Industry news

A few months, I was fortunate enough to meet up with Rick Perry, head of international network planning at telecomms company Cable & Wireless. What I learned from Rick surprised me: that the laying of an undersea fibre-optic cable isn't just an impressive feat of engineering and financing, but also a process fraught with political tension, intrigue and high drama.

After all, he pointed out, an undersea cable can, in most cases, only be laid if a consortium of competing telecomms operators can set aside ferocious commercial rivalries and work together to fund, install and maintain it. At the same time, they must often work with the leaders of developing nations where political risk and regulatory complexity are a fact of life.

"A lot of games are played. Getting all the parties involved to agree on a single paragraph in the necessary documentation can take a whole day. Just getting a consortium together in the first place is a task in itself," Rick told me. (For more on our conversation, see my profile of Rick, which appeared in the Financial Times in June).

Rick's words to me on the huge problems involved in delivering fibre-optics to developing regions of the world came to mind again when I visited Nairobi in late June, as the guest of Kencall, Kenya's first international call centre company.

Kenya has long been impeded in the outsourcing industry by poor communications links to the rest of the world. At present, companies such as Kencall are forced to rely on satellite systems. While Kencall chief executive Nicholas Nesbitt insisted to me that call quality is pretty good over satellite when we met at the company's Nairobi headquarters, he also acknowledged that this is a turn-off for many prospective clients in the US and UK. "We've had companies walk away from us when they've heard we use satellite," he said.

As soon as Kencall can take advantage of fibre-optics, it will leap at the opportunity. "That will take the call-quality issue off the table entirely, enabling Kencall to compete on a level playing field with any other outsourcing provider in the world," Nick said.

Kencall is already preparing to make the jump, because two fibre-optic cable systems - the East Africa Martime System (TEAMS) and SEACOM systems - could be about to transform Kenya lives on an almost unprecedented scale.

In fact, the SEACOM system was 'switched on' today (for more on this, see news story, 'East Africa goes fibre optic'). Both systems, however, have faced considerable challenges along the way and will likely face more in future. When I met Jean-Louis Parmentier, chief operating officer of Seacom (a consortium of private investors) at dinner in Nairobi last month, he related to me how the company's cable ships had recently been attacked by Somali pirates (also reported in this Team Seacom blog entry).

A fierce rivalry already exists between his organisation and that running TEAMS (a joint venture between the Kenyan government, Abu Dhabi-based mobile operator Etisalat, and a handful of local telecoms and internet companies), which has led to much public sniping in the past year (although a future price war between the two would clearly be good news for Kenya corporates and consumers).

And it will still be months before either cable system is fully operational and connected to Kenya's national fibre infrastructure, which itself needs serious upgrading work.

With those tasks out of the way, however, the impact of lower-cost, higher bandwidth connectivity will be enormous - not just for companies like Kencall and the people they employ, but for all Kenyans.

President Mwai Kibaki has ordered a radical revamp of the government's ICT infrastructure, with the goal of making government departments more accessible to the population via the Internet. By contrast, his predecessor, Daniel Arup Moi, banned computers from government offices, I was told by Dr Bitange Ndemo, permanent secretary of the Kenyan Ministry of Information and Communications.

Above all, more reliable, low-cost connectivity will also allow a far greater proportion of the Kenyan population to get online, delivering incalculable social and economic benefits, and it is to be hoped, bridging the 'digital divide' that currently exists between them and their contemporaries in more prosperous nations.

The City of Irvine, California has signed a five year IT services contract extension with Affiliated Computer Services (ACS).

The agreement, worth US $18 million, will see ACS continue to manage IT operations and provide a broad range of services, including operation and support of the city's data centre, helpdesk and desktop support, applications support, and network management. In addition, ACS will provide consulting services to help the city, including its public safety department, align IT operations with business objectives.

"ACS has been a trusted partner to the City of Irvine for nearly 15 years, providing the city with excellent support and continued innovation," said Jan Stinger, information technology administrator for the City of Irvine. "ACS' expertise provides the city with a greater ability to focus our resources on serving our citizens."

The U.S. Defense Information Systems Agency (DISA) has awarded EDS potential five-year, US$34 million contract renewal, which will see EDS continue to support DISA’s Multinational Information Sharing (MNIS) program.

Under this contract, EDS, through its teaming partner, Harris Information Technology Corporation (HITS), will provide systems engineering and technical assistance to the MNIS Program Management Office.

Since 2004, EDS and HITS has supported the MNIS program management office’s day-to-day operations by providing life cycle system engineering and integration support services.

Hutchison Whampoa's 3G mobile telecoms business, part of the 3 Group, has extended its ITO contract with Perot Systems Corporation for three more years. Perot Systems has supplied Hutchison Whampoa with IT services for three years prior to the extension.

Under the extended agreement, Perot Systems will continue to provide ongoing maintenance and management of key IT business applications, including knowledge management and solutions in service activation support for the seven 3G telecommunication operators of Hutchison Whampoa's 3 Group.

The project will be driven extensively from Perot Systems' Bucharest, Romania facility as part of the company's global delivery network of applications, infrastructure and consulting solutions.

Financial terms of the contract have not been disclosed.

United Launch Alliance (ULA), the spacecraft launch services initiative, has awarded CSC, a new managed IT services contract. CSC will provide a consolidated service center and desktop and application services for the ULA enterprise. The agreement supports ULA's mission of engineering, manufacturing and launching rockets for the U.S. government and commercial organisations. The three-year agreement has an estimated value of US$9 million.

CSC's relationship with ULA, a joint venture between Lockheed Martin and Boeing, began in December 2006. CSC currently provides personnel support for ULA's help desk, desktop, server, network and application organisations.

Carmine Orsini, Vice President of ULA's Information Technology and Chief Information Officer, commented, "ULA looks forward to working with CSC in the journey to support our company-wide ethic called Perfect Product Delivery. Our primary goal is to optimize the processes and products we deliver throughout the IT value stream using continuous improvements techniques based on customer value."

The Honolulu based Rehabilitation Hospital of the Pacific (REHAB) has signed a five-year, $10 million, ITO contract with Affiliated Computer Services (ACS). Since 2002, ACS has been providing a full range of IT application and technology infrastructure services. REHAB is the only acute care medical rehabilitation organisation serving both Hawaii and the Pacific.

"ACS enables us to provide high quality IT services at predictable costs," said Clair Jones, chief executive officer for REHAB. "Extending our long-standing relationship with ACS strengthens our ability to provide outstanding care and service to the community. Our plans include installation of a new Electronic Medical Record system and the ACS team will be an integral part of this key initiative."

Under the renewed contract, ACS will continue to provide full IT services, including mid-range and server management, network management, applications management, service desk, and desktop management. ACS will also continue functioning in the CIO role for REHAB.

Call Centre Focus, the UK’s leading publication for the call centre industry, and the National Outsourcing Association has combined forces to bring the readers of CCF a thought leading supplement. Written by senior figures within the NOA and other industry experts the supplement will focus on the current issues and developments facing the outsourcing industry. CCF is providing the opportunity for a limited number of organisations to align themselves with this thought leading supplement. For more information on the opportunities that exist, please contact Mark Arneill at mark.arneill@ubm.com

Trintech Group Plc, a provider of integrated financial governance, risk management and compliance software solutions, has announced a strategic partnership with WNS (Holdings) Limited, the global BPO provider. Under the terms of the agreement, WNS will offer its customers financial governance applications, implementation services and technical support in order to tighten controls and increase ROI from financial operations.

"We are delighted that WNS has decided to offer Trintech's solutions to its client base. Our combined expertise in helping finance departments achieve operational excellence through automation process control and data-driven insight will result in real benefits for WNS customers," said John Harte, General Manager of Trintech's GRC Division.

I recently spent a very interesting four days in Kenya, visiting Nairobi-based Kencall, the country's first international call centre. During this time, I had plenty of opportunity to discuss with company executives how Kencall is already addressing the needs of major clients in the UK and US and their plans to capture an even greater slice of the market in future, as rising prices (and, to their minds, falling quality) in other geographies pushes such organisations to consider other options for offshoring. 

But what struck me most forcibly during my visit was the commitment, drive and enthusiasm demonstrated by a largely younger generation of workers to this vision of Kenya as a future hub for offshore outsourcing. 

In short, it's an opportunity for them to build careers - and better lives for themselves and their families. Kenyan universities produce some 50,000 graduates per year, but only 5,000 of these are typically able to find work at home, with many forced to look overseas for employment, Dr Bitange Ndemo, permanent secretary of the Kenyan Ministry of Information and Communications told me. 

So it's hardly surprising that, when a local company emerges that offers good salaries, regular incentives and a solid framework for career progression, as Kencall does, there's no shortage of candidates. "Few Kenyan companies do as much as Kencall to promote employees internally," says Pauline Kamande, Kencall's company's head of training, who joined five years ago as a first-level agent.

And Kenya's younger generation of workers, many of whom have studied or worked internationally, have much to offer international clients, with their clear accents and strong work ethic, points out Nicholas Nesbitt, Kencall chief executive.

But I was also struck by a palpable sense of how successive Kenyan governments have let the country's young people down. Following Kenya's disputed election at the end of 2007, a coalition government, cobbled together in February 2008 at the insistence of former UN Secretary General Kofi Annan, has limped along uncomfortably, hampered by internecine struggles, continued corruption and widespread inefficiency.

Geopolitical uncertainty is never good news for domestic outsourcing ambitions, and it seems clear that many would-be clients may hold back from taking a chance on Kenya until they can be sure that the fragile coalition will hold and that the next general election, due in 2012, will pass off more peacefully.

But from talking to the people who work at Kencall, it's clear that young, middle-class professionals have high hopes that things are changing in Kenya. I was told by several that Kenyan people are more insistent on good customer service these days and less inclined to view bribes and corruption as an unpalatable fact of life, whether they are dealing with businesses or their own government. And the outsourcing business is seen as a platform from which they can showcase their skills and talents in the business arena. "We have a natural ability to deal politely with even the most difficult customers," Kamende told me proudly.

Of course, it still comes as a surprise to many international customers to discover that they are speaking to a call centre agent in Kenya, rather than some of the more usual outsourcing locations. The agents at Kencall regularly get questions about the animals that foreign visitors have seen on safaris ("Do you have lions in your back yard?") and about the prospects of well-known Kenyan runners in forthcoming international sporting events, according to Paula Nyambura, Kencall's head of customer experience.

Above all, it's clear to me from my visit to Nairobi that Kenya has much to offer international outsourcing customers. Political stability remains the one vital ingredient that must be added to the mix if the next generation is to achieve its full potential. But there's no doubt to my mind that this potential is huge.

My thanks to everyone I spoke to at Kencall, who not only showed me incredible generosity and hospitality but also gave me a better insight into how powerful a catalyst for change outsourcing might be for day-to-day life for many in Kenya.

In my next blog, I will write about how the Kenyan government is investing heavily in the country's telecommunications infrastructure, with a view to making its outsourcing vision a reality.

There have been a number of occasions recently when I have been speaking to CIOs that they have said to me they don’t always think they are the most popular person in the senior management team in an organisation. I have had other CIOs say to me “I don’t really think I am properly understood” and I have been dismissing this as a little bit of paranoia from the CIO community.

Then last week I came across a CFO Research report entitled ‘Are CFOs from Mars and CIOs from Venus?’. I had a read of the management summary and I would like to share with you a couple of the key findings from this report which perhaps show that CIOs are not paranoid after all and it may in fact be true.

The first summary was that there is a perception gap between CIOs and CFOs that hinders a shared agenda. Questions about leadership, the ability to collaborate and long term strategic thinking and planning illicit marked differences in the way senior finance and IT managers see each other. Overall CIOs express a much better opinion of the CFO than vice versa. 6 in 10 CIOs rate their CFOs as excellent whereas only 3 in 10 CFOs rate their CIOs as highly.

The second key finding is when invited to state their biggest frustrations with CIOs, many CFOs concur that a better understanding of financial reality would help CIOs deliver more value - perhaps this is code for them speaking in too much of a technical language. But, better communication tops the wish list from most CIOs who also cite more frequent communication and even forced communication as the only ways to speak with a CFO.

So there does seem to be problem here: it does appear that CIOs and CFOs in a meeting room probably speak different languages. To frame respective priorities in a common language, research confirms that CIOs and CFOs must lay better ground work, but how? How can you make sure that there is that common language?

In my view the way to overcome this problem is to make sure you rotate the business experts into IT and give the IT employees opportunities in the business - get into each other’s shoes, share each other’s jobs and devise a common language.

So would anybody from Venus or Mars like to comment?