Industry news

HP Enterprise Services today announced the Federal Bureau of Investigation (FBI) has selected HP as one of the prime contractors to provide information technology solutions to it and other U.S. Department of Justice agencies under the FBI Information Technology Supplies and Support Services (FBI IT Triple S) contract.

HP will be able to compete for task orders under the $30 billion FBI IT Triple S multiple-award Basic Ordering Agreement contract. The contract has a one-year base period followed by a seven-year option period and serves as a centralized source for the FBI to buy integrated technology products and services. By establishing simple and uniform mechanisms in support of the FBI’s mission and daily operations, the agency is able to obtain contractor services as well as high-quality products.

Under the FBI IT Triple S contract, HP will offer technology solutions across several functional areas, including operations and maintenance, technical development, consulting, hardware and software and other related IT services, to meet the national security and criminal investigation objectives of all FBI organizations, as well as the U.S. Department of Justice.

In a world of continuous connectivity, the U.S. government is leveraging technology to modernize, transform, secure, optimize and deliver immediate services to citizens. In support of the Triple S initiative, HP will offer comprehensive, secure technology solutions on time and on budget in support of the agency’s journey to an Instant-On Enterprise environment. HP’s Instant-On Enterprise delivery model improves flexibility and embeds technology to provide innovation at every point that matters within an organization, from mobile devices to global data centers.

“The FBI IT Triple S contract will be an essential vehicle used to obtain the supplies and services needed to deliver improved and efficient information technology to the criminal justice community,” said Dennis Stolkey, senior vice president, U.S. Public Sector, HP Enterprise Services. “As a Triple S vendor, HP will provide industry best practices, technology, innovation, security and thought leadership from the desktop to the cloud that will assist the Bureau in accomplishing its critical missions.”

HP has provided support services to U.S. government agencies for more than 45 years, building, integrating, securing and operating some of the most complex environments in the world, while enabling agency effectiveness, securing the exchange of information and ensuring citizen privacy.

Nick Hopkinson, formerly the chief information officer at Government Communications Headquarters (GCHQ), the UK communications spying centre based in Cheltenham, has left the UK intelligence service to work as UK director of cybersecurity at IT services firm CSC.

Hopkinson's transfer to the private sector comes at a time the UK government says cybersecurity is now a major priority in its defence of the country, in the face of sophisticated attacks.

Our clients want to be confident that their information and network systems are protected,” said Samuel Visner, CSC vice president and global lead executive for cybersecurity. “Under Nick’s leadership, CSC will work closely with its clients to develop or improve their technology roadmaps, mitigate their security risks and ensure their enterprise is protected.”

For six years, said CSC, he was a member of the GCHQ board, where he led major programmes that transformed the operational technology base of the organisation and modernised IT services.

In his most recent role, Hopkinson was director general for information security and assurance at CESG, an organisation that provides security and risk certifications and assessments for UK government departments and some private sector organisations.

Source: http://www.computerworlduk.com/news/public-sector/3256450/former-uk-spy-centre-cio-joins-csc/

Via the Government Agency for Financial Applications, the French Ministry of Budget and Government Accounting, Civil Service and State Reform, has retained the consortium led by Steria and its co-sourcing partner, Capgemini France - a subsidiary of the Capgemini Group - for the maintenance of Chorus. The six-year contract, is worth around €120 million, and is part of the French state modernization program.

A part of the Ministry of Budget and Government Accounting, the AIFE is in charge of running the state financial information system in France, which notably includes building, deploying and maintaining Chorus.

The Chorus program is based on an SAP solution. It was designed to make a unique and integrated information system that conforms to the Organic Law Relative to the Laws of Finance (LOLF)[1] available to all stakeholders involved in spending, non-fiscal receipts and accounting[2], for financial, budget and accounts management. Chorus contributes to the modernization and rationalization of budgetary and accounting processes of French state services.

Steria and Capgemini at the centre of the modernization of the French Administration

Steria and Capgemini have worked with the French Administration on the deployment of the LOLF for a long time. After having been selected to take part in the construction of the LOLF Agreement budgeting and accounting system, Steria has handled its maintenance since 2005. Capgemini has also been a major partner in Chorus construction, since 2007. Capgemini has supported the deployment of all State budgeting and accounting systems, since 2001, and since 2009, the Group has notably handled the deployment of Chorus to half of all ministries, thanks to the mobilization of 230 IT consultants, from 23 sites around France. This new information system will eventually be used by nearly 50,000 users, of which 25,000 will use the core SAP application.

This new contract sees Steria and Capgemini strengthen their position as partners of large-scale government IT programs, and continue their support of the French state in its modernization program.

“Steria’s expertise in industrialized global maintenance solutions, and the skill of the 150 team members dedicated to the project - notably from the SAP services center in Toulouse - who handled Third Party Application Management under very tight deadlines, were deciding factors in this new contract, and confirm our ability to support major transformation projects for the Administration,” comments Olivier Vallet, Senior Executive Vice President and CEO France, in charge of Group Innovation Policy and the supervision of Scandinavia and Belux.

“Our offer stood out for the complementarity of our skills, and ability to respond to the client’s particularly selective quality and cost criteria. Capgemini’s strategy is to accelerate its commitment to public institutions, by building on its international experience and ability to support the Administration in its large-scale modernization projects,” says Jean-Philippe Bol, Head of Technology Services, Capgemini, in France.

Can outsourcing work for SMEs?

For big companies, outsourcing works. If you’re a major bank and you want to write a new core system and want to outsource that development to Infosys in India, it is absolutely the right thing to do. It’s a big project that’s going to require millions of man hours. It’s got a defined scope and it’s going to need to be very structured, because the bank as a company is very structured, so the fit is perfect.

For small companies and start-ups, outsourcing can also work very well for non-core operations such as legal, accounts and IT support. Whilst companies need to be careful in choosing the appropriate partner, these are functions which are better provided by specialists. However, for core business functions, where you need control over who delivers them and how, outsourcing brings disadvantages for smaller businesses. This is because they may come across the following challenges:

You have a lack of control: Just when you have a great team member who understands your business processes and is really productive, they get moved over to another client and you then have another person in their place. You cannot control who is working in your team.

There is, inevitably, a lack of integration. An outsourced team can’t become part of your team; therefore they will not feel part of your company and understand your business culture – which can have a detrimental effect on productivity levels and quality of work.

You have limited day-to-day flexibility, which is normally a core requirement for SMEs. Outsourcers are very process driven, and SMEs generally are not. If you do not have a process driven approach, projects may veer off track when they are out of sight.

There aren’t always cost benefits. People often outsource projects that last less than a year and subsequently don’t receive the perceived offshoring cost benefits or return on investment because the high planning, training, communication and travel costs mean that the wage differential can be severely reduced, while the training investment is lost when the project ends.

Lastly, there is a lack of IP protection and subsequently you can get IP leakage. If you are experts in something you have to teach an outsourcer your domain knowledge and, over time, the outsourcer becomes an expert as well. The next thing you know these guys are pitching that expertise to your competitors. They can’t help what they’ve learned and, as a third party company, they’re going to try and leverage that as much as they can. Larger companies are typically outsourcing non-core activities where IP is not as much of an issue.

So if outsourcing isn’t a good fit for your operations what are the other options for small companies? Well, for ad-hoc project work you should give it to a freelancer, or find a domestic company which already has an offshore model and expertise in place.

If you have on-going needs then look to build your own team abroad, in a location which meets your strategic needs. You can set up the team yourself, if you have lots of spare resources to devote to this, and are willing to take the risk of going into unknown, or do it via a partner where you retain control but employ their local - or should I say global - expertise. And the final option is to consider a merger or acquisition to bring in a team in the relevant location.

For SMEs and start-ups which need flexibility, speed and control, have changing priorities, or where IP is a critical consideration, offshoring (be it DIY or assisted) is likely to be the best solution.

Legal services company Myhomemove faced exactly this dilemma. Having worked with traditional outsourcers in India and Sri Lanka for over four years, they were looking to move to a different model which would allow them to manage the staff in a way which fitted their company culture and ethos and gave them more control over decisions such as salaries, conditions and career paths of their staff. They considered setting their own operation, but were concerned by the complexity and bureaucracy involved.

By offshoring their operations through a partner they were able to have absolute control over day to day operations and culture compared to a traditional outsourced relationship and without the risks of setting up their own legal entity.

Whatever your needs do make sure you understand the different routes you can take and weigh up the pros and cons very carefully. Some companies make the mistake of confusing offshoring with outsourcing, and disregarding both models as a result. They are distinctly different and should be considered according to their individual benefits and disadvantages.

Neal Gandhi is the chief executive of Quickstart Global, which helps companies to expand globally, and is the author of Born Global which offers practical advice to entrepreneurs. www.quickstartglobal.com

If we look at the number of organisations outsourcing their software development, IT service desk or WAN support to India and other cheap-labour countries, offshoring nowadays seems not only convenient and straight-forward, but as easy as abc. But what the media doesn’t seem to cover is an issue that is not at all uncommon: it hit Barclays, Quark, Dell and a large number of other companies – what happens if all is not well and you have to take the offshored back in-house?

The phenomenon has already been dubbed ‘backshoring’ in the US, where 30% of Fortune 500 companies have experienced it, according to Oxford Analytica. As for the UK, a survey conducted by the National Computing Centre found that 14% of the respondents who have used offshored facilities for their IT have switched work back to the UK, and another 24% are considering the move. This means that nearly 40% of organisations haven’t found offshoring satisfying.

However, the problem is that once you decide to reverse the decision, the process is not trouble-free. Of those who have taken services back in-house, 30% say they have found it ‘difficult’ and nearly half, 49%, ‘moderately difficult’. When we talk about IT, in fact, we are dealing with the pulsating heart and veins of a modern business, where everything seems to rely on technology. So the costs of reversing an offshore operation do not only cover the facilities and assets – it extends to data security, staff skills, system disruptions and inefficiencies, low user or client satisfaction, client loss, and maybe much more. What happens to the CIO who proposed or supported the offshore move?

Let’s look at some examples. Barclays’ recent ‘divorce’ from Accenture appears to be peaceful and grievance-free, just the best answer to their present needs. When the application development and management of their banking systems were assigned to Accenture in 2004, around 900 employees were transferred to the provider. But only 230 are expected to be taken back. What happens to the various development, support and maintenance staff and their skills every time they are shifted to the other side? Some are taken on by the new employer under TUPE arrangements - the Transfer of Undertakings (Protection of Employment) Regulations preserve employees' terms and conditions with the previous company - although the majority will be lost, either voluntarily or forcefully made redundant. Unfortunately, when you lose people you lose their acquired skills as well, and to that there is no remedy.

An organisation which decided to openly talk about their failure is Everdream, which provides customers with remote desktop management services, and that in 2003 decided to outsource their Californian help desk to Costa Rica to aid scalability as their business was growing. Fifteen people were sent to the provider to train the call centre employees ‘the Everdream way’. It turned out to be an ever-nightmare when trainers found themselves dealing with a completely different business culture where the idea of customer service was “move ‘em through”, clashing with the hands-on approach of the firm. The strong foreign accent also failed to impress the customers, who started to complain almost immediately. The ‘shallow talent pool’ led Everdream to pull out, as happened to Dell the previous year: customers unhappy with their Indian technical support launched in 2002 made the company decide to re-route calls back to the U.S. In Everdream’s case, the pull-out was spread across six months, making the transition softer and minimising the damage, and many employees had their jobs back. However, it did take some extra financial effort to take the work back in-house and the long-term damage, the relationship with customers, is difficult to measure.

Bad customer service and poor product quality is what brought many Quark clients to switch from their software to Adobe’s InDesign during the Indian experience, never to return – 60% of their customer base, it is claimed. When work was brought back home, the C-executive who decided and led the offshore move was fired without hesitation.

Finally, a mixture of reasons have brought many offshored Oracle projects to fail for a number of US companies, it was reported a few years ago. Communication problems, poorly skilled and trained developers and enormous cost over-runs were topped with the previously unconsidered difference in the Indian law system. Oracle jobs were re-shipped back to the US, but the unrecoverable financial loss left many organisations strained.

These examples confirm the findings of research in the area: the most popular reason for failure is the lack of preparation and execution not on the provider’s but on the client’s side. An organisation needs to be prepared and know what they want from the provider and if offshoring is the right move, to avoid disappointment. Poor joint planning is also often at the root: if the client does not clearly outline and clarify roles and responsibilities, expectations, performance metrics and flexibility prior to signing contracts, there is not much to be expected. Service Level Agreements have to be clear for both sides and have realistic metrics and targets. Experts also suggest defining an exit strategy for contract end or for under-performance, as in fact poor vendor performance is another important reason for failure. Problems related to communication between the in-house and offshore team and to their different culture are often the cause of poor execution, as highlighted with the case of Everdream.

It is important to note, nonetheless, that not all outsourcing projects end up in failure. There are plenty of instances where they do deliver real benefits, both in terms of cost-reduction and improvements in service. However, the success stories tend to involve the use of a partner closer to home, able to understand the client’s environment while allowing easier monitoring of their performance.

So in the case of offshoring gone wrong, what should a CIO take into account when considering the costs of its failure?

The most obvious, and often largest, cost comes about when taking down the offshored department and re-installing it elsewhere should things go wrong, either in-house or with an IT partner nearer to home. Then there are the costs related to lost skills: organisations are unlikely to be able to re-employ previously fired staff so it will be a case of starting again from scratch. New staff will have to be found and trained, and it will take time before service levels are sufficient to deal with business demand – meaning costs could quickly run to seriously damaging amounts.

Technical issues like data security are also not to be overlooked. Different countries have different laws, and might not be so respectful of the privacy of your data. It can be lost, stolen and leaked by redundant employees abroad, legal protection from whom might be weaker than in the UK.

Finally, one last consideration for any CIO is the cost to them as an individual. Should a project as controversial as offshoring fail the responsibility is likely to rest squarely on the shoulders of the person in control. This means ensuring offshoring is really the right path for your organisation is key, as is making sure you are able to clearly demonstrate that it was the partner, not the process, that was at fault should things go wrong – both of which being easier said than done.

Network capacity consumption for data services side continues to skyrocket globally, and communications providers are under tremendous pressure to increase capacity and manage costs, while delivering high-quality customer service.

How can one accomplish these goals simultaneously? The answer may be found in strategic outsourcing of key network functions, which can enable providers to cut costs up to 40 percent, by consolidating fragmented operations and more efficiently using resources across companies and geographies.

If strategic network outsourcing can be so effective, it’s rather surprising that outsourcing isn’t as widespread among communications providers as one might expect. To find out why, we talked to senior network and IT executives at some of the world’s leading global communications providers. We asked them if outsourcing their network and IT operations is their first choice to better manage their company and help ensure customer service – and if not, why not. We described network operations as the people, processes and systems that plan, provision, and manage voice, video and data networks and services; typical IT functions include help desk, desktop support, data center operations, disaster recovery and Web site/e-commerce systems.

We queried senior IT and network executives at communications companies in Western Europe, but we believe their perspectives are common to any provider, regardless of the geography it serves. Among network executives, the top challenge cited is completing the roll-out of next generation broadband networks, such as fiber to the node (FTTN), fiber to the premise (FTTP), or 3G/4G mobile broadband networks while continuing to cut operational expenses, maintain legacy networks and support migration to the new technologies. For IT executives, controlling costs is the biggest hurdle, followed by “business agility,” or the ability to accommodate the fulfillment, management and monetization of new services or consolidation of current systems.

Network executives expressed an overall higher reluctance to outsource network operations, compared with IT executives, who have historically used outsourcing to enhance capabilities, tap into deep skills, and reduce costs. Most network executives said their company outsourced one or more specific individual tasks, rather than entire processes. By contrast, IT execs were more likely to outsource complete functions, such as desktop management, infrastructure (networks and servers) and management or module development (such as application development and testing). And among the IT executives we interviewed, many had also outsourced either the desktop or infrastructure as well as their company’s help desk.

IT and network executives agree that their network is core to their business, and therefore not something that can be easily managed by an external provider. Despite this assertion, given the challenges that they face, providers are starting to reconsider outsourcing certain network functions. Why the change of heart? They must offload the planning, provisioning, and management of legacy services -- such as private line, frame relay, and ATM – so they can focus on next generation networks and services. Secondly, they need additional capacity to scale new networks and services, such as FTTx, Internet TV, or 3G/4G.

When considering outsourcing as an option, network reliability, above all, IT and network executives’ number one worry. Other mutual concerns include potential loss of customer satisfaction, loss of control and internal expertise, and difficulty keeping suppliers motivated throughout a long-term contract.

We believe there are ways to address these areas. Some guidelines providers can keep in mind include:

• Look for an outsource supplier who can handle entire processes, such as order entry, circuit provisioning, and service activation, rather than discrete tasks. The best outsourcing providers stake their reputation on bringing industrialization, standardization and disciplined approaches to end-to-end processes, which typically results in improved cost control, higher quality and high business value for their clients.

• Base sourcing decisions not only on cost considerations, but on other differentiating factors, including flexibility, cultural fit, industry knowledge, and a reputation for delivering results. Look for a long term partner, rather than a low- cost service provider, and closely examine the outsourcing company’s track record in managing contracts several years into it.

• Choose a provider that can outsource as well as transform the operational capability. The ability to improve processes and systems through transformational outsourcing can result in even lower operational costs, improved operations, and higher service levels.

As the technology environment changes at an accelerated pace and time-to-market gets more squeezed, relying solely on internal skills could become a risky business, indeed. At the very least, providers would be wise to more deeply understand the potential benefits they might derive from the strategic use of network outsourcing, so they can make an informed decision that serves their business – and their customers – well.

By Gerardo Canta, Network Outsourcing Lead, Europe and Latin America, Communications & High Tech Operating Practice, Accenture, and Rob Rich, Managing Director, TM Forum Insights Research

The UK's mob-busters, the Serious Organised Crime Agency (Soca), has agreed a 10-year, £157m IT outsourcing deal with the i2d consortium of services firm Logica.

Over the course of the contract, Soca aims to consolidate its datacentres, networks and desktops to reduce its operating costs in line with government cost-saving targets.

But Soca will also be hoping that the deal will improve its case management and data analysis capabilities.

"It will improve secure collaboration with our partners and make everything run more smoothly," a Soca spokesman told Computing.

As previously reported by Computing, Soca completed an overhaul of its IT systems in 2009.

But with the coalition government's laser sharp focus on delivering better services at lower costs, it was always likely that Soca would need to revise its IT strategy, said Anthony Miller, managing partner of market watchers, TechMarketView.

"Public sector IT spending may be squeezed, but as this deal clearly shows, it's far from moribund," he added.

"This contract secures an efficient and sustainable IT platform which will enable us to modernise and enhance our technological capabilities in fighting crime and improve the effectiveness of UK law enforcement in dislocating criminal markets," said Trevor Pearce, director general of Soca in a statement.

The i2d consortium comprises Logica, QinetiQ, Detica and Cable & Wireless.

Source: http://www.computing.co.uk/ctg/news/1936128/soca-signs-gbp157m-outsourcing-deal

In the past 24 hours Microsoft, AMD, and Capita have seen top executives step down from their positions.

Robert Muglia, president of Microsoft's server and tools business, is set to leave the company in the summer after chief executive Steve Ballmer decided that the division needed a new leader.

According to The Wall Street Journal, Ballmer took responsibility for the decision yesterday in a letter to employees after conversations with Muglia about "the overall business and what is needed to accelerate growth".

The division Muglia headed up was seen to be performing well, with an operating profit during its fiscal year ended 30 June of $5.49bn (£3.53bn), up 14 per cent on the previous year.

This announcement comes after a string of leadership changes at Microsoft. In the past year Ray Ozzie, chief software architect, Stephen Elop, business division president, and Robbie Bach, devices division president, all left the company.

Microprocessor manufacturer AMD also saw a change in management yesterday as CEO Dirk Meyer handed in his resignation.

The board of directors has appointed senior vice-president and CFO Thomas Seifert as an interim CEO. Seifert joined AMD in 2009.

The company has also launched a CEO search committee, which is being headed up by AMD's chairman of board of directors, Bruce Claflin.

"Dirk became CEO during difficult times. He successfully stabilised AMD while simultaneously concluding strategic initiatives such as the launch of GlobalFoundries. He also helped with the successful settlement of our litigation with Intel, and helped deliver Fusion APUs to the market," said Claflin.

Meanwhile, business process outsourcing company Capita has appointed Vic Gysin and Andy Parker to the group board as joint chief operating officers; the move will see current COO Simon Piling step down.

Piling joined the group board in 2006 and has served as both a joint and sole chief operating officer.

"These changes to the board are being made to support the next stage of our continued growth," said Paul Pinder, chief executive of Capita.

http://www.computing.co.uk/ctg/news/1936161/execs-leave-microsoft-amd-capita

Cognizant, a leading provider of business, technology and consulting services, today announced it is increasing its North American service delivery center capacity to accommodate continuing rapid growth. Cognizant recently crossed the 100,000 employee mark and continues to hire talent aggressively within North America as well as Europe, Asia, South America, and Australia.

Cognizant's new delivery center in Phoenix will accommodate over 1,000 employees, replacing its existing 500-person facility. Cognizant will provide a full range of services from the new center, including consulting, application services, IT infrastructure services, and business and knowledge process services.

In addition, Cognizant continues to expand employment in its existing delivery centers in the United States. In addition to the Phoenix delivery center, Cognizant operates an enterprise analytics center in New Jersey; a global Network Operations Center (NOC) in Massachusetts that supports Cognizant's IT Infrastructure Services business; and delivery centers in Arkansas and Illinois that provide application development and maintenance, testing, and packaged software implementation services. Other rapidly growing North American locations include delivery centers in Canada and Mexico.

"We are proud to have grown to 100,000 employees in just 16 years, with over 17,000 professionals in North America. We are making substantial North American investments in people, facilities, systems, and processes to meet continued strong demand for our services," said Gordon Coburn, Chief Financial and Operating Officer at Cognizant. "Our distributed delivery center model, globally and locally, helps us attract and retain the world's best talent, both from leading universities and the professional labor market, enabling our customers to address structural changes brought about by the reset economy."

In 2010, worldwide IT spending totalled $3.4 trillion(£2.17 trillion) and this year spending will be US$3.6 trillion (£2.3 trillion), according to a Gartner report titled 'Forecast Alert: IT Spending, Worldwide, 4Q10 Update'.

The research firm says that this amount represents a 5.1 per cent increase from 2010 and negates its previous forecast of 3.5 per cent growth.

Apparently, the IT industry is performing better than what Gartner expects and according to research firm's analysts, currency exchange rate fluctuations have continued to affect the U.S. dollar-denominated forecast.

Businesses experienced about 2.2 percentage point increase in IT spending growth in 2010, and out of this, about 1.6 per cent is attributable to the recent devaluation of the U.S. dollar against other currencies.

Macroeconomic uncertainty

Commenting on the forecast Richard Gordon, research vice president at Gartner said global IT spending growth is expected to exceed five per cent in 2010, aided by favourable U.S. dollar exchange rates.

However, a similar level of growth in 2011 is far from certain, due to continued macroeconomic uncertainty. Noting the improving global economic situation, Gordon said the recovery is slow and hampered by a sluggish growth outlook in the mature economies of the U.S. and Western Europe.

Gordon continued: "There are also growing concerns about the ability of key emerging economies to sustain relatively high growth rates. Nevertheless, as well as a fundamental enabler of cost reduction and cost optimisation, investment in IT is seen increasingly as an important element in business growth strategies. As the global economy repairs itself in the coming years, we are optimistic about continued healthy spending on IT."

Telecom equipment market

Readers of the Gartner quarterly IT spending forecast gain a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. These predictions are meant to help Gartner clients understand market opportunities and challenges.

The newest report shows that the telecom equipment market is set to experience the strongest growth in 2011. Gartner says it had to revise its forecast due to strong sales of mobile devices in the third quarter of 2010, driven by smartphones in mature markets and white box devices in emerging markets, as well as stronger local currencies.

Although the computing hardware segment is forecast to grow 7.5 per cent in 2011, vendors face possible challenges, particularly in the area of PC growth. Gartner analysts said this is because of weak economic growth through the first half of 2011.

Source: http://www.computerworlduk.com/news/it-business/3256300/gartner-global-it-spending-to-total-23bn-in-2011/