Industry news

The European Commission has awarded Sword Group, a leading international IT services vendor, a €69 million four year framework contract for the provision of IT services for the Commission’s Seventh Framework Programme (FP7).

The FP7 has succeeded the Commission’s FP6 framework programme and is responsible for allocating €53.2 billion in research, education and innovation grants in the coming seven years. Under the terms of the contract Sword will be responsible for a variety of processes including: Developing customised Information Systems, providing technical support and maintenance and enhancements of existing FP7 IT applications.

This contract sees a significant expansion in the service Sword currently provides to the Commission and the company expects to grow its onsite team of technical resources in the Commission by around 100 percent.

This latest contract is one of a number of recent public sector contract wins for Sword Group.

Satyam Computer Services Limited, the global consulting and information technology services provider, has unveiled its new brand identity, Mahindra Satyam. This comes after Tech Mahindra acquired a 31 percent stake in Satyam.

Speaking on the rebranding initiative, Mr. Anand Mahindra, Vice Chairman & Managing Director of Mahindra Group, commented, "Customer centricity, high standards of corporate governance, and unimpeachable ethics form the cornerstones of the Mahindra Group. This rebranding exercise symbolises an amalgamation of the Mahindra Group's values with Satyam's renowned expertise.”

Vineet Nayyar, Executive Vice Chairman of the Satyam Board, added, "This is a significant milestone towards the recovery of the company. We are optimistic that this new brand will re-energise the organisation and will be well received by all our stakeholders”.

Tata Consultancy Services, the Indian-owned IT services company, is opening a third global delivery centre in Queretaro, Mexico. TCS expects to hire 500 professionals during the current financial year for its new centre.

At the new Global Delivery Centre, TCS will provide advanced IT services, consultancy, test factory, business process outsourcing, contact centre, IT infrastructure solutions, industrial and engineering services, and solutions based on TCS products to existing and potential customers.

Since TCS established operations in Mexico in 2003, the company now serves more than 30 local clients in addition to international clients across various industries, including telecom, finance, banking, manufacture and retail.

During the opening ceremony, Ankur Prakash, director of TCS Mexico, Central America and the Caribbean said, “This new facility reinforces our global leadership position in Mexico and will help underpin the accelerated growth that we want to sustain in this country and region by delivering certainty of outcomes to our customers.” He added: “We remain committed to Mexico and we continue to invest in developing the skills of the IT professionals here and generating high quality employment in the industry, given our ability to retain and nurture talent.”

AVG, the global internet security company that protects home and business computer users against viruses and web threats, has chosen ntl:Telewest Business to deliver a telecoms system for customer support at its new UK headquarters.

ntl:Telewest Business, part of the Virgin Media group, has installed its IP Voice service to help AVG to create a unified communications system quickly and cost-effectively as it continues to expand its operations.

“Our frontline customer support personnel are vital to the continuing growth of our business,” said Michael Foreman, Managing Director, AVG. “ntl:Telewest Business had the appetite to help us meet our relocation timescales and the sophisticated network services we needed to create a better contact centre environment.”

AVG relocated from premises in Barnbygate, Newark, Nottinghamshire to purpose-built offices on the town’s Glenholm Park business park early this year.

BREAKING NEWS… the UK ITO market is going strong. The Bulldog that it is, according to Ovum, has been more resilient to the downturn during the first half of 2009 than previously expected. The report from Ovum titled UK ITO: opportunities in a recession, provides a promising outlook for the United Kingdom.

It seems this conclusion has been reached as a result of the mega ITO deals that have been signed since January 2009. These include deals signed by HP-EDS (Aviva and the Ministry of Defence), BT (National Health Service), CSC and IBM (UK Identity and Passport Service), and Fujitsu Services (Marks & Spencer) which will add over an impressive £2 billion of new ITO spend into the market over the lifetime of the deals – which range between six and ten years.

However, the broader picture of the IT services market in the UK is a little less optimistic. Most suppliers, particularly the tier-2 and tier-3 players, are finding life very tough in the current climate, while those at the top end are clearly benefitting from significant contract wins. That’s always the way isn’t it? Oh to be big…

A quick Round-Up round up of the report is as follows;

• The ten biggest UK ITO providers saw their total contract value of ITO deals signed grow 31 percent.

• The vertical sectors that are actively investing in ITO in the UK in 2009 are the public sector, retail and insurance sectors.

• Public sector is by far the biggest opportunity.

• Polarisation of the UK ITO market is accelerating between large providers and smaller ones. [ed. It is just so unfair!]

There is some food for thought. The large will get larger and the small will get smaller. Sounds like capitalism to me…

Although we would all like to think this increase is a result of the impressive services available through IT outsourcing, it’s fair to assume that a huge motivation for this surge is due to cost effectiveness. Interestingly Gartner has forecasted that prices in all areas of IT services will fall by between five and 20 percent. This may inadvertently cause a steeper rise in ITO service. Gartner predicts that there will be an average fall of 10 percent in the coming year because of the uncertain economic climate and IT budget constraints.

"This fall in prices will occur due to increasing competition in the market between traditional and new providers, as more providers compete aggressively to keep revenue growth on target," Claudio Da Rold, an analyst at Gartner, said in a statement. So it seems it is a tough market out there for IT outsourcing. I suppose there is nothing wrong with a bit of healthy competition.

Another piece of interesting research to flag up this week is from GFT Technologies AG (GFT). In correlation with the Ovum report, it focuses on the economic downturn (what doesn’t?) and reveals that large retail banks expect more innovation from IT in this time of economic crisis. I wonder if more innovation calls for more IT outsourcing… Vendors – are you up for it?!

The research, carried out by Pierre Audoin Consultants (PAC) into the impact of IT in shaping business success in the financial industry, calls for IT to move from an operational to an innovative role within the bank.

Sorry to all those outside the IT industry, we really have been swept along on the ITO wave this week. See you again next week, same time, same place.

Sri Lanka has had its name in the press a great deal over recent years, coming to a grand crescendo in the past few months. The Tamil Tigers conflict has caused a vast amount of opinionated articles to be written, some neutral, but most cast a dark cloud over Sri Lanka’s politics and military activity. However, the 25 year conflict appears to have reached a final conclusion and, while the rest of the world pick through the pieces of the aftermath, Sri Lanka is setting it’s sights on building the country into an outsourcing hub.

In a bid to drum up business and support, Sri Lanka has this week launched its IT and BPO Industry Chamber into the UK market place. SLASSCOM (yes, like NASSCOM but Sri Lankan) has the UK in its sights and has one aim in mind, to attract new investment into Sri Lanka’s BPO and IT industry.

Big name Indian BPO companies have already setup operations in the country. More look set to follow suit as organisations such as Genpact ready themselves to launch a Sri Lankan presence. Tholons, the sourcing advisory company, has ranked Sri Lanka as one of the top 15 emerging outsourcing destinations in the world, so what makes Sri Lanka an appealing destination?

Well for one, they have a huge pool of UK certified accountants, all with cheaper salaries than their domestic counterparts. Government incentives are coming thick and fast in the form of tax breaks, infrastructure investment and other tantalising perks and language skills are also of a high standard.

One particularly unique angle being taken by Sri Lanka is its push towards making the country the destination of choice for SMEs. SLASSCOM believe that SMEs can fare particularly well by using Sri Lankan services and, in a market where many outsourcing destinations look to fight over the scraps from the tables of large cooperates, an SME targeted push may be one of the more innovative and interesting opportunities available to Sri Lanka.

However, the question remains, how much damage will the Tamil Tiger saga have had on promoting Sri Lanka within the UK? India was notoriously in full support of the Sri Lankan government during the conflict and it would be realistic to assume that the conflict did little to the confidence of Indian companies looking to open up Sri Lankan venues.

The UK market, on the other hand, is a completely different beast. Organisations are already concerned about their public image. Offshoring is considered a cardinal sin amongst unions and the public alike, however businesses grit their teeth and continue to offshore, or at least nearshore. However, offshoring to a country that has just emerged from a very high profile and somewhat controversial civil war maybe a step to far.

The only recent example of outsourcing crisis management we have comes from Sri Lanka’s neighbour, India. The terrorist attacks in Mumbai and the Satyam scandal had the potential to cause a devastating drop in confidence amongst offshorers. However, the events seemed to have little impact on the industry at all. India came out relatively unscathed (except of course those directly involved in the Satyam debacle) and it appears to be business as usual.

Now this may fill SLASSCOM with hope, however they must realise that India is a highly mature outsourcing destination that has developed such a lucrative offering that it would be hard to see anything significantly rocking the boat. Sri Lanka on the other hand is a new and evolving outsourcing destination and must position themselves exceptionally well in order to generate sufficient buy-in from UK companies.

Sri Lanka is on course to be a key destination, especially in the finance and accounting market. It is hard to ignore the fact that the likes of HSBC, Aviva and WNS have set up shop and Quattro are looking to expand their Colombo operations. SLASSCOM are making their way over to the UK in the next couple of weeks and sourcingfocus.com will be there to find out a bit more about the destination which has a lot of people in the industry talking.

As always, any question suggestions are welcome.

The legal process outsourcing (LPO) market has taken a giant step forwards today, with the announcement that Anglo-Australian mining company Rio Tinto is to outsource its in-house legal work to India. The company is working with LPO specialists CPA Global to build a team of India-based lawyers in a move that it hopes will cut its annual £60 million legal bill by 20 per cent.

This is a major deal for a number of reasons. For one thing, while it's not uncommon for the legal sector to outsource back-office jobs such as accounting and word processing to India, Rio Tinto is asking CPA to undertake substantive legal work on its behalf, including contract review, drafting, legal research and document review.

But more importantly, in this case, it's the client that is outsourcing, rather than an external law firm. In fact, Rio Tinto, which works with 'magic circle' firms including Linklaters and Baker & McKenzie, is asking these firms to pass on some of the tasks their juniors would normally perform on its behalf to CPA, too.

In an article in The Times today, Richard Susskind, a visiting professor at the Oxford Internet Institute and author of The End of Lawyers?, says the deal will "trigger what is predicted to be an irreversible trend in the legal sector".

"People often assume that outsourcing and the options are applicable only to high-volume, low-value legal work," he writes. "The Rio Tinto deal confirms this is wrong. There is no legal job whose complexity and value elevates it entirely beyond market forces. The reality is that significant parts of even the biggest transactions and disputes are repetitive and routine; and in-house lawyers will be delighted that these can be packaged out to less costly providers."

Rio Tinto estimates that its Indian team, which has operated since May 1, will be seven times cheaper than comparable lawyers in London. It said that it had already saved more than $1 million.

Other large multinationals, which can spend from £10 million to £100 million a year on legal costs, will no doubt be watching the progress of this contract carefully.

Aranxa

Aranxa is a UK based company with a development centre in Sri Lanka. Starting out as a development services provider in the Microsoft, Java and LAMP environments the company has its own highly customisable ERP solution and Content Management Solution.

Eurocenter DDC Ltd

Eurocenter DDC Ltd. is an ISO 9001:2000 and CMMI level -3 certified software engineering organisation of international repute with offices based in Colombo, Sri Lanka and Oslo, Norway. Eurocenter believes in empowering customers to succeed in the Global IT economy by offering a dedicated off-shore delivery model based on ‘Extended Engineering’. The company has been in operation since 2000.

HelloCorp

HelloCorp, established in 2002, is a specialised Business Process Outsourcing (BPO) services provider; and is a fully-owned subsidiary of Expolanka Holdings in Sri Lanka. HelloCorp offers BPO services to leading companies from different parts of the world including U.S.A., U.K., Australia, Singapore and Middle East.

HelloCorp operates two state-of-the-art BPO service delivery location comprising of 120 high-end workstations, in the heart of Colombo, the commercial capital of Sri Lanka. We are currently in the certification stage of ISO 27001 Information Security Standards, consulted by KPMG Ford, Rhodes, Thornton & Co. and we run a fully redundant IT, Telecommunication infrastructure to support its round-the-clock operations.

HelloCorp is the most diversified BPO service providers in Sri Lanka; with a local management team which boasts the highest levels of collective experience in multi-disciplinary international BPO service delivery.

We also manage other BPO services such as outsourced legal secretarial services, remote IT support, back office processing and inbound call handling. We have 18 toll-free numbers which are answered at our centre in English, Japanese, French and German on a 24 X 7 basis.

hSenid Software International

hSenid Software International is a reputed software company founded in 1997, based in Sri Lanka, with clients in Asia, Europe and America. Our core competencies lie within wireless applications and backend Integration

(Middleware) for Telecommunication Companies and Enterprise markets, as well as HRIS applications, Open Source software and Outsourcing.

hSenid offers offshore outsourcing services through several models such as Onsite contract worker/projects, Offshore project and Onsite-offshore project, in order to match with different scenarios and meet the needs of our clients.

Years of experience and domain expertise, increased flexibility on the operational level and a proven track record on outsourcing with a staff of over 280 skilled employees including over 220 engineers worldwide, hSenid offers the best solutions for your business whilst currently carrying out its operations from United States, Singapore, Malaysia, India and Sri Lanka.

JKCS

JKCS is a premier software services provider specializing in outsourcing services & aviation software solutions. We are based in Sri Lanka with offices in UK and UAE . Our service portfolio includes Resourcing (Onsite Consultants), Offshore Development/Support Services, Software projects and Products. We are a company with a special focus on aviation and travel.

Our customers benefit from solutions delivered through our products and outsourcing their software engineering projects to a company that has experience in working with big names (P&O Nedloyd, Emirates Airlines, NTT, SAS etc) but offers continued cost-advantage and flexibility.

OrionCity

OrionCity Pvt Ltd is presently Colombo’s first and only IT-Park. It is located in the heart of Colombo on 13 acres of land. The location is conveniently located near the heart of the city as well 25 km from the Bandaranayke international airport.

Currently Sri Lanka’s IT and BPO industry is growing at a remarkable pace and most of this sectors operations are based primarily in Colombo. However the amount of space required and the infrastructure necessary to support further expansion and growth to even their basic power requirements is not adequate, let alone the more advanced IT services.

Sabre Technologies

Sabre Technologies is an IT Services and Solutions company with operations in Sri Lanka and USA. With experience in servicing a wide and varying clientele in US East Coast, Sabre Technologies are now ready to work with UK & Irish companies as their technology partner to bring their innovations faster to the market at a lower cost to their customers.

Operating on an ISO 9001:2000 certified process framework and backed by one of the strongest companies in Sri Lanka; Sabre Technologies gives its customers the attention it expects from a smaller company and reliability of a large company.

While Sabre Technologies possess a strong skill set across industry standard technologies such as MS .NET and JEE, it also has specialized skills in RFID, NFC, Mobile Application development and building applications for SaaS model.

Sapientia Credit consortium

Sapientia Credit consortium (Pvt) ltd provides a range of integrated business solutions that will streamline and facilitate your core business.

TechSys (Pvt) Ltd.

TechSys (Pvt) Ltd. a fully owned subsidiary of JIT Holdings is Sri Lanka’s pioneer Man¬aged ICT Resource and Solutions Provider, TechSys allows clients to focus on their core business by mobilizing the “right people” with the “right skills” as well as offering robust software solutions based on consistent industry best-practices and standards.

We harness the true potential of technology to enhance the client’s business needs. TechSys delivers flexibility to clients whilst providing increased experience and exposure to the employees on site. Our business advantages are driven through the IT services and solutions we offer. Our resources and solutions serve some of the leading businesses in the government, financial and telecommunication sectors, locally and overseas.

Our customer success stories attest to the core competencies and professionalism we possess in the industry. In addition to providing Managed ICT Resources, TechSys also develops end to end solutions and helps transform a business through integrated technology and infrastructure.

With Business Development expertise at the core of the TechSys process model, the development team is always sensitive to a customer’s needs and requirements. Change, Time and Cost, are the 3 volatile components that are coordinated by the project development and operations team.

Virtusa

Virtusa (NASDAQ : VRTU) is a financially strong and growing global IT services company with over 4,300 consultants and a 13-year history of providing full software lifecycle service offerings to software product firms and enterprise clients in the communications and technology; banking, financial services & insurance; and media & information markets. We use a global delivery model that leverages expertise through our advanced technology centres, delivering quality services and solutions with very competitive pricing. We are one of four strategic suppliers of IT services to British Telecom. Virtusa is operates in UK, USA, Canada, Sri Lanka and India.

Just In Time Group (Pvt.) Limited

Just in Time Group., is a young and dynamic team of industry specific professionals, which derives its strength from the numerous relationships world wide, offering flexible and customized end-to-end solutions, in the field of ICT, backed by the pool of knowledge and expertise available in-house.

Whilst specializing in the IT/Software/ networking arenas the Group has a strong presence in the BPO and e-learning solutions and has also made numerous strategies investments in non –IT related Industry Sectors such as construction, Education, Banking etc.

The management team comprising members with wide and varying experiences in the field of ICT, has in the past, used its strength to actively contribute to Sri Lanka’s IT industry. Through strategic investments and working relationships with other IT resource companies, JIT is also able to support within its framework, multiple platforms and other professional services related to software & network projects as well as hardware supply and support.

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The National Outsourcing Association

invites you to the

Inaugural Sri Lanka Forum

Tuesday 30th June 2009

8.45am - 5.00pm

Park Plaza Riverbank Hotel, 18 Albert Embankment, London, SE1 7TJ

A must attend event for anyone interested in business in Sri Lanka or offshoring in general

	The future belongs to Sri Lanka, not India or Eastern Europe Despite the conflict in the north, Sri Lanka's outsourcing market still grew 23 percent during 2006-2007. With the conflict now over Sri Lanka is primed to be the next offshoring hub for the ITO and BPO markets. With the Colombo Stock Exchange aiming to double its capitalisation to $14 billion in a year and the government expected to almost double the nation’s 2009 growth forecast to five percent because of the increase in business confidence, the change in Sri Lanka is clear. This first of its kind event will examine Sri Lanka as the future leader in the ITO and BPO markets, with esteemed speakers from the Information and Communication Technology Agency of Sri Lanka, the Chartered Institute of Management Accountants, the British Computer Society and Quocirca Ltd discussing the opportunities and implications of offshoring to this key destination. Delegates will get the opportunity to hear end user success stories and thoughts on Sri Lanka's prospects of becoming a leading player in the offshoring stage from HSBC and The History Press who currently operate in Sri Lanka. The event will include: The state of the Sri Lankan economy and how the end of the conflict will positively impact business The outlook for offshoring to Sri Lanka, including grants and benefits for UK companies 10 leading suppliers showcasing what Sri Lanka really has to offer

Agenda

8.45am - Morning seminar

1.00pm - Networking Lunch

From 2.00pm - Informal Networking Meetings

Please note this event is free of charge to attend and delegates are welcome to join at any point during the day

To register, please email nataliem@noa.co.uk or call 0207 292 8686

New European-wide research from GFT Technologies AG (GFT), reveals that large retail banks expect more innovation from IT in this time of economic crisis. The research, carried out by Pierre Audoin Consultants (PAC) into the impact of IT in shaping business success in the financial industry, calls for IT to move from an operational to an innovative role within the bank.

The research reveals that financial institutions across Europe are facing three main issues; the 3Cs of competition, consolidation and cost-efficiencies. Many European countries have been seeing an increase in competition in the financial services sector, as a result of globalisation, and the banking crisis has forced consolidation and M&A throughout Europe. All of this has increased the need for operational cost-efficiencies, often seen as the responsibility IT.

The UK, possibly the European country most affected by the banking crisis, nevertheless has a mature financial services sector and long experience of a competitive market place. Thus the main issue preoccupying respondents were the second two Cs; the impact of consolidation in the sector (35percent) and cost-efficiencies (21 percent), where the tremendous write-downs are probably behind an above average percentage.

In other countries similar themes prevailed:

54 percent of German respondents cited globalisation/internationalisation as an important or very important issue.

33 percent of French banks named increased competition as a major challenge and had an above average response in citing mergers and acquisitions as having a significant impact (38 percent against an average response across Europe of 33 percent)

Spanish banks also cited mergers and acquisitions as a challenge to the sector (46percent) but seemed much less troubled by the need for efficiency increases or cost-reductions, perhaps because they are amongst the most efficient banks in the world?[2]

Graham Underwood, Managing Director, GFT UK commented, “across Europe banks are feeling the impact of the internationalisation coupled with the economic crisis. But, if financial institutions are going to position themselves for the upturn, IT must begin to offer innovation and not just operational solutions”. He continued, “This may mean considering a cross-European approach, to take advantage of Spanish efficiencies and British understanding of a competitive market within a project. Our research shows that it’s time for IT to move out of the back room. Rather than merely being a service provider, IT needs to reposition itself as a consulting partner, offering different strategic solutions at differing levels of budget and scope”.

IT and the business side of banking have also become misaligned according to GFT’s research. The IT sector itself recognises it is guilty of not engaging in strategic decisions and projecting an image of only being able to respond to tactical business issues. IT believes it could offer more to the business; business recognises that it does not fully understand what IT can offer. It sees some limitations in IT, but also realises it could benefit from better use of IT and believes that technology still has great potential to impact the business.

91 percent of business respondents believe there is still potential for IT to have an impact on increasing efficiency

89 percent forsee an impact for IT on new business models and technologies

78 percent see IT as having an effect on the increase in competition.

Graham Underwood explained “financial institutions clearly realise that IT still has huge potential to shape the business and can help fight the challenge of the 3Cs of competition, consolidation and cost-efficiencies as a strategic partner to the business side of the bank. It’s time to unlock the strategic potential of IT; to get the bank at full, innovative strength, ready for the recovery when it comes.”