Industry news

The newly formed venture is a 51:49 partnership between act between JR Kyushu System Solutions Inc (JRQSS), the IT systems arm of Japan’s Kyushu Railway Company and Patni Japan.

The JV will provide high quality, cost effective IT and product engineering services to the Japanese enterprise market. It will also seek to expand into other Asian markets in the future.

Those companies that outsourced, spent an average of $104m ACV each year, according to outsourcing consultancy TPI’s Momentum 2010 Market Trends & Insights Vertical Industries Report.

It also reports that approximately 40 companies in the Forbes Global 2000 outsource for the first time each year.

The report goes on to illustrate the significant differences in average spending by vertical. The consultancy firm is currently tracking an active outsourcing contract in 34% of G2000 companies, up 2% over 2009.

Cost-cutting imperatives brought on by weak economic conditions are affecting outsourcing activity in all verticals, including several that traditionally have outsourced only sparingly. Outsourcing spending is falling in some of the largest verticals, including diversified financials, consumer durables and banking.

In telecommunications services, ACV averaged more than $300m, while in construction it was less than $25m.

Because of the precarious situation, it may come as a surprise to learn that North Korea has been positioning itself as an interesting ITO destination in recent years.

How has this come to happen? Part of the answer could lie with Pyongyang relations with China, which has been a longstanding IT destination and production factory of the world.

In a very short period of time, China's software industry has emerged to become a global player. ITO providers, the likes of TCS, Infosys, Wipro and Satyam, have all established a Chinese presence.

And now, Chinese companies are outsourcing IT work to North Korea. This may have provided enough spark to light a small fire and drive the country to invest in the IT sector.

The government’s emphasis on IT and innovation can be seen in the increased number of computer engineers and scientists graduating from universities. But as a destination the country also offers business process outsourcing (BPO) services and has also been reported to possess the skills necessary for high-quality animation.

While US firms may be banned from carrying out business with North Korean companies, most other countries don’t face such restrictions.

Could the quality and level of skills offered overcome the political and economic conditions of the country? Time will tell.

The new centre will create 300 jobs in the first instance, and a further 200 jobs in the future will have a significant impact on the town.

Regional development agency One North East, has given a grant of £1.9m for the project.

Firstsource, one of the UK’s main investors and according to the FT FDI Index, already has three UK contact centres employing over 1,900 people between Belfast and Londonberry.

Based in London, he brings a wealth of insurance industry and IT experience to his new post. He will be looking to leverage Capgemini’s global capabilities in life, property and casualty insurance, including its world-class transformation skills in claims processing and policy administration, as well as its offerings around risk (including Solvency II), business information management, testing and managed services.

McQuade started his career as the classic ‘Man from the Pru’ before progressing to senior sales management positions and taking responsibility for introducing new CRM technology at the Prudential.

He was recruited by IBM in 2000 where he played a key role in founding and managing the company’s CRM practice.

The appointment highlights the role of IT in Tesco’s business and follows 18 busy months of IT implementation.

Over the last decade Clarke has overseen a number of large IT changes at the supermarket chain, including introducing systems to improve sales, the supply chain and efficiency across the company.

Last year the group made £550m in savings following the implementation of its Step Change efficiency programme, which involves IT improvements as well as general process efficiencies.

Clarke has been with Tesco for 29 years occupying various positions through the years. He joined the Tesco board in 1998, and then he assumed the responsibility for the group supply chain, taking over the role of looking after group IT a year later.

In January 2004 he was made responsible for international operations in addition to his IT responsibilities. Outside of his tech role he has overseen the opening of new stores and operational improvements across Asia and Europe.

Clarke replaces Sir Terry Leahy who has been at the helm of the group for 14 years.

Officials expect to save £86m once all exit costs are met and are currently renegotiating two contracts worth £650m with companies who had agreed to deliver parts of the project.

Various reasons have been quoted for the scheme’s failure. The advantages to the holder were slowly eroded while the voluntary nature of the scheme meant that few people would pay the £30 processing fee; the fee on which the government relied to recover some of its investment.

However, what appears to have sealed the fate of the scheme was concerns by civil liberties activists regarding privacy issues and how secure the information stored would be. Who would be able to potentially gain access to the information and their reasons behind it, certainly became a concern in the minds of the public.

The fear could well be founded after all the HMRC breach is quick to come to mind. Two years after the publication of the Poynter that folloed the breach, a similar breach could occur again.

Indeed, a survey by security firm Cyber-Ark, found that 19% of businesses still use couriers for transferring large files. Alarmingly, the number using the postal service has increased from four per cent in 2008 to 11% this year.

Meanwhile, research by service-oriented architecture (SOA) provider Software AG has shown that in the UK public sector bodies are failing to keep records on inter-organisational secure data transfer procedures and costs.

The research questions were asked to local authorities and central government departments across the UK. A total of 14 organisations out of 26 were unable to provide any information at all.

The issues pertaining to secure data storage and transfer also resonate with the private sectors, and in particular the financial services sector.

While the vested interest of Cyber-Ark and Software AG is clear, the issues raised are real.

The new system will replace more than 20 legacy systems and is designed to improve the efficiency of the Authority’s processes for financial management, procurement and works management.

Under the contract Accenture will deploy a new, fully integrated system in two phases over a three-year period, followed by an application maintenance period of five years.

The first phase will focus on upgrading the Authority’s finance and procurement capabilities with the implementation of ERP and supplier relationship management (SRM) software from SAP.

The second phase will feature the implementation of additional SAP modules to provide support for the Estate Maintenance division. When fully deployed, the new system will support more than 8,000 Housing Authority users.

The settlement sees BSkyB get £230m in damages and a further £40m in interest and tax – awarded in February this year. The balance corresponds to the legal fees incurred by BSkyB since the start of the legal battle.

BSkyB awarded the CRM implementation project to EDS back in 2000, but the contract was terminated in 2002. While the original deal was worth only £48m it ended up costing some £265m and six years to implement.

BSkyB’s victory comes as the National Audit Office (NAO) has called for a mandatory system of safeguards for major IT projects to halt projects running over budget.

The NAO wants a system that will provide necessary project information to the various parties involved. The new system of assurance would need to be compulsory, focused on outcomes, capable of collecting plenty of evidence from those involved in projects and triggering interventions where necessary.

It also needs to be capable of "systematically propagating the lessons learned". The safeguards would contribute to reduce the financial risk to the taxpayer and increase the likelihood of successful project delivery.

Indeed, the Central Government has become associated with big IT projects that run over-budget by millions of pounds and fail to be delivered on time, and the NAO said previous attempts to stop this happening have not worked.

In the current economic environment the safeguards become all the more relevant, especially with more systems such as the NHS’ centralised electronic medical records, ID systems, etc. being implemented or in the works.

A further increase (to 66%), subject to employee performance, could enter into effect from 1 October.

The decision comes following the series of suicide attempts at one of the firm’s productions plant in Longhua, where so far this year 16 people have attempted suicide, resulting in 12 deaths.

Foxconn, a major supplier for the likes of Apple, Dell, Hewlett-Packard (HP) and Sony among others, employs more than 800,000 workers in China.

The firm’s Taiwanese parent company Hon Hai Precision Industry, is said to have stated that the decision to raise wages was not a direct response to the suicides.

Apple, Dell, and HP are all said to be looking into Foxconn's working conditions. But for brands such as Apple a ‘divorce’ would be painful. Its order book for iPad deliveries is already behind while orders keep piling up.

It may be that end-users and suppliers will have to share the cost of bringing the working conditions in production plants to acceptable and responsible levels.

How this decision will impact on the contracts Foxconn has with its existing clients remains uncertain. This could be the IT industry’s ‘Nike moment’.