Industry news

The NOA’s 8th Annual The Sourcing Summit was held on the 16th and 17th November at Grange St Pauls, confirming its reputation as the UK’s leading conference focusing on outsourcing and offshoring strategy.

The conference was focused on developing mature outsourcing partnerships and driving innovation to deliver success. The programme reflected developments across the sourcing sector, examining the rise in innovation and the renewed focus on multi sourcing.

Martyn Hart, Chairman of the NOA, opened the summit and said: “It is always a pleasure to open this summit. These are very interesting times for outsourcing and I hope you will all gain some invaluable insights from the combination of expert speakers and superb networking opportunities which we have arranged for you. We have a very exciting programme this year including high-level case studies, a best practice exchange, workshops and peer-to-peer networking discussions."

In the context of the current economic climate, the conference provided an excellent insight into methods to drive real business efficiencies through outsourcing.

Tuesday was arranged into four sessions; Outsourcing – lessons learned from a maturing market, driving and delivering innovation in outsourcing, streams and crafting and renegotiating effective contracts. Industry experts delivered presentations for each topic before taking part in a panel discussion.

The streams were an opportunity for delegates to choose from three outsourcing workshops which were facilitated by business experts and involved case studies as well as active discussions. The streams consisted of business process outsourcing, moving into the cloud and a NOA practical insight, solutions, and actions workshop.

Wednesday was arranged into three sessions; Developing an effective partnership – the human factor, peer to peer networking sessions through zones and offshoring and near-shoring – what is the future?

Delegates were able to choose one of three discussion zones, each facilitated by a NOA board member. Outsourcing in financial services, corporate social responsibility and environmental concerns and SME outsourcing.

The interactive and informative conference was attended by a variety of organisations involved in outsourcing including Siemens, Carphone Warehouse, BP, Tube Lines and Intetics. Highlights included the cloud workshop, Elexon and JLT case studies, CSC presentation on an innovative commercial model and all panel discussions.

In the last week we’ve seen Prime Minister David Cameron announce plans to redevelop London’s East End into a ‘Tech City’, with the construction of a £200 million network of technology and innovation centres to rival Silicon Valley.

The thinking behind this is clearly that a technology hub of this sort will help to encourage foreign investment and give the economy a boost.

It seems that research and development is one area which will act as a key driver to helping the private sector pick up new contracts and create new jobs in the months and years ahead, especially important in the wake of the recent public sector cuts.

Indeed, a technology centre in London can only help to cement the UK’s position as a top research and development destination, with leading technology players such as Intel already expressing an interest in setting up base in East London.

It’s clear that Tech City is being planned with a view to , leading more businesses to recognise East London as an area with access to leading innovations and technology to outsource their work to.

But what do business’s gain from outsourcing their research and development? There are a number of benefits for end users, including access to knowledge, resources and experts which they may not have or need in the long term.

Indeed, outsourcing product development to specialists can offer a more productive method to businesses who would otherwise have to undertake a project themselves - which can prove problematic when the core skills are not in place and more expensive.

David Cameron is keen to use Tech City to improve the economy by using it to encourage business and investment. Of course, all of this is good news for the outsourcing industry with the prospect of international businesses using the UK to source high level, fully trained technology professionals.

However, it’s not just about stimulating growth in the UK economy - it’s clear that a growth in onshoring to the UK can also offer tangible benefits for business.

For instance, onshoring services here could provide greater cost efficiencies for businesses, wherever they are, as they look for ways to beat the effects of a global recession, these efficiencies will help to stimulate their markets which in turn will boost trade for everyone.

So, it seems that the future for UK-based technology outsourcers is bright, and Tech City will be a major part of that. It’s important to understand that a technology hub in London is not only good news for outsourcers, but also for British business in general - and the economy as a whole, too.

The Royal Liverpool and Broadgreen University Hospitals NHS Trust says it has boosted efficiency via early use of a new portal that brings patient data from multiple sources into one place.

"Just being able to view all critical information about a patient on one screen is a revelation," said Patrick Chu, consultant haematologist at the Royal Liverpool and Broadgreen University Hospitals NHS Trust. "The use of portals is clearly the way forward to help increase efficiency, improve treatment and diagnosis and patient safety."

The trialled system - the Clinical Information Portal from supplier CSC, implemented with technology from Carefx - has been shown to save around 30 minutes average clinician time during its 60 day evaluation.

The portal is letting healthcare professionals get a single screen view of a patient's notes, collated from information currently held in disparate clinical and administration systems across the trust, such as the trust's PAS (patient administration system) and PACS (picture archiving and communications system).

It has also allowed consultants, their registrars and specialist nurses to consult with patients by viewing patient medical history, key treatments, referrals, diagnosis and test results electronically rather than by paper case notes.

The system also shows promise for reducing admin load on nursing and back office staff, who may end up spending much less time moving case notes around and searching for and preparing case notes.

The pilot is also significant as it forms part of the early evaluation stages of the NHS Interoperability Toolkit, a Connecting For Health initiative to connect disparate systems and data sources instead of replacing them.

The portal was tested in the hospital's haematology and dermatology departments which then extended to include cardiology and renal.

The trial was to see if Royal Liverpool and Broadgreen could eventually find a technology-based replacement for paper case notes - which feedback suggests is now highly achievable.

"We are aiming to begin full roll-out of a portal system at the beginning of 2011," added James Norman, Director of IM&T at the Trust. "We are excited about the efficiencies and opportunities that a portal can bring to the trust through the elimination of case notes and improved access to the right information at the right time for clinicians."

Royal Liverpool and Broadgreen University Hospital Trust is one of the largest in the North of England, with an annual budget of over £400 million, more than 5,500 staff and almost one million patients being seen every year.

Source: http://www.publictechnology.net/sector/nhs-health/new-portal-csc-gets-green-light-royal-liverpool

Microsoft has abandoned efforts to make profits in the US out of its “HealthVault” cloud computing system designed to store personal medical data, because of the complexity of the country’s health system.

Peter Neupert, corporate vice-president for health, told the Financial Times the benefits to Microsoft in the US of HealthVault was simply to “increase the brand relationship” by raising its image with customers as “important, critical and trusted”.

HealthVault provides a way for individuals to store details of their medical consultations, prescriptions and results of home-based medical monitoring in the “cloud” so it can be easily read, transferred and analysed.

Mr Neupert said Microsoft would not make any charge to US users because of the fragmentation of the system, with information managed by different health insurers and providers.

The decision highlights the commercial difficulties for software providers moving into medical applications – even in the world’s largest healthcare market with a high number of users with online access. The company has decided not to charge users directly for HealthVault in the US. Mr Neupert said the company had also resolved not to pursue sales from advertising or other revenue sources via third parties within the country.

Microsoft took the unusual step three years ago of making its coding for HealthVault open to competing software developers so they could provide applications for the system.

But it has also decided to reject its rival Apple’s commercial model of taking a cut on applications developed by others and sold through its “app store”.

Mr Neupert would not disclose how many Americans use HealthVault, but when asked whether it was “tens of thousands”, he replied “far more than that”.

HealthVault is generating revenues in some other countries, with Microsoft receiving financial sponsorship in Germany, Canada and Wuxi province in China. It continues to look for funding in other countries and regions to generate income.

In the US, it has charged some large users such as Medicare/CMS for its “blue button project” to help make their medical data compatible with HealthVault, but that move only generated modest income.

Mr Neupert said Microsoft was instead concentrating its business efforts in its health division in the US on the commercialisation of a separate product called Amalga, which helps hospitals in real time integrate data from across their different existing systems.

Source: http://www.ft.com/cms/s/2/6e10b422-f58d-11df-99d6-00144feab49a,dwp_uuid=9a36c1aa-3016-11da-ba9f-00000e2511c8.html#axzz16HtDD590

The recent surge in the usage of cloud computing has been attributed to its unique features which include pay for use, mulitenancy, and external services, according to IT research and advisory firm Gartner.

The research firm said that there continues to be great diversity of activity, maturity and growth among the many different elements of the overall cloud services marketplace.

Gartner analysts said they are seeing an acceleration of adoption of cloud computing and cloud services among enterprises, and an explosion of supply-side activity as technology providers channelise to exploit the growing commercial opportunity.

Gartner research vice president Rakesh Kumar said the potential benefits of cloud are a shift from 'capacity' on demand to 'capability' on demand, a reduced cost of computing resources and a shift from technology use to 'value' consumption.

Gartner fellow and vice president Stephen Prentice said virtualisation, service orientation and the Internet have converged to sponsor a phenomenon that enables individuals and businesses to choose how they'll acquire or deliver IT services, with reduced emphasis on the constraints of traditional software and hardware licensing models.

The acquisition of Thesys expands Capgemini’s global delivery capabilities for Temenos-enabled core banking front-to back-office solutions and product offerings – such as retail, corporate, universal, private wealth management, Islamic banking and microfinance – to financial institutions, and bolsters Capgemini’s position as a leading core banking and wealth management service provider. Thesys’ specialized service delivery infrastructure will expand the scope of Capgemini’s offerings in the Middle East, Asia-Pacific and Latin America and will strengthen its position in the packaged core banking platform market.

Its portfolio of services complements Capgemini’s vast financial services sector expertise in business and IT services and its industry leading data migration, testing and project management services. The acquisition of Thesys, to become part of Capgemini’s current offering, should provide Temenos’ current and prospective clients with the opportunity to significantly accelerate speed to market, mitigate risk and enhance operational efficiency.

Tirunelveli Sivaramakrishnan Jeyaraman, CEO of Thesys, said: “Thesys has delivered the highest levels of Temenos implementation services for over a decade. Combining Thesys’s offerings with Capgemini’s global delivery model will create the industry-leading delivery platform of choice for Temenos-enabled core banking and wealth management implementation services."

Aiman Ezzat, Chief Executive Officer of Capgemini’s Financial ServicesGlobal Business Unit, said: “The acquisition of Thesys enables Capgemini to create value for more than 700 existing Temenos clients as well as a large prospective client base,” said Aiman Ezzat, Chief Executive Officer of Capgemini’s Financial ServicesGlobal Business Unit. “This acquisition helps ensure that Capgemini will maintain a leadership position as a trusted business and technology solutions partner in the retail banking and wealth management market segments.”

Luxoft, a leading global provider of advanced application and product development services, today announced its 2011 outsourcing industry predictions. As companies continue to rebuild and re-invest following the global economic recession, the overall outlook for the outsourcing industry is strong. Fuelled by technological expertise, regional advantages and business alignment capabilities, Luxoft believes that outsourcing will move from a more fragmented function towards a more integrated approach which will help companies to achieve their business goals in the year ahead.

High Demand for Global Delivery Capabilities

In 2011, the market will see an increased push for more comprehensive global IT strategies. In the year ahead, enterprises will look for outsourcing vendors with strong global delivery capabilities in an effort to optimise cost structure, increase scalability, tap into the global labour pool, and foster innovation.

Mobile Software Surpasses Other Traditional Application Development Platforms

With the rise of mobile device usage in the enterprise environment, companies are more than ever focused on software application development for devices such as the iPhone, Android and tablet PCs such as the iPad. As such, mobile software will surpass application development on all other traditional computing platforms in 2011. Furthering this trend will be companies that demand access to services and wireless internet connections in cars and airplanes and will push for the development of new solutions to meet this growing demand.

Larger Corporations Turn to Agile

In the past, Agile was seen as an effective development methodology for small to mid-sized organisations. Today, that trend has transitioned to larger enterprises that are looking to effectively manage processes and respond to change, as well as to have full visibility into possible outcomes for stellar software delivery. The same flexibility that Agile software development has provided to smaller enterprises will now allow large corporations to continually transform and thrive in a dynamic environment.

Transformational Outsourcing Becomes Mainstream

Today, more and more executives are recognising that outsourcing can deliver significant gains by way of efficiency, productivity, quality and cost-savings. In 2011, companies will look for an outsourcer with the capacity to take over the entire product or application development process, and in some cases, manage the entire business function. This will allow the client company to focus internal efforts on advancing the business, while the outsourcer focuses on cost structure, optimisation and other factors that contribute to business growth for that particular segment.

Cloud Computing Spans the Enterprise

Whether used in a storage capacity or to greatly decrease carbon footprints, the public cloud will experience growth, specifically in the area of Internet services in 2011. In addition, large corporations will embrace the benefits of the private cloud, as previous doubts will give way to clear cost-savings and infrastructure optimisation benefits. As a result, the outsourcing market will witness a steep increase in demand for the rework of existing applications and the innovation needed to develop new corporate solutions.

Industries to Drive Outsourcing in 2011

In response to growing pressures and regulations imposed on the banking community over the past several years, the outsourcing industry will see a drastic rise in participation from financial services companies. More specifically, U.S. and European-based business units operating in investment banking, commodity and equity trading, fixed income and risk management will find the value and quality that outsourcing provides to be an enticing business endeavor. Additionally, the automotive sector will experience a significant up-tick in outsourcing engagements in response to the increased demand for embedded development projects for infotainment and other in-vehicle options. Other industries, such as e-commerce, media and telecom, will turn to outsourcing as improved technologies will allow for new services and revenue models.

“The outsourcing industry is in the midst of an exciting evolution as more and more large enterprises recognize the broad value that outsourcing providers can deliver for a company’s bottom line,” said Dmitry Loschinin, president and CEO, Luxoft. “While many are still cautious following the global economic recession, many other enterprises are looking for a cost-efficient way to accelerate key business activities in 2011. As such, software development partners that can meet the growing demand for expertise in such progressive areas as mobile application development and cloud computing, while adhering to strategies that will yield the highest ROI for clients, will be at a significant advantage.”

Oracle Corp. won a $1.3 billion jury verdict against rival SAP AG, the world’s largest maker of business application software, for copyright infringement by a now-defunct software maintenance unit.

The jury yesterday awarded the damages after an 11-day trial in federal court in Oakland, California. Oracle sued SAP in 2007 claiming its U.S.-based unit made hundreds of thousands of illegal downloads and several thousand copies of Oracle’s software to avoid paying licensing fees and steal customers.

SAP got a “toxic Christmas present from Oracle,” Thomas Becker, a Commerzbank AG analyst, said today. “$1.3 billion is a bold number and the amount is higher than we expected.”

The verdict, which came after one day of deliberations, is the biggest ever for copyright infringement and the largest U.S. jury award of 2010, according to Bloomberg data. The award is about equal to SAP’s forecasted net income for the fourth quarter, excluding some costs, according to the average estimate of analysts surveyed by Bloomberg.

SAP spokesman Bill Wohl said the German software maker will pursue all available options, including post-trial motions and will appeal if necessary. “This will unfortunately be a prolonged process and we continue to hope that the matter can be resolved appropriately without more years of litigation.”

SAP, based in Walldorf, Germany, has reserved $160 million for the litigation.

Lower Provisions

“The provisions which they made were much lower than the ruling,” Theo Kitz, an analyst at Merck Finck in Munich, said today. “The judge may reduce the award and they can appeal, but I don’t expect the reduction will be large.”

Shares of SAP today dropped as much as 1.6 percent to 35.63 euros and were down 1 percent at 35.85 euros as of 12:18 p.m. in Frankfurt trading. Oracle yesterday gained as much as 1.9 percent to as high as $27.70 in extended U.S. trading after the verdict.

SAP spokesman Guenther Gaugler said via phone today that the jury award won’t have an effect on its operating business and forecast. The company on Oct. 27 reiterated its full-year outlook of non-IFRS software and software-related service revenue growth of 9 percent to 11 percent at constant currency rates. It expects 2010 non-IFRS operating margins to be in the 30 percent to 31 percent range.

Oracle said in its lawsuit that the copyrighted software was used by SAP’s U.S.-based TomorrowNow unit to offer technical support to customers of companies that were acquired by Oracle, to lure the customers to buy products from SAP, and to deprive Oracle of support revenue for future product development.

‘Liability Shield’

TomorrowNow had a program to automate the downloading of the software from Oracle’s customer-service websites, which at one point crashed Oracle’s computer systems, according to the evidence at trial.

SAP’s executive board knew that TomorrowNow might be accessing Oracle’s software when it considered buying the unit, according to evidence at trial. SAP acquired TomorrowNow in 2005 and kept it incorporated as a separate entity as a “liability shield,” Oracle attorneys said.

Jurors mulled a verdict that at first ranged from $519 million to $3 billion, said the jury foreman, who declined to give his name. The panel decided on an award that represented the fair market value of the license SAP should have negotiated with Oracle rather than trying to estimate Oracle’s lost profits from infringement, he said.

‘Fair Number’

The panel looked at “the scope, the duration and the timing” of TomorrowNow’s conduct, the foreman said. The $1.3 billion, which was less than the $1.7 billion Oracle’s expert had recommended, took into account all the elements of damages to Oracle that had occurred, he said.

“We thought that was a fair number,” the foreman said.

The executive board’s involvement in overseeing and approving the $10 million acquisition of the 30-employee subsidiary, which occurred just days before Christmas of 2004, showed how valuable TomorrowNow was to SAP, said one of the jurors, Joe Bangay.

“If you take something from someone and you use it, you have to pay,” Bangay, 57, an auto body technician, said.

Geoffrey Howard, an attorney for Redwood City, California- based Oracle, said before the verdict that the breadth of the illegal downloading was “unprecedented” in the software industry.

‘Guilt and Liability’

“For more than three years, SAP stole thousands of copies of Oracle software and then resold that software and related services to Oracle’s own customers,” Oracle President Safra Catz said in an e-mailed statement. “Right before the trial began, SAP admitted its guilt and liability; then the trial made it clear that SAP’s most senior executives were aware of the illegal activity from the very beginning.”

Oracle has used more than 65 acquisitions worth more than $42 billion since the beginning of 2005 to become the second- largest supplier of business applications after SAP.

Just before the trial began, Oracle Chief Executive Officer Larry Ellison said his company would show evidence that former SAP CEO Leo Apotheker, now CEO of Hewlett-Packard Co., another Oracle rival, had overseen the TomorrowNow’s downloads. Oracle elected not to show Apotheker’s videotaped testimony, and said it was unable to subpoena him to appear as a witness.

Mylene Mangalindan, an HP spokeswoman, said Nov. 19 that Oracle had ‘been trying to harass’’ Apotheker, who had a limited role in TomorrowNow. Oracle competes with HP in the market for computer servers.

‘Grossly Exaggerated’

SAP didn’t contest that it was liable for the infringement by TomorrowNow, which it closed in 2008. SAP lawyers told jurors that Oracle’s damage estimate was grossly exaggerated and SAP owed about $40 million for infringement.

TomorrowNow garnered just 358 customers out of about 3,000 potential customers, and only 86 of them bought products from SAP and a small portion of those customers converted to SAP because of the infringement, company lawyers told the jury.

Damages should be based on the amount of profits Oracle lost and SAP gained from the customers who left Oracle due to the infringement, Bob Mittelstaedt, SAP’s attorney, told the jury. He declined to comment after the verdict.

The verdict is the 23rd-biggest jury award of all time, according to Bloomberg data. The largest jury award in a copyright-infringement case previously was $136 million verdict by a Los Angeles jury in 2002 in a Recording Industry Association of America lawsuit against Media Group Inc. for copying and distributing 1,500 songs by artists including Elvis Presley, Madonna and James Brown, according to Bloomberg data.

The U.S. Justice Department and the Federal Bureau of Investigation are investigating “some facts and circumstances” involved in Oracle’s lawsuit, according to an Aug. 5 court filing by SAP. Kyle Waldinger, an assistant U.S. attorney in San Francisco who attended the trial, declined to comment Nov. 1.

Source: http://www.bloomberg.com/news/2010-11-23/sap-must-pay-oracle-1-3-billion-over-unit-s-downloads.html

Communications Minister Ed Vaizey is no longer talking about net neutrality – and how he both agrees and disagrees with the principle – and has instead turned his attention to the benefits of cloud computing.

The minister outlined the technology's potential at the third annual UK-China Internet Forum, held yesterday at the Department for Business, Innovation and Skills. The forum brings together government and business from both countries to discuss commercial opportunities and policy issues related to the internet.

Vaizey, in line with the soon-to-depart government CIO John Suffolk and other IT-savvy members of the Cabinet Office, argued that cloud computing could drastically reduce costs for new companies and transform, for example, the way people use portable devices.

He said: “Access to the networked resources provided by ‘clouds’ enables companies to enter markets without having to meet the capital costs of building their own computer infrastructure.

“What they get instead is a sort of ‘pay-as-you-go’ service tailored to their specific requirements. This is especially significant today, at a time when we are seeing an explosion in the number of portable devices with limited storage capacity.

“Access to clouds enables them to transcend that limitation and provide a level of functionality that would normally be associated with much larger machines.”

But realising the full potential of this technology would require significant change, Vaizey added.

He said ensuring individual privacy and data security, which would be essential for consumer trust and confidence, would need a step-change in co-operation between industry, consumers and governments.

The minister also argued that the advance of cloud computing was a good illustration of the need for international co-operation around the development and maintenance of the internet: “Cloud computing will require international co-operation to ensure the very important developments on the internet that hold great potential for both our countries [China and the UK] are taken forward.”

Source: http://www.computing.co.uk/ctg/news/1900017/comms-minister-cloud-key-supporting-international-trade

The Video Touch Mart (VTM) was launched at Intelenet’s Plymouth contact centre by Oliver Colvile MP, and is the first kiosk of its type made available in this country to enable live interaction between customers and call centre agents. The VTM uses high quality video and audio to allow back-end call centre agents based in Plymouth to provide assistance to customers looking for help, whilst completing transactions.

With broadband internet and video telephony, and a transaction ready card reader (for both debit and credit cards) and printer, the VTM is ideal for organisations in both the public and private sectors looking for a cost-effective method of providing user-friendly and speedy transactions.

Rohit Narang, Sales Director at Intelenet said: “We’ve found that customers increasingly prefer face-to-face interaction to quickly resolve their queries. The high cost of labour and real estate makes establishing physical face-to-face interaction channels at multiple locations impractical – all of which makes the VTM a cost-effective and convenient way for organisations to connect with customers and add value to them in real time.”

Oliver Colvile MP said: “I’m delighted to be here today to help with the launch of Intelenet’s VTM. It’s an extremely innovative solution, and one which I’m sure will appeal to any organisation with the need to process transactions or provide information in busy areas. I’m also very pleased that Plymouth has been chosen as the location for the first of these kiosks, and I’m sure that it won’t be too long until they become a common sight up and down the country.”