Industry news

Barclays has boosted its technology staff and budget, according to the bank's full-year results.

Staff numbers increased by 1,000 from 66,000 in 2009 to 67,000 last year across the firm's global retail banking operations.

Due to economic pressures, this is not a common trend but one which is largely due to the insourcing of operations and the company's international development of IT infrastructure.

Overall administration and general expenses in the banking arm increased, up 18% from 2009's figure of £5.56bn to £6.585bn last year.

SQS Software Quality Systems announces it’s tripling the size of its software testing facility in Belfast to meet increased demand for outsourced testing services from a ‘near-shore’ site. The expansion will mean the creation of 37 new jobs.

SQS is the largest independent software testing and quality assurance provider. The Belfast facility will offer a range of services including: security testing, environment hosting, test automation and performance testing for its Irish, UK, European and US customers. It will also provide specialised expertise in banking, insurance and telecommunications.

Rob McConnell, SQS Regional Director for Northern Ireland, says: “We’ve seen a strong growth in demand for outsourcing testing services to Belfast. In addition to cost-savings, near-shoring customers benefit from highly technical resources, close proximity for site visits, a common language and time-zone, full-cultural alignment and common communication channels.”

“We’re also fulfilling the needs of organisations, such as those in the public sector and financial services, whose data needs to remain in the UK for political or legislative reasons,” Rob continues.

The SQS Belfast office was originally set-up in 2007, based on Northern Ireland’s reputation as a technology hub with a strong supply of skilled IT graduates, high-quality service provision and low-cost differential over onshore providers.

The expansion has been partially funded by Invest NI.

The “super council” between Westminster, Kensington & Chelsea and Hammersmith & Fulham will include a “rationalisation” of tech posts. It is hoped that the cuts will save £400,000 a year by losing between 10 to 12 positions which are part of a five year programme that includes other cost-cutting moves in the tech area such as adopting unified communications.

Source: http://www.publictechnology.net/sector/local-gov/ict-jobs-go-flagship-london-shared-services-partnership

Interconnector, gas pipeline operator, has signed a £28m outsourcing deal with HP.

The 10-year contract involves the full range of HP products and services, including a dual data-centre service.

"Our expectation is that the improved performance will enhance our user experience and our visibility of service quality and we estimate that it will reduce IT costs significantly over alternative solutions," said Terry Stephens, chief information officer for Interconnector.

The services will be delivered from HP's data centre in Wynyard, UK with disaster recovery through Interconnector's Data Centre in Zeebrugge, Belgium.

Wipro Technologies have announced that it has completed the implementation of an Enterprise Work and Asset Management(EWAM) platform for NV Energy, a US based energy company. This project was rolled out across NV Energy’s north and south Nevada operations covering both electricity and gas distribution businesses and Phase 1 has been completed. NV Energy is a vertically integrated utility serving 1.2 million electric customers and 145,000 gas customers in Nevada and supporting a floating population of 40 million annually.

This implementation will achieve NV Energy’s strategic objectives of standardising systems and processes across north and south Nevada operations while reducing operating costs, achieving efficiencies in managing capital and O&M work and assets.

Craig Pinneo, Project Director, Enterprise Work and Asset Management , NV Energy said “Wipro’s ability to manage large business transformation programs, its domain competency, a mature global delivery model and close alignment with our teams and strategic goals helped us in achieving this significant and complex implementation.”

Anand Padmanabhan, Senior Vice President and Global Head – Energy and Utilities, Wipro Technologies said, “We are privileged to partner with NV Energy on their strategic journey of establishing and rolling out an Enterprise wide Work and Asset Management program. This opportunity extends our footprint in the US utilities industry and positions us as a partner of choice on engagements involving transformation and end-to-end services.”

America’s top banks including Citigroup, JP Morgan and Bank of America are set to outsource IT and back office projects worth nearly $5 billion this year to India, as they seek to lower costs of complying with new regulations and integrate banking systems.

According to at least a dozen senior executives at Tata Consultancy Services , Infosys, Wipro , HCL and Cognizant, apart from outsourcing consultants advising these banks, new investments in compliance and regulatory norms, apart from ongoing integration with acquired assets are among top drivers for this spend.

Alex Blues, IT sourcing specialist, PA Consulting Group, states how the Nasscom Forum 2011 has changed from a large Indian conference to a large global conference in India.

It would appear from the twenty senior IT industry representatives we interviewed - including ten CEOs - that the recession in the outsourcing industry is over. The industry is expecting growth to increase from 16 to18 per cent in 2010 to in excess of 23 per cent in 2011 for IT, with BPO being just slightly lower.

The key to many of our discussions has been focus, by both domain and geography. There is a need to be consistent - a big change from three to five years ago when the offerings were very generic.

The market is no longer interested in the inputs. What the market is interested in is the business output. As a result, the economic buyer is moving from the application owner, often found in the IT department, to the service owner, who is often outside the IT department.

In 2010 innovation was driven by cost. In 2011, innovation is being driven by many reasons. Cloud has sparked many debates, and while there is a majority verdict that it will change the shape of the industry, people still want to know 'when will this happen?'. Other discussions have included; whether the cloud will add to revenues or cannibalise existing income, whether it will be used more widely - with new systems and in new geographies - or whether it will actually have an impact on the current systems of end users.

Consolidation has been and will continue to be a trend, particularly between the smaller suppliers. This will allow them to provide the focus I mentioned earlier in this blog, and makes my concluding thought a promising one - the market is definitely maturing.

A Cloudy Day

Another great day at NASSCOM with a further eight interviews with industry leaders, including the CEO and chairman of Steria and the CEO of Genpact. The messages today are consistent with yesterday, though the key area of divergence is around Cloud.

Cloud

There are people that are passionate about Cloud, who believe that Cloud is going to be at the centre of the industry very quickly, regularly citing statistics such as “25 per cent of all outsourcing business will be Cloud-based in two years”. The feeling is that this will represent new business rather than replacing existing legacy business. A key message about Cloud is that it will empower the business user, and as we explored yesterday, the CIO really needs to watch out.

Others are slightly more hesitant, stating that Cloud holds promise for new or peripheral applications, but that it will be some time before it is suitable for core and critical applications.

At the other end of the spectrum, references are being made to the “ash cloud”. Here, there are concerns over integration, security and business uses not being coordinated.

I think the general conclusion is positive though, and again the key message is that the decision maker is going to change from application owners to service owners.

Consolidation

Interestingly, most of the interviewees have been sceptical about the benefits of iGATE acquiring Patni. The general belief is that there will be two tiers of player – the largest Indian players (there are still rumours that one of the largest Indian tier one players are looking to purchase a major European or US company) and then the specialist tier two players. The only consolidation that will take place in tier two will be in order to strengthen specialisms. The general view though is that the iGATE/Patni merger is in a no man’s land rather than sitting neatly in one of these two areas.

More insight to follow tomorrow.

2010 was truly the year of the Cloud. Whilst analysts are predicting 2011-12 IT budgets will have modest growth over 2010 levels, the impact of economic conditions, the need for greater flexibility and lower capital costs is continuing to increase demand for cloud based services.

The surge in cloud computing interest has also been put down to the fact that the traditional computing model has evolved. Both information and the consumption of that information are distributed, and because users have distributed both the computing power and the information storage, they have in essence distributed the data centre.

David Silke, EMEA Marketing Director at Brocade, expands this point: “The old guard of computing has been reversed. With increasing adoption of high-powered mobile devices and applications, more and more information is being created outside of centralised data centres and at ever increasing, rapidity. According to research conducted in Summer 2010, there will be 15 billion mobile devices in use by 2015 and by 2020 over 35Zb (Zettabytes) of data will be generated by users.

“Building an architecture that has the elasticity to cope with these modern demands might seem simple enough, requiring a forward-thinking strategy to embrace different ideas and solutions; however, achieving this is easier said than done. The answer to this has long been, Cloud Computing, and over the last six months it has finally started to emerge from the hype, as a viable entity and an alternative model to in-house systems.

“Despite the increased public awareness of the Cloud, the majority of the public still find themselves asking; “how does this work?”

“The cloud is a simple idea, but a more complex entity. It can be broken down into three broad areas; Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS). These on-demand services can be delivered over public infrastructures (a public cloud) or be provided as bespoke services to the enterprise over private networks (a private cloud), or as a combination of the two (a hybrid cloud). In other words, there are multiple clouds, and so the cloud refers to the concept rather than the delivery system.

“Such services offer multiple business and financial benefits to the enterprise. For example, access to a highly scalable infrastructure, meaning the customer incurs costs as operational expenditure. It also means that the upgrade path for the underlying technology is both seamless and invisible. It becomes part of an on demand service.”

Impact on Technology

Although Apollo Research shows that Cloud was the number one ‘hot topic’ last year, with a total share of 61%, many organisations still do not have a strategy in place.

Considering the above points and the inevitable evolution of this technology, TP suggest five reasons why organisations need to develop a strategy now to take advantage of Cloud Computing’s upcoming disruptive impact on technology:

1. The iPad Effect on Business: The enormous popularity of the iPad has not only been lucrative for Apple, it has also shown the world how the rapid adoption of Cloud Computing by consumers is putting enterprises on the spot. As executives and employees have grown enamored of the iPad and its ability to access services from the Cloud with ease, they are increasingly attempting to use them for work. To avoid the risk and confusion created by individuals going around the IT department with their own ad-hoc implementations, organisations need a plan for supporting Cloud Computing widely.

2. Need for Cost Control: While the “Great Recession” may have subsided, uncertainty about the speed and timing of an economic recovery is keeping the pressure on organisations to reduce costs and limit investments until business demand returns. TPI Research has found that the ability to more tightly manage IT spending is the number one reason clients are interested in Cloud Computing. As budgeting for 2011 begins, organisations should be preparing to leverage this disruptive technology to reduce costs and capital expenditures and align future spending with value.

3. Pricing Confusion: In theory, the Cloud Computing market is pay-as-you-go. But in practice, it can be hard to discern just what you will pay and just what you will get. Pricing and terms vary widely, and there is no standard methodology for service level agreements. The business models for public, private, hosted and hybrid solutions are all different, and figuring out the best deal for your organization will require enterprise-wide planning, research and testing, all of which takes time.

4. Changing Landscape: There has been a flood of new Cloud-based offerings coming on the market recently, while intensification in merger-and-acquisition activity has caused major shifts in the service provider community. Organisations should be thinking of their Cloud Computing strategy as a roadmap that will help them navigate this increasingly cluttered landscape and arrive at the right set of vendors and solutions for their needs.

5. Only the Beginning: Cloud Computing only works as well as an organization manages it. The key to achieving the benefits it promises is with an integrated, centralized IT Service Management (ITSM) system dedicated to demand management, capacity management and service integration. The only path to such a system is through proactive strategic thinking well in advance of implementation. Migrating a service to the Cloud is only just the beginning.

Be Prepared

The hype surrounding cloud computing is expected to reach unprecedented levels over the next few years. Despite being lured by the prospect of achieving significant cost savings and efficiency gains, not all organisations are ready to embrace cloud computing and some lack an adequate contingency plan in the event of it all going wrong.

It’s important to consider the move to cloud computing very carefully and ensure that your organisation is practically and culturally ready to gain the most from what the cloud has to offer.

Neil Cross, Managing Director of leading managing services and cloud computing provider, Advanced 365, says that businesses should consider the following key factors before seeking to introduce cloud computing as part of their IT strategy.

Determine what you want to achieve and why

IT is about delivering improved business services, not just on ensuring the smooth-running of technology, so make sure you understand what you want to achieve as an organisation and why. Both public and private cloud options should be thoroughly reviewed alongside non-cloud alternatives with the benefits and drawbacks of each being given fair consideration. Moving to cloud computing just because it’s the latest buzz in IT isn’t a good enough reason and your project is likely to fail.

Understand your business drivers as well as the IT drivers

The pressure to achieve efficiency savings may encourage more IT teams to look at moving to a cloud computing model. However, it’s essential that any changes made to IT infrastructure are suited to the needs of the business first rather than being modified to fit the IT department’s preferred cloud platform.

Fail to prepare, prepare to fail

It might seem obvious, but make sure you plan thoroughly and decide how your chosen cloud solution is going to be integrated, managed and monitored. Although it’s possible to access ‘on demand’ cloud services in a matter of minutes with the aid of a credit card, you should not become complacent about the level of planning that is required to ensure that your project is a success.

Reducing complexity is as important as reducing cost

Compared with managing your IT systems exclusively in-house, cloud computing may not be a cheaper option due to the additional costs of accessing cloud services on-demand and having to retrain your staff. Introducing a new cloud supplier to your business could also create more management complexity into your IT infrastructure if you’re uncertain as to how this supplier will be managed and how you are going to link your various applications together.

Think about the risks

Though cloud computing brings undoubted business benefits, organisations also need to consider carefully the potential risks. Is your data going to be held safely and securely on the cloud and are you satisfied that your cloud supplier is reliable and experienced enough to provide your business with the necessary service-level provision you require?

Choose the right partner

It is essential to work with specialist cloud partners that can manage their services in line with your organisation’s requirements. Check that your partner can provide you with an end-to-end service combining service level management, service desk facilities, remote monitoring, advanced reporting capabilities and complete data transparency to help minimise the risk of integrating your systems into the cloud. You should pay particular attention to whether your cloud provider’s service desks run 24/7 so that they can react quickly to keep downtime to a minimum.

Ensure your service level agreement is appropriate for your business

In the event of a business-critical application going down, you need to be reassured that your cloud provider has the expertise and skills to get it up-and-running again as quickly as possible. Ensure that your provider offers service level agreements (SLA’s) that are appropriate for your business which cover almost any eventuality. The most effective cloud partners can offer multiple SLA’s for a single customer giving the business peace-of-mind at all times.

The Growth of Cloud Services

Many more development projects are now being trailed on the cloud - demonstrating an increased confidence in enterprise-ready cloud services for business use including critical applications, test and development and batch processing/data analytics.

Neil Cresswell, Managing Director for EMEA, Savvis, comments: “As these projects grow in size and the adoption of cloud becomes pervasive, we have seen concerns on important issues such as security, policy and governance.

“Rightly so, these are all issues that must be well understood if the cloud is to provide the benefits it promises. Not all clouds are created equal and all providers are not the same- security, reliability and risk mitigation can vary across cloud providers. Enterprises evaluating cloud services have started to get into policy implementation mode for the cloud services they are buying into. This is resulting in a shift from ad hoc deployment on ‘credit card cloud’ to formalised processes for cloud development and deployment within the corporate compliance framework.”

Looking forward, cloud will continue to dominate in 2011. It does not seem unreasonable to state that the explosion in cloud services will only continue with the big players laying the foundations. With the unveiling of the Government’s G-Cloud, Microsoft’s Azure offering along with Salesforce bringing the Java and Ruby developer communities together – the future of cloud looks bright.

Venkat Narayan, Senior Vice President, Mahindra Satyam, states: “Cloud is now poised for widespread adoption and will continue to be, a core part of Mahindra Satyam’s strategy going forward, and one in which we expect to see significant growth.

“As a model for buying services, the cloud will be transformational, but organisations have to take a pragmatic approach when considering how the transition can benefit the client base. Customers are at varying stages of cloud ‘maturity’- there are still concerns about privacy and security from some sectors.”

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Gartner has identified seven critical questions that designers of social media policy must ask themselves:

"Social media offers tempting opportunities to interact with employees, business partners, customers, prospects and a whole host of anonymous participants on the social web," said Gartner analyst Carol Rozwell.

What Is Our Organization's Strategy for Social Media?

There are many possible purposes for social media. It can be used for five levels of increasingly involved interaction (ranging from monitoring to co-creation) and across four different constituencies (employees, business partners, customers and prospects, and the social Web). It is critical that social media leaders determine the purpose of their initiatives before they deploy them and that those responsible for social media initiatives articulate how the organization's mission, strategy, values and desired outcomes inform and impact on these initiatives. A social media strategy plan is one means of conveying this information.

Who Will Write and Revise the Policy?

Some organizations assign policy writing to the CIO, others have decided it's the general counsel's job, while in other cases, a self-appointed committee decides to craft a policy. It's useful to gain agreement about who is responsible, accountable, consulted and involved before beginning work on the policy and, where possible, a cross-section of the company's population should be involved in the policy creation process. It's important to remember that there is a difference between policy — which states do's and don'ts at a high level — and operational processes, such as recruitment or customer support — which may use social media. These operational processes need to be flexible and changeable and adhere to the policy, but each department/activity will need to work out specific governance and process guidelines.

How Will We Vet the Policy?

Getting broad feedback on the policy serves two purposes. First, it ensures that multiple disparate interests such as legal, security, privacy and corporate branding, have been adequately addressed and that the policy is balanced. Second, it increases the amount of buy-in when a diverse group of people is asked to review and comment on the policy draft. This means that the process by which the policy will be reviewed and discussed, along with the feedback, will be incorporated into the final copy. A vetting process that includes social media makes it more likely that this will occur.

How Will We Inform Employees About Their Responsibilities?

Some organizations confuse policy creation with policy communication. A policy should be well-written and comprehensive, but it is unlikely that the policy alone will be all that is needed to instruct employees about their responsibilities for social media. A well-designed communication plan, backed up by a training program, helps to make the policy come to life so that employees understand not just what the policy says, but how it impacts on them. It also explains what the organization expects to gain from its participation in social media, which should influence employees in their social media interactions.

Who Will Be Responsible for Monitoring Social Media Employee Activities?

Once the strategy has been set, the rules have been established and the rationale for them explained, who will ensure that they are followed? Who will watch to make sure the organization is getting the desired benefit from social media? A well-designed training and awareness program will help with this, but managers and the organization's leader for social media also need to pay attention. Managers need to understand policy and assumptions and how to spot inappropriate activity, but their role is to be more of a guide to support team self-moderation, rather than employ a top-down, monitor-and-control approach.

How Will We Train Managers to Coach Employees on Social Media Use?

Some managers will have no problem supporting their employees as they navigate a myriad of social media sites. Others may have more trouble helping employees figure out the best approach for blogs, microblogs and social networking. There needs to be a plan for how the organization will give managers the skills needed to confront and counsel employees on this sensitive subject.

How Will We Use Missteps to Refine Our Policy and Training?

As with any new communications medium, some initiatives go exceptionally well, while others run adrift or even sink. Organizations that approach social media using an organized and planned approach, consistent with the organization's mission, strategy and values, will be able to review how well these initiatives meet their objectives and use that insight to improve existing efforts or plan future projects better.