Industry news

Publisher Reed Elsevier saw an increase in revenues and operating profit last year aided by cost savings from the outsourcing of IT development and back office activities.

Reed Elsevier said outsourcing its IT work helped hold down costs, it was reported in computerworlduk.com, as systems engineering and maintenance and software development engineering were all outsourced, in addition to some back office processes.

"Good progress is being made in developing the next generation of legal research products, and the advanced back office infrastructure to support them, to deliver an integrated and superior customer experience across legal research, workflow tools, practice solutions and client development,” said the company in a statement.

The publisher revealed last week that its revenues for the year had grown 14 per cent to £6,071m, while operating profit had also increased 14 per cent to £1,570m.

Appliance manufacturer Electrolux has signed an IT infrastructure management contract with outsourcing giant HCL.

Under the contract, lasting five years, HCL will take charge of network monitoring and management, servers, IT security and end user computing.

“We wanted to offer a standardized service to Electrolux operations in Asia Pacific without increasing costs. In HCL we found a partner that understands standardization of services and has an ability to support the business locally across the region” said Bertil Norberg, Electrolux Group CIO.

HCL will serve Electrolux through its Global Delivery Centres in India and Malaysia and onsite. It will provide helpdesk services in languages including English, Vietnamese, Thai and Bahasa (Malaysia & Indonesia).

The deal covers 12 countries in the APAC region including Australia.

Israel’s Ministry of Immigrant Absorption has signed a $11.2m contract with ITO provider, Ness Technologies.

Under the five-year agreement, Ness Technologies will provide 24-hour technological support to the ministry’s IT systems responsible for immigrant absorption, registration of immigrants and management of assistance resources, such as public housing, financial assistance and customs tax grants.

The company will also upgrade the ministry’s existing helpdesk in the ministry’s bid to expand ICT systems even further.

“Ness Technologies will assist us in leveraging our IT resources whilst further developing our ICT systems to streamline the immigrant absorption processes. We will continue to improve service to immigrants based on these advanced IT systems,” said, Sigal Lebovich, manager of the Information Systems Department of the Ministry of Immigrant Absorption.

CAE, a developer of simulation technologies, has signed an agreement with Wipro to address the simulation-based training, operations and maintenance needs of India’s defence forces.

Wipro and CAE will work together to provide training systems integration and simulation-based solutions for war gaming, C4ISR (battle command) and a range of other defence platforms expected to be acquired by India’s defence forces.

“The Indian defence market is of strategic importance to CAE and this importance is demonstrated in the investments and strategic relationships CAE has established in India,” said Ash Sarin, CAE’s regional VP for marketing.

By Graham Underwood, managing director of GFT UK

Banking has a long history of producing innovative technology; from the Big Bang of the 1980s, through ATMs and debit cards, to this century’s online banking. Technology has repeatedly changed the way banking happens. Today, this combination of a strategic and innovative approach is vital if the financial services sector is going to transform itself. As Gartner suggests “banking and investment service providers need to make a critical shift to a more outward-facing set of objectives for IT that are risk-aware, but still innovative and bold ”.

This isn’t about technology as a cost-cutting tool, or as a quick route to new, but unsustainable, products. Now, rather than focussing on specific products, banks should develop innovative technology to create a better way of banking and respond to the challenge of new entrants into the financial services world; new entrants that have already established customer-focussed and trusted images, such as Virgin Money, Tesco Bank and Orange. The rise in peer-to-peer lending, predicted by Gartner to be $5bn by 2013, the cost of maintaining High Street branches and the necessary decline of the hub system of bank services, are all issues to which banks must find a response.

We’re also seeing a new generation of mobile natives becoming consumers of banking services as they enter adulthood. Although likely to be a mostly retail phenomenon, the impact of mobile phone technology cannot be ignored by the sector; payments and banking via your mobile phone will be the subject of much discussion throughout 2010.

All of these developments could have a game-changing impact on established financial institutions and business at a wider level. Tactical, cost-cutting use of technology will not be enough. Recent Datamonitor research for BT also cites the importance of technology as a general business driver, concluding that “greater investment in IT by businesses will help aid recovery in the wake of the anticipated economic upturn”. Despite this the Gartner report reveals that half of the banks it questioned will not have a budget or programme dedicated to technology in place by 2013.

Transformational and innovative projects could be the catalyst to refocus and rebuild banking and lead to positive growth prospects. Banks must seize the opportunity to bring technology out of the back room and into the boardroom. Innovative technology should be a key component of the banks’ strategy for the new decade, properly funded and resourced it will enable our financial institutions to adapt to what Gartner describes as the “new normal” and thrive in this changed economy.

It's no secret that today's cybercriminals are far more sophisticated than they were just a few years ago.

Instead of labouring away in loose affiliates of code-obsessed hackers, they're key lynchpins in well-funded, highly organised crime gangs. They want to get their hands on your organsation's customer data, not just deface its website. And their motivation? Well, it's not just prestige and notoriety within the hacking fraternity that they're after; it's good, old-fashioned financial gain.

The name that Albert Gonzalez gave to his plan to steal data from the computers of major US retailers says it all: Operation Get Rich or Die Tryin'.

By the time the law finally caught up with Gonzalez, he and his co-conspirators had netted the details of some 170 million individual credit cards, lifting them off systems owned by a host of brand names well-known to US shoppers, including TJ Maxx, Barnes and Noble and OfficeMax.

So I was interested to see predictions from respected IT market research company Forrester Research last week that 2010 could be the year for IT security outsourcing.

But as the report, entitled Twelve Recommendations for your 2010 Information Security Strategy, points out, IT security is an area that few companies will be comfortable to outsource in its entirety. Instead, say Forrester analysts, they'll be looking for a 'co-sourcing' approach.

There are clear reasons for that. "Some companies employ outsourcing vendors because they want to wipe their hands clean of regulatory compliance or hand over a messy environment in the hopes that the outsourcer will be able to fix it," the report observes. "Those are obviously the wrong reasons to outsource."

"First, even if you outsource security, you're still accountable for the protection of that data," it continues. "Second, if you have a messy environment, the outsourcer does not have any incentive to fix it -- and the nightmare of managing that environment will be worse if a third party gets involved."

And, when it comes to IT security, the price of failure is often too high a cost to pay. If my credit card details are stolen from a retailer's servers, I'm going to blame the retailer, not its outsourcing partner. The brand damage will be theirs, whomsoever they choose to point the finger at. Organisations can't pass the buck for IT security. Understanding and addressing any existing security issues is surely a pre-requisite for outsourcing IT.

Santander Asset Management may look to reduce its in-house fund management operation through outsourcing.

According to reports, the firm may look to reduce its in-house fund management operation by focusing its attention on only a handful of European and Latin American countries.

The key countries would be México, Argentina, Chile, Colombia and Puerto Rico.

According to Spanish newspaper Expansion, the firm’s recent appointments, Juan Marin and Javier Alcaraz as heads of its private banking and asset management team, indicate a change of focus.

This could lead to the firm managing products only in the Spanish, Portuguese, UK and Latin American markets whilst outsourcing products in its other markets, the paper claims.

Alcatel-Lucent will provide end-to-end network operations management for Bulgarian telecommunications firm Vivacom in new outsource deal.

The contract, which is set to last five years, will also see around 3,000 of Vivacom employees join Alcatel-Lucent under pre-existing terms and conditions of service, it has been widely reported.

"The selection of Alcatel-Lucent will enable Vivacom to lower its operating expenses and ensures that Vivacom customers will receive services of top quality," said, Andy Williams, president of Alcatel-Lucent's services business.

Alcatel chief executive, Ben Verwaayen, also predicts outsourcing and co-sourcing deals will increase even further in the future, as companies seek to pool expertise as they search for new areas of growth in a bid to save costs.

Over two-thirds of customers feel complaints made to call centres are not being taken seriously enough, with more than half of customers finding call centre employees 'robot-like', research has indicated.

A study from speech search specialist Aurix suggested 70 per cent of complaints were not being heard or taken seriously, with further fundings including 96 per cent of respondents saying they would consider switching to a competitor as a result of their complaint not being taken seriously.

Furthermore, nearly three quarters (74 per cent) said they get frustrated by ‘poor communication’ when dealing with an agent, in the survey of 105 customers online.

Peter Rogers, Aurix chief executive said: "Our survey reinforces the message that customers are significantly more likely to “churn” to a competitor based on a poor experience."

Capgemini has joined forces with Swedish energy company Fortum Distribution to manage its smart metre provisions, in a deal worth €94m.

The ten year contract includes management of Fortum’s existing portfolio of 860,000 smart meters in Sweden, and will provide regular and scheduled meter reading, field services, service desk, management reporting, data centre hosting and application management.

Capgemini will also be responsible for managing subcontractors, such as telecommunications, software providers, meter manufacturers and field service providers in the deal, which will operate globally from countries including Sweden, Poland, India and Finland.

Peter Harris, VP and European leader of Capgemini’s Smart Energy Services said this was a deal of the utmost significance for Capgemini.

"Not only is Fortum an ambitious company, with aspirations to be a leader in the smart energy sector, the Nordic region is also leading Europe in this space with smart meters already deployed in every household in Sweden, and Finland and Norway close behind.

"We welcome the opportunity to harness the strength and collective expertise of our newly formed dedicated Smart Energy Services practice to help the company achieve its goals,” he added.