Industry news

Dell and Perot Systems have entered a definitive agreement for Dell to acquire Perot Systems in a transaction valued at approximately $3.9 billion. Terms of the agreement were approved early this week by the boards of directors of both companies.

Dell’s customer base spans large corporations, government agencies, health-care providers, educational institutions, and small and medium enterprises (SME). The company’s existing services include expertise in infrastructure consulting and software-as-a-service.

Perot Systems provides services including, applications, technology, infrastructure, business processes and consulting. The company has clients in health-care, government and other commercial segments, from SMEs to the largest global institutions. Perot Systems has a large and growing base of customers and service-delivery capabilities in North America; Europe, the Middle East and Africa; and Asia.

Over the past four quarters Dell and Perot Systems had a combined $16 billion in enterprise-hardware and IT-services revenue, with about $8 billion from enhanced services and support.

The transaction, which is subject to customary government approvals and the satisfaction of other customary conditions, is expected to close in Dell’s November-January fiscal quarter.

Once the acquisition is complete, Perot Systems will become Dell’s services unit and be led from Plano by Peter Altabef, the current Perot Systems chief executive officer. At the same time, Dell directors are expected to consider Ross Perot Jr., Perot Systems’ chairman of the board, for appointment to the Dell board. Based on current estimates, the transaction is expected to be accretive to Dell’s GAAP earnings in its fiscal 2012.

Ross Perot Jr. commented: “This transaction represents a great opportunity for our company and our associates. When my father founded Perot Systems he envisioned a global information-technology leader. The new, larger Dell builds on that promise and its own successes by taking Perot Systems’ expertise to more customers than ever.”

Convergys Corporation, a global leader in relationship management, announced it is expanding its U.S. home agent program to the United Kingdom. Convergys currently has home agents in 29 U.S. states and six Canadian Provinces in North America.

Convergys has begun seeking UK clients to support the home agent rollout and is targeting clients who need UK-based agents or support in multiple languages.

The home agents receive calls ranging from billing and informational service to technical assistance from customers of Convergys clients in a variety of industries. The initiative is a response to the growing need for workers to have more flexible working hours and the option to work from home. Employees can work full time or part time from their homes in urban, suburban, or rural areas, depending on their Internet connectivity. Work-at-home also contributes towards the governments 2010 Carbon Reduction Commitment as such programmes can reduce energy consumption and contribute to a greener environment by avoiding a potentially long commute to work each day.

Brad Krinhop, the vice president of operations for the global home agent program, commented: “...the elimination of a daily commute will allow them (workers) to save money on fuel, auto maintenance, parking, clothing, and meals. The program provides an ideal opportunity for students facing high tuition costs, stay-at-home parents needing a second income to help pay bills, or retirees who wish to augment their retirement savings.”

The hiring process is also remote in its nature. It can be completed from an individual’s home desktop from application through training and employment. Candidates will still require a quiet place to work inside their home, a PC that meets Convergys’ minimum standards, cable or DSL high-speed Internet access, and a noise-cancelling headset.

The Bonduelle group, an international processor of vegetable produce, has renewed the contract to manage the bulk of its computer infrastructure with Steria. The European IT services company has managed the contract since 2004 and will now continue to manage the central computer system and decentralised servers, as well as the global Help Desk, office IT and support functions for the group.

The Bonduelle information system requires just-in-time management of each step in the supply chain, from reception of the raw materials, to taking of orders, adjustment of production and delivery to the final customer, in compliance with current standards for preserving products. Steria will continue to manage the systems that coordinate these processes and ensures their stability.

Steria will deliver its service from the group's on-shore and near-shore centres, making it possible to share resources to improve cost control. The management and technical offices set up by Steria are located in Lille, close to the Bonduelle IT Department. The local teams which are mainly present at the headquarters of Bonduelle in Villeneuve d'Ascq (Nord), also cover the factories located throughout France and Benelux. Shared administration of servers is carried out in Sophia-Antipolis, at Steria's shared administration centre. The help desk and management services are provided by Steria's platform in Katowice in Poland.

BHP Limited, major shareholders in a Chilean mining project has signed an outsourcing agreement with CSC. CSC will take responsibility for the management of information systems and service infrastructure for Escondida, the world’s largest producing copper mine.

The agreement, worth US $19 million, is an extension of CSC’s existing outsourcing agreement with BHP Limited.

Last May, CSC signed a seven-year, US $470 million agreement with BHP to provide a full range of information technology (IT) services. The extension runs concurrently with the existing outsourcing agreement.

“Escondida views itself as a leader in the use of technology in the copper industry,” added Bruce Turner, president of Minera Escondida Limitada. “I believe that with CSC we have selected the right partner to enhance and strengthen our leadership position in this critical support area.”

As part of the agreement, 28 employees from MEL have transferred to CSC. CSC is providing the full range of IT services, including applications, midrange, networks, desktop, helpdesk and communications support to MEL.

Energy Future Holdings Corp (EFH), a Texas-based energy company, has entered into a five year IT infrastructure management agreement with HCL Technologies Ltd. (HCL), an IT services provider.

HCL will be responsible for managing EFH's IT infrastructure, comprising of a host of services including data centres and voice networks. HCL's service desk will also provide desk-side support to EFH end users.

Linda Jojo, SVP and CIO for Energy Future Holdings, commented, "We are delighted to extend our relationship to HCL with this new engagement. We look forward to a long and mutually beneficial partnership.”

R Srikrishna, Senior Vice President & Head of Global Sales at HCL's Infrastructure Services Division, added, "This engagement re-iterates our focus on the Texas region where we continue to invest aggressively”.

sourcingfocus.com will be bringing you the latest news from the NOA Offshoring Day. We will be sending out regular Twitter updates and blogging live from the event. Please keep a look out for the NOA Offshoring Day's own hashtag #noaoff

London stock market-listed property investors, Raven Russia, has signed a £1 million outsourced IT management services contract with IT infrastructure provider Fifosys.

Under the terms of the agreement Fifosys will provide secure IT infrastructure management across all of Raven’s geographies. Fifosys will work to centralise all of the company’s data in the UK to reduce vulnerability while still providing secure, high speed and immediate access to all of its senior executives and management.

Mark Sinclair, Chief Financial Officer of Raven Russia comments, “With all of our developments in Eastern Europe we were clear from the outset that we would keep our data within the UK. Fifosys understood our requirements immediately and were very quick to come up with an effective IT solution to suit our business needs whilst meeting all the various risk mitigations that we require. As a result Fifosys designed our highly secure networks to be accessible from anywhere in the world but so that they can be instantly locked down if circumstances dictate.”

Vince Cable, the liberal democrat’s treasury spokesperson, has shown a lack of understanding the public sector IT market in his demands that several major programmes should be scrapped, according to a leading analyst in the field.

In a television interview with the BBC today Vince Cable laid out his party’s plans for cost cutting across the public sector especially focusing on public sector IT. Stephen Roberts, principal analyst at public sector IT specialist Kable, says the Liberal Democrat shadow chancellor has greatly exaggerated the scope for savings and failed to explain how some would be made.

"It's hard to see how he has arrived at some of these projections, and he seems to have fallen into tilting at the usual set of government IT windmills without questioning whether they are appropriate targets," Roberts says.

Among Cable's proposals to reduce public sector spending - made in his report Tackling the Fiscal Crisis - are that the government should drop the national identity card, the ContactPoint children's database, and the "super database" in the Interception Modernisation Programme. He also calls for sharp cuts in England's NHS IT programme, claiming it has been costed at £18bn-£20bn.

Roberts says that several of the figures quoted are unreliable, and the assertions attached are often vague. "The costs of the Interception Modernisation Programme are generally estimated at £2bn, not £6bn. And the communications providers will be expected to hold data themselves: Clegg's "super database" is no more real than Cameron's "NHS supercomputer". The estimates of £20bn each for the NHS IT Programme and for ID cards are out of step with all government and independent forecasts. "

Cable also claims that a move towards using more open source technology in UK government would save up to £500m per year. Roberts says that public bodies are already able to choose open source for many applications, and that the savings figure is implausible.

"He's suggesting that costs for software could be reduced by almost half. There's a surprising amount of open source software in government already, and there isn't an open source alternative for much of the proprietary software used, so that's hugely ambitious."

Now it’s the turn of the smaller ISV to reap the benefits of offshore outsourcing. Tapping cheaper labour overseas isn't just for large companies anymore as small and mid-sized businesses are increasingly taking up outsourcing and offshoring. If you are looking for a highly flexible workforce that is readily trained in the current broad spectrum of multi discipline technologies, then outsourcing can provide a valuable resource.

A good starting point to finding the right offshore outsourcing partner is to talk to your peer groups, your customers and other technology partners to get a feel for their experience both good and bad. A potential outsourcing partner needs to be able to demonstrate real knowledge and experience. It is therefore, absolutely crucial that you conduct a thorough due diligence. Interrogate their level of experience in the market place and ask if any of their staff have been onshore before and to site previous projects and customers. Examine their human resource department to look at their staff turnover and ascertain what their cultural appreciation is like, particularly if they should need to come onshore to a customer site in the latter stages of a project.

As an ISV, you may well be considering two distinct types of engagement:

• Development of your product

• Development work on a customer project.

Time, effort, quality and resulting costs are ‘unknowns’ to start with and need to be seriously evaluated.

Ideally, start with a low value, low input project to test the company’s ability and the processes. Before embarking on a project it is essential that you set out clear areas of responsibility, understand where their services start and end. Find out if they are a truly customer focused organisation and are committed to quality. Ideally both the ISV and the outsourcing partner should be jointly responsible for the risk so agree up front on how you both want to share the value of the project.

I found that two of the main issues were quality and consistency across all disciplines in order to maintain the required standard of work. It is important to have well defined and easy to follow processes that are very clearly documented. You also need to step up to the management challenges and be prepared to closely supervise a project’s progress. Don’t sit back and expect your outsourcing partner to guess what is needed.

When you generate an outsourced team, try to keep them on the project as continuity for your customer is paramount. Visit the offshore teams regularly to make them feel part of your organisation. When you tread carefully there is no reason why you can’t achieve great value from offshore outsourcing and gain the benefits that have traditionally been the domain of the big boys.

Symetra Financial, a leading US provider of employee benefits, has extended its IT outsourcing agreement with ACS.

ACS has provided a full range of IT infrastructure services including data centre, help desk, and voice and data networks for Symetra since 2004. ACS will also continue to provide output and content management services, as well as a variety of cross-functional services including security, asset management and disaster recovery.

"ACS enables us to provide high quality IT services at predictable costs," said Troy Olson-Blair, chief information officer for Symetra Financial. "Extending our long-standing relationship allows us to maintain IT industry best practices, incorporate continuous technological innovations and increase service capabilities to our customers."

Under the renewed contract, ACS will continue to provide full IT infrastructure services, as well as utilise new technological innovations including the ACS Management Platform, an offering that provides best-in-class service management capabilities to clients.