Industry news

Orange is outsourcing its mobile network operations in the UK to Nokia Siemens Networks. Under the contract, Nokia Siemens Networks will manage, expand and provide maintenance services for the Orange UK 2G/3G mobile network for the next five years. The deal aims to deliver improved quality of service and enhanced coverage for Orange UK’s 15.9 million mobile subscribers, while driving operational efficiency. Orange will continue to own and strategically plan its network.

Nokia Siemens Networks is also finalising arrangements for a UK sub-contractor to provide first line maintenance services. As part of the outsourcing arrangement, close to 470 staff will transfer from Orange UK with approximately 230 joining Nokia Siemens Networks and the remainder being transferred to a first line maintenance sub-contractor.

Pete Marsden, VP of IT & Networks for Orange UK, commented, “Nokia Siemens Networks has a proven global expertise in managing large, multi-technology networks, and our partnership with the company is a win-win for all involved.” Mr Marsden also commented on the future of the Orange employees being transferred, “Nokia Siemens Networks will provide our transferring employees with strong career paths within global organizations recognised as telecommunications industry leaders.”

No financial details were released.

The NHS has launched ‘The Cancer Commissioning Tool’ (CCT) developed by IT services company, Concentra. The CCT will help NHS managers, specialists in public health, senior staff within networks and clinicians develop better cancer-fighting strategies at a local level, based on national data and standards.

The new system brings together information that had previously only been available in piecemeal fashion to give the health service a much more comprehensive view of cancer care across England. The system will also help create greater NHS efficiency by allowing important activities like checking costs of new medicines to be done just once.

Richard Hancox, Associate Director of Commissioning at the National Cancer Action Team, commented, “I am convinced a lot of positive results will flow from the CCT. I also foresee that the success of the CCT can be built upon in other disease areas in the NHS.”

The Cancer Commissioning Toolkit works by helping local cancer networks obtain the fullest picture on all the most promising new cancer treatments, benchmark their performance and share vital information with other parts of the NHS. The main users are managers in Primary Care Trusts, who will use it to better plan their local cancer treatment strategies, working to national guidelines as outlined in the NHS’ Cancer Reform Strategy, with the ongoing aim of improving the UK’s cancer treatment record.

Air Canada has extended two outsourcing contracts with Unisys Corporation for hosting & integration services (HIS) and cargo portal services (CPS).

Under the terms of the HIS agreement, lasting until 2015, 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.

Lise-Marie Turpin, MD of Air Canada Cargo, commented, “Our relationship with Unisys has worked very well for us. As well as providing our enterprise system as a hosted service, we also collaborate on eBooking, Cargo 2000 shipment quality services and integration with specialist third-party software. In today’s tight economic environment, we found value in reviewing and extending our agreements and are confident that Unisys commitment in the ongoing evolution of their products will provide our employees with best of breed solutions for the years to come,”

The contract extensions were both signed in December 2008.

WNS, a global BPO provider, has appointed Rick Sturge as Deputy Managing Director, Europe.

Rik will be responsible for driving the firm’s business development efforts, particularly in the travel and leisure and finance and accounting sectors, leveraging his cross-industry experience and will be working closely with Eric Selvadurai, Managing Director, Europe.

Rik, a Chartered Accountant, has over 25 years of diverse and varied experience in business development, finance and transformation, outsourcing and finance and accounting. Most recently, Sturge was Head, Strategic Development for the Chartered Institute of Management Accountants (CIMA), focused on fostering and nurturing business relationships with companies and governments around the world. Earlier in his career, he held progressively responsible executive roles with Serco, PricewaterhouseCoopers and Accenture.

"WNS’s strong reputation in the BPO industry and the opportunity to be a key player in the company’s growth were key factors in my decision to join. I look forward to bringing WNS’s resources and capabilities to clients around the globe, working with Eric and the team,” said Sturge.

To an interesting roundtable lunch with Microsoft integrator and consultancy Avanade, the joint venture in which Accenture has a majority stake.

The meeting was to launch the UK results of a recent worldwide cloud computing survey, for which Avanade spoke to 500 C-level executives – only a small number of whom were in the UK, however.

While the research suggests many businesses believe cloud computing can have a positive impact on the bottom line, it found that most have no plans to integrate it into the enterprise in the next 12 months. It's a viable business model, said Avanade, but security concerns override the benefits in many respondents' eyes.

The meeting was interesting for a number of reasons: first, because defining cloud computing seemed to be a challenge. They eventually agreed that it meant software as a service (SaaS), infrastructure as a service, and application development as a service: all hosted externally and delivered over the internet.

There was nervous laughter when I shared a comment from a US cloud computing CEO that the term was invented to give large consultancies something to sell to global enterprises. Renting out your MIPs is hardly a new idea... but I digress.

From Avanade's report, however, most of the executives surveyed equated the cloud primarily with SaaS. Of the companies using cloud computing, 60% said it was within business applications, such as CRM; 40% for HR services; 33% for wikis and other collaborative tools; 33% for webmail, and 20% for social media and networking.

But in terms of the overall response, by a five-to-one ratio executives said they trust bespoke, on-premise systems more due to perceived security risks and a loss of control over data and systems when using hosted services.

Among early adopters, however, cloud computing investments are increasing after reported upfront cost reductions and improved responsiveness.

With the UK being a longstanding outsourcing market for potential providers, Avanade also found present and future implications for outsourcing. Avanade's Kamran Ikram said that the UK is lagging behind the US in cloud uptake partly because of existing long-term, large scale outsourcing deals.

Introducing cloud models internally can disintermediate the benefits of tradtional outsourcing and vice versa, suggested Avanade – which implies that it's 'either, or' for many customers. And it's not just a matter of introducing cloud models when existing contracts run out, as customers still have to drive the payback from those earlier investments.

If you ignore the view that the term was invented to baffle people so companies like Accenture can explain it to you, cloud computing is also a threat to traditional consultancy. "Who has the skill to intermediate between cloud providers?” asked one Avanade executive. Indeed. And this from a consultancy!

In the UK, organisations are more risk-averse than in the US, the survey found. Forty-eight percent of UK organisations said they are keen to adopt new technologies that will save them money, but 65% said they tend to wait until technologies are tried and tested before adopting them – against two-thirds of US companies who describe themselves as early adopters.

That said, 78% of UK respondents said they are familiar with cloud computing concepts, compared with 61% worldwide.

Breaking out the UK findings, the report reveals a mixed picture of IT decision-making in the recession: existing internal IT systems take too long to upgrade, said 42% of respondents, with 45% describing them as too expensive.

However, of the companies that solely use existing bespoke or on-premise IT systems, 75% said that the downturn has not spurred their interest in cloud computing models, with the remaining 25% saying it had actively decreased their interest.

So you can all sleep easy. For now.

News that Wall Street has enjoyed stock advances for three straight days has made headline news from Baltimore to Beijing, buoyed by Citigroup's announcement that it made a profit for two consecutive months this year.

Only in a distorted media culture where news is valued by the speed at which it moves rather than interrogated and analysed for its truth is such a story received as the first green shoots of spring and economic recovery.

The truth is that the US economy is in fundamental trouble. Unlike in the UK where the government has at least taken a stake in the banking institutions whose toxic 'assets' it is insuring, the US public sector has simply taken on vast amounts of poisonous debt to allow American banks to turn a quick profit.

In the medium term, this means the prospect of Wall Street's cancer being cut out, perhaps, but transplanted instead into US public services where it will remain for years to come.

I have been counting my lucky stars recently. Not that lawyers are ever renowned as in need of sympathy, but I can only feel sorry for some of my profession in the worst hit areas of corporate, real estate and banking who are perhaps somewhat underutilised at present. In contrast, for us in the technology and sourcing world, things continue pretty much as normal.

Part of this is of course driven by outsourcing, given the payoff which it promises to provide in terms of cost reductions. But, for every new outsourcing project which I have been asked to advise on in recent months, there has been at least one re-negotiation of an existing deal.

One might assume that the re-negotiation process is not that different from the original contract negotiation discussions between the parties. But in fact, the dynamic is very different. After all, in the original discussions the customer will usually have the option to simply not sign the contract, which invariably means that it has the whip hand in the negotiations. With an existing deal, however, the supplier has the ability to simply say "no" and to insist upon the existing terms as originally drawn and agreed, no matter how unpalatable that might appear to the customer.

Some of the supplier community (and particularly the larger suppliers) will often take this approach, or at least ask the customer, "what's in it for me?" (e.g. in terms of an extension of the term, additional service scope or other deal sweeteners). The customer can end up feeling that it was held to ransom in order to secure the more short term financial advantages which its re-negotiation efforts were focussed on achieving (at least in the current markets). The process ends up being somewhat counterproductive.

That said, on a couple of recent projects I have been working on, it has actually been the supplier who could justifiably claim to have come away from the re-negotiation table feeling as if they had been somewhat "mugged". In one case, the customer threatened complete contract termination (with only minimal compensation payments) and a "blacklisting" on future contract work if the supplier did not agree to both a cost reduction and an adjustment to the service level regime. Other customers have been a little less blunt about it, but have been equally Don Corleone-like in looking to make the suppliers an offer they cannot refuse, at least if they ever wanted to win any more work from the client in future.

The truth appears to be that in difficult markets, the larger (and financially stable) clients continue to hold all of the aces, and can in extreme cases simply look to tear up existing contracts and start to negotiate afresh, however reluctant the suppliers may be to go along with such a process. I am driven to wonder quite how far down this road we'll end up, as the recession continues to elongate and even deepen, and what implications it may have for the future relationships and negotiations between such customers and suppliers.

The Reader's Digest Association (RDA) has signed a seven-year IT outsourcing deal with HCL Technologies. The value of the agreement is estimated to be approximately US $350 million.

Under the terms of the agreement, HCL will be responsible for supporting infrastructure and development across RDA’s Oracle applications, ‘Open Technologies’ and its mainframe. Services will include infrastructure support for network, security, storage, end user computing and data centers (DC) including disaster recovery. HCL is also tasked with optimising and consolidating existing applications and updating necessary legacy IT to modernize RDA's IT environment.

The global engagement will be delivered from HCL's centres in Poland, US and India and supported by an onsite support network. As part of the agreement number of employees will also transfer to HCL.

Al Perruzza, Senior Vice President for Global Operations, IT and Business Redesign for RDA, commented, "IT is a key enabler to our business. We expect that HCL will bring down cost of operations significantly, while improving services and bringing cutting-edge technology and capabilities to transform our IT functionality and service. We look forward to a long relationship of mutual trust with them."

The Belgian Police Department's Legal Identification Division has chosen Steria’s Benelux division to implement an innovative fingerprint identification system.

Steria will act as "prime contractor" to implement the system which is based on Cogent Systems' "Automated Palm Print and Fingerprint Identification System" (APFIS). Steria will implement 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.

The new system will replace an earlier version which was installed 10 years ago. The new system will provide more precise results with a shorter response time and be prepared for future additional functionality. The system will also offer increased search precision, significantly improved response times and a palm print search option.

"For Steria, this is a strategic project in systems integration and security. Our expertise in biometric systems integration unquestionably played an essential role in the final phase of evaluation. This project illustrates our ability to offer our public- and private-sector customers innovative solutions delivered by our biometrics expertise centre," says Steria Benelux CEO René Luyckx.

Long gone are the days when clean air targets and reducing environmental impacts were viewed as the concerns of flower power, tree hugging liberals. The buzz words of 2008/2009 have most definitely been international climate change. Every company seems to be conveying their allegiance with controlled carbon emissions and Corporate Social Responsibility targets. It has become cool to care.

This week saw climate change move further up the scale with NASA partnering with Cisco to develop an online global monitoring platform called the “Planetary Skin”. This platform will capture, collect, analyse and report data on environmental conditions all around the world.

Everyone can get in on the act as the data will be made available for the general public, governments and businesses to measure, report and verify environmental data. The aim is to allow access in near-real-time to help detect and adapt to global climate change. Take a look at the NASA and Cisco develop climate change monitoring platform article to hear what the director of NASA’s Ames Research Centre had to say about the partnership.

Another unlikely collaboration has come in the form of the University of Cambridge and Infosys. They have signed an agreement to undertake research in engineering, management and business, architecture and pharmaceuticals (that should keep them busy).

Both the Vice-Chancellor of the University of Cambridge and the Chairman of the Board at Infosys Technologies have been quoted raving about the partnership and its benefits. Though nothing as yet has been said about what they hope to get out of the research…

And finally, after the controversial launch of 2009’s Outsourcing Black Book last week, this week the Ukrainian Hi-Tech Initiative has launched research entitled the “Central and Eastern Europe IT Outsourcing Review 2008”. This time Central and Eastern Europe will be under the spotlight with the research looking at the state of the IT outsourcing market there.

The report will cover market volume, number of professionals, number of IT companies providing outsourcing services and individual labour costs to end users. This research will also look at the expert opinions about the impact of economic recession on global outsourcing development, particularly on the development of outsourcing in CEE region. All round, a pretty informative study in an area largely lacking relevant data.

See you next week, same time, same place.