Industry news

Nokia and Microsoft today announced plans to form a broad strategic partnership to create a new global mobile ecosystem.

Nokia and Microsoft intend to jointly create market-leading mobile products and services designed to offer consumers, operators and developers choice and opportunity. Under the proposed partnership:

- Nokia would adopt Windows Phone as its principal smartphone strategy, innovating on top of the platform in areas such as imaging.

- Nokia would help drive the future of Windows Phone. Nokia would contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies.

- Nokia and Microsoft would closely collaborate on joint marketing initiatives and a shared development roadmap to align on the future evolution of mobile products.

- Bing would power Nokia's search services across Nokia devices and services, giving customers access to Bing's next generation search capabilities. Microsoft adCenter would provide search advertising services on Nokia's line of devices and services.

- Nokia Maps would be a core part of Microsoft's mapping services. For example, Maps would be integrated with Microsoft's Bing search engine and adCenter advertising platform to form a local search and advertising experience.

- Microsoft development tools would be used to create applications to run on Nokia Windows Phones.

- Nokia's content and application store would be integrated with Microsoft Marketplace.

"Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience," Stephen Elop, Nokia President and CEO, said at a joint news conference in London. "Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale. It's now a three-horse race."

"I am excited about this partnership with Nokia," said Steven A. Ballmer, Microsoft CEO. "Ecosystems thrive when fueled by speed, innovation and scale. The partnership announced today provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute."

Sitel is to provide phone and email customer care to LOVEFiLM.com, Europe’s largest subscription service.

Sitel have announced they will provide all CRM, online cutomer and billing support for the LOVEFiLM group of sites. The agreement sees Sitel supporting both UK and German customer markets with the aim of Sitel continuing to play a major part in all dedicated outsourced support as LOVEFiLM expands further into Europe and overseas.

“As a company we are dedicated to ensuring the highest levels of customer service and chose Sitel because of their proactive approach in improving customer experience.They were our first choice to handle our UK and German markets as we expand,” says Fern O’Sullivan, Group OPS Director of LOVEFiLM.com. "Sitel within a few short weeks was able to support LOVEFiLM’s fast-moving progress during the PS3™ launch, and is able to act as an able partner with the continued success of LOVEFiLM as we grow to new heights in the EMEA marketplace.”

“The ability to provide Pan EMEA coverage as well as maintaining the very best customer care is core to the service we provide all of our clients,” said Tim Schuh, general manager northern EMEA, Sitel. “One of the benefits of partnering with Sitel is our ability to scale up and down quickly to meet the peaks and troughs of customer demand. We’re pleased to be able to support LOVEFiLM’s customers as the company grows.”

Coalition to help SMEs by streamlining procurement rules

Francis Maude is streamlining procurement rules across Whitehall in an attempt to double the share of the government’s annual £191bn procurement budget won by small and medium-sized companies.

The cabinet office minister and David Cameron, will announce he is scrapping onerous “pre-qualification questionnaires” for SMEs to make it easier for them to apply for government contracts.

He is also instructing Whitehall to simplify complicated tender documents to open up the bidding process as well as encouraging mandarins to adopt a more private sector mindset when being pitched for business.

The goal is to get 25 per cent of all procurement contracts going to small businesses.

Stephen Bentley, Owner and CEO, Granby Marketing Services said: “I welcome changes to the application process for government contracts. At the moment the PQQ procedure is expensive and labour intensive for SMEs which puts many off applying for contracts. By slimming down the initial assessment stages, the speed of turnaround should improve. It’s important to add a level of common sense to the assessment process, there will be times when the right company for the job won’t fit extensive criteria lists exactly but there is a good reason to keep them in the process. Obviously there will also be a level of box ticking but keeping this to a minimum is important.

"There has been a shift in mindset to the view that smaller companies can handle government contracts. At the moment relatively small contracts still tend to go to a big organisation by default which doesn’t make sense. For example with call centres a contract that needs six people to manage the work load, will still tend to go to a major call centre with hundreds of seats. I think this initiative will be better than previous attempts to give more government contracts to SMEs as they have set a clear target. It’s always easy to say we want to encourage SMEs but a clear target makes it measurable and the organisations involved more accountable.

"There has to be a balance to ensure the manual process of sifting through applications is manageable for government staff but at the same time companies shouldn’t have to write the equivalent of ‘War and Peace’ in order to win a £2,000 contract. I think the key question now is when will this take effect? For many business owners it can’t come soon enough.”

Capgemini Wins IT Outsourcing Contract at Tube Lines

Single supplier status aims to boost ‘One IT’ vision and enhance cost-effectiveness

Tube Lines has signed a £10.5 million IT outsourcing contract for the three-year period to December 2013 with Capgemini UK plc. The new contract is an extension and significant expansion of an alliance between the two companies that started in 2005 and effectively means that Capgemini now becomes Tube Lines’ prime IT partner, with responsibility for all IT support including infrastructure, applications and networks.

Tube Lines was acquired by Transport for London in June 2010. The contractor, under direct management of London Underground, maintains the trains, tracks and stations for London’s Jubilee, Northern and Piccadilly Lines.

Under the new contract Capgemini will for the first time take over support for IT applications at Tube Lines, including all core business applications, as well as continuing its existing responsibilities for IT infrastructure and networks. Capgemini will also provide service desk support for some 2,500 desktop users at Tube Lines. The award follows a rigorous open tender process by Tube Lines involving a number of other leading global and national bidders.

The majority of work on the contract will be carried out from Tube Lines premises and Capgemini sites in the UK, with additional support from Capgemini centres in India and Poland. Capgemini’s Rightshore® global delivery model, which aims to get the right balance of the best talent from multiple locations, was a positive factor in winning the new Tube Lines contract. Capgemini as prime contractor will also assume responsibility for the work of a number of specialist subcontractors including BT Engage, InTechnology and Servo. In consequence of the new contract, a number of staff will be moving from the previous incumbent applications outsourcing supplier to Capgemini under TUPE conditions[1].

Capgemini intends to maintain both its highly collaborative approach and its service record at Tube Lines. An independent audit report recently confirmed that the existing Capgemini service to Tube Lines was in the top quartile for quality and the bottom quartile for costs. The collaboration will include the exploration of cloud computing solutions for certain aspects of IT support at Tube Lines.

Siemens PLM Software has announced that Aston Martin is standardizing its global sports car development process using their NX™ software for integrated computer-aided design, manufacturing and engineering analysis and Teamcenter® software to manage their product and process knowledge.

This company-wide commitment will enable Aston Martin to drive productivity improvements, common processes and enhanced global collaboration for product design and development.

“The automobile industry is undergoing enormous transformation both in terms of technology and business operations. The increasing complexity of vehicles and changing economic conditions are forcing automakers to re-evaluate their existing PLM applications to align with the best available in the market,” said Sanjeev Pal, PLM analyst at IDC Corp.

“Luxury automotive manufacturers like Aston Martin must make their product decisions earlier and more efficiently in today’s marketplace. We are pleased that our technology has been selected for the advanced product planning through detailed engineering processes which are critical to increased productivity,” said Chuck Grindstaff, president and chief technology officer, Siemens PLM Software. “It’s truly a must for OEMs to be able to manage increased sophistication across all systems in a car to ensure quality while reducing time-to-market.”

Aston Martin’s decision to adopt Siemens PLM Software’s technology as the corporate-wide PLM standard highlights the importance of an open PLM environment to enhance innovation and manage increased sophistication.

Executives from Facebook, Google and other companies have held talks with Twitter over a possible acquisition of the micro-blogging service, pushing its estimated value as high as US$10 billion, according to a report in The Wall Street Journal.

The figure is high for a company that only had revenue of $45 million last year, posted a loss, and estimates its revenue this year will be between $100 million to $110 million, the Journal said.

However it is reported that Twitter executives are not interested in selling. The newspaper did not say whether any formal offer was imminent.

Hewlett-Packard Limited has announced that it has been awarded a US$46 million IT outsourcing contract to improve security and reliability while reducing costs for Interconnector (UK) Limited, the operator of the strategic gas pipeline between continental Europe and the UK.

The ten-year deal involves the full range of HP products and services, including a dual data-centre solution across international boundaries and converged infrastructure technologies designed to offer the high levels of security, availability and reliability.

“Our expectation is that the improved performance will enhance our end 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. “We chose HP because of their deep understanding of our business needs and they delivered a competitively priced solution which minimized our risk.”

The new services will be delivered from HP’s state-of-art data centre in Wynyard, UK with disaster recovery through Interconnector’s Data Centre in Zeebrugge, Belgium. The agreement covers the provision of dual data centres, webhosting, networking services, end-user workplace services, service management, application maintenance and development, security services and disaster recovery, server and storage refresh and technology transfer and adoption support.

“With our technology breadth, data centre and services capability, we are able to help companies like Interconnector build an Instant-On Enterprise. This will enable them to drive growth through innovation, reduce costs through optimization and manage risk to their advantage,” said Craig Wilson, vice president for United Kingdom and Ireland, HP Enterprise Services.

If the last year has taught us anything, it’s that 2011 will see government departments moving outsourcing rapidly to the top of their list of priorities.

Indeed, we’ve already seen a number of private organisations bidding for public sector contracts to provide everything from street cleaners to back office bureaucrats, and it’s a trend that we’re set to see more of in the coming twelve months.

Nicholas Ridley, the former environment secretary in Margaret Thatcher’s cabinet, once said in his pamphlet “The Local Right” that the ‘ideal’ council was one that utilised practically nobody and meets just once a year to award contracts to private firms.

Produced in 1988, he claimed outsourcing would take politics out of the public service equation, making everything from education to refuse collection a simple transaction.

Although this might have been unthinkable as recently as a few years ago, many are starting to wake up to the fact that, for the public sector at least, it could be the reality.

According to analysis by the consultancy firm, Deloitte, local councils are spending around £42bn a year (40% of their total expenditure) on private sector firms. Deloitte also believes third-party suppliers will make up 44% of total public sector spend by 2014/15 and there are fears among unions the figure could end up even higher.

Suffolk county council have already explored ways to outsource the running of all libraries, youth clubs, highway services and children's centres to private firms. The expectation is that big, private contractors such as Capita, Serco and Sodexho will benefit as councils and quangos follow Suffolk's lead and outsource services in a bid to save money. But is this a dangerous move?

It’s true that there is a risk that we might see private companies becoming so powerful that they could be able to determine what services are provided and how much they charge. But this event might be one driven by the public sector looking to just outsource cheaply, at the cost of improved service, in order hit cost reduction targets over the next four years.

Obviously, a project that is initiated on cost alone stands a much bigger chance of ending in failure. But, as we have seen, if the right due diligence is in place, it’s clear that outsourcing can achieve real results for the public sector.

To deliver both high levels of savings and protect our front line services, new ways of working across the public sector have to be developed, to ensure long term quality and cost savings. This could mean that the private sector may need to change the way it deals with these programmes and how the public sector views private sector bids.

Do we need to see the outsourcing industry stepping up to the mark, really working in partnership with government departments and local authorities in the coming months and years? If we all are really to drive efficiencies without sacrificing service - then the answer is yes!

The Retail Distribution Review is a new piece of regulation that will come into effect at the end of 2012 and will ultimately change the financial services industry. The RDR will apply to all advisers in the retail investment market, regardless of the type of firm they work for (e.g. banks, product providers, and Independent financial advisers or wealth managers). This, in turn, will have an effect on financial products and how they are designed and sold.

There are a number of changes that are due to come into force following the RDR, starting with two options, from which advisers and firms will have to choose one. These are the ‘independent’ option – offering unrestricted and unbiased advice which may include a panel approach (which is required to cover a broad range of requirements and be regularly reviewed). The other option is known as ‘restricted’ and includes offering single or multi-tied advice through simplified or basic advice regimes.

Advisers must make it clear with which regime they operate before advice is given (the ‘execution-only’ sales channel will still exist and will be the only area where no advice is offered).

Product providers will no longer be able to commission advisers for the sale of a product. The onus is now placed on the advisers to set out their own charges in agreement with their customers. Along with this, if the adviser is to charge ongoing fees they must provide a proven service for the fee.

Products written pre-RDR will not be affected by these changes and any alteration/top-ups to these products can continue on a commission basis post-RDR. Products and services must also have clear pricing models that can be evidenced to the customer in an unbundled manner.

We expect the RDR to increasing demand for outsourcing in financial services. The range of financial products on offer to the market is now so extensive that the reality is, for any firm to remain competitive and compliant, the need to outsource is becoming a must. Third parties can provide compliance and regulation support which has kept many firms in business in spite of the environment of constant change in the UK market. Outsourcers can also help providers bring new ‘RDR-friendly’ products to market much more quickly.

Here at OPAL, we’re doing just that - supporting product providers in the evolution of outsourced product design and administration technology to ensure product propositions are fit for purpose under RDR.

Providers are looking for the functionality to administer structured products, onshore/offshore bonds and maximum investment plans (MIPs), among other products, in both pre- and post-RDR environment. In order to make things simpler for financial services providers, we have put together an RDR checklist to summarise the points which will come into force:

Key RDR Check List

• Advisers are able to clearly define service they offer and fees.

• Advisers have the ability to charge fees for a service either against product or standalone.

• Advisers have the ability to clearly show difference in fee and product charges.

• Advisers have the ability to clearly show ongoing services for fees.

• Fee structures are clear and unbundled.

• Advisers are suitably qualified to provide investment advice

Alex Blues, IT sourcing specialist, PA Consulting Group.

I know that they say that a year is a long time in politics, but a year is certainly a long time for NASSCOM.

Last year, there was a nervous and cautious optimism about 2010. This has now evolved to a greater level of certainty about growth in 2011. Everyone we have spoken to has talked about sustained pipeline growth in IT of around 16 to 18 per cent, although this is perhaps slightly lower in BPO.

The key messages from today have been:

1. There has been a major move from project-based work, where every client’s requirement is tailored to their need and to platform-based work. This has led to a lot more talk about specialism and domain knowledge and as a result, organisations are talking about requiring different skill sets.

2. There has been very little talk of offshore. People are talking instead about globalisation. This can be seen just from the attendees at the conference – there are far more nationalities represented here than last year.

The key point for today is that the market has moved from ‘lift and shift’ or ‘mess for less’ to ‘innovate and serve’. All of the CEOs that we interviewed talked about the move from ‘time and materials’ type contracts to outcome-based business solutions, where the client is looking to have a business problem solved rather than having the component of a problem solved, leaving the client responsible for the outcome.

Organisations are therefore applying pricing formulae based on the outcome, not the input and component prior to that outcome. Again, this endorses the point that there is a greater need for domain knowledge and a greater need for different types of staff.

Given this backdrop, it was widely agreed that the role of the CIO is going to diminish as decision making moves from the CIO to the CFO and CEO. NASSCOM is a completely different place this year in terms of the level of optimism and the maturity of what people are talking about. I’m looking forward to tomorrow.