Industry news

Garlands Call Centres has gone into administration with the loss of 1,100 jobs in the North-east of England.

Administrators from Pricewaterhouse Coopers (PWC) have been appointed, with PWC director Nick Reed saying that directors could not see a way forward for the business after "a significant deterioration in contract work and high infrastructure costs."

The company, whose client rollcall included Vodafone, TalkTalk and Virgin Media, has centres in Hartlepool, Middlesborough and South Shields and had previously announced plans to open another centre in South Africa.

Chief Executive Chey Garland, a former Veuve Cliquot Business Woman of the Year, yesterday relayed the news to staff that the company would be closing it doors at 3pm over the PA system, according to the BBC. She said she was "devastated" by what had happened. The firm had taken 30 years to grow, she added, and 18 months of recession to kill.

Premier Foods - the company behind Hovis, Mr Kipling, Bisto and Branston - has outsourced management of 'contingent workers' (those working on temporary contracts) to recruitment company Alexander Mann Solutions (AMS).

The deal will see AMS coordinate interim employees working a wide range of roles across all of Premier Foods' 70 locations. Previously, these workers were managed on a local basis by in-house HR teams and line managers.

The new service will provide Premier Foods with clear visibiilty into the availability and usage of temporary workers. The two companies are currently working through a detailed implementation phase, with operations expected to go live this month.

Integreon, a provider of knowledge and business process outsourcing to professional services companies, has today announced that has signed a "record-breaking" deal with legal and tax services specialist CMS Cameron McKenna.

Under the terms of the deal, Integreon will review Camerons' entire UK back office function, including all support departments, to establish which parts can be transferred to Integreon. This includes substantial portions of accounting and finance, human resources and training, marketing and communications, learning and development, library and information services, research, information technology, facilities and other services. The total value of services addressed by this agreement is $852 million, the legal industry's largest outsourcing agreement ever.

By outsourcing non-billable tasks to Integreon, CMS Cameron McKenna plans to focus on its core competencies of legal and tax advisory services. The move is part of the firm's strategy to create a new model for law firms. "We chose Integreon because it is the only firm with a global network of experienced professionals that can meet our needs," said Duncan Weston, managing partner for CMS Cameron McKenna.

Professor Richard Susskind, a legal industry expert and author of the 2009 book, The End of Lawyers?, commented: "This is a hugely significant development that sets the pace for the global legal market. The scale and ambition of the arrangement is remarkable, and the business case is compellingly strong - by outsourcing many of its non-core activities to Integreon, CMS Cameron McKenna should achieve major cost savings and free itself to focus more strategically on its clients and services."

The US State of Indiana and computer giant IBM are taking each other to court over a 10-year, $1.6 billion outsourcing contract that was designed to modernise Indiana's ageing welfare administration system.

Yesterday, the two parties filed claims and counterclaims against each other over the project, which came to a halt when Indiana Governor Mitch Daniels pulled the plug in October 2009, describing the system delivered by IBM as "unworkable".

Launched in 2007, the new system enabled state residents to apply for welfare benefits in person, online or via telephone and aimed to speed up and standardise eligibility determinations. High error rates and slow processing of eligibility requests quickly became a major source of contention between Indiana and IBM.

In an Indiana courtroom on Thursday, Indiana sued IBM for $1.3 billion, claiming breach of contract. The Indiana Family and Social Services Administration (FSSA) claims that processing errors from IBM led to faulty benefits denials that brought harm to needy citizens.

"FSSA was left with virtually nothing of value from IBM's failed performance, and indeed is now faced with expending hundreds of millions of dollars in re-programming and eventually entirely replacing IBM's failed systems, restructuring procedures and client services, and reengineering IBM's 'modernised' system," the state said.

In turn, IBM countersued for $52.8 million for fees and expenses outstanding. In a public statement, the company acknowledged that, although Indiana had the right to cancel, the contract requires the State to pay IBM "certain amounts", including deferred fees and equipment costs.

"By refusing to honor certain contract provisions, while at the same time relying on other provisions to remove IBM from the project, the State threatens to undermine the integrity of a public procurement process under which thousands of private companies conduct business with Indiana, expecting and depending on the State to fulfill its contractual commitments," the company said.

The UK National Grid has shortlisted Infosys, Mahindra Satyam and Cognizant for an outsourcing contract expected to total some $250 million (£172 million), according to reports in today's Economic Times.

National Grid already has a seven-year, $470 million contract with Computer Sciences Corporation (CSC), which is due to expire this year. The work involves developing software applications and maintaining IT infrastructure for the utility firm, which manages the UK's electricity and natural gas network.

When contacted by the Economic Times on Thursday, a National Grid spokesman confirmed that his organisation is reviewing its IT operations, but declined to elaborate any further.

CSC has announced today that it has won a high-performance computing outsourcing deal with US government body, the National Oceanic and Atmospheric Administration (NOAA).

NOAA is a scientific agency whose mission is to understand and predict changes in the Earth’s environment and conserve and manage coastal and marine resources to meet the US's economic, social and environmental needs.

The deal between NOAA and CSC takes the form of an indefinite-delivery/indefinite-quantity, or IDIQ, contract - a contract between a federal government agency and a contractor for the indefinite delivery of an indefinite quantity of services.

Under the terms of the contract, task orders will be funded to design and implement a new high-performance computing system to support NOAA’s environmental modeling program. This will allow NOAA to improve the accuracy of global and regional climate models and advance weather forecasting capabilities critical to the protection of life and property.

The IDIQ contract has a four-year base period, one four-year option and one one-year transition option, bringing the estimated contract value to $317 million if all options are exercised. The first year will be funded at $49.3 million by NOAA, using funds from the American Recovery and Reinvestment Act of 2009.

“We are proud to work with NOAA in helping the nation better understand how the Earth's climate is changing, which will aid in the development of adaptation and mitigation strategies,” said Mike Gaffney, president of CSC's Civil and Health Services Group.

“CSC is confident that, with the new high-performance computing facility, NOAA will be able to produce more accurate and agile models and share computing resources across the agency and its research partners.”

Tel Aviv-based IT services provider Ness Technologies announced today that is has won a multi-year outsourcing contract with Israel's largest hotel chain, Fattal Hotels, valued at 12 million New Israeli Shekel (NIS), or approximately £2.1 million.

The new contract builds on previous deal between the two companies.

Fattal Hotels recently acquired Azorim Tourism, adding 12 hotels to its portfolio of 29 hotels in Israel. The company also manages 30 hotels across Europe.

Under the terms of the contract, Ness Technologies will now operate and maintain Fattal's IT systems, including applications and infrastructure, as well as the chain's communications network. Ness also has responsibility for maintenance of Fattal's servers hosted at Med-1, a local supplier of collocation and IT room hosting solutions.

In addition, Ness Technologies' Unified Reference and Delivery (URD) Center, Israel's largest outsourcing helpdesk center, serves as Fattal Hotels' helpdesk, supporting hundreds of users across Israel.

Ness Technologies has 7,300 employees and offshore centres in Bangalore, Mumbai, Hyderabad, Pune and Chennai.

"The outsourcing of our IT activities to Ness Technologies enables us to focus on our core business and improve our customer service and satisfaction, ensuring our guests' complete enjoyment," said Gadi Priewer, General Manager of Fattal Hotels. "As part of the outsourcing contract, Ness will support our reservations system, which is critical to our business, and will enable us to maintain a high operational performance level in service, quality and efficiency."

A prison located in India's technology hub of Hyderabad is set to launch BPO services from its premises, according to reports in today's Times of India.

The unit in the southern Indian city's Cherlapally jail is to be staffed by educated convicts. Prison authorities are working in partnership with Indian information technology company, Radiant Info Systems. The company is to invest money and expertise in the unit, with prison authorities providing space and labour.

Chief of prisons CN Gopinatha Reddy told the Times that up to 250 prisoners could be employed from among inmates who had passed school and university exams.

"For starters, the convicts working at the BPO would not have access to phones as is the case in a call centre," he is quoted as saying. "They would be involved in bank-related work of data entry and transfer."

"The idea is to ensure that on being released, the prisoners find it easy to get absorbed in the mainstream. Prisoners often find getting suitable employment post release a tough task. So, this is an attempt to ensure that their employers know them well in advance," said Reddy.

IT and BPO services company Cognizant, based in Chennai, India, has today announced its acquisition of The PIPC Group, a global project management consulting firm based in London.

PIPC has a workforce of around 200 staff, based primarily in the UK, Australia, New Zealand and the US. Established in 1992, PIPC has assisted companies including the BBC, banking group Santander and Malaysian Airlines to deliver business-wide transformation projects, using the firm's Project Management Office (PMO) methodology and Project Health Diagnostic (PHD) tool.

A particular area of specialism is post-merger integration, which accounts for some 35 percent of the firm's business.

"At a time when cyclical and secular pressures are driving clients to seek new performance thresholds, effective program management is essential to ensure measurable business outcomes. PIPC’s strategic program management offerings will strengthen our ability to manage increasingly complex global projects while expanding our geographic footprint, particularly in Australia, New Zealand and the UK,” said Francisco D’Souza, President and CEO of Cognizant.

The terms of the deal were not disclosed.

Private equity firm Apax Partners has made its first investment in Brazil, with the announcement that it has bought a 54 percent stake in TIVIT, a supplier of IT and BPO services.

TIVIT operates out of 16 locations in Brazil, handling operations on behalf of a client base that includes 300 of the country's 500 largest companies, including financial services providers, manufacturers, public utilities and retailers.

Luiz Mattar, CEO of TIVIT, will retain a "substantial" portion of his ownership stake in the company and has committed to continue leading the company, describing Apax Partners as a "patient investor".

Meanwhile, Jason Wright, a partner at Apax described the rationale behind the firm's purchase: "Apax is attracted to TIVIT's market leadership in both IT Outsourcing and Business Process Outsourcing. Luiz Mattar and his team have build a solid foundation for continued growth and expansion and enjoy the tailwinds of a strong Brazilian economy."

Apax is buying its stake from Tivit's controlling shareholders at 18.10 reais a share ($10.14), valuing the company at approximately $1 billion.