Industry news

Property firm Frogmore has implemented a virtualised IT infrastructure with information management company Bluesource.

Bluesource has consolidated Frogmore's existing server hardware into specified VMWare virtualised servers. The company's system data was copied and replicated to an external tier-one datacentre.

Frogmore is also in the process of migrating its traditional PC users to virtual desktops using VMware View. The company's IT environment is fully managed by Bluesource, delivered remotely from its datacentre in London.

Sandie May, administration manager at Frogmore, said, "Bluesource helped us to build a process and recovery plan, and ensured that it was regularly tested. We had experienced a power outage which could have been very damaging to our business. But Bluesource was able to react immediately."

Ventrica is the name of a new 134 seat outsourcer that plans to shake up the market for providing high quality, professional customer contact on behalf of medium to large enterprises. The company is the brainchild of well-known industry entrepreneur Dino Forte, who was previously a co-founder of Converso Contact Centres. Having already secured new business from a global software specialist and an international cosmetics group, Ventrica is looking to attract further household names to its customer base.

Managing Director and founder of Ventrica, Dino Forte says, “There is a massive untapped demand for high calibre customer contact that demonstrates both professionalism and substantial attention to detail. However, whether it’s for lead generation or managing service enquiries, many organisations can’t justify the resources or technology infrastructure in-house to support this type of activity. Ventrica aims to plug a gap in the market by offering smaller scale, ‘niche’ customer contact services such as B2B lead generation, that focus on the quality rather than the quantity of conversations. Larger outsourcers can provide this same level of excellence, but they typically only consider very high volume work.”

“We have invested substantially in both the contact centre environment as well as the latest multi-media technology so we can deliver a premium service that matches many of the bigger players in the industry. We won’t just be managing calls though, we will also be handling other types of customer communication such as web enquiries, web chat, SMS and so on.”

A range of career opportunities are now available including customer service representatives, telemarketers, service delivery managers and IT. There will also be vacancies for those with multi-lingual skills.

World-famous travel and leisure company Thomas Cook Group plc has signed a contract with Capgemini for the radical modernisation of a core IT system in the UK. The programme is designed to significantly increase Thomas Cook UK & Ireland’s efficiency and flexibility, and transform services to its millions of UK customers. By streamlining its IT, Thomas Cook also aims to boost its ability to satisfy evolving customer tastes and preferences, and increase its responsiveness to changes in the travel and leisure marketplace.

The Capgemini development will allow Thomas Cook UK & Ireland to replace a number of its existing IT systems by deploying new technology able to support the end-to-end management of all aspects of tour and travel management from booking through to delivery. A radically updated reservation and management system will enable Thomas Cook UK & Ireland to market and distribute both custom-designed and traditional package holidays via multiple channels including websites, call centres and travel agents. The IT development programme also aims to facilitate rapid integration with external IT systems from third party providers such as hotel groups, airlines and car hire companies.

Mark Foy, Programme Director at Thomas Cook Group plc, said: ‘People booking holidays need the freedom and flexibility that today’s choice of booking channels gives them, but they also appreciate the traditional values of service, security and expertise that Thomas Cook can provide. The new Capgemini developments will enable us to offer our customers the best of both worlds, marking an important new chapter in the ongoing development of the holiday industry.’

He added that there are further possibilities for collaboration between Thomas Cook Group plc and Capgemini in the future involving markets and customers in other parts of the Group including Continental Europe and the fast-growing markets for tourism in countries such as India and China.

The new partnership will drive the next phase of Thomas Cook’s GLOBE programme that was announced in 2006. The new project will focus on Thomas Cook Group plc’s activities in the UK market, its largest business segment.

Thomas Cook Group plc selected Capgemini as prime contractor for the project following a review of competitive proposals. It says that Capgemini was selected because of its attractive commercial proposition, its commitment to collaborative working and its leadership in ‘agile’ software development, a technique which enables rapid and iterative fine-tuning of IT systems to business needs as the development process proceeds. Other important factors were Capgemini’s ability to offer excellent quality and value through its Rightshore® delivery model, and its first-class references from existing clients.

The 70-strong Capgemini team of experts from the UK, Germany and India will be based at Thomas Cook’s offices in Peterborough and at Capgemini Accelerated Development Centres in Birmingham and Manchester, UK and Mumbai, India. The updated systems are expected to centre on largely custom-designed software but will also include an Oracle database and IBM Websphere components. As well as serving the holiday-making public, the systems will also be accessed by Thomas Cook UK & Ireland people in Thomas Cook head offices, stores and call centres. Capgemini is starting development work on the programme immediately. The first Release within the programme is scheduled for Q4 2010 with final completion within three years.

Ian Fairclough, Programme Director at Capgemini UK, said: ‘The Thomas Cook Group plc is a world-class name in travel and tourism and we are proud to be entrusted with this crucial project – one which, we believe, will transform the face of tourism and open up many exciting new opportunities for holiday-makers from the UK.’

Buyers and suppliers are increasingly drawn to the benefits that a pricing model such as output-based pricing can bring. The move to control costs has seen many buyers transition their existing input-based model into an output-based model while some buyers are turning to new suppliers or setting up entirely new outsourcing relationships that are based on output-based pricing.

Here, SQS Software Quality Systems, the largest independent provider of software testing and managed testing services, outlines the motivations behind moving to output based pricing, benefits and challenges that must be overcome, including the mechanisms needed to handle demand variation and improved SLAs.

Over the last few years, as the cost impact of poor quality software products and applications has risen, the need for specialisation in testing has been accepted within the IT industry. Outsourcing and off-shoring of testing has become the norm. However, there is room for improvement in the way outsourced testing is implemented today.

While outsourcing has delivered cost reductions and flexible access to skilled technical resources, many companies today are seeking outsourcing providers that will work with them as true partners taking greater ownership of the outsourced work and delivering results rather than bodies and processes.

The incentive model in most engagements can be an issue and common head-count based pricing models work against the concept of partnership. So, is there a viable commercial model that encourages long-lasting effective partnership without compromising quality? Possibly the best answer to this is output-based pricing.

Benefits of output-based pricing

The biggest benefit of pricing on the basis of output is obvious – the customers pay only for what is delivered. But this mechanism brings about a complete change of mind-set in both the customer and the vendor.

Output-based pricing shifts risk away from the customer. In head-count based pricing, the risk is predominantly with the customer, as the vendor is paid for resources used on the project at a pre-determined rate. There are of course SLAs to cover the risk, but on the ground it is extremely difficult to design and execute these SLAs. In an output-based pricing mechanism, the SLA is built-in.

There is a more subtle, but extremely important benefit that output-based pricing provides. The head-count driven vendor has no interest in increasing efficiency – the way to grow business is to increase head-count, not decrease it. Conversely, in output-based pricing, the vendor is incentivised to increase efficiency.

The vendor tries to increase output with the same team-size, or even reduce the team-size by using automation and improving processes. Customers benefit too, as vendors can offer year-on–year benefits, increasing their units of delivery per unit of cost.

Truly, a win-win for both parties, which is very difficult, if not impossible to achieve in a head-count based engagement.

The requirements of output-based pricing

An initial calibration phase is critical for output-based pricing engagements. During this phase both parties agree on a unit of testing deliverable (at SQS, they are known as Quality Points), and on the rate for each unit.

To maximise benefits, the engagement needs to be planned over multiple years, giving the vendor the confidence to plan and invest in building efficiency in the service offered. By signing up for multiple years, customers get year-on-year efficiency benefits.

Of course, reviews must be planned to track performance and ensure that the output-based pricing is in line with the objectives of the outsourcing.

Example of output-based pricing, as applied to Test Automation

It turns out that Test Automation is an area where output-based pricing can be applied successfully. In this paradigm, the rate card only mentions prices for test cases delivered, executed and maintained. To be able to prepare the rate card, in the initial calibration phase a sizeable number of test cases of representative size and complexity are taken up for automation and delivered.

The output-based rates are calibrated based on the efforts taken on the automated test cases as well as release plans of the application under test. The engagement is necessarily over multiple years covering many releases and thus repeated executions of the test automation suite.

With the delivery responsibility completely with the vendor, backed by output-based pricing for guaranteeing the delivery, this mechanism delivers on the promise of a truly managed testing service.

Author: Gireendra Kasmalkar, SQS India

Gireendra is the MD and CEO of SQS India. Gireendra had founded VeriSoft, one of India’s leading independent testing companies. VeriSoft was acquired in July 2008 by SQS Software Quality Systems AG, the global leader in independent testing. SQS is headquartered in Germany, has operations in 15 countries and is listed on the London Stock Exchange.

Through SQS Managed Testing Services, businesses only pay for what is tested, have access to a global delivery team and work with a pure-play independent testing consultancy, so benefitting from a clear division between implementation and testing teams.

Gireendra is a Mechanical engineer from the Indian Institute of Technology, Mumbai, India (1987) and University of South Carolina, USA, (1989).

Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, today announced the results of the second annual Capgemini Executive Outsourcing Survey, which found that Latin America is the third most popular outsourcing destination, with 25 percent of responding companies currently outsourcing to this region. While still perceived by many respondents to be an “emerging” outsourcing destination, this survey revealed that Latin America is not far behind legacy outsourcing destination China, which is ranked second at 27 percent, while India leads with 60 percent of companies outsourcing to this country.

The survey, commissioned by Capgemini and conducted online by Harris Interactive, among 300 senior executives at Fortune 1000 companies also identified the top reasons for executives to select Latin America as part of their outsourcing strategy. More than two-thirds (69 percent) of surveyed executives cited cost of labour as the top reason why their company might outsource to Latin America, while other attributes reported included technology and infrastructure capabilities (49 percent), skilled labor (48 percent), and economic stability (44 percent). These attributes are aligned with the key reasons why companies choose to outsource in general suggesting that outsourcing to Latin America will continue to expand.

Other reasons cited as important for selecting Latin America for outsourcing include its proximity to the U.S., time zone alignment and accent neutrality. These attributes are all unique to this region when compared to other outsourcing locations such as China and India.

The Executive Outsourcing Survey findings also revealed that almost half (45 percent) of executives who do not currently outsource to Latin America say their company would be interested in considering the region as a resource for outsourcing in the future.

In addition to uncovering Latin America as a leading outsourcing destination, the survey highlighted the region’s increasing value to the global economy. An overwhelming majority of executives (89 percent) believe that Latin America is an emerging market that will become increasingly important to U.S. businesses, and that there are advantages to doing business in Latin America (83 percent). Further, more than half (56 percent) of executives believe doing business in Latin America is becoming easier than doing business in other parts of the world.

“As the economy rebounds, companies are looking to use outsourcing more strategically as a tool to increase efficiency, yield significant cost savings and drive growth; this includes considering locations beyond India,” said David Poole, Vice President and Head of Americas Business Process Outsourcing, Capgemini. “The expansion of Capgemini’s outsourcing services in Latin America, and our work with Unilever, Coca-Cola Enterprises and other clients in the region underscores our understanding of our clients’ needs and ability to provide the right global delivery model for multinational businesses.”

Other survey highlights include:

The top five factors listed by executives in choosing an outsourcing destination are labor costs (79 percent), technology & infrastructure capabilities (62 percent), skilled labor (61 percent), language proficiency (49 percent) and economic stability (44 percent);

Less important factors listed by executives in choosing an outsourcing location are tax benefits (26 percent) and proximity to the U.S. (3 percent);

Forty-one percent of executives outsourcing to Latin America cited language proficiency as a key reason;

Forty percent of executives cited the average education of the Latin American workforce as a key factor in their decision to outsource in Latin America.

Capgemini’s Business Process Outsourcing organisation applies unique business insight, business intelligence tools and deep domain knowledge to help clients transform business operations. As part of its global delivery model, Capgemini has eight outsourcing centers throughout Latin America, including Argentina, Brazil, Chile and Guatemala.

For more information regarding the Capgemini Executive Outsourcing Survey and to download a summary of the results, please visit http://apps.us.capgemini.com/harrissurve y

Survey Methodology

This Executive Outsourcing Survey was conducted online within the United States by Harris Interactive on behalf of Capgemini between April 6 and April 16, 2010, among 300 senior executives at Fortune 1000 companies. Company revenue and number of employees were weighted where necessary to bring them into line with their actual proportions in the larger universe of Fortune 1000 companies.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with no response, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words “margin of error” as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

The Norwegian Competition Authority has granted approval to EDB Business Partner to acquire rival ErgoGroup in a move that will have a huge impact on the IT services market in the Nordic region.

Besides consolidating EDB's position as the leading supplier in Norway, it will also leapfrog HP and Logica to become the third largest SITS provider to the Nordic region, according to the latest rankings from Pierre Audoin Consultants (PAC).

The acquisition of ErgoGroup fulfils a number of EDB's strategic aims: expanding its presence in Sweden, boosting presence in the public sector, raising its penetration of the SME market and taking it a step closer to its long-standing goal of becoming the leading Nordic SITS provider.

However, PAC believes that the new EDB ErgoGroup AS faces three big challenges. The group will be heavily reliant on Norway, the smallest Nordic SITS market with only a limited number of large client organisations. Both companies have been building their presence in the largest Nordic market, Sweden, with EDB acquiring Spring Consulting and ErgoGroup buying BEKK. A good first step for the combined group would be to look to support the Swedish operations of existing Norwegian clients.

The second challenge for EDB ErgoGroup AS must be to increase its global delivery capabilities. Local rivals such as Tieto and Logica have placed the growth of offshore resources and the industrialisation of processes at the centre of their plans. If EDB ErgoGroup wishes to remain price competitive it needs to address this issue.

The final challenge is to address the SME market. ErgoGroup has been very successful in this area, supported by a strong local presence. However, EDB has tended to focus on large enterprises. It is essential that the ErgoGroup culture is preserved through the integration, or the combined group risks alienating companies in the SME market, which is becoming an increasingly important battleground. An important factor here is that ErgoGroup MD Terje Mjøs will lead the new company which will provide a point of continuity for SMEs, for whom a local interface with suppliers is an important concern.

A contract for this activity has been signed, for a term of three and a half years. As a strategic partner for software testing, SQS will primarily be conducting system integration tests for Deutsche Bank.

To be specific, SQS will take on the testing of business applications for Deutsche Bank in Germany and Switzerland. This task will include the management, design and execution of tests, and the documentation thereof. For the purpose of best practices, SQS will first standardise, integrate, and systemise the required test processes. The chosen pricing model is structured in a strictly performance-oriented manner.

"We are very pleased about our classification as a strategic partner of Deutsche Bank for software testing" comments Reto Züst, CEO of SQS AG for Central Europe and the Middle East, on the subject of the agreement. "We will be providing these testing services as managed services. This proves that the corporate strategy of SQS is on the right path and that the focused activities of the Managed Testing Services area are currently - as planned - the strongest driver of growth for SQS. Through Managed Testing Services, SQS can reduce test costs, increase system quality and enable the further industrialisation of software production."

Security firm IronKey has announced that its Enterprise S200 package of USB flash drives and management software is undergoing certification for government use by the CESG, the UK national technical authority for information assurance.

If approved, it will allow UK government departments to include USB portable storage media in business plans that will comply with data protection laws.

The AES 256-bit hardware-encrypted USB flash drives and management software are being evaluated under the CESG Assisted Products Service (CAPS).

The software is designed to enable organisations to administer policies across thousands of devices over the internet as well as wipe or disable them remotely.

The CAPS program certifies that products and services meet government cryptographic and other data protection standards.

Government departments are coming under increasing pressure to protect data on portable storage devices, said Kevin Bocek, director of product marketing at IronKey.

The Information Commissioner's Office has highlighted the poor data protection record of government organisations and is now able to impose fines of up to £500,000 for serious breaches, he said.

According to Bocek, the CAPS certification will give government departments the tools they need to enable employees to work securely from any location.

"The certification is also relevant to non-governmental departments and suppliers. as the same technology is used in the commercial product," he said.

IronKey is confident of winning CAPS certification for the S200, which has been validated to FIPS 140-2 Level 3 security standards by the US National Institute for Standards and Technology (NIST).

The IronKey Enterprise S200 hardware and software package was launched to the commercial enterprise market in July 2009.

CAPS certified editions configured to run in government-approved modes will be available in the next nine to 12 months, said Bocek.

With stringent government cuts imminent, we have seen the likes of Northamptonshire and Cambridgeshire County Councils sign long term framework deals for the services of an ITO provider, worth between £23.5 million and £70.5 million for IT services. With many of these services certain to be offshored to destinations far and wide, the classic offshoring vs. nearshoring debate is reemerging.

While one cannot deny it’s benefits, offshoring is not necessarily the best strategy for local government, and careful consideration needs to be taken before any rash decisions are made. Some councils are just not suited for offshoring, with aspects such as staffing and local culture posing obstacles that could cause more harm than good. Furthermore, for certain tasks, offshore staff will simply not have the level of skill and knowledge required to complete the necessary local activities.

Therefore, it is my view that nearshore outsourcing has a lot of benefits compared to offshore outsourcing for local government. The outsourcing solutions provided by the near countries such as Ireland to their customers will not have much difference in their time zones and thus can provide services in the same time zone as their customers do. It also helps to avoid problems that can evolve due to language, culture, legal affairs, infrastructure and technology. Furthermore with nearshoring, cost effective structures are available, so it becomes less expensive and easier to travel and communicate for the customer.

Dell Services has today announced eight new healthcare customers, following the recent launch of a new IT consulting services group.

The division, called ‘Dell Services Healthcare Consulting’, has seen rapid growth within the healthcare sector, sealing deals with Bupa Cromwell Hospital, Berkshire Healthcare NHS Foundation Trust, Cambridge University Hospitals NHS Foundation Trust and Papworth Hospital Foundation NHS Trust. Other wins include, Royal Surrey County Hospital NHS Foundation Trust, NHS Lanarkshire, Golden Jubilee National Hospital and Solent Healthcare.

The Dell Services Healthcare Consulting team provides a combination of clinical and business process improvements, alongside technology to help healthcare providers achieve a patient focused environment that is connected, streamlined and efficient. The team is a part of the wider Dell public team, which includes services for implementation services, software development, testing and IT outsourcing. It will also serve the education sector and regional governments.

Stuart Black, chief business architect, Bupa Cromwell Hospital, said: “Based on a positive experience in an earlier project, we asked Dell Services to help us. We talked to another potential partner, but we had a good feeling about working with Dell Services from the start because their consultants clearly had our interests at heart.”

Black went on to say, “Bupa Cromwell also required demonstrable healthcare experience. Our trust in Dell Services was reinforced by the extensive IP it owned, based on numerous hospital projects. The solution will open the door to further innovation. For example, we’re looking at the installation of screens in each patient room so that staff can access patient records at the point-of-care without having to carry a device.”

According to Tim Sheppard, Director of UK Public Sector at Dell Services: “It’s really exciting to see our Healthcare Consulting team doing so well. This team provides the final jigsaw piece in our Healthcare offering. We can now work closely with clients right from the initial clinical or operational strategy through technology implementation to realising the benefits. I look forward to this team developing long term mutually beneficial relationships with our Healthcare clients.”