Industry news

Salesforce has move to open its first data centre in the UK, in a move to bypass data protection laws which prohibits sensitive data from being stored in non UK or non EU locals. The move comes as part of an expansion program in Europe which is expected to create 500 new jobs.

Successful expansion in Europe, with a 41 per cent increase in revenue growth, has resulted in Salesforce moving to open data centre facilities in France and Germany alongside the UK.

The new UK site is planned to open in August 2014, while the German and French sites are scheduled to be operational in 2015.

The new site will be used by existing customers, with European customers including BMW, Pernod Ricard and Zeiss all benefiting from the locally hosted facilities.

President of EMEA at salesforce.com, Miguel Milano, said: "Our tremendous growth and customer momentum is why salesforce.com is significantly increasing its investment in Europe, by adding 500 new jobs and opening three new data centres across Europe, in the UK, France and Germany."

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Civica, an outsourcing services provider has moved to acquire Bristol based Coldharbour Systems, which specialises in providing application software services to the UK healthcare sector.

Coldharbour Systems provides software services to over 160 customers and has worked on projects with Civicabefore.

While payment details were not disclosed, a statement released by Civica regarding the acquisition, said that: “The acquisition of Coldharbour extends Civica's presence and expertise in sectors adjacent to its existing customer base while the combined product and service portfolio will enable the company to offer broader solutions to the health care sector including cloud and managed services."

The acquisition by Civica will provide the outsourcing group with a broader service offering and an additional business arm which enjoyed a profitable 2013.

CEO of Civica, Simon Downing, said: “Coldharbour brings a market-leading product set and an excellent reputation, and the combined business is very well placed to respond to the needs of customers across the healthcare sector.”

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Outsourcing firm Capgemini has teamed up with Aston University to develop workplace degrees in IT.

Two degrees in software engineering and information systems have been developed by the partnership, with the majority of the five-year courses taking place within the workplace.

The degrees will include a two year placement on the Capgemini Higher Apprenticeship scheme and three years undertaking a BSc degree.

Capgemini has revealed that 120 degrees places will be available in 2014, and that it is also in the early stages of developing a cyber-security apprenticeship, with plans to offer five positions.

Professor Dame Julia King, Aston University vice chancellor, said: “Over the past two years, 14 of Aston’s own graduates have been recruited to Capgemini’s graduate training programme and I look forward to welcoming the Higher Apprentice graduates to Aston University and the next stage of their educational journey.”

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One in six firms has moved re-shore work back to the UK due to savings in the face of rising costs in traditional offshoring destinations.

In a report entitled ‘Backing Britain – a manufacturing base for the future’ found that manufacturing companies were increasing sourcing back to the UK, due to competitive logistics costs and improved quality.

The report compiled by EEF and law firm Squire Sanders, identified that reshoring had increased over the last three years, with only one in seven firms bringing work back to the UK in 2009. The report found that 40 per cent of companies that did reshore services experienced increased turnover, while 60 per cent saw increased profit.

The report concluded that: “It is now key that government policy supports the most competitive business environment possible so that we continue to see more high value, innovative manufacturers invest in and sell from the UK.”

The G-Cloud director Tony Singleton has revealed that nearly 90 per cent of local authorities have not heard of the G-Cloud.

The G-Cloud director posted on his blog that despite the benefits of the procurement framework, “research carried out by the 6 Degree Group suggests that nearly 90 percent of local authorities have not heard of G-Cloud.”

The director detailed that the G-Cloud needed to be publicised more with the benefits communicated to local authority in order to drive uptake.

Mr Singleton said that the publication of clear guides designed to help buyers to better understand the procurement framework would help authorities understand how the cloud could reduce procurement times and improve competitive pricing.

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Liverpool Council has moved to end its multi-service joint venture known as Liverpool Direct Ltd (LDL), with BT after the telecommunications giant was unable to agree to price reductions.

The council in order to meet public sector savings targets after reduced budgets has asked BT to further reduced service prices, but will now move to take complete ownership of the joint venture, bringing services back in house, after BT failed to agree to the cost cuts.

LDL had provided a range of services including payroll, HR, IT, and revenue services, with the contract planned to cover up services until 2017.

The mayor Joe Anderson said: ”Over the last three years as much as possible has been done to protect services to the vulnerable from the budget cuts. However going forward this cannot continue.”

He acknowledged that despite price cuts by BT, these changes would not be enough: "Unfortunately BT feels unable to commit to any further price reduction within the contract as they need to sustain their own financial position. Moreover, the City Council is now well placed, as a result of the long collaboration with BT and the learning gained from the Partnership, to continue to drive forward business transformation and run the services with consequent cost savings to the city."

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The Driver and Vehicle Licensing Agency (DVLA) have been told to increase the speed and size of its digital transformation following a review from the Department of Transport.

The report identified that many DVLA services are still paper based, and that digital transformation is a prerequisite for service improvement and cost savings.

The report also cautioned that the DVLA transformation programme had an element of risk due to a lack of in-house skills and experience, the complexity of the digital upgrade and the need for a new IT infrastructure while maintain services throughout the transformation process.

The report said that the digital programme is expected to be operational by September 2015, however service will be delivered incrementally, delivering short-term, large scale savings.

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The stock prices of UK outsourcing company Serco Group rose by the highest amount in a decade, with a 13 per cent increase after the appointment of a new CEO.

Serco shares climbed to 463.50 pence with the company’s market value now at £2.23 billion.

Rupert Soames was appointed as the new CEO, and is set to take over from incumbent CEO Ed Casey on June 1st according to a statement from the outsourcing service provider.

Mr Soames has been appointed on the back success in driving growth in his past roles, and his posting comes as part of Serco’s attempts to grow following put negative stories in 2013, including a 68.5 million recharge to the UK government following service overcharging.

G4S and Serco criticised by government watchdog

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Capita has said that it expects to benefit from a buoyant outsourcing market as the public and private sector turn to outsourced services to create savings.

While other large outsourcing companies such as G4S and Serco have been hit heavily by fallout from a series of scandals, including overcharging and failure to meet service targets, Capita has managed to emerge relatively untouched.

Capita also expects that contrary to past expectations, the pre-election period will continue to see strong outsourcing market performance due to the need for savings, with the hope of meeting budget goals driving the markets growth.

Deputy chief executive, Andy Parker, said: “There’s been £1bn of decisions since November, and we have won £600m of that. The G4S-Serco deals have obviously damaged sentiment for the sector but I don’t think it’s affected that many decisions.”

Capita post 14% profit rise

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House-prices have risen again according to the latest figures, with job market growth and strong performances from manufacturing, fuelling expectations of a sooner than expected interest rate rise from the Bank of England.

House prices have risen to the highest level since 2007 while job creation entered into a 22-month high. Manufacturing has also performed strongly, growing despite poor weather and 17 inches of rain over February.

The Bank of England policy makers are due to meet this week, with analyst predicting that interest rates will still remain at 0.5 per cent.

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