Industry news

Meggitt have signed an engineering management outsourcing contract with HCL. The contract is worth $50 million and will see HCL providing engineering services for the company’s global operations.

The contract was awarded after a multi-vendor review which ran for several months. Terry Twigger, Meggitt’s chief executive commented: “This strategic initiative will help us respond to the current economic environment while successfully positioning us for future growth.”

Meggitt is a UK headquartered company with a presence in North America, Europe and Asia. It specialises in extreme environment engineering

Bharti Airtel has invited bids to outsource the management of its inter-city optic fibre cable network.

It has been reported that the deal is estimated to be worth up to $1bn over a five-year period.

“We will form a JV and have a stake in the company to which we award this contract,” Bharti’s chief executive officer, Manoj Kohli, told the Economic Times. Kohli also suggested that Bharti hopes to close the deal before the end of this fiscal.

Bharti operates optical fibre cable network of over 100,000 route kilometers. The company is also set to renew its multi-billion network-outsourcing contracts with Ericsson and Nokia Siemens this year.

India continues to be the most popular publishing sourcing destination, according to research carried out by Valuenotes Database.

With 66 per cent of the 237 respondents selecting the offshore giant, the destination pipped other publishing offshore locations to the post.

The US was second favourite followed by the Philippines, UK and China.

“An increasing cost of production and print, coupled with the global economic slowdown, has led to the industry struggling to address the increasing demand of digital content as opposed to print acting as the driving forces behind publishing outsourcing,” said Rakhi Vig, manager of product sales with Valuenotes Database.

“Whilst we have seen publishers trying a variety of approaches - going digital, reducing print publishing, and cutting costs, believes the industry is yet to find that one formula that addresses all its problems.”

The UK and Irish IT services market will see a slow increase in growth this year, according to analysts Ovum. The countries can expect real-term growth of less than two per cent in 2010 and won’t return to pre-recessionary levels until at least 2011.

By the end of the forecast period in 2013 the UK and Irish IT services market is expected to grow to over £32 billion. However, less than a third of this will come from the public sector which is facing big cuts.

However, the IT services market has been through the worst effects of the recession, according to the analysts. But the recovery promises to be a slow ascent rather than a quick bounce-back.

Dr Alexander Simkin, co-author of the forecast, said: “Some IT services vendors are pinning their hopes on a marked uptick in the UK and Ireland in 2010. [But] They need to take a more realistic view: the market will remain challenging for at least 12 months with only modest growth overall during 2010.”

Fast food giant McDonald’s has announced it will extend its existing relationship with IT provider, ACS for an additional five years.

Under the renewed agreement ACS will provide McDonald’s with a range of managed IT services including, desktop support, messaging services, data centre facilities management and network operations.

ACS will also supply McDonald's with an end-to-end application performance monitoring service, enhancing the diagnosis of performance issues across the core technology stacks, support planning and infrastructure readiness.

"Sourcing has been a key component of our strategy to enable and empower our business. The extension of the ACS agreement is a sign of our further commitment to this strategy and to all the benefits we've received from our relationship with the ACS team. We look forward to the continued successes we have achieved with all our sourcing partners,” said Chris Millington, vice president and chief technology officer for McDonald's.

IBM has signed a business process outsourcing (BPO) contract with Convergys to provide customer service and data accuracy services for the upcoming 2010 US census, in a project that will need more than 1,500 agents.

As part of the outsourcing deal, Convergys’ contact centre agents will call citizens who have submitted incomplete or inaccurate census questionnaires to improve data accuracy.

“For government funding to be done fairly, the Bureau of the Census needs to count everyone, count them once, and count them in the right location,” said Jim Boyce, Convergys President, Global Sales and Services.

The Bureau of the Census counts all United States residents every 10 years and will mail or deliver census questionnaires to each household in March 2010.

Marshall Space Flight Center Information Technology Services, a department of the National Aeronautical and Space Administration (NASA), has signed a five-year IT outsourcing contract with CIBER.

Under the NASA Marshall Space Flight Center Information Technology Services contract, CIBER will provide over 60 personnel, generating revenues exceeding $26 million.

In delivering this contract CIBER will join Dynetics, an engineering, scientific and IT solutions provider, who is the prime contractor on this $355 million contract.

BMO Capital Markets has signed a long-term BPO contract with BancTec to manage its invoices and cheques.

As part of the contract BMO Capital Market will direct invoices to BancTec's facilities, where they are scanned, processed and archived for backup.

Additionally, paper cheques will be converted to electronic images to enable clients to manage late payments or missing customer account details more efficiently.

Steve Rogers, managing director and head of U.S. Global Treasury Management, at BMO Capital Markets said: "This strategic relationship with BancTec allows us to provide our clients full treasury management services and meet their working capital and cash flow needs".

BMO’s investment and corporate banking arm, BMO Financial Group, will continue its retail remittance processing services with BancTec.

Telecoms and sourcing projects are often not as efficient as they could be, according to a survey from Forrester Consulting.

The survey found staff shortcuts, short-sighted strategy, and lack of planning, multisourcing and resources to be the main pitfalls for the loss.

According to the survey, “the public sector could potentially save up to 20 per cent on each contract,“ if they were to change the way they approached outsourcing.

“As organisations plan their IT projects for 2010, CIOs need to change the way they approach, plan and source their telecoms in a disciplined and methodical way –dedicating the right skills and adequate time to projects. With attention to detail and best practice, the results will follow,” said Harry McDermott, CEO at telecommunications and network sourcing specialists Hudson & Yorke.

Wipro Technologies is in negotiations with employee representatives as the firm plans up to 85 job cuts across Finland.

Indian IT services exporter, Wipro currently provides the telecom segment with IT services including global firms such as Ericsson and Nokia.

In the past year, the industry sector has been proved somewhat challenging, although the company during its recent third quarter results has said that there has been some demand returning.

“After carefully considering all possible options, the company has decided to enter into a negotiation process with the employees given the challenging industry situation within telecom R&D,” said Wipro Technologies.

The company has however said, that operations in locations of Helsinki, Tampere, Turku and Seinajoki are all expected to continue with virtually no interrupted.