Industry news

Balfour Beatty, the international infrastructure group, has recently been awarded two support services contracts, totalling around £200 million. These contracts add significant volume to the Support Services order book and are notable in highlighting the changes in local authority requirements, with a marked shift towards larger, multi-activity contracts and bundling together of contracts from more than one local authority.

The Warwickshire and Coventry highways term maintenance contract involves full maintenance of the region’s highways and bridges together with street lighting. The five-year contract, beginning in May 2011, is worth £100 million, with a possible four-year extension conditional to meeting performance targets.

The 25-year Cambridgeshire County Council street lighting PPP project we announced on 6 May 2011 has a significant element of support services. The maintenance contract, worth around £100 million, is innovative in the way it places emphasis on energy reduction by using the latest technologies.

Kevin Craven, CEO of Balfour Beatty Support Services, commented:

“We are developing our business to serve the Local Authority market more effectively. Balfour Beatty is well-placed in respect of the changing nature of local authority contracts which favour companies that can offer a broad range of capabilities, thereby providing savings as well as improved services for local government.”

Value Added Reseller (VAR) Trustmarque Solutions has announced the acquisition of cloud infrastructure and hosted services provider, Nimbus Technology Systems Ltd. Nimbus Technology Systems currently provides consultancy, planning and migration services as well as a range of cloud Infrastructure and software-as-a-service solutions for SME organisations. Nimbus' clients are able to access and run their businesses on enterprise-class IT systems, software and infrastructure without any capital investment.

This transaction is the first in a planned series of strategic acquisitions by Trustmarque as it aims to extend its expertise, range of capabilities and value added service offerings. The Nimbus acquisition will enhance Trustmarque Enterprise Solutions Group (TESG) services by adding a suite of hosted and managed solutions that sit between on-premise and SaaS offering a greater degree of customisation and customer alignment.

Simon Rutt will be heading up the TESG division, which will incorporate the Nimbus stack of services following the acquisition, and takes on the role of Services and Solutions Director. Rutt comments:

"Customers want to understand straight forward options around cloud and how we can help their organisation securely and safely adopt cloud technologies. They need sensible, knowledgeable advice and services that are dependable.

As the cloud market develops, more and more technologies are being offered as a managed service. This ‘externalisation' of IT is compelling as it offers the promise of agility and efficiency. However, questions remain around compliance, licensing, governance and security. There are complexities around interoperability and how best to ‘knit' these managed services together with on-premise applications, to deliver the best business process outcomes. We aim to help organisations negotiate these hurdles for better business outcomes."

Data Gathered by Lieberman Software Suggests Organizations Should Proceed Cautiously when Outsourcing Critical IT Security and Management Operations

A new survey from Lieberman Software Corporation, taken at the recent Infosecurity Europe 2011 event in London and mirrored at RSA Conference 2011 in San Francisco, shows that the relationship between many outsourcing companies and their clients is at a breaking point. According to the survey, an astonishing 77% of IT professionals who work in organizations that use outsourcing say their outsourcers have “...made up...” work in order to earn extra money.

The survey reveals that 43% of IT professionals work in organizations that have outsourced a significant portion of their IT. Larger organizations are more likely to have outsourced IT - with 55% of respondents at organizations having more than 1,000 employees replying that they utilize outsourcers, versus 30% at organizations with less than 1,000 employees.

However, the shock comes as 62% of respondents said that, compared to their original plans, their outsourcing agreements had cost them more than anticipated while only 11% said they paid less than they originally expected. Perhaps most surprisingly, fully 27% of participants said that their outsourcing agreements had cost “…significantly more than planned”.

According to Philip Lieberman, President and CEO of Lieberman Software, this should be no surprise to those who have put their faith in the hands of the outsourcing industry: “Fundamentally, IT outsourcing has been an exercise in reducing expenses and passing along HR issues to others. The unfortunate by-product of this quest for lower costs and fewer headaches is a situation where corporate collective knowledge, as well as loyalty and intellectual talent, has been lost.”

Cognizant, a leading provider of information technology, consulting, and business process outsourcing (BPO) services, has announced that Lincoln Trust, an established leader in the self-directed retirement plan industry, has selected Cognizant to provide BPO services supporting its full range of retirement plan products including member enrollment and on-boarding, distributions and settlements, and plan management.

"Providing an exceptional service experience to every client is a hallmark of our business," said Helen Cousins, Executive Vice President and Chief Information Officer, Lincoln Trust. "At a time of immense economic and regulatory pressures on the financial services industry, Cognizant's rich experience in the financial services industry will help us adopt and institutionalize global best practices and help compete with much larger institutions."

"We are honored to help Lincoln Trust set the standard for superior customer service in self-directed retirement plans," said Gajen Kandiah, Senior Vice President and Global Head, Business Process Services and Solutions for Cognizant. "The combination of our experienced staff, deep understanding of core business processes, and leading-edge technology and tools contributes to our ability to be responsive to customer needs."

Xerox and Cisco have announced that they intend to form an alliance to simplify IT management by delivering cloud-based services and technology solutions that combine network intelligence and print.

The alliance plans to bring Xerox's managed print and cloud IT outsourcing (ITO) services to customers over Cisco's intelligent network infrastructure. Both companies will arm channel partners with solutions that help businesses extend their existing IT investments to improve performance and reduce cost.

"This relationship puts Xerox and Cisco at the center of a simplified, connected infrastructure – bringing together networking, printing and cloud services," said Ursula Burns, chairman and CEO, Xerox. "Together we're helping businesses transition to the cloud in ways that best suit their operations, and add the services needed to enhance security and productivity for employees."

The government will publish a "coherent data policy framework" by the autumn of 2011, as part of efforts to establish a public data corporation (PDC), Cabinet Office minister Francis Maude has confirmed.

Responding to a written parliamentary question in May, Maude said the government was continuing to work on proposals.

"Our intent remains to put in place a coherent data policy framework by autumn 2011," he said.

"We are also considering the merits of machinery of government changes to facilitate the development of a PDC through a sponsoring department and the subsequent establishment of a PDC shadow board."

British outsourcing group Serco is in talks about buying Blackstone's controlling stake in India's Intelenet Global Services, the Financial Times reported on Tuesday.

There was no guarantee that a deal would be reached with the U.S. private equity group over its 66 percent stake, according to the FT.

The FT said Serco, which runs a diverse range of public services including London's cycle-hire scheme and Dubai's metro, is seeking to make a further push oversees despite a slowdown in its domestic market.

Capgemini acquired 100 percent stake in Minneapolis-based BI Consulting Group (BICG), a leading full-service technology consultancy for customers who purchase Oracle Business Intelligence (BI) and Enterprise Performance Management (EPM) technologies.

BICG’s offerings include implementation, support, education and software enhancement services. This move, which follows the acquisition of another Business Information Management (BIM) company – Avantias in France-, will reinforce Capgemini’s BIM positioning in North America. The acquisition will be financed by the Capgemini Group’s net cash. The contract was signed last week and the acquisition is expected to be completed shortly.

Virgin Media has confirmed that 80 IT roles will be at risk after it expands an existing outsourcing contract with Accenture to continue its integration programme.

The telecommunications provider, which was formed from a merger of ntl:Telewest and Virgin Mobile UK in 2006, currently employs 175 IT staff.

The redundancies are expected to take place in August, after a 90 consultation with employees and their trade unions.

Country's second largest software exporter Infosys has stated that recent negative sentiment about outsourcing could hurt the UK's business prospects .

In recent times, there has been increasing criticism about outsourcing in many developed markets, especially in the wake of huge job losses due to sluggish economic activities.

"Recently, some countries and organisations have expressed concerns about a perceived association between offshore outsourcing and the loss of jobs," Infosys said in a recent filing to the US Securities and Exchange Commission .

"Legislation in certain countries in which we operate, including the US and the UK, may restrict companies in those countries from outsourcing work to us or may limit our ability to send our employees to our client sites," it noted.