Industry news

Microsoft's worldwide Hosting Partner of the Year 2010, and leading Cloud Service Provider Outsourcery, is launching CloudSmart, its latest campaign supporting its InPartnership programme designed to help partners take advantage of the rapidly increasing opportunity presented by cloud. The market for cloud is growing exponentially as illustrated by Forrester Research's revised global cloud market value figure of $241 billion by 2020, compared with the $40.7 bn predicted last year for the same time frame.

"The campaign, 'CloudSmart', is built around the ten commitments that Outsourcery is making to its partners in order enable them to make the move into cloud," said Simon Howitt, Channel Business Unit Director. "Cloud is seeing significant take up but we understand that partner's businesses are at different levels of understanding and adoption which could lead to them missing the opportunity should they delay entry into the market. To simplify their decision we have created CloudSmart to support their needs and make their relationship with us as successful and profitable as possible, while opening up their potential to become part of the cloud success story."

He continued, "InPartnership delivers the opportunity to earn excellent commissions whilst helping partners define their cloud strategy. The cloud has arrived but there are still lots of partners who are ignoring or resisting the opportunity, hoping that it will go away. They need to be aware that if they are not talking to their customers about cloud, their competitors will be. Partners will find working in partnership with Outsourcery hugely rewarding as well as incredibly easy."

Accenture reported strong financial results for the third quarter of fiscal 2011, ended May 31, 2011, with net revenues of $6.7 billion, an increase of 21 percent in U.S. dollars and 15 percent in local currency over the same period last year. Diluted earnings per share were $0.93, an increase of $0.20, or 27 percent, over the same period last year.

Operating income was $949 million, an increase of 18 percent over the same period last year, and operating margin was 14.1 percent.

New bookings for the quarter were $7.1 billion, with consulting bookings of $3.7 billion and outsourcing bookings of $3.4 billion.

Thorntons has announced the decision to outsource its Distribution and Warehousing function to DHL, a leading expert in the distribution field.

Thorntons expects the outsource to deliver a net benefit to Thorntons in excess of £5 million over the six year contract through utilisation of DHL's established operating network. One-off transition costs of up to £680,000 will be incurred in the first year of the contract.

Thorntons Chief Executive, Jonathan Hart, will be presenting his strategic review of the Thorntons business to analysts and major shareholders at 11am on Tuesday 28 June 2011.

Large cuts to the supplier base make headline news. In November last year, support services and construction company Carillion, announced that it was cutting its supplier base from 25,000 companies to just 5,000. In February this year, Balfour Beatty’s construction services UK division set out its plans to reduce the number of suppliers it uses from 27,000 to 10,000.

Initiatives along these lines are met with great enthusiasm in the City as expectations rise for significant cost savings. For Carillion the slimming of the supply base is part of a drive to save £140m a year by 2013.

Such radical rationalisation of the supply base sends shock waves down the supply chain, and perhaps, to some extent, that is the intention. Keener pricing on contracts are achieved through a combination of a desire on the part of the supplier to retain business and the opportunity to discount on larger scale contracts. A smaller supply base also allows for closer collaboration between supplier and buyer, with all the potential for efficiency gains this affords.

Consolidating the supply base may deliver cost savings, but what does it do to a buying organisation’s exposure to supplier risk? Does increasing your dependency on a smaller group of suppliers work for or against your long-term aims? And, if the strategy is sound, how do you go about reducing supplier numbers?

In many respects, it is easier to manage supply chain risk when you have a fewer number of suppliers. A clear focus can be applied to a more refined list, risk analysis is easier to conduct and closer checks can be carried out to verify data on higher risk suppliers. Costs for managing a smaller supplier base should also be lower as there are fewer reviews and audits to conduct.

However, a prerequisite for both managing supplier risk and rationalising a supplier base is to have access to accurate, clean data that reflects the current status of regular suppliers.

For many corporates the large number of suppliers they have on their database may be misleading. There can be significant numbers of duplicated records, with the same supplier being entered onto the database several times due to misspellings or inaccuracies in address details etc. Cleansing a list to remove duplication, errors and one-time purchases is essential to understanding your supply base. It is quite common to see lists of suppliers come down by 50 per cent through this process.

Equally important, records need to be regularly checked and updated to ensure accuracy is maintained. The problem is, most companies do not allocate the necessary resources to maintaining and updating their supplier information – the result being that purchase orders end up in the wrong place or that failings occur. Further issues arise when it comes to spend analysis. Often when people raise purchase orders they are in a rush and so assign a purchase to an inappropriate category. Then when it comes to conducting a spend analysis an incomplete picture results.

Consistency in the approach taken to record keeping is critical to managing and maintaining a supplier database. Companies that have grown through acquisition may struggle with having a single, well thought out process for gathering and storing supplier data. Legacy systems and disparate pools of information create a fragmented view of the supply chain and result in mismatches of supplier data which cause confusion, create errors and work against the benefits that come from a common view of the supply base. For instance, benchmarking suppliers only becomes possible through having consistent and accurate data.

If organisations are to make important decisions on their supply base they need to address these issues by centralising supplier information and introducing processes that create consistency of data across the entire enterprise. Time and effort must be spent on ensuring that the right questions are asked of the supplier, the correct depth of data gathered, appropriate to the risk presented by the supplier, and that the information is, where necessary, backed up by methods that verify that data.

Only by having complete visibility of your supply base can supplier numbers be rationalised and risks properly assessed and mitigated. Driving these efficiencies in the supply chain and making the savings that boost investor confidence starts with healthy supplier information.

Capgemini will acquire a 100% stake in Beijing-based Praxis Technology, a provider of IT and consulting services to the Chinese utility market.

This acquisition should help Capgemini improve its position in the Chinese market, where it already has 1800 professionals in major cities including Beijing, Guangzhou, Shenzhen and Hong Kong.

Capgemini head of New Businesses Gilles Taldu confirmed that the buyout will strengthen their capability in the utility sector, helping meet the needs of China's largest utilities.

"We look forward to working with the Praxis Technology team to bring the latest SAP technologies to our utility clients in China," Taldu said.

In a move that appears to be contradictory to government SME policy, government departments are cancelling freelance IT contractors supplied via SMEs and handing their interim staff business to Capita - under orders from the Cabinet Office's Efficiency and Reform Group (ERG).

The Ministry of Justice cancelled all such SME contracts and moved them to Capita's £123m Cipher contract on 31 March, just one day after the publication of an ICT strategy promising to end the "ICT oligopoly" – of which Capita is a substantial part – and do more business with SMEs.

Martin Tucker, managing partner of interim executive agency Gatenby Sanderson, said: "The majority of government departments have signed up to Cipher and that means Capita manage the hiring of interims."

"IT in particular is hit by this," said an IT SME, who requested not to be named. "It might save some money in the short term but it will cost a lot more in the long term because you are just reducing competition. When you create a monopoly supply situation, service goes down and cost goes up; simple as that."

Sprint is to offer new managed telepresence servives for enterprise customers as a result of a new partnership with Tata Communcataions.

Tata will provide managed telepresence technology for HD video conferencing with “superior audio, video and environmental qualities”

Not only does Sprint bring their stronger brand recognition to the table, they provide the Global MPLS network that will power these managed telepresence features.

Although these services will never quite match up to face-to-face meetings, teleprescense is constantly improving and is becoming ever more important to enterprise, especially given its contribution to saving on emissions from car and air travel.

Swiss banking giant UBS is to cut 500 jobs from its worldwide operation.

As part of a cost cutting drive, around 180 jobs will be lost in Switzerland, 90 in the USA and the remainder from the UK and Asia-Pacific. The total represents marginally less than 6% of UBS' 8,700-strong total IT workforce.

A spokesperson for the bank stated that some of the job cuts relate to its arrangement with Indian IT offshore outsourcing provider Cognizant.

40 employees are said to have opted for early retirement, and some positions may be relocated, but redundancies will definitely take place.

Nokia will outsource Symbian software development and support activities to Accenture, in a deal due to be finalised in October. It is expected Nokia will transfer approximately 2,800 employees currently located in China, Finland, India, the UK and the US.

Accenture will retrain and redeploy transferred employees, developing their capabilities to provide mobility software, business and operational services for the Windows Phone platform.

Nokia’s executive VP for Smart Devices Jo Harlow stated that joining forces with Accenture allows them to meet their continued commitment to supporting their Symbian smartphone customers.

"As we move our primary smartphone platform to Windows Phone, we will look to explore potential opportunities to tap this talent pool as they develop and expand their knowledge and capabilities beyond Symbian."

The Police National Database (PND) was launched officially on Wednesday. Now police forces nationwide are able to share intelligence on crime. The PND has been tested over recent months, and focuses on information relevant to crimes, not victim and witness details.

The database was developed with Logica, costing £75.6m.

National Policing Improvement Agency chief executive Nick Gargan stated that the PND would allow police investigators to see the full intelligence picture. "We know that child abusers, drug dealers and terrorists don't respect force boundaries, but in many cases forces have been conducting their investigations in isolation, unable to see everything the police service knows about a suspect and unable to make fully informed decision. Until now this information had to be shared manually, a fallible and sometimes bureaucratic process dependent on the right staff being able to access and share the relevant files, which could take up to two weeks,"

The PND was developed in accordance with the recommendations of Lord Bichard's inquiry following the Soham murders in 2002.