Industry news

Ashok Soota began his career in 1965 with the Shriram Group of Industries in India. In 1978, he became CEO of Shriram Refrigeration, a company which was unprofitable for four consecutive years. He went on to become the President of Wipro Infotech from 1984 to 1999. Under his leadership, Wipro’s IT business grew from US$2 million in 1984 to US$500 million run-rate in 1999.

In 1999 Ashok co-founded MindTree which in a span of 11 years became a global entity with revenue run rate of US$350 million, with over 9000 people and offices in multiple cities in the U.S., Europe and Asia. Happiest Minds (a next gen IT solutions & Services Company) was launched in August, 2011 by Ashok Soota and a team of industry experts, with the mission to create Happiest People and Happiest Customers.

Ashok is an industry leader. He was President of Confederation of Indian Industry (CII), India’s largest Industry association and also President of Manufacturers’ Association of Information Technology. He has served on the Prime Minister’s Task Force for IT and on the Advisory Council for the World Intellectual Property Organization, Geneva. He was recognised as ‘IT Man of the Year’ twice and as ‘Electronics Man of the Year’.

Can you give me some examples of how a business can conduct true transformational change through something like business analytics or cloud?(Puneet Jetli, Co-CEO of Happiest Minds Technologies) I think that what has happened is that for a long period of time organisations and enterprises have invested in actually trying to decipher insights from data and they found 2 problems that they have actually ended up as reporting tools, and when you are looking at reports they only tell you about the past. But in economies of today where growth is not a given, you have to be able to predict the future, and if you can predict it as accurately as possible it will give you a competitive advantage. The true way of doing it is to get into the world of analytics. The second thing that organisations have realised is that there is x amount of structured data, there is literally 10 times of that which is unstructured within the organisation as well as outside of it. If you now want to get into meaningful insights and take decisions, you can’t ignore this qualitative data. So that is where we believe the need of the enterprise is likely to be, and that it marries very well with our focus area of social media, getting social analytics marrying it with structured data, making it predictive so that you can then take the right bets and then reach out with the right offers, right products, right services to the consumers when they are likely to need it. In doing so, do it with the medium which is likely to be the most effective – if you can reach out with a discount coupon, based on past purchasing behaviour of a consumer or a set of consumers, to the shopper as he or she is entering the store you are most likely to make the impact, and that can only come if you look at some of these pieces of technology and integrate it in a holistic way. It requires understanding of social insights and understanding of analytics and purchasing behaviour, it requires creating a proposition and delivering on the mobile at real time to the consumer, and that’s what we believe most enterprises would be tempted to adopt in the years ahead.

So, in essence, business analytics can replace the need of invention and that the computer becomes the inventor and predicts a new product people are going to want.

Either a product or an opportunity, absolutely. That is where innovation is going to happen, you’d be surprised how many enterprises are figuring out that they are reinventing their businesses, to enable that you need insight and analytics.

(Ashok Soota) You used an interesting word then, ‘replaces’. Because in my mind it facilitates and expands that invention because you need it all the time, but it is one more new powerful tool that is giving you new thoughts and new ideas because of the analysis of that data and connoting that into intelligence.

Where is outsourcing going in 2012?

That’s a big question! There are one or two things to consider when answering a question like that. The first one is the environment. The convention would be to look at the economy, it’s in trouble, it’s a bad time also for the IT industry, but in reality it’s in times like this that people really need Information Technology, particularly with the new transformational technologies you are not talking of just cost reduction, you are really talking of enlarging markets, of opening new channels that didn’t exist in the past through technology. You will also notice that the IT intensity of the world is increasing by the day, industry by industry is becoming an internet company, what I’d call the creation of web 2.0 companies which are purely internet based. So IT still remains at the core of change. The need for outsourcing is increasing because people cannot capture all the expertise within their own system, there is so much to be integrated. As the speed of change increases, the complexity of the technology increases, and how can anyone, even the largest companies, incorporate all of the skills that they are going to require to implement this change, therefore the need for outsourcing increases exponentially. I would make a distinction here between outsourcing and offshoring. We don’t just want to be seen as an offshoring company, we see ourselves as working as partners to our customers, and we want to bring the best of both worlds to our customers. Here in the UK we have actually hired a considerable number of local citizens.

Speaking of hiring people locally, there was an article recently about Rackspace experiencing problems with hiring people that had cloud experience – is this a problem you’ve experienced in the UK?

(Ganesh Narasimhaiya Vice President & Country Head of Happiest Minds Technologies)

Cloud is a new technology so there is not an abundance of people but there are people chartered at around 10-12 months in the market and the focus we have on the next generation and the area of opportunity we are able to attract the right talents.

(Ashok) I mentioned about how our message resonated with customers, it has obviously resonated with people also. So we have demonstrated at an early age our ability to attract talent. There is the excitement of working in a start-up, there is the fact that people know that this is a company that focusses on these areas, and there is also the message of the company.

What about the term outsourcing, we’ve been seeing that companies want to move away from being associated with the word itself. Is this something you agree with?

I can understand and appreciate that. For a start I think we’d all like to be seen as partners and we’d be open to having that reflected in the business model. There could be the other approach of how do you go about co-creation with your customers.

What do you think will be the next big thing in outsourcing?

Hopefully the term itself will become less prevalent and less used and there will be a different name. I think you’ll see new business models evolving, more partnering, more outcome-based, more procreation and sharing of intellectual property.

(Puneet Jetli) We believe that a lot of that will be influenced by cloud. Cloud will not just be a medium to offer to our customers to reduce cost, but also look at bringing innovation to the market and I think it would mean a lot even for service providers like us to embrace cloud to provide services to our customers in a very different way to what we have traditionally been used to.

What particular innovations do you think will be in cloud?

I think we have to move away from the mind-set of looking at pure services to looking for solutions, where you are essentially looking at a business opportunity but backwards, you are essentially trying to assess a business problem. When you are creating a solution by yourself or co-creating it along with your customer then how do you manage end-to-end delivery of that. That is why we are not only in IT services, but also infrastructure management and security, because you have to give a holistic solution as a package on a software-as-a-service model if required for customers to really appreciate and benefit from the range of technology.

Plans for and above-the-line (ATL) R&D credit tax were announced last week in the budget which could simplify the way in which businesses claim R&D.

This comes as part of recent reforms in the move towards improving R&D tax credit for small businesses. David Gauke exchequer secretary at the Treasury stated that “overall, we would like a system for supporting R&D which is simple for both business and HMRC to administer. Reflecting this, we would also welcome your views on the existing large company scheme and whether it should be retained.”

The change in R&D tax credits is a welcome move for smaller businesses as they changes are expected to facilitate innovation and growth particularly in the technology industry. However, Mariana Mazzucato, Chair in Science and Technology Policy at the University of Sussex, warns that the government must introduce more structured ways of helping companies with R&D if it is to effectively encourage innovation. She says only 3% of the UK economy comes under high-tech manufacturing.

The Office of National Statistics (ONS) has reported that the pay gap between the public and private sector has reached its height, with civil servants being paid up to 9pc more on average.

According to ONS public sector workers were paid on average between 7.7pc and 8.7pc more than private sector employees last year. The April 2011 figure compares with a gap of 7.8pc in 2010, and 5.3pc in 2007, before the financial crisis began.

In order to ensure the figures are consistent over time, the numbers assume employees of those banks nationalised in 2008 were in the private sector until 2011; if the ONS had not made that assumption, the pay gap would have widened even more to 9.3pc.

There are many reasons for these high figures, such as the higher number of older employees with higher wages in the public sector, the public sector holds higher skilled jobs and therefore has a higher proportion of employees with degrees or higher education and it outsources the lower-skilled jobs to private businesses.

The ONS's figures do not take into account that the private sector excludes self-employed people and non-cash remuneration such as pension contributions and health insurance.

The education minister’s plan to sweep aside current ICT curriculum could leave void, warns academic Dr Peter Twining, senior lecturer at the Open University.

Teachers are using the education minister's proposal to reform the ICT curriculum as an excuse to stop all teaching of computing as it would no longer be assessed until a new curriculum is implemented, which could take over a year.

Twining argues that if the plan goes ahead we could be without a curriculum for 2 years, and that it would be preferential to keep the existing curriculum whilst working on the new one. He also added that it is not only the curriculum that needs reviewing, but the lack of qualified ICT teachers too.

Analyst group Gartner has reported an 18% growth in sales of software-as-a-service (SaaS) in the last year, and predicts that the growth will continue thanks to cloud SaaS.

Gartner’s $12.3bn in sales has climbed in twelve months by no less than 18% to hit $14.5bn in 2012 and could reach as much as $22.1bn by 2015.

The growth is most prevalent in vertical-specific software, but the most widespread use is still characterised by horizontal applications with common processes, among distributed virtual workforces and within web 2.0 activities.

The Government Procurement Service has signed two more deals, both in the print area.

In the first, the Government Procurement Service has selected the UK arm of Xerox as sole supplier for an estimated £150m multifunctional devices contract and as a preferred supplier of managed print services in a new framework agreement, with Xerox being named as a sole supplier in the devices category.

In the second deal M2 a specialist firm was appointed, to a role as national pint auditors. The supplier, an independent managed print IT services company, will now offer a tiered range of audit consultancy services for “any government body,” helping it to assess their current print environment.

London’s Overground will soon have free Wi-Fi access at all stations. The Wi-Fi is set to be installed this summer as London Overground signed a contract with providers The Cloud. Passengers on the service will be able to check their email and surf the web for free for 60 minutes a day.

Steve Murphy, Managing Director of London Overground Rail Operations, said: "Access to the internet is no longer limited solely to home or to the workplace, and people’s expectation is to be able to work and communicate effectively and seamlessly while they’re on the move so we’re delighted to support this initiative which will bring reliable, free WiFi to London Overground’s customers.”

The move follows a similar deal earlier this month, with Virgin Media signing a contract London Underground to provide Wi-Fi at their stations. The underground service will be free initially, but will become a pay-as-you-go service. The Overground service, however, will remain free.

Indian outsourcers employed 107,000 staff in the US last year. A study by the U.S National Association of Software and Services Companies also revealed that 175,000 other jobs were created indirectly by the outsourcing.

Indian IT and business process outsourcing employs around 2.5 million, and the study revealed that the number of US staff employed has increased to 30% from less than 10% four years ago. Nasscom President, Som Mittal, also stated that local hiring in the US has more than doubled in the last five years.

Mittal stated that Indian companies are not only creating jobs in the US but also investing in training schemes and other activities designed to enhance local workforces.

The study comes in to the run up to the US presidential election, and looks to defend offshoring in the US, which had an unemployment rate of 8.3 million in February.

La Caixa has agreed for its listed arm, CaixaBank, buy out their smaller rivial Banca Civica in a £915 deal. The deal valued the whole of Banca Civica at around €980, as La Caixa offered €1.97 per share and the deal makes La Caixa Spain’s biggest bank in terms of assets.

The deal comes as new government laws have encouraged mergers between banks after several collapsed following the bursting of the property bubble. Civica itself was formed out of combining four struggling regional banks. The merger will mean La Caixa will have around 14 million customers.

"The merger will help to consolidate the restructuring of the Spanish banking sector, by creating a leading bank in the Spanish financial system with an extensive regional presence, which will help support the country's economic development," the bank said.

The deal is expected to generate cost savings and other benefits to the vaue of around €540 million by 2014.

IBM and Accenture have proposed to create 500 new developer roles in the UK and India for work on the Department for Work and Pensions’ Universal Credit system.

The outsourcing contract, worth £525 million, is expected to be carried out next year and by having some of the development work done offshore, the DWP expects to save "both cost and time", but has created controversy.

Paul Macpherson, from the department's Universal Credit Design Technology, stated: "I truly believe we have an offshore capability which provides world-class expertise and we are leveraging the best resources Accenture and IBM, in particular, have to offer. We are looking to maximise the use of offshore development in the interests of both cost and time.”

DWP also defended the decision as they insisted that no existing jobs in the UK are being sent overseas under the plans and are exploring how previously off-shored could be moved back to the UK.

The Universal Credit system will unify all current means-tested benefit systems to create one, single income-replacement benefit for all working age adults.