Industry news

HP Enterprise Services UK Limited has announced that Centrica plc has signed a seven-year outsourcing services agreement worth more than £247 million.

With the new agreement, HP will enable Centrica to move to a utility-based private cloud computing environment that will support Centrica’s change program, improve speed of deployment, help lower costs and support the company’s environmental objectives.

“Centrica is striving to improve our ability to respond to market changes to supply gas and electricity to homes and businesses more efficiently,” said Dave Bickerton, group chief information officer, Centrica. “We value HP’s utility computing capabilities and quality solutions that are flexible, cost-effective and help reduce our carbon footprint.”

The Big Society requires public and private organisations to work together if it is to stand any chance of becoming a success, according to global IT services provider HCL Technologies.

The Office for Budgetary Responsibility has predicted that as many as 330,000 jobs could be lost in the public sector, by 2015 as a result of the spending cuts. Back in October, the government insisted that it had planned to ‘facilitate a movement of jobs from the public sector to the private sector’, taking steps to ensure that the transition was a smooth one.

However, considerable doubt has been cast upon this plan after a recent survey of more than 500 companies in the private sector found that over half were unwilling to take on public sector workers. An additional 52 per cent believed that public sector workers were ill-equipped to work in a commercial setting. Furthermore, 75 per cent of these companies claimed that they couldn’t be sure that there would be enough jobs available to compensate for those lost in the public sector.

It seems that by setting out plans which will ‘presume’ that private (and voluntary groups, it should be noted) will run almost every kind of public service, the government is putting their trust, to a large extent in the private sector to deliver increased efficiency at a reduced cost to the taxpayer, with the outsourcing community set to benefit more than most as a result. However, many are now speculation on how will this work in practical terms.

Bindi Bhullar, director of global IT services provider HCL Technologies, commented: “A lot of IT service providers and their customers are confused by what the Big Society actually stands for and what real difference it is going to make to local business. We rarely hear it being explained in easily digestible language, which encourages those who don't want to understand it to resort to ridicule. Over the years, everyone has got so used to these flagship policy ideas being nothing more than political rhetoric.ˇ

“What we need above all is for the government to take a more active role in equipping public sector workers to manage existing and future IT projects. By training them in a broader set of skills, public sector workers will be more prepared for the transition into the private sector, and more suitable for the jobs that may exist there.

“One thing’s certain - if we are to look back in the years to come and see the Big Society initiative as a big success, then it will be important to have everyone - in both the public and private sector working together.ˇ

Dell Services has announced it has signed a six-year IT outsourcing contract with leading pan European travel company TUI Travel PLC.

Deploying managed infrastructure services, Dell Services will utilise its IT Infrastructure Library (ITIL)-based best practices and systems as well as cloud-based asset management capabilities to help TUI Travel boost cost savings and productivity.

Under the agreement, Dell Services will help TUI Travel standardise its tool set and infrastructure, specifically for IT services that support its employees, with Service Desk offerings such as Desktop, Laptop, and Printer support, and Managed Client services including Managed Active Directory and Exchange.

Specifically, Dell Services will provide a single point of contact for resolving technical issues and offer 24/7 service desk support, utilising disciplined workflows, automated process tools and industry best practices to help increase efficiencies and control costs.

The contract also includes the provision of hardware and use of Dell Managed Deployment Services, an end-to-end offering designed to help speed deployment time, save money, and provide comprehensive planning and project management to support IT staff.

Additionally, Dell Managed Print Services will be utilised to assist TUI Travel in modernising its printer fleet, which will help decrease the total cost of printing. Dell Managed Print Services will help enable TUI Travel to focus on its core business, and not the day-to-day management of a complex fleet of printers, copiers, faxes, scanners, and multi-function devices.

Services will be provided initially in the UK, Germany, France, Spain, the Netherlands and Switzerland.

“Through increased IT efficiency and cost reduction of technology ownership, our partnership with Dell will provide significant value to our organisation and will also enable TUI Travel’s team to focus on more customer-centric development,” said Jim Mann, CIO,TUI Travel PLC.

“It is our privilege to deliver innovative IT solutions that help TUI Travel serve its 30 million customers in 27 markets. With a standardised tool set and cloud-based infrastructure, we are excited to help TUI Travel drive cost savings and boost productivity for its operations across 180 countries,” said Eric Velfre, director, Dell Services.

Whichever way to look at it, the backbone of any strong, successful business relationship is the ability to work together toward a common goal.

Collaboration offers the opportunity to share the flow of knowledge and experience between individuals and organisations. Moreover, it gives organisations an excellent opportunity to establish an open dialogue to generate positive changes to the dynamics of how the organisations work together to deliver benefit and add value. This is particularly relevant in the outsourcing industry.

Matthias Mierisch, chairman and CEO of arvato UK and Ireland, said: “It is important not to rush into a partnership without first having a detailed and realistic understanding of what it is aiming to achieve. The only way this can be done is through extensive consultation in advance, and honesty from both sides is paramount.

“Clearly there always needs to be a degree of flexibility so that any unforeseen issues when transferring the service can be taken into account, but having a thorough and transparent strategy in place from the start is a vital foundation for a successful relationship.

“Whether in the public or private sector, any transformation of services must be supported by the organisation’s people. There is a significant challenge in transferring the necessary skills, knowledge, technical infrastructure, tools and techniques while ensuring that the change is embraced by employees at all levels.

“For this to work there needs to be an emphasis not only on process design, but also on the cultural aspects of the change. This requires extensive consultation with front-line staff in advance, followed by provision of necessary support and training throughout the transfer and beyond.

“Any outsourcing partner should be able to work as an integral part of clients’ businesses. Not only does this means respecting their client’s culture, representing their brand and supporting their employees, but also having the deep sector experience to create a service that can adapt to market pressures.

“Once an agreement is in place, measuring success and striving for continuous improvement and innovation is key, and it is essential that the measurement criteria are shared by both parties.”

As part of its activities in helping business organisations create solid and profitable relationships, the NOA has been working with other industry associations in collaboration with the British Standards Institute (BSI) to publish the first-ever standard on Collaborative Business Relationships.

The new Standard part one was formally launched at the House of Lords in December with the BS 11000-2 currently in development. It will provide additional guidance on practical implementation of BS 11000-1 within organisations and is due to be published later in 2011.

Adrian Quayle, NOA Board member, has been contributing to the British Standard. He said: “It is expected that the British Standard 11000 will become a requirement for companies across a wide range of public sector contracts which will obviously include many outsourcing deals.

“The guidance standard will help with the ‘how to’ aspects of establishing, managing and evaluating collaborative relationships in organisations from any sector, focussing on the key aspects of the methodology such as partner selection, risk and knowledge management and the internal assessment process.”

BS 11000-2 may draw upon case studies where the benefits of forming collaborative relationships (over non-collaborative relationships such as typical supplier-client ones) have been realised within organisations working to the principles of BS 11000, in terms of greater efficiencies and in demonstrating value-creation.

In shaping BS 11000-2, BSI hopes to engage with small and medium-sized organisations to ensure that their perspective is reflected in the guidance and the benefits of building collaborative relationships is achieved by different organisations across the private and public sector.

Chris Baldock, Managing Director of intY, said: “The BS 11000 standard will be a real benefit to the public sector. It will allow businesses to collaborate and work in partnership to a set standard that will ultimately help them to achieve a competitive edge.

“In some situations it is more efficient and cost effective to outsource certain resources. Focus on what you are good at, and partner with those particular companies that can add value to your organisation. Partnering should be seen as a mutual benefit, not a threat and this will help the industry to understand that collaboration will only make their businesses stronger. Adoption of standards will quickly address this providing commonality of approach and implementation that can only be good for the industry.”

The benefits of collaboration in any business are clear and it is hoped that the BS11000 will help organisations to share best practice and skills through their relationships in order to provide greater value.

Advances in technology have also helped to support a collaborative approach in outsourcing, with innovations such as virtualisation and the cloud leading to new ways of working, managing, innovating and outsourcing together. With more tools available for organisations to work together, it’s no surprise to find that more are taking the opportunity to do just that.

Cloud computing is clearly the latest hot topic for the IT industry. In fact, it’s hard to find a vendor or service provider that isn’t making highly positive claims about the business benefits of 'the cloud.' What’s all the hype about? Without a doubt, there are some compelling benefits of cloud computing, such as cost reduction, increased agility, and so on.

With a more traditional infrastructure, companies are normally tasked with buying, maintaining, managing and upgrading their own hardware and software. Clearly, this requires a certain amount of dedicated time and attention, as well as expense. With cloud computing, access to storage, applications and servers are provided and managed by a third party versus in-house. In all honesty, cloud doesn’t offer any new functions, but rather a new way of delivery.

Because of the way that cloud computing works, the solutions being offered by many vendors tend to be rather 'vanilla' in their specifications because of cloud providers’ “build it once, build it for many” approach. While cloud computing can be very useful for companies that use widely available software and systems, it will be less useful for companies that heavily rely on bespoke or highly customised software and systems. Also, because cloud computing can cause complex integration problems, the integration costs can sometimes outweigh the pure cost benefits.

As a result, most companies will probably end up with something of a 'hybrid' solution whereby some of their more standard applications will make use of the cloud, whilst others will be hosted in-house. In other words, cloud computing does not need to be an all-or-nothing proposition.

So how does a company know which applications are suitable for cloud computing and which are not? The truth is that it will depend on the business and the systems that are being used, but there will still be some universal questions to ask:

• How important is this system / application / data to the running of our business?

• Do we have the skills to maintain these systems in-house?

• How much are we spending on maintenance and support now, and how would that change with cloud computing?

• What are the dependencies between my existing business processes and applications and how will moving to the cloud affect these?

• What about regulatory requirements? In some cases it's required that data is stored in the UK, for example, and some cloud computing vendors may not be willing or able to guarantee this.

At the moment, most end-users aren't giving much consideration to the issue of system integration, and unfortunately most vendors downplay it. There will certainly be some integration work needed to keep your processes and multiple applications or data sources knitted together. How do you plan to increase the interoperability between different functions; for example, to enable business intelligence systems to mine data from CRM systems?

As a starting point, any decisions in this area should be driven first and foremost by your own business requirements, not by the availability of technology. Some aspects of cloud solutions are genuinely innovative and beneficial, but that doesn’t mean they are universally suitable. Unfortunately, many companies seem to think that cloud computing is a 'silver bullet' that is easy, inexpensive and secure, all at the same time. But the reality is that any form of IT is quite often just a necessary evil, and just because something is technically possible, that doesn't mean it's a good idea for every company, in every situation.

British support services company Interserve has made a cash-and-shares approach to peer Mouchel create a UK outsourcing powerhouse, trumping construction firm Costain.

Maintenance group Interserve said on Friday it had inked a "co-operation agreement" with design consultancy Mouchel and discussions over the offer were continuing.

Mouchel said on Thursday it was in advanced talks with an unnamed potential buyer, prompting a denial from Costain that it was the party involved.

Interserve is one of the UK’s foremost outsourcing and infrastructure companies, operating in the public and private sectors in the UK and internationally, offering advice, design, construction and facilities management services for society's infrastructure and providing a range of plant and equipment in specialist fields.

Goldman Sachs has invested in a British virtualisation firm in a bid to expand in the market. AppSense, a virtualisation software firm, has received £43 million from the company.

A Goldman Sachs executive will now have a direct role in the oversight of the company although AppSense said Goldman Sachs was taking a "minority stake" in the company.

Pete Perrone, managing director at the bank, will join the AppSense board of directors.

Perrone said: “With the increased mobility of the workforce and the need to be able to access information from any device, Goldman Sachs sees a clear demand for user virtualisation solutions that span multiple desktop delivery methods. AppSense’s strong customer traction, history of innovative solutions in desktop computing, and the record growth it has experienced over the past two years further solidified our decision to invest in the company."

Atos Origin, an international IT services company, has announced that it has signed a new five year deal worth more than $30 million with FirstGroup, the leading transport operator in North America and the UK.

This announcement follows the outsourcing of First's UK data centers to Atos Origin in 2010. The deal covers the consolidation of the Group's data center infrastructure in North America, which has grown through recent acquisitions and mergers.

Atos Origin will provide a range of services with varying architectural standards. It will migrate and transform First's North American data center operations into a utility based service delivery model creating a single, global way of managing and delivering a business-driven technology landscape. The five year deal is expected to deliver cost savings, minimize risk and provide the commercial, financial and technical flexibility to support First's business plans.

Craig Wallace, FirstGroup's IT Director, said: "Atos Origin delivered an excellent proposal which complements our plans to improve and standardize our IT practices. It has a strong track record in both the IT and transport sectors and is well placed therefore to deliver the IT infrastructure and support that enables us to further strengthen our business."

Paul Stewart, CEO for Atos Origin North America said: "This is an important and strategic deal for Atos Origin, which showcases our global expertise. We are absolutely committed to deliver world class service to FirstGroup and our experts in the US and the UK will work together to ensure a smooth transition. The goal is to deliver real business benefits in the short term."

Capita, who depend on the government for much of their turnover, lifted revenues and profits in the year to 31 December despite the coalition government’s austerity measures.

Pre-tax profits climbed to £364.2m from £325.1m on revenues that rose to £2.74bn from £2.69bn.

Capita, whose activities include collecting the TV license, said it is strongly positioned despite having faced a slowdown in decision making on major outsourcing contracts.

Paul Pindar, Chief Executive of Capita Group Plc, commented: "Capita delivered a good performance in 2010, with the majority of businesses across the Group producing robust results against a challenging background. A focus on optimising our operational infrastructure and on growing our offshore operation ensured that we continued to increase margins.

"In 2010, we faced a slowdown in decisions on major outsourcing contracts, lower additional spend by existing clients and reduced activity in some of our transactional trading operations due to constraints on public spending. Notwithstanding these challenges, Capita is positioned strongly for securing new business in 2011."

Dell has completed its acquisition of virtualised storage provider Compellent Technologies for $940m (£578m).

Compellent shareholders approved the acquisition at a shareholder meeting. The two firms first entered merger talks in December.

Brad Anderson, senior vice president at Dell Enterprise Product Group, says the deal will complement the firm's storage portfolio.

"Our team is committed to helping Dell transform the datacentre with open, capable, and affordable solutions that allow customers to do more with their IT dollars," added Phil Soran, president of Dell Compellent.