Industry news

As dependency on IT systems and services increases, so too does the threat of system flaws of incorrect maintenance. Recent months have seen multiple examples of highly expensive failures from flaws within IT infrastructure. The need for establishing best practice for IT stability is painfully evident.

Recent public data protection failings while often the fault of human error, have been exacerbated by poorly implemented technology.

When technology is used on a daily process by global companies, often involving huge amounts of revenue, failures can have a huge impact.

Examples such as the recent technical failures of the Nasdaq stock exchange during the floatation of Facebook shares demonstrate the impact of IT glitches. The technical issues saw the potential loss of millions in business and Nasdaq have had to offer as much as $40 million in compensation to investors after trading was delayed by half an hour.

Last week saw two incidents of IT failures that resulted in million pound losses in both cases. Manganese Bronze Holdings who specialise in making London black cabs lost £3.9 million in profits from IT accounting errors.

The company said that system errors had “led to the over-statement of stock and under-statement of liabilities in the financial statements of previous years.” The company declined to mention the supplier of the IT system responsible for the fault. The announcement of the IT failure saw the company’s stock crash by 36 percent.

Accidental trades made by Knight Capital were revealed to be caused by dormant software which activated when a new system was installed. The fault resulted in a $440 million loss for the trading firm. Bloomberg reported that “once triggered on August 1, the dormant system started multiplying stock trades by one thousand."

As financial systems become more dependent on IT services it is vital that these services are maintained properly. While technology advancements occur rapidly, rapid upgrading can cause instability as demonstrated by the losses sustained from Knight Capital’s implementation of new software.

The establishment of clear guidelines and best practice guides for safely employing and upgrading technology is vital to achieving security and stability. With the recent examples of large scale losses resulting from failed technology industry guidelines now have an added urgency.

Dilip Allam, client services director at Mastek, explains how organisations can implement successful outsourcing schemes, even when teams are based in different locations.

With the explosion of cloud computing and Software as a Service (SaaS), it has never been easier for organisations to outsource business processes to other countries in order to take advantage of a large talent pool, cut costs and increase efficiency. Many businesses, however, are still reluctant to implement offshoring projects like these, since there is a misconception that the project won’t work if the team isn’t in one location.

To change this out-dated view of offshoring and implement more agile ways of working, firms need to develop a framework that incorporates an on-going cycle of ‘identify, plan, develop and deliver’.

As a first step, organisations need to identify exactly what they are looking to achieve. By understanding their key business objectives, it is possible to design a methodology that can meet these specific requirements very quickly. Secondly, agile offshoring will require a cultural change within the business in order to encourage greater collaboration with any offsite teams. For example, by training key stakeholders on the various tools and technologies that enable a flexible approach to IT projects, it is possible to ensure that the business can see the progress being made abroad much more easily and in real time.

Tools like audio, video, instant messenger or desktop sharing via a high-speed link are already making it possible to increase communication between the onshore/offshore teams. These regular updates also have the added benefit of ensuring that any change in requirements can be easily communicated on a continuing basis, and can help to ensure that everyone is happy with the end result.

Finally, organisations can boost engagement with offshoring staff and create a single homogenous team by using the same development tools, code repository and increment goals in every location, regardless of where the project team is located. This synchronous way of working means that offshore teams can be set up as an extension of the onshore team.

In today’s business world, the reality is that project teams are located across multiple locations and geographies, but that doesn’t need to be a problem. By adopting a more agile approach to outsourcing, this model can provide a viable and productive way of meeting many different business objectives. In fact, by adopting a more strategic and cyclical approach to offshoring, businesses can ensure they are taking advantage of growing trends in globalisation and maintaining competitive advantage. As such, by adopting a more agile approach to outsourcing, we expect that more organisations will be able to enhance their IT implementation, boost innovation in development models, and create greater communication between different teams.

The Public Service Network (PSN) has announced new service providers for the public sector procurement service.

The new service providers include Telefónica UK, and Level 3 Communications, offering service including security monitoring, call centre services and local area networks.

David Shields, managing director of Government Procurement Services, said: “PSN not only has the potential to save the public sector a significant amount of money, it will also bring real benefits to government organisations, enabling access to new services and a more collaborative way of working”.

Texas Memory Systems (TMC) is set to be purchased by IBM, in order to enhance the technology giants offering and acquiring technology licensed by TMC.

Brian Truskowski, general manager of systems storage and networking at IBM, said: “The TMS strategy and solution set align well with our smarter computing approach to information technology, by helping clients realise increased performance and efficiencies at lower costs”.

So far both sides have yet to comment on the position of TMC in the purchase, if whether the company will be absorbed completely into IBM, or if it will remain and a stand-alone department.

Students taking IT based courses have fallen in number, with students taking the 2012 ICT A-level exams falling to 11,088 compared to figures of 11,960 in 2011.

ICT Grades also failed to improve significantly, while female student numbers fell by nearly 400 compared to figures in 2011.

The figures will be disappointing to the government and IT industry which are trying to increase the UK IT industry, who have been attempting to increase the uptake of IT courses.

Dorset County Council has successfully delivered the first version of its Public Services Network (PSN).

The PSN was procured in July 2011, and represented the first council to use the service for tendering for communication services across the county.

The PSN has been designed for employing shared services, including implementing a public sector framework across school sites, council departments and libraries.

Elaine Taylor, Director for Corporate Resources, Dorset County Council, said: “The completion is a tremendous step in creating easier pathways for shared public services for Dorset residents by enabling more coordinated working between government departments and agencies in the county.”

Leicestershire, Derbyshire, and Nottinghamshire’s Fire and Rescue services are preparing to enter into a shared services agreement, after the success of a similar shared services project between Devon and Somerset fire services.

The contract which will see the sharing of ICT services, mobile data services and training and management, is expected to cost between £4 million and £7 million.

The shared services project, named ‘Tri-Service Control’ is expected to deliver large cost savings, with the shared Devon and Somerset Fire services agreement saving £4.2 million from its 2007 implementation.

The Department for Work and Pensions (DWP) has been criticised by the National Audit Office (NAO), for its failure to address weaknesses regarding its medical assessments outsourcing contract with Atos.

The NAO attacked the DWP for failing to penalise Atos for its “under-performance” in assessing the eligibility of patents for Employment and Support Allowance (ESA).

Labour frontbencher Mr Greatrex, MP for Rutherglen and Hamilton West, said: “My underlying concern was the fact that the contract is worth £112 million a year to Atos, at the same time, through the Tribunals Service, the appeals are costing about £60 million a year so effectively we are paying twice to try to correct the mistakes in the initial assessments or the process that leads to the assessments and decisions. That isn't good value for money and this is a contract that really needs a lot more scrutiny to understand how effective it's been."

KPMG have reported that SMEs have driven cloud services during the recession, with the cloud-services industry now reportedly worth $2.2billion.

KPMG have detailed that cloud-services now has come to represent the most popular form of SaaS service model.

Gartner have identified cloud as the fastest rising service in global IT outsourcing market, identifying the service as worth $250 billion

Steve Watmough, partner at KPMG’s CIO Advisory team, said in regard to cloud: ““The attraction, especially for smaller business, lies in organisations no longer needing to find funds for infrastructure, deployment or training”.

Juniper Research has reported that mobile banking will be worth $730 billion by 2017.

The driving force of the growth is expected to come from high street purchasing, with tablet devices transferring payments away from desktops and laptops.

Juniper detailed that retailers are rapidly increasing their service offering to meet the increasing demand, with companies such as Argos seeing a 7 percent rise from mobile services.