Industry news

Banco Santander has chosen Accenture to support the bank’s global operations in a two year deal worth 100m Euros.

In the first phase of the operation, Accenture will provide systems integration services to support Santander’s acquisition of Banco Real in Brazil; Royal Bank of Scotland’s European consumer finance unit; and the integration of Abbey National and Alliance & Leicester (A&L) into Santander Group in the United Kingdom. As part of its engagement in the United Kingdom, Accenture is also overseeing change management.

Mr. José Mª Fuster, general technology and operations manager of Grupo Santander, commented, “Thanks to this agreement, we can significantly strengthen our execution capabilities to continue implementing our strategic systems vision, which has made us the most efficient global bank in the world.”

Affiliated Computer Services, the US-based BP/ITO provider, has acquired Caribbean-based BPO provider, e-Services Group International, for US $85 million, including the assumption of the company’s existing liabilities.

The acquisition nets ACS and its clients an additional 4,000 English-speaking staff based in Jamaica and St. Lucia. The company also hopes the deal will enhance ACS’s ability to handle complex business functions from a location convenient to the Americas and Europe.

Tom Blodgett, Executive VP and Group President of ACS Business Process Solutions, “The veteran management and talented employees of e-Services will continue to provide high quality service to e-Services’ global customers. The acquisition also allows ACS to expand in a location that gives clients access to cost competitive customer care and BPO services.”

Thalys International, a major European rail company, has extended its contract with Atos Worldline, part of Atos Origin Group, to continue the development of its multi-channel customer services system, the Cybelys loyalty program. Under the terms of the agreement Atos will work to extend ticketless ticketing to all Thalys rail customers.

As global prime contractor for the project, Atos Worldline developed and now operates the Cybelys prgramme. The ticketless system works by employing dedicated wireless PDA and anti-fraud technologies. Conductors are equipped with on-train PDAs to check passenger identity and travel data against information in the reservations system. The paperless ticketing information is transmitted via contact or contactless identity cards and partner cards.

The ticketless system enables travel to any Thalys destination without a paper ticket. Travelers also receive email and SMS alerts in the event of disruptions in the train service schedule. The system enables Thalys International to address emerging sustainable development issues, while increasing customer satisfaction.

“Following the tremendous success of our first paperless tickets, we decided to partner again with Atos Worldline to take this strategic initiative to a new level,” commented Laurent Lenoir of Thalys. “The solutions developed by Atos Worldline further sharpen the image of Thalys as an innovator and trailblazer.”

Introduced in 2003, the Cybelys loyalty program supported trials of the first paperless rail transport service in Europe.

Prices of IT services in outsourcing are anticipated to shrink by 5 percent to 20 percent during 2009 and 2010, according to Gartner. The analyst house said IT outsourcing prices are likely to decrease during the next two years due to the uncertain economic climate, IT budget constraints and general market consciousness.

Gartner said that 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, while ensuring margins. Furthermore, cost-focused buying behaviors in the current economic phase will be a key factor behind the reductions for IT infrastructure outsourcing services from 2009 to 2010, with a great variability based on each single deal.

“Regardless of the relative strength of outsourcing during a recession, many clients are reporting intense discussion with their vendors and renegotiation of contracts for Terms and Conditions (T&Cs) Service Level Agreements (SLAs), fees, volumes and low-cost offshore delivery locations,” said Claudio Da Rold, vice president and distinguished analyst at Gartner. “These items are under scrutiny to identify satisfactory concessions to further reduce the cost of services on a case-by-case basis.”

Mr. Da Rold added that Indian offshore providers have been coming under significant pressure for pricing reductions due to the Mumbai terrorist attack, the scandal at Satyam, rupee exchange rate fluctuations, and continued wage inflation and attrition levels.

North Somerset Council has selected IT consultancy, Kainos, to implement its electronic document and records management system (EDRMS). The first project is underway in Adult Social Services & Housing and expected to go live in the next few months.

Kainos was awarded the contract following a market tender which attracted a number of supplier responses. The deal was sealed after North Somerset Council held reference discussions with Havant Council, another user of Kainos’ services.

Barrimore England-Davis, EDRM Project Manager at North Somerset Council commented, “Kainos’s track record implementing EDRM solutions in other councils was very comforting to North Somerset. Havant spoke very highly of their experience.”

North Somerset has already made significant headway tackling the EDRM demands of its Adult Social Services and Housing department. This department relies entirely on paper files but a recent white paper that indicated the benefits of handling electronic rather than paper files, provided the necessary impetus to help this department to ‘go electronic’. The EDRM system links closely with the department’s patient care system and all new correspondence coming into the department will be scanned, indexed and stored electronically.

Barrimore explains, “EDRM will make a great difference to the speed and accuracy with which we find information. The cost of maintaining and supporting documents in filing cabinets is simply staggering when you account for floor space, management, retrieval, heat, light & storage. These are some of the very tangible savings that we expect to realise through the broader implementation of electronic document and records management technology across departments.”

Barrimore and the implementation team have their sights set on a number of departments that will benefit from EDRM technology across the council.

According to KPMG, the recession is expected to prompt a fresh "rush" of employers seeking to outsource services to new locations such as Sofia and Cairo rather than to traditional centres such as Bangalore and Chennai.

But what about the UK? It is incredible to see that companies are off-shoring their outsourced services while the UK is suffering from a declining economy, high unemployment and a lack of jobs. As in the US, the UK government should provide a tax incentive for companies that near-shore their outsourced services rather than sending money and jobs abroad.

Outsourcing has always and continues to provide an appropriate means of reducing cost and employing expert or specialist skills whilst allowing an organisation to concentrate on its core business. But the cost/benefit analysis of offshore versus near-shore outsourcing has changed dramatically in recent years, and in particular since the onset of the global financial crisis.

Now, a business may receive the same or a similar quote from an outsourced services provider in India and one in Inverness. This is due to rising inflation in other countries and the cost of a local liaison to front-end the agreement where there is a disparity in time zones, language and business practices.

Even where offshore outsourcing wins on price, this is rendered insignificant by the risks to communication and security that are involved. In the last two years, undersea cables have been damaged at least twice in shipping or geological incidents, resulting in significant degradation to communications and the time-critical transfer of important data.

And, businesses take for granted the regulation and trustworthiness of the UK business market by comparison with most other parts of the world. The UK is a very compliant society whereas large scale fraud has been widely publicised in the US through the escapades of Enron and recently Bernard Madoff. Astonishingly, the Indian commercial world has been rocked by the recent $1bn fraud at Satyam – India’s fourth largest IT outsourcing company.

We must come back to the much publicised quote, “British jobs for British workers”. Every £ spent in the UK rolls through the economy generating tax revenues at every turn. Every £ spent on an Indian Graduate is a loss to the UK exchequer and most importantly is a waste of the “Education, Education, Education” we have all been paying for since 1997. If businesses can reduce costs to stay in business, whilst keeping that work within the UK economy, my argument is that ministers at the Department of Business, Enterprise & Regulatory Reform (BERR) need to wake up to the notion of a commission or incentive and provide some direction and encouragement before it is too late.

News that up to a quarter of all government databases may be illegal comes as little surprise.

A report by the Joseph Rowntree Reform Trust claims that as many as 25% of all Whitehall databases are probably in contravention of European privacy, human rights and data protection laws and should either be scrapped or redesigned.

The Trust funds political campaigns in the UK that promote democratic reforms and social justice.

It considered 46 Whitehall databases and found that a quarter of them are “almost certainly illegal” under human rights or data protection laws.

“The collection and sharing of sensitive personal data may be disproportionate, or done without our consent, or without a proper legal basis; or there may be other major privacy or operational problems,” explained the report.

Those singled out in this category are:

• The National DNA database, which holds approximately four million records, including those of nearly 40,000 children, and has already been condemned by the European Court of Human Rights. The Trust says that over half a million of its records are of innocent people who have not been convicted or cautioned for any offence and who have no pending legal proceedings against them;

• The National Identity Register, which will store biographical information, biometric data and administrative data linked to the use of an ID card;

• ContactPoint, the national index of all children in England. It will hold biographical and contact information for each child and record their relationship with public services, including a note on whether any sensitive service is working with the child;

• the NHS Detailed Care Record, which will hold GP and hospital records in remote servers controlled by the government, but to which many care providers can add their own comments, “wikipedia-style”, says the report, without proper control or accountability;

• The Secondary Uses Service, which holds summaries of hospital and other treatment in a central system to support NHS administration and research;

• The electronic Common Assessment Framework, which holds an assessment of a child’s welfare needs. It can include sensitive and subjective information, and is too widely disseminated;

• ONSET, a Home Office system that gathers information from many sources and seeks – extraordinarily – to predict which children will offend in the future. This suggests an emerging programme for a highly interventionist state;

• The Audit Commission’s National Fraud Initiative, which collects sensitive information from many different sources and, under the Serious and Organised Crime Act 2007, is absolved from any breaches of confidentiality;

• The communications database and other aspects of the Interception Modernisation Programme, which will hold everyone’s communication traffic data such as itemised phone bills, email headers and mobile phone location history;

• The Prüm Framework, which allows law enforcement information to be shared between EU member states without proper data protection.

But perhaps the most interesting of the Whitehall programmes to be condemned by the Trust is the Department for Work and Pensions' cross-departmental data sharing programme, which involves sharing large amounts of personal information between government departments and the private sector.

Just listing these initiatives in the light of the inexorable 'mission creep' of such projects (either by design or incompetence) is enough to give serious pause for thought.

Factor in the increased sharing of data across borough and county borders in the name of citizen relationship management and you can begin to see the big picture: an imminent future in which the state can intervene in people's everyday and private lives to an extraordinary degree, all in the name of efficiency and security.

Twenty-nine other databases are listed as being problematic and potentially illegal. The Trust recommends that these be scaled back and should offer people increased opportunities to opt out.

The findings suggest that the widespread extension of surveillance and data-gathering about British citizens may be exploiting the Internet's ability to move more swiftly than legislation, and a culture of datasharing by stealth is being allowed to become the norm.

However you look at it, the Trust is suggesting that a large majority of the government's IT programme is, or may be, illegal and of questionable value.

If “the innocent have nothing to fear”, as legend has it, then what of those innocent people whose data is incorrect, corrupt, or has been tampered with, stolen, or lost? Or retained on these databases despite there being no apparent reason for them being there?

The outsourcing industry will increasingly be called in to underpin these programmes. We should be wary of where all this is heading; the possible legal and social implications of the relentless, multibillion-pound pursuit of modernity, and the more mundane repercussions of a future government putting a red pen through this wasteful and dangerous campaign.

SABMiller has awarded a five year, $120m deal to BT, who will deliver network and telecommunications services for the brewing giant, across the Latin American and European regions.

BT will provide and manage the company’s communications and networked IT Services needs in Latin America as well as global connectivity services into North America, South Africa, and Hong Kong.

SABMiller is one of the world’s largest brewers with brewing interests and distribution agreements across six continents.

The deal was concluded by BT Business with support from BT Global Services. Bill Murphy, Managing Director, BT Business, said, “SABMiller is a growing global brand that reaches the lives of hundreds of millions of people worldwide. BT aims to help SABMiller achieve its goals by ensuring that the company’s communications are amongst the best in the world.”

Good news for our readers this week; firstly it’s Friday (it comes every week but is always a joy) and secondly the best weather is yet to come – yes more sun is forecast for the UK this weekend! Those based elsewhere we wish you good weather too!

But before we continue into the sun-soaked weekend and lazy disposition that such days inspire, its time for our very important and ever informative weekly news round-up.

News that Steria and the Belgian Police have united to introduce a new fingerprint identification system will please those worried about the UK’s Big Brother society - at least we’re not alone in our government’s surveillance exploits.

Orwellian complaints aside the new system does sound pretty good and is likely to make catching the bad guys a whole lot easier. According to a statement the system will provide “more precise results with a shorter response time and be prepared for future additional functionality. It will also offer increased search precision, significantly improved response times and a palm print search option.”

Steria’s Benelux division has joined hands with the Belgian Police Department’s Legal Identification Division to implement the system. Steria will apply the technology required for the capture and transmission of finger and palm prints and traces, and will also be in charge of all necessary integration services.

Now onto other news; WNS, a global BPO provider, has appointed Rick Sturge as Deputy Managing Director, Europe. If this isn’t a sign of WNS growth intentions in the UK and rest of Europe I don’t know what is.

Before this move Rick was Head of Strategic Development for the Chartered Institute of Management Accountants (CIMA). He has over 25 years experience in ‘business development, finance and transformation, outsourcing and finance and accounting’ [sic] – wow that is a mouthful. Not to blow his trumpet too much, he has also previously held progressively responsible executive roles with Serco, PricewaterhouseCoopers and Accenture.

Rick will have the small task of driving WNS’s business development efforts, particularly in the travel and leisure and finance and accounting sectors, leveraging his cross-industry experience.

News from our neighbours across the pond reports that Air Canada has extended two outsourcing contracts with Unisys Corporation for hosting & integration (HIS) and cargo portal services (CPS).

The contracts will last until 2015 and Unisys will continue to host Air Canada on its Logistics Management System at its data center in Minneapolis. The CPS cargo system, which Air Canada will use until 2011, is an Internet portal for the air cargo industry.

The system brings together a range of carriers and forwarders in a neutral portal reducing transaction costs and allowing cross-market competition. Seems logical to us.

The final big story of the week comes from our beloved Orange UK. It’s decided to outsource the operation of its entire mobile network in the UK. Nokia Siemens Networks will take up the reigns for Orange UK’s 15.9 million mobile subscribers and responsibility for 230 of its staff.

Few details of Orange’s business reasons were released. But with UK mobile saturation at an all time high perhaps it’s prudent to slash overheads when new revenue streams are few and far between. Only time will tell the fates of the nation’s canniest mobile operators – watch with interest.

On that note, I bid you farewell for another week. Now feel free to commence that lazy disposition and more importantly for those in the UK - enjoy the sun this weekend.

Over the past few weeks we have had a recurrence of deplorable violent activity in Northern Ireland. A policeman and two soldiers have been murdered by the Real IRA and many are concerned that this will restart the ‘troubles’ Irish people have long fought to end. Public feeling against renewed violence was palpable as more than 2000 people took to the streets in Northern Ireland holding ‘No going back!’ placards and making a stand for peace.

However, despite the uproar from the general public, potential investors may be concerned that the near-shoring hub has trouble bubbling under the surface and this could deter organisations from taking advantage of the outsourcing opportunities Northern Ireland has to offer. These opportunities have led to a significant surge in investment, something that Northern Ireland has been relishing over recent years. As recently as the beginning of the month gem, a contact centre provider based in Belfast, announced a £19.5m expansion plan which will see another 900 seats made available for an ever increasing client list. Geraldine Fusciardi, Sales and Marketing Director of gem, further promoted the image of Northern Ireland and commented, “We are extremely busy right now as businesses are looking to use contact centres with similar cultural touchpoints.”

This is all welcoming news, especially as the global economy is experiencing a period of financial instability. The last thing Northern Ireland needed was an obstacle in its progress to becoming one of the most attractive destinations for near shore outsourcing. The recent ‘Black Book of Outsourcing’ produced by Brown and Wilson had a section devoted to establishing the riskiest and safest locations to outsource to. This outsourcing handbook had Belfast in the safest 25 destinations to outsource to. This is certainly an acknowledgement of the benefit that peace has brought to the country and in turn highlights how Northern Ireland has become an attractive business area. However the Black Book was published before the recent activity and as we all know, bad news has the potential to severely knock confidence in a location, you only have to look to India for an example of how quickly confidence can be rocked within the outsourcing world.

The Mumbai attacks and the resignation of the CEO of Satyam over a £1bn fraud may have contributed to Mumbai being placed in the 25 riskiest destinations to outsource to. We have certainly heard mumblings of a slowing down in the Indian BPO market and many people are wondering whether emerging destinations such as South Africa and Eastern Europe are going to chip away at the Indian stronghold as a result of a confidence downturn. Does Northern Ireland risk having its end users lose confidence and consider other destinations first?

Speaking to Sourcingfocus.com Bill Montgomery, Director for International Investment at Invest Northern Ireland, commented on the impact the recent events will have on Northern Irish businesses, ‘These are utterly terrible events that have occurred, however in relation to business we are not seeing any adverse effect. Of course questions have been asked however there have been no investment cancellations or potential investment trips halted. Mr Montgomery goes on to say that the events have been ‘isolated and targeted incidents that everyone is against’.

Indeed it appears that it has been pretty much back to business as usual. After putting their U.S. tour on hold briefly, to deal with the events, Martin McGuiness and Peter Robinson met Barack Obama this week in Washington and will presumably continue to promote Northern Ireland as a foreign investment destination.

So concern of a possible reduction in business interest in Northern Ireland may be premature. As Bill Montgomery highlighted, Northern Ireland has done extremely well and the proposition they offer is too strong to ignore. Potential investors should, like with any investment, carry out a thorough risk analysis of the potential locations they are considering. However, they should not be overly concerned about a sudden turn for the worse in Northern Irish violence. The country is united against falling back into the awful times that characterised the late 60’s and continued for nearly 30 years. The area has evolved and despite the awful actions of a few extremists, Northern Ireland looks set for continued growth continue to grow as the country continues offer one of the most competitive near-shore outsourcing models in the industry.