Industry news

Toshiba Corporation has signed an agreement with Innovation Network Corporation of Japan (INCJ), for Landis+Gyr Acquisition.

As per the deal, INCJ will be a strategic investment partner in Toshiba's acquisition of Landis+Gyr.

Toshiba will set up a special purpose vehicle (SPV) in Switzerland for the acquisition of smart meter maker Landis+Gyr capitalised at $1.7bn.

INCJ will also invest $680m in the SPV and secure 40% of its equity, while Toshiba's equity stake will be 60% or $1.02bn

New scope up 30 percent in first half of year, returning to pre-recession levels on higher demand in Netherlands, United Kingdom, growing adoption in France

TPI, an Information Services Group company and the leading independent sourcing data and advisory firm in the world, today released data showing the commercial outsourcing market in Europe, the Middle East and Africa experienced a healthy increase in total contract value (TCV) in the second quarter of 2011 despite continued movement away from large contract awards globally.

The 2Q11 EMEA TPI Index, which measures contracts valued at €20 million or more, recorded TCV in the region of €7.6 billion, a year-over-year increase of 13 percent. EMEA accounted for more than half of the TCV the global market awarded during the quarter and nearly twice the amount recorded in the Americas.

Globally, TCV dropped 18 percent over the second quarter of 2010 to just over €13 billion. The decrease is attributable to the awarding of fewer mega-deals – those contracts worth over €800 million – and other large contracts. Clients signed just four mega-deals in the first half of 2011 this year, compared to six in the same period a year ago, and three of these were in EMEA.

“EMEA was a standout for the global outsourcing market during the second quarter, but it was not immune to the decline in large contracts,” said Duncan Aitchison, Partner & President, EMEA, TPI. “While the number of contracts signed in the region in the first six months of 2011 jumped 23 percent, TCV grew by just 10 percent. We believe this is partly the result of increased multi-sourcing and also a sign that companies were somewhat hesitant to commit to the larger investment of these sizeable contracts.”

Now in its 35th consecutive quarter, the TPI Index provides a quarterly snapshot of the sourcing industry for clients, service providers, analysts and the media. It is the industry’s authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.

The Index found that the TCV of IT outsourcing (ITO) declined in EMEA in the first half of this year compared to the same period in 2010, but the region awarded 13 percent more contracts, many of which brought new-scope value to the market. By contrast, the business process outsourcing (BPO) market grew sharply, with 58 contracts recorded in EMEA, the highest ever in a first half, and TCV up 132 percent to almost €6 billion.

Compared to its record-high levels in EMEA last year, restructuring TCV declined by 29 percent in the first half of 2011, reverting to its historically normal level of activity. In the same period, new-scope TCV increased by 30 percent, returning to pre-recession levels of 2007. Increased demand in the Netherlands and United Kingdom and the continuing adoption of the outsourcing model in France particularly drove this growth.

“During the recession, we saw companies rush to restructure their existing contracts in an effort to reduce costs quickly,” Aitchison said. “We are now seeing a return to new-scope contracting as clients seek quality improvement and access to skills as well as the cost savings, which were the primary focus in previous years.”

Continued Aitchison: “Although market growth so far this year has been somewhat patchy, we believe that the second half of the year looks more promising.”

The Index also showed the changing face of public sector outsourcing activity in EMEA in 2011. Historically, the UK has been the leading market for this activity, accounting for 86 percent of the region’s public-sector TCV from 2005 to 2010. This year, that figure has dropped to 71 percent as other countries have grown their share of the market.

“We have actually seen the pace of UK public sector activity increase in 2011, but contract values have declined,” Aitchison said. “In an effort to meet near-term savings targets, public sector organisations seem to be pursuing outsourcing strategies which offer best-of-breed solutions that can be implemented quickly rather than large-scale change initiatives.”

HCL Technologies Ltd., a leading global IT services provider, has announced results for the year and quarter ended June 30 2011.

For the full year, HCL’s global revenues increased by 31.1% YoY to US$ 3,545 mn. During the quarter, HCL posted strong growth with global revenues increasing by 30.5% YoY to US$ 963 mn.

HCL’s European business posted a revenue increase of 28.9% YoY in FY 2010-11 and 5.9% QoQ in the fourth quarter of FY 2011. This geography contributed 27.1% to HCL Technologies’ revenues in the quarter. HCL’s continued commitment to the region has resulted into several significant multi-million dollar wins across Europe this quarter including Mecom, Deutsche Bank, Ikea and Danfoss amongst others.

These wins come on the steam of HCL’s increased micro-vertical focus in the region and a strong positioning in the swiftly expanding Continental Europe market.

Commenting on the results, Rajeev Sawhney, President for HCL Europe, said “HCL’s Go-To-Market (GTM) strategy in the region continues to be validated by demonstrating the increase in market recognition of the value HCL delivers to its current and new customers in Europe. By encompassing specific integrated horizontal, sector and geographic focus and we have gained momentum in ensuring HCL’s success in a dynamic market especially in the Nordics and the rest of Continental Europe.

"We are now better geared to deliver a balanced growth, going forward. This winning strategy combined with our continued commitment in endorsing our ground-breaking philosophy and principles around Employees First, Customers Second, has put HCL on the map in Europe.”

International solutions provider, Logicalis, has been awarded a six-year services and managed service contract with high-street retailer, Marks & Spencer, aimed at improving the efficiency and agility of their network infrastructure, as well as supporting the cost-effective deployment of innovative ICT services.

Logicalis' on-site and Managed Service Centre (MSC) teams will provide professional services and 24/7 management of the wired and wireless network infrastructure across M&S's 700 UK stores, Head Office, regional offices, distribution centres and depots.

Richard Presant, head of operations at Marks & Spencer comments: “In Logicalis we have a partner with the ability to align IT to the needs of our business. Our relationship is founded on Logicalis’ continued achievement in maintaining excellent levels of service.”

The six-year agreement includes access to a wider range of Logicalis UK’s services and managed services, particularly focussed on providing strategic consulting to M&S on future technology innovation and project strategy and implementation.

Tom Kelly, managing director of Logicalis UK, adds: “Logicalis will continue to act as an extension to Marks & Spencer's IT team, with a strong cultural fit and understanding of the pressures of operating in the retail industry.

The Norwegian Armed Forces has awarded Accenture a three-and-a-half-year, $70 million contract to implement an SAP® solution to better support core processes in logistics.

Under the terms of the contract, Accenture will design and configure a solution based on the SAP for Defense & Security solution portfolio to enable the client to expand and improve its solutions and processes in force generation and structure maintenance, procurement and supply chain management, heavy equipment maintenance and investment management. The project also will implement both a mobile and deployed solution to support the Norwegian Armed Forces operations for mobile units and certain maritime and NATO missions.

The new logistics solution will replace a number of existing information systems so that the Norwegian Armed Forces can drive operationalefficiencies and reduce costs across its operations. The project is designed to significantly improve and establish common processes across all parts of the Norwegian Armed Forces, including the Army, Navy, Air Force and Home Guard.

With regard to the appointment of Accenture as lead system integration partner, Brigadier Jan Christian Ødegaard from the Norwegian Armed Forces said, “We chose Accenture due to its superior expertise and recommended logistics solution design. It is with great confidence that we initiate this project with Accenture as our integrator.”

“We are committed to working in close collaboration with our new client Norwegian Armed Forces in such an important national mission to make the Logistics project a success,” said Tonje Sandberg of Accenture Health & Public Service Norway, “This project provides the client access to Accenture’s global skills in support of SAP solutions and leverages our global experience of delivering similar projects for other defense forces and government clients around the world.”

ITV, the broadcaster, is adopting cloud computing systems from Google, as well as Apple Mac computers, as part of its five-year transformation plan.

As part of the company’s goal to upgrade its technology infrastructure and improve communication, collaboration and creativity of staff, ITV is deploying Google Apps to 7,000 employees and adopting Google Chrome as its standard Internet browser.

Paul Dale, ITV's chief technology officer, said: "When I arrived at ITV one of my tasks was to implement a company-wide plan for workplace technology in order to enable our staff to deliver ITV’s Transformation Plan.

"I am delighted to announce these collaborations with leading technology providers who offer the depth and scope of service we need to transform our internal ways of working across the business.”

HP has announced new solutions and services that advance the way clients use Unified Communications (UC) to improve collaboration and business responsiveness.

HP’s new Voice Transformation Solutions, Virtual Workplace Solutions and Network Readiness Services address the trials organizations face when integrating telephony with communications applications, such as video or instant messaging

Many organizations are facing challenges with enabling a growing virtual workforce, as well as interoperability issues caused by aging, inflexible telephony and network infrastructures and disparate communications systems. Gartner predicts that by year end 2015, 60 percent of organizations will offer employees at least four parallel, overlapping, voice/telephony options.

As employees share information faster, they increase responsiveness to customers, partners and across the organization, ultimately improving productivity.

“Clients need to understand how changes to their work environment can impact communications,” said Rich Skoba, director, Global Unified Communications Portfolio, Technology Consulting, HP. “By collaborating with HP, clients can leverage HP’s methodology and testing of multivendor UC solutions to create their unique Unified Communications journey, transforming their communications infrastructure to address needs today and into the future.”

Cognizant, a leading provider of information technology, consulting, and business process outsourcing services, today announced the successful deployment of an integrated food safety solution at Feihe International, Inc., formerly known as American Dairy, Inc., one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in China.

This innovative end-to-end solution was developed by Cognizant in collaboration with Heilongjiang LiGao High-Tech Development Co. Ltd., a high-technology services company, and FoodlogiQ, a leading provider of traceability, food safety, and sustainability software. The solution enables Feihe International to trace foods, feeds, ingredients, and food-producing animals through all stages of production, processing, and distribution.

The enhanced traceability across farmers, producers, processors, and retailers provides for significantly superior quality and safety tracking, compliance monitoring, and issue resolution, which are critical focus areas for the food and beverage (F&B) industry in today’s globalized manufacturing environment. The solution also provides operational efficiencies by minimizing costs associated with conducting recalls or withdrawals, and improves stock and distribution control while aiding in the removal of unsafe food from the marketplace.

“Inspiring food safety confidence among consumers has become a business imperative for food companies,” said Xiao Guanghui, Vice President and General Manager of the Production Division at Feihe International, Inc. “We are committed to doing all it takes to address consumer concerns and meet regulatory requirements around food safety in the most accountable and transparent manner. We are pleased with the successful implementation of a state-of-the-art food safety traceability system developed by Cognizant in collaboration with Ligao and FoodlogiQ. It will help us align our advanced production technology with the highest standards of quality and safety throughout the supply chain, ranging from raw material to production processes and distribution, enabling our consumers to trace any finished product back to its source conveniently and accurately, and buy our products with greater confidence. We look forward to integrating this unique solution with our enterprise-level systems.”

“Food safety crisis is a crisis of confidence, which is leading to distrust in the food safety and quality assurance system,” said Wang Xinxiang, Chairman of Heilongjiang LiGao High-Tech Development Co. Ltd. “At present, consumers distrust the food safety assurance system because there is no way for them to know about this system and supervise food safety. Therefore, to solve food safety issue, the food trust system must be re-established. Three years ago, our company began to study the best practices of the operational and food safety system in the dairy industry.

"Feihe International’s food safety project is among the first traceability projects covering the whole industry chain, relying on the advanced technologies and experience of a global company such as Cognizant in the fields of dairy operation management, plant MES, food safety, and traceability system. This project not only helps consumers purchase safe products but also provides an independent food safety platform for regulating the dairy production management. ”

“We are delighted to help Feihe International strengthen its capability to provide safe and higher quality products,” said Mahesh Venkateswaran, Senior Vice President and Head of Engineering and Manufacturing Solutions Practice, Cognizant. “Ensuring food safety and regulatory compliance in the highly competitive dairy industry is a complex process and increasingly crucial to public health and consumer confidence. Our traceability solution will enable Feihe International to trace ingredients as well as track all process steps from farm-to-fridge, and make sure its products are safe, wholesome, and compliant with microbial and compositional requirements. This solution will help Feihe International improve customer confidence, grow sales, and capitalize on market opportunities, thereby reinforcing its leadership position in the Chinese dairy market.”

Interoute, owner operator of Europe’s most advanced next-generation network and largest private cloud, today announced its membership of the Cloud Security Alliance (CSA). Interoute has long recognised the immense potential of cloud solutions, providing leading enterprises across the world with private cloud solutions that have the necessary security controls required to protect their critical data across all technology platforms.

“Enterprises trusting their data to cloud solutions providers need to demand the highest levels of security. The Cloud Security Alliance and Interoute share the same philosophy, which is to enable organisations to employ the benefits of cloud computing without having to worry about the security of their data,” said Joe Stevens, Chief Security and Risk Officer of Interoute. “Interoute is focused on securing the data of Europe’s enterprises in the cloud and our membership in the CSA reflects this commitment.”

The CSA is a member driven organisation that was formed to promote the use of best practices for providing security assurance within Cloud Computing, and provide education on the uses of Cloud Computing to help secure all other forms of computing. Interoute maintains rigorous security and compliance controls, deploying an integrated Enterprise Security Management System across its operations to protect all critical data held within its private pan-European cloud.

Jim Reavis, CEO of CSA, said: “We are delighted to have Interoute participate as a member of the Cloud Security Alliance. Cloud computing is becoming increasingly ubiquitous and security is a fundamental component for enterprises. CSA is focused on driving best practice for cloud solutions to demonstrate the necessary ‘trust’ assurances in the Cloud. Interoute’s participation, as one of the leading cloud solutions providers, supports CSA’s overall objective to demonstrate the benefits and commitment of service providers to secure critical data in the cloud.”

Interoute offers a comprehensive portfolio of security solutions including, DDoS protection, firewalls, Intrusion Protection and encryption Services, email filtering, and a Web application firewall (WAF). Interoute’s Enterprise Security Management System is based on the best practice management guidelines of the ISO 27001 accreditation, and has been awarded this certification across all of its operations and data centres.

Martyn Hart, NOA Chairman, has commented on Capita shares downgraded from 'buy'

“City analysts who have downgraded Capita from ‘buy’ are taking an extremely short term view. Capita is a massive player in the public sector. Although the value of four of its existing contracts has shrunk because of cutbacks, it has nearly £5 billion worth of work in the pipeline! Following the Open Public Services white paper - which means all public sector organisations are now free to hire the most efficient provider, regardless of ownership - there is going to be so much more work available for support services companies.

"Capita is among the most experienced, and is in a great position to take full advantage of the devolution of buying power to a local level. Capita is converting a smaller percentage of its profits to cash as part of their acquisition strategy – a move that will bring in even more business. City analysts need to look deeper into situations than merely scanning profit/loss and cashflow. Although that is important of course, the National Outsourcing Association suggests that for investors taking a more mid-term view, this could be an excellent time to be buying shares in support service providers like Capita.”