Industry news

The arrival of any new approach to technology is traditionally accompanied by hype, and nowhere is this more true than in cloud computing. Yet it has become very clear that cloud computing, or more specifically cloud-based Infrastructure as a Service (IaaS), is far from a fad: we are moving towards a point where this approach will become the norm for corporate IT. The benefits appear obvious – reduced costs, increased automation and simplified IT are often cited – but lingering doubts exist outside the IT department. So is the IT department being held back from investing in the cloud – and potentially transforming the way IT is delivered – by others in the business?

Recent research suggests this is indeed the case. SunGard Availability Services recently polled 100 Chief Financial Officers (CFOs) in mid-sized organisations, and found that a mere one third admitted to understanding fully the benefits of moving their IT into the cloud. This was substantiated at a seminar hosted in September 2010 by the Institute of Chartered Accountants in England and Wales (ICAEW), where half the delegates admitted that the 'finance department is a laggard in the adoption of cloud computing'.

This initially may seem strange, particularly when considering one of the key benefits of cloud-based IaaS solutions: reduced cost. The efficiencies, which cloud computing enables, can allow organisations to pare back on new capital investments, and instead fund projects from operational expenditure, helping maintain a lean balance sheet. It also offers the flexibility to scale with ease, adopt the latest technologies cost-effectively, and eliminate surplus equipment being left under-utilised within an organisation’s data centres. IT would also point to the easier change management of infrastructure including maintenance and upgrades, improved agility to deploy solutions and choice between vendors – all of which have a positive impact stretching beyond the walls of the IT team and out into the business.

So why, at a time of budget squeezes and economic uncertainty, have CFOs so far been wary of the cloud? The research revealed that the main source of CFOs’ reluctance is centred around the lack of control when outsourcing the management of their IT infrastructure, with fifty-six per cent of respondents also citing fears around the security of sensitive customer or commercial data.

Perhaps it is understandable – there have been several high profile outages and security breaches from cloud solutions from big name providers, and forty-five per cent admitted that high-profile media stories around IT outages or data losses made them more inclined to keep their data in-house, despite the cost implications. But one of the research’s most telling statistics was that only just over a quarter of CFOs said they fully understood the difference between private and public clouds – two very different approaches to cloud computing.

Public clouds, as the name suggests, include resources (such as computing or storage) which are shared with others, and can often by used by anyone with a credit card. Many believe that the public cloud will be the dominant way of IT delivery in the future. But despite the major capital and operational expenditure savings the public cloud offers, the vendor’s focus is usually to provide flexible IT resources at a low cost, which does not tally with the needs for secure and available data and infrastructure which are high on a businesses’ list of requirements for many elements of their IT.

In order to exploit the benefits of modern computing, network, virtualisation, and storage resources which the cloud offers, it seems finance needs much more reassurance that they will not relinquish control and security. To do this many organisations are turning to an enterprise-class private cloud-based IaaS solution, as IT resources are delivered from within the corporate firewall and therefore within the boundaries of an organisation’s own security policies.

It is crucial, however, that a private cloud provider’s resilience can be proven. Organisations need to be supremely confident in the availability and integrity of the data or infrastructure they pass over to a third party provider. If this can be demonstrated, the private cloud allows businesses to leverage the benefits of the cloud, without any fears surrounding loss of control, security and overall performance trade-off.

IT – both vendors and internal IT departments – have a job on their hands to ensure that businesses do not miss out on the cloud by communicating its benefits, and the right type of cloud approach. Many business leaders are already familiar with provisioning IT ‘as-a-Service’ through Software-as-a-Service, and the old ASP (application service provider) model, but the real value comes by taking IT further into the cloud and provisioning their IaaS. Using a trusted partner who can demonstrate data integrity and resilience, permits IT to focus on revenue generating projects rather that performing endless maintenance on legacy systems.

The right IT systems are essentialfor business growth, says Jon Milward, Director of Managed and Support Services, Northdoor plc, but modern businesses still need to domore with their ITin order to stay competitive

Driving profitable growth is the top priority for every business leader. Whether the route to growth is organic or through mergers and acquisitions, IT will play a critical role in helping small to medium enterprises (SMEs) achieve their key business objectives.

IT should not just be seen as a tool that enables the day-to-day running of the business. As a matter of fact, IT can help a business grow in a number of key areas, such as developing new revenue streams, streamlining processes, increasing efficiency, andincreasing cost competitiveness.Furthermore, IT can enable the creation of a crucial network between partners, clients, or even employees.

With increasing economic pressures in the form of tax increases, rising manufacturing costs and inflation, SMEs tend to focus their strategy on cost reduction, rather than investing in growth. Undoubtedly, in challenging economictimes, companies need to achieve more with fewerresources. But what do businesses need to consider so they can advance from the survival mode (saving for now) to the growth mode (investing for the future)?

Building the foundation for growth

In order to determine whether you are getting the maximum value from your existing IT operation, you need to understand what your company’s key efficiency factors are, and how you can evaluate the performance of your IT against these controls. These efficiency factors can be the ability to deliver the services faster or cheaper, for example, or to reduce any service downtime.

There are few key criteria that you need to consider when it comes to evaluating these factors.As a starting point, it is essential that you look at whether you have automated all the processes within your business wherever all possible, and especially those thatcan help to reduce any manual tasks that lower workforce productivity.

By streamlining your business and production processes in this way, you can vastly reduce the cost of your products and services.After all, a business that has lower operating costs can normally translate these reduced costs into their business pricing strategy, and thus help to gain a more competitive edge in the marketplace.

At the same time, the automation of manual processes that have low productivity, but which are necessary for your business (such as customer service), can also speed up production and free up vital resources that are often limited in SME businesses. As a result, these resources can be used to focus on business growth instead.

You also need to evaluate how you are currently delivering and managing the IT services that are required to support the business. In some cases,you may want to consider outsourcing your IT infrastructure, as this approach can often help to reduce costs and also free up in-house resources that can be focussing more on business growth.

Recent developments with cloud computing and business virtualisation can also help you to manage a number of business functions more efficiently. It’s also a good idea to assess whether your in-house IT support team has sufficient understanding of these new,rapidly evolving technologies, and to determine whether they have the knowledge required to implement and manage them.

In any case,itis crucial to sit down and analyse the split between your business spend for maintaining day-to-day IT operations, and then compare it with your spend on developing advanced IT capabilities and infrastructure that can differentiate you from the competitors. Developing new infrastructure and technologies can give your business a more streamlined and competitive edge.

Investing in technology that gives you the competitive edge

Investing in new IT technologies can allow your business to develop and support important new business streams, which are vital for growth. The latest internet technology can be utilised to conduct business between buyers, sellers and other trading partners in the form of e-business. For example, a retailer can use the internet as a platform for both domestic as well as international sales and marketing activity, either to other businesses or to the consumer directly.

In this way, IT can be used as a vehicle for the creation of high-value networks with business partners and clients that enhance communication and the exchange of knowledge. Furthermore, this network can allow you to outsource key business processes to your partners through a shared technology platform, which frees up in-house resources to concentrate on business-critical areas like supply chain activity and accounting. With this approach, remote working can also be achieved via collaboration and communications tools, such as messaging, video conferencing, and SharePoint.

In addition to the day-to-day running of the business, IT will also be an essential tool in supporting a wide range of sales and marketing activities, as it can help you to attract (and interact with) customers more effectively, and to create an online presence that fully supports and encourages customer engagement.

E-business strategies like these can also vastly increase the scope for potential sales and growth by allowing a business to enter into new geographies. A business whose activity takes place offline may ultimately have a more reduced audience, thereby putting them at an immediate disadvantage.

New initiatives? Don’t let the costs spiral!

We’ve seen many large-scale IT projects that have gone sour or failed to deliver the desired results, even after millions pounds of investment. But how can businesses be sure that their new IT projects/investments deliver the desired outcome (and provide the enhanced capabilities that the company needs), without having the costs spiral out of control?

First of all, when planning any large scale IT project,you need to identify the desired business outcomes and benefits of implementing a project clearly, whilst also justifying the investment. There is no sense in implementing a costly and time-intensive project if the benefits don’t outweigh the costs involved.

You also need to be aware that it’s vital to involve your IT department or a specialist (if this expertise is not available in-house) in the early stages of the planning, in order to make sure that you get the IT elements right. These elements will include important factors likescope, pricing, and complexity.

It is also worth taking time to asses the risks involved when investing in a new initiative, these could be both financial (in the sense that costs can spiral) and operational(in the sense that there may be ‘downtime’ whilst the IT project is being implemented). There may also be the risk that the project does not yield the expected outcomes / benefits.

These risks can mitigated, but only when you fully understand the IT elements and implications of the initiative, and if you are able to secure sufficient expertise and resources (by freeing them up from the day-to-day operation) to focus on the new project). It will also be essential to have an efficient and robust operation that is able to cope with / reduce any likely disruption during the implementation.

The benefits of outsourcing are evidenced

Without a doubt, efficiency in your IT infrastructure is a business imperative. If the costs involved with running your day-to-day IT operations are too high, you are likely to endanger your business growth by not investing in capabilities that will categorically put your business ahead of the game.

Furthermore, only by increasing the efficiency of your IT operation can you free up your resources for more strategic business initiatives, and create the foundation that’s needed for sustainable growth.

You will need to make sure that you have easy access to proven project management skills throughout this process; if you don’t, even (what seem like) simple IT projects can very quickly escalate out of control. Whether it is at a consultation, implementation or service managing stage, outsourcing can therefore be significantly beneficial, especially when an SME doesn’t have the in-house knowledge and resources to undertake such a project.

We have seen many successful stories of IT outsourcing and over the years, it has become a strategic and validated option for managing and delivering core business services. Utilised rightly, outsourcing can help you to reduce costs, improve service quality and gives you the agility, scalability and even the specialised knowledge that you need for growth.

Demand for Tata Consultancy Services (TCS)'s outsourcing services is so robust the information- technology company hired 70,000 workers last fiscal year and plans to add 60,000 more this year.

Tata Consultancy projects annual sales, which have quadrupled since 2005 to $8.4 billion, will increase 20 percent a year for the "foreseeable future." That has it and rivals Infosys Technologies and Wipro hustling to find hundreds of thousands of qualified candidates as global IT purchases grow 7.1% this year to $1.7 trillion.

TCS's expertise at using low-cost IT workers to replace more expensive labour in developed countries helped it land contracts with Deutsche Bank , Hilton Worldwide and Air Liquide last fiscal year. The company, Asia's largest computer-services provider by market value, reported record annual income of $2 billion.

"As long as there's growth, you don't want to leave business on the table," said Ajoyendra Mukherjee, TCS' vice-president for human resources. "What we're trying to do is make sure the supply chain is large enough to meet our growth requirements in the future."

Nearly 300 jobs are under threat in Swansea at a call centre outsourcing company.

Conduit UK said it had lost a major client which had undertaken a "strategic consolidation of suppliers".

The firm said work for 290 will end in October unless it finds new clients.

Chief executive Denis Creighton said: "Whilst we are hugely disappointed to lose a key client, our main focus is on ensuring that we support our staff during this difficult period."

The 2011 National Outsourcing Association Awards (NOAAs) for Best Practice in Outsourcing is inviting suppliers, users and integrated teams to enter a submission to this industry leading event by the 5th August 2011.

For the first time ever the NOA will be bringing together it’s annual Sourcing Summit and Awards on the 9th and 10th November 2011 at the Park Plaza Riverbank Hotel, London. Held on the final day of the summit, the eighth annual awards will recognise and reward innovation and achievement by suppliers, users and integrated teams within the outsourcing industry. The winners represent the length and breadth of the outsourcing industry, from banking to telecoms, small companies to large, individuals and major corporates.

With planned attendance of 500 guests, the glittering evening will provide an ideal setting to entertain and network with leading players from the industry. The NOAAs are unique in that they are completely independent, and as such they are highly respected and coveted within the industry.

Contact Natalie Milsom, NOA Head of Events, 0207 2928689 or email awards@noa.co.uk for further information.

Visit www.noa.co.uk for registration details.

Accenture will help CF Industries Holdings, a global leader in fertilizer manufacturing and distribution, to implement a management and information platform to increase operational excellence and information flow across CF Industries’ businesses.

CF Industries expects that the new IT system will support growth and drive competitiveness through coordinated business processes such as supply chain management, customer interaction, finance and inventory, among others. The company also has an objective of enabling its team to make more timely business decisions through easy access of accurate data and business information.

“The new system with its self-service approach to business information and standardized processes across functions will make CF Industries a more effective organization,” said Douglas C. Barnard, Vice President, CF Industries. “We chose Accenture because they understood our business objectives and for their knowledge of leading industry practices.”

Ericsson, the world leader in telecommunications technology and service, has announced that it has reached an agreement with Providence Equity Partners, LLC and Warburg Pincus to acquire 100 percent of the shares of Telcordia, a global leader in the development of mobile, broadband and enterprise communications software and services, for USD 1.15 billion. Closing anticipated to Q4 2011 with full effect Q1 2012.

Hans Vestberg, President and CEO, Ericsson, says: "The importance of operations and business support systems will continue to grow as more and more devices are connected, services become mobile and new business models for mobile broadband are introduced. In this context, Telcordia brings very skilled people and knowledge, a large business in North America and other markets, as well as a good multi vendor product portfolio."

"We have global presence and scale, global services capabilities and superior knowledge about networks and network performance, as well as an already established position in the OSS/BSS space. It is a perfect fit," he adds.

HP has announced Wärtsilä Corporation of Finland, a leading power solutions provider to the global marine and energy markets, has signed a three-year outsourcing services agreement with two one-year extension options. HP will deliver information technology services to help Wärtsilä become even more productive servicing their customers in the 70 countries where it operates.

“Our customers depend on us to power the ships that sail the world’s seas and power plants that light up our world, a feat requiring tremendous operational innovation and efficiency,” said Esa Kivineva, chief information officer, Wärtsilä. “HP helps us remain on top of technology developments with an infrastructure that gives our team the flexibility they need to serve customers and sustain cost-effective growth.”

HP will continue providing a full scope of technology infrastructure outsourcing services enabled by the HP Best Shore global delivery model. Best Shore combines HP’s technology portfolio with global delivery expertise to give clients greater flexibility and cost efficiencies while minimizing risk.

Wärtsilä will continue to benefit from Data Center Services, which HP will deliver from HP data centers and customer’s global sites. HP will provide Server Management Services and monitoring from HP Best Shore delivery centers in Bangalore, India as well as Storage and Backup and Restore Services to ensure high availability of IT services and continuous reliable operations. HP will also provide Network Management Services to remotely manage and monitor the company’s LAN/WAN environment from the HP Best Shore delivery center in Kuala Lumpur, Malaysia.

In addition, HP will continue delivering Workplace Services for all of the company’s computing devices such as desktop and notebook PCs, handheld devices and printers. Wärtsilä will use HP Service Desk Services, Onsite Support Services and remote Desktop Management Services from HP Best Shore delivery centers in Bangalore, India.

A company owned by the Ministry of Defence today will launch a High Court lawsuit against the American giant 3M, claiming that it failed properly to market an innovative MRSA diagnostic invented by the MoD at its Porton Down research laboratories.

The MoD company, Ploughshare Innovations, and its financial partner, private equity firm Porton Capital, are claiming up to £41m from 3M for failing to ‘actively and diligently’ market their MRSA test, named BacLite. 3M denies liability and is defending the claim.

BacLite was a high-speed test which enabled hospitals to identify MRSA infections within five hours, compared to the more usual 48-hour test procedures. Originally discovered in the nineties at the MoD’s Porton Down research establishment in Wiltshire, it was subsequently approved by the UK health authorities and was first marketed to hospitals here in 2005.

Following early sales success in the UK, in 2007 3M bought BacLite and the company which the two partners had formed to market it, Acolyte, for an initial £10.4m. An earn-out clause in the contract meant that the partners could have been entitled to up to an additional £41m depending on BacLite’s sales between 2007 and 2009.

Ploughshare and Porton’s sales agreement with 3M committed the American group to develop and market BacLite to health authorities and hospitals in Europe, North America, and Australia. However, just over a year later 3M closed the business, following intervention by its chairman, CEO and President, British-born George Buckley.

The High Court lawsuit launched today will accuse 3M of deliberately allowing BacLite to fail commercially by starving it of competent staff and funds. Additionally, the lawsuit alleges that 3M mismanaged its application for regulatory approval for BacLite with the US health authorities, and failed to seek similar approval at all in other territories.

After a series of rumours and speculation, the Web-search giant Google officially confirmed that it has acquired the New York-based yield optimization firm, Admeld.

Google claimed that the acquisition of Admeld will help major publishers to make more money out of the rapidly changing and growing display ad landscape. The Admeld acquisition is a new step in Google's strategy to improve the display ad landscape.

Google and Admeld have refused to disclose the financial terms of the deal but it's believed that the deal may cost around $400 million. With this new move, Google expect to outclass Facebook and other new start-ups in the display ad market.