Industry news

Capgemini Consulting is partnering with the MIT Center for Digital Business to anchor its strategy in new research in order to gain “best practice” perspectives on the state of digital transformation in organisations around the world.

Pierre-Yves Cros, CEO of Capgemini Consulting, said: “Digital Transformation goes well beyond technology. It is about the impact that digitization is having on the business, from strategy to people to operations. This is also about a new transformation agenda for companies: making customer experiences coherent within the multitude of channels now available. It’s about making better and smarter decisions based on an everincreasing flow of data, creating open enterprises with strong links to customers and suppliers, encouraging stronger collaboration across often geographically disparate units, as well as managing these new technologies within the existing infrastructure of the corporation.”

Capgemini Consulting is planning to expand its current global network of over 3,600 expert consultants across Europe, North America, Asia- Pacific and the Middle-East by hiring up to 1,000 additional consultants in 2011.

In a three-year joint research collaboration with the MIT Center for Digital Business, Capgemini will also conduct a joint research study into digital transformation through interviews with C-level executives from 30 of the world’s leading companies in sectors such as financial services, life sciences, retail and government. The study will examine how companies around the world are managing and benefiting from digital transformation and the processes and best practices involved, providing Capgemini Consulting with detailed market insights to inform its experts and ultimately its clients.

“The new digital economy is increasingly shaping the way we do business and digital technology is going to drive even more change in the future,” said Andy McAfee, Principal Research Scientist at MIT. “However, the extent of this digital transformation varies across companies, regions, and even within companies. Together with Capgemini Consulting, by studying companies as they currently work, we plan to gain a perspective on the state of digital transformation, the process of transformation, and how they can position themselves to benefit in the future.”

Cost containment, business continuity/availability and capacity issues are the most important drivers of strategic change in Australian data centres in 2011, according to a recent survey by Gartner, Inc. While green IT and sustainability ranked lower down the list, Gartner analysts believe there is a high probability that many Australian CIOs would link these with cost containment.

“Australian companies are focusing on optimizing the cost structure of the data center with the aim of supporting business growth in the near future,” said Phillip Sargeant, research vice president at Gartner. “IT managers are evaluating ways to save money from routine operations and use the savings for running transformational IT projects with significant business impact.”

One of the biggest challenges faced by Australian data centers that is forcing change is data growth, with many Australian data centers running out of capacity. 59 percent of survey respondents ranked data growth as the leading infrastructure challenge, followed by system performance and scalability (37 percent), and network congestion and connectivity architecture (36 percent). While all the top infrastructure challenges impact cost to some degree, data growth is particularly associated with increased costs relative to hardware, software, associated maintenance, administration and services.

Highmark Blue Cross Blue Shield has awarded CGI Group Inc, a leading provider of information technology (IT) and business process services, a five-year renewal of its existing contract for claims validation.

Under the contract, CGI will provide claims audit services to identify provider overpayments and coding errors on claims submitted from providers. The work will be performed by consultants, claims investigators, clinicians, and coding specialists using the company’s proprietary Customized Audit System (CAS) software—an enterprise-wide solution designed to support the prediction, identification, management, and analysis of claims.

“CGI is proud to continue our successful 10-year partnership with Highmark,” said Robert Rolf, Vice-President, CGI. “With the increased emphasis by the Administration on improper payments, we are pleased to have both the in-house clinical and claims expertise as well as the technology solutions needed to support our clients as they seek to reduce the impact of improper payments on medical costs.”

Telecommunications incumbent Telstra has refuted a report that up to 1200 back office jobs will be outsourced overseas as part of a restructuring proposal carried out under it renewal initiative, Project New.

The report claims an outsourcing request for proposal was issued this week for finance and accounting positions. It also claims that vendors such as IBM and HP Enterprise Services are intending to bid for the tender.

A Telstra spokeswoman confirmed that the company is in the market for a request for proposal process for some back of house services, but denied 1200 jobs would be outsourced, but would not comment on how many jobs may go.

Serco is to make a further push overseas in the face of a contract hiatus in the UK.

Nearly all of Serco’s 9 per cent annual sales improvement to £4.33bn ($7.06bn) in the year to December 31 came from the FTSE 100 company’s international operations, including the US, Australasia and the Middle East.

Sales in the UK, where Serco suffered the phasing out of some contracts and cancellation of a prison, were broadly flat at £2.59bn.

Although Chris Hyman, chief executive, remained confident about the prospects for further outsourcing in the longer term, he expected the domestic market to remain “quiet” for the next 12 to 18 months.

Capgemini UK has won the bidding to supply leading UK energy company EDF Energy with a spectrum of IT support services under a new outsourcing agreement.

The contract is for an initial three years with options for a further two years. The value of this partnership is around £100 million (approximately €120 million) over the period to end- 2015.

Under the new contract Capgemini will provide service desk, procurement and managed desktop services, including support for email, instant messaging and file sharing, to 15,000 EDF Energy IT users, with some services being provided by specialist subcontractors working with Capgemini as prime contractor.

Bob Barker, Head of Client Computing & Telecoms for EDF Energy, said: ‘Capgemini demonstrated a clear understanding of our business needs and offered convincing proposals that will add value to our IT users and to our business. We are confident that working with them will maximise the return on our investment in desktop IT while minimising risk, and we look forward to an excellent relationship with them. Capgemini clearly have great strengths as a people company and we are sure that their teams will work effectively with ours.’

The award of the contract involves the transfer of a number of IT specialists from EDF Energy and its incumbent IT suppliers to Capgemini and its subcontractors under TUPE (Transfer of Undertakings, Protection of Employment) regulations. The majority of the Capgemini team working on the EDF Energy contract, will continue to be based in the UK.

Alison Gallagher, Capgemini’s Client Director for EDF Energy, said: ‘It is a privilege to be chosen to provide such a crucial service to one of the UK’s largest and most forward-looking energy companies, and we look forward to working with EDF Energy on a long-term basis. We also warmly welcome those IT specialists from EDF Energy and its incumbent IT suppliers who are joining Capgemini as new employees as a consequence of this contract.’

The City of London Corporation has awarded Accenture a five-year contract to help it reduce its procurement costs by creating a new, world-class procurement shared service center.

Under this arrangement, Accenture will have a proportion of its fees directly tied to the savings achieved to demonstrate its commitment and confidence in its ability to deliver savings. Accenture will initially focus on delivering strategic sourcing -- savings from across the City’s diverse base of suppliers -- and by transforming the way that the City manages its procurement operations.

A new central City of London Procurement Service will be created to undertake all procurement and procure- to-pay functions. This service will be delivered by a joint team from the City and Accenture for the duration of the contract.

“The City is seeking to achieve savings and drive efficiencies through the way in which it conducts its procurement and procure-to-pay functions,” said Chris Bilsland, the City of London Corporation’s financial director. “We selected Accenture because of its proven success in delivering procurement services to organizations across the world, although, of course, this new contract will complement our commitment to local procurement. The City of London Corporation will continue to enjoy the legacy of both the financial and non-financial benefits after the contract period.”

Outsourcing group Serco reported pretax profits up by 21% to £213.9m in the year to end-December 2010 (2009: £177m), with revenues up 9% to £4.327bn.

The full-year dividend was increased 17.6% to 7.35p (2009: 6.25p).

At period end, the group's order book stood at £16.6bn, compared with £17.1bn at the end of 2009. During 2010 Serco signed £4.2bn of contracts and was appointed preferred bidder for £1.4bn of contracts.

Serco said 40% of revenues were generated outside the UK, with strong growth in the Americas and AMEAA.

Christopher Hyman, CEO, said: "Our colleagues across the world deliver essential services and their achievements have led to a strong financial performance in very challenging times. We expect Serco's position in new, diverse and expanding international markets to deliver ongoing benefits. Our agility and capacity to innovate underpins our confidence in continued growth across all our regions."

Agilisys has announced they have been named the preferred bidder for a joint, 10-year contract with the London Boroughs of Sutton, Merton, and Kingston to implement a single integrated HR and Payroll platform and to provide ongoing shared services to the councils.

The new service will save the boroughs over half a million pounds annually over the life of the contract through standardisation of much of the three councils’ HR and payroll services.

Agilisys will provide a shared service to the councils, including the delivery of payroll services, as well as hosting the technology itself, creating further opportunities for savings and service improvement.

Speaking on behalf of all the boroughs, Sutton Councillor John Drage, Executive Member for Finance and Efficiency said: “We’re working very hard indeed to cut out waste, reduce staffing costs, use our buying power more effectively, and deliver on major developments. Buying big services jointly with our neighbours is one of the ways we’re trying to protect our frontline services from the deep cuts there have been to the money we get from government.

“This decision will save 42% of what the current system costs and help pave the way for the sharing of many more services and contracts. Local people have said they want us to do everything we can to be more efficient, and this move is a good example of how we’re doing that.

“We believe this sort of contract offers a national template for other councils to follow and we’ll be asking the Local Government Association how they’d like to champion the approach we have taken.”

Kay Andrews, Agilisys CEO added, “We’re delighted to be working with these three councils who, like Agilisys, are at the forefront of innovative service provision to their customers. By working closely with Sutton, Merton, and Kingston Councils, we continue to expand our shared services offerings, delivering highly efficient and effective services to our local government customers, allowing them to modernise their working practices and focus critical resources on front line delivery.”

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HP has announced the integration of 3PAR Utility Storage across the HP Converged Infrastructure portfolio to simplify scalable cloud computing, and introduced new storage solutions for virtualisation and data deduplication.

This integration enables clients to optimise cloud delivery with features like automated storage tiering to improve performance, and thin storage offerings to eliminate over-provisioning.

“Our clients tell us their journey to the cloud will be one of the most critical transitions for them this decade,” said David Scott, senior vice president and general manager, StorageWorks, HP. “HP 3PAR Utility Storage meets their demand for a new storage architecture specifically designed for IT as a Service. The integration of 3PAR with Converged Infrastructure is ahead of schedule and HP is poised to take clients to levels of agility and efficiency they’ve never experienced before.”