gap

CIO has reported that Apple was responsible for supercharging two of its fiercest rivals – Samsung and Foxconn – and that it did so by outsourcing manufacturing responsibilities to these companies.

The article suggests that Apple was determined to outsource manufacturing and assembly operations from the outset. The lion’s share of manufacturing including screens, Flash, DRAM memory and logic processors were all outsourcing to Samsung Electronics, while the responsibility for assembling the iPod, iPhone and iPad was outsourced to Foxconn.

Unsatisfied with making margins of 12.02 per cent and 1.7 per cent from the sale of each product respectively, Samsung and Foxconn opted for rebellion. In 2011 Samsung invested billions and formed a relationship with Google Android, ultimately leading to the creating of the Samsung Galaxy S3, S4 and Galaxy note, devices that now directly compete with Apple’s own products.

In 2013, Foxconn created a venture capital-backed hardware accelerator programme – shortly after the release of the Apple Watch, unsurprisingly Foxconn’s first product release was also a smartwatch.

After a drop in value from $700 to £566 per share, 2013 saw Apple’s share price stall for over a year at $550, with over $150 billion in shareholder value lost.

Read the full article on the CIO website.

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The Times of India has reported that BPO company Genpact is considering the acquisition of Syntel, the leading IT outsourcing, IT consultancy and BPO firm.

According to the Indian daily newspaper, Genpact and its principal shareholder Bain Capital have been considering the acquisition of Syntel for several months, with preliminary discussions already taking place.

According to CRN, the deal would theoretically add $911 million to Genpact’s $2.27 billion in annual sales. The news site has also reported that Genpact was in contention to acquire North American solutions provider IGATE, before being ultimately outbid by Capgemini.

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Related: Capgemini Acquires IGATE: Hear from the CEOs

Serco Group has completed the sale of its Australian long distance railway service Great Southern Rail to private equity firm Allegro for a total of £2.5 million.

Serco announced the sale of GSR back in November 2014 and came to an agreement with Allegro late in March 2015. The ownership of GSR does not coincide with Serco’s new strategy to focus on public sector services; it is thought that the railway’s historical lack of profitability also influenced the decision to sell.

Rupert Soames, CEO of Serco Group, commented: "Great Southern Rail is an iconic and award-winning Australian tourism business operated by some great people.

"However, Serco needs to concentrate on its core as a leading supplier of public services and we cannot provide the focus and investment GSR needs to thrive."

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Related: Serco Appoints Sir Roy Gardner as Chairman after Six-Month Search

On 26 May 2015, Capita announced its acquisition of Pervasive Ltd, an IT solutions provider that specialises in wireless networks, mobility managed services and bring-your-own-device solutions.

Pervasive is the leading EMEA partner for wireless networking provider Aruba Networks, recently acquired by HP. Pervasive’s clients are mostly based in the higher education, further education, local government and health service sectors.

Peter Hands, executive director of Capita IT Enterprise Services, said: “We are continuing to see a shift in working habits with the increased use of mobile devices, requiring flexible technology that enables employees to enhance productivity.

“Pervasive has a strong record of providing wireless networks to clients across multiple sectors, offering the agility to respond to changing customer requirements. The addition of Pervasive further enhances the range of services offered by our Technology Solutions division, which already offers clients expertise in information security, networking, unified communications, cabling and data management.”

Pervasive employs 76 individuals and has key sites in Newbury and Newmarket. The business will integrated into Capita IT Enterprise Services’s Technology Solutions division.

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Related: Genpact Takes Steps to Acquire Syntel

King’s College Hospital NHS Foundation Trust has selected Civica to provide a digital care records system to integrate with other key clinical functions.

King’s College estimates it will save £700,000 over two years and has a plan to go paperless by 2018.

The college will use Civica’s WinDIP electronic document management (EDM) technology as well as a third party scanning solution.

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Related: Capita Wins £80 Million NHS Contract

Research conducted by The Hackett Group has found that many medium-sized cities in the United States are becoming increasingly popular as outsourcing locations for finance, IT and other business service operations.

The research found that an increasing number of US companies are opting for the likes of Syracuse and Jacksonville over cities in India, the Philippines and other prevalent offshore locations.

Verizon Communications is just one of many companies that has chosen to reshore, consolidating nearly 1,500 financial operations staff into two US-based service centres over the past two years.

Hackett Group has cited the following as the top US cities for outsourcing, according to their study: Syracuse, NY; Jacksonville, FL; Tampa, FL; Lansing, MI; Grand Rapids, MI; Atlanta, GA; Allentown, PA; Green Bay, WI; Richmond, VA; Longmont, CO.

The Group concluded that “the number of new business services jobs moving offshore has declined steadily over the past few years and will continue to do so, as companies reach the practical limits of the type of work in these areas that can be effectively offshored.”

You can find further details by reading the press release on the Hackett Group website.

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Related: Soitron’s Destination Analysis: Spotlight on Slovakia

Everest Group has found that, in the first quarter of 2015, Europe surpassed Asia in “new setup activity” of service centres for the very first time.

This is despite a sluggish start to the year for outsourcing overall, with global transaction activity continuing to decline for a third consecutive quarter.

Everest reports that Europe’s success largely came down to the manufacture, distribution and retail sector, as well as local technology firms building research and development centres in nearshore locations.

Salil Dani, vice president of Everest Group, commented: “A highlight of Q1 is that the overall GIC market continued to increase and is shifting toward getting better, thanks to persistent demand from adopters.

“In particular, we are seeing GIC setups for IT and R&D/engineering work gaining traction, driven by the increased adoption of Social, Mobile, Analytics and Cloud—or SMAC—technologies.”

The full Market Vista Q1 2015 report is available for purchase on Everest’s website.

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Related: Genpact Named BPO ‘Leader’ by Everest Group

Capita has signed a contract with Ark Data Centres, meaning that Ark will supply secure, energy efficient data centre space for the new Capita Private Cloud platform.

In a press release Ark Data Centres has claimed that, by using Ark’s services, Capita will spend one-tenth the capital cost compared to what it would stand to spend maintaining its existing facilities.

Executive director of Capita IT Enterprise Services Peter Hands said: “Ark Data Centres offers modern facilities which integrate its innovation in cooling technology, dynamic monitoring, modularity, security by building not site, guaranteed power usage effectiveness (PUE) and speed.

“Combined with our expertise in cloud based services, we’re in prime position to deliver the availability that our customers need, with the flexibility and security that they want and with the reduced carbon footprint that everyone seeks.”

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Related: Capita Finds Success Rewarding Staff through Gamification

The London Borough of Hounslow has extended its contract with Liberata. The extension, worth £9.5 million, will see Liberata manage the digital transformation and automation of its business processes.

Liberata originally won the contract in 2005, taking over from Serco to provide administration and call centre functions for Hounslow.

This has saved the council £22 million through the contract so far, with further savings planned to help fund schools and care for older people.

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Related: Amey Wins £235 Million Contract with Trafford Council