Industry news

Deloitte, the business advisory organisation, has appointed two UK member firm partners to the leadership team of its life sciences and health care industry group.

Dean Arnold has been appointed health care sector leader and David Jones takes up the role of financial advisory services leader for life sciences & health care.

Bob Go, managing director of the life sciences and health care industry group at Deloitte, said, “With new opportunities regularly presenting themselves within the organisation, I’m delighted that Dean and David have agreed to share their broad industry knowledge and take on these pivotal roles.”

The NOA Awards last week (not attended by yours truly, owing to a bout of lurgy) were by all accounts a glittering success, Congratulations to all of the winners (such as destination of the year Egypt), and also to the nominees. There is clearly a great deal of innovation and good work out there, and that is indeed cause for celebration.

The big question, though, is how will we look back on 2009 at next year's event?

As 2008 draws to a downbeat close, with the UK economy in Q1 of a likely recession, we're facing a year to 18 months of rising unemployment, falling property prices, scarce credit, and business collapses – especially among smaller enterprises and manufacturers.

Some economists believe the worst is yet to come, and few would bet against further banking collapses. At least one international bank, which owns some UK finance names, has been quietly selling off its assets.

It's sometimes said that a recession is an opportunity for the outsourcing industry, in that companies looking to slash costs or source external, non-core expertise will turn to outsourced service providers. But I'd argue that's a challenge, not a cause for backslapping and glee.

Of course, there is good news... on the face of it. Despite the fact organisations worldwide are deferring capital expenditures, outsourcing continues to be the number one tool chosen to drive organisational change, according to EquaTerra’s quarterly Advisor and BPO/ITO Service Provider Pulse Survey.

The findings of the Q3 2008 edition show that demand for outsourcing is outpacing business investments in areas such as hardware, software and other types of more discretionary service.

Growth in outsourcing was positive in Q3, it said, with the focus shifting away from “longer-term initiatives and towards efforts that deliver a quick return on investment (RoI)... help align operating costs to reduced circumstances, and minimise short-term capital outlays”. In other words, projects that slash costs.

Despite this, the economy's losses are not our gains, and we must guard against celebrating.

Face it: most people still see outsourcing as about job losses, not expertise or innovation. In a recession – perhaps even a slump – that means storing up a huge amount of negative equity, if you like, in terms of people's attitude to our industry and we should take a careful step back from celebrating an apparent upturn in our fortunes. Otherwise we will be seen as part of the problem, and not as a long-term solution.

Celebrate innovation, as the NOA Awards did, and not an opportunity to trouser cash as unemployment soars, people default on payments, and businesses can't find the credit they need to survive.

The international healthcare organisation, AstraZeneca, have appointed Cognizant to provide application maintenance over the next five years.

Cognizant will work with AstraZeneca’s global shared services organisation and implement end–to-end application maintenance services.

Richard Williams, global CIO at AstraZeneca, commented, “Our strategic partnerships will enable us to streamline operations efficiency, raise standards and deliver world-class services. The selection of Cognizant will allow us to leverage their global operations to meet the needs of our business.”

Francisco D’Souza, president and CEO of Cognizant, said, “We are pleased to have been selected by AstraZeneca’s global shared services organisation to provide application-related services.”

No financial details have been released.

Whitbread, the UK's largest hotel and restaurant company, has signed a five year contract with Steria, the European IT enabled business services company. The contract, which will be going live in early 2009, will see Steria provide a finance and accounting (F&A) service which is delivered from its offshore locations.

Andy Pellington, Whitbread finance director, said, "This signifies an important step in Whitbread PLC's ongoing organisational review.”

John Torrie, CEO of Steria UK, commented, "We are delighted to be working with Whitbread PLC.”

TCS has reported strong consolidated financial results for the quarter ended September 30, posting a 17.69 % increase in year on year revenues to $3.1 billion in H1. Its Q2 revenues were also impressive, with a 14.74% year on year increase to $1.57 billion.

Mr Ramadorai, TCS CEO and MD, commented: “Our growth has been balanced across markets and verticals with a 9.5 per cent sequential growth in our international business during Q2 and we have improved margins significantly. New opportunities are emerging and there are signs that our services will play a significant part in the global economic recovery. Our acquisition of Citigroup Global Services will provide another driver for growth.”

TCS’s success in the BFSI sector continued to register positive growth despite unprecedented volatility and uncertainty in the global financial markets. The Manufacturing and Retail verticals grew as large transformation deals ramped up, while the Travel, Energy and Media verticals gained traction in new markets. While outsourcing services continued to enjoy strong demand across major markets, traditional application development and maintenance opportunities gained futher prominence in the current economic climate. The engineering services sector continues to experience strong demand across all markets.

Commenting on the reasons behind TCS’s good performance Mr Chandrasekaran, Chief Operating Officer, explained: “Our business model is resilient and we have demonstrated this in Q2 through volume growth, improvement in our offshore leverage, pricing, productivity as well as over 50 new client wins. We have a robust pipeline even in the current environment and our diversified market presence and full services will drive growth in the future.”

EPAM Systems, a leading Central and Eastern European ITO provider, has expanded into Sweden opening an office in Stockholm. The new office will be the first of several offices in Scandinavia providing onshore consulting and support to its Nordics clients, while enhancing EDS’s nenarshore delivery capabilities.

Karl Robb, Executive VP and President of EPAM Europe, commented: "The adoption of offshore and nearshore services is growing in Scandinavia. Adding a solid Scandinavian presence of domain consultants, technical engagement leaders, and project managers, reflects EPAM’s balanced approach to nearshore service delivery. Several members of EPAM’s senior management team have lived and worked in Sweden for many years, as have a handful of our senior nearshore delivery leaders — so EPAM knows the culture, the processes, and the language and believes that this model will provide the ideal alternative to distant Offshoring and organizations heavily biased towards onshore services.”

Telefónica, the parent company of O2 UK, has extended its finance and accounting business process outsourcing (BPO) agreement with Steria until 2014.

According to Steria, the contract extension aims to reduce costs, improve performance and drive innovation within O2's UK operations. The deal will look to secure O2 cost savings on its finance and accounting transaction processing and will be subject to external benchmarking and best practice review.

The deal builds upon an existing five year relationship between the two businesses and is due to be implemented from April next year.

CSC has been awarded part of an Enterprise Development Support Services (EDSS) contract by the Department of Education’s Office of Federal Student Aid. The indefinite-delivery contract has a top-end value of no more than US$300 million for the total life of the deal.

Under the terms of the agreement, CSC will provide the Office of Federal Student Aid with a range of IT services, including application development, software configuration management, transition planning and project management. In addition, contractors will work together by sharing information and collaborating as part of a team. Federal Student Aid’s core mission is to ensure that all eligible individuals can benefit from federally-funded or federally-guaranteed financial assistance for education beyond high school.

“CSC brings proven service-oriented architecture and Federal Student Aid-specific knowledge and capabilities to support the Department of Education efforts to administer the nation’s largest source of student aid,” said Tom Anderson, president of CSC’s North American Public Sector Civil Division. “CSC is pleased to work in this integrated, collaborative team environment to deliver innovative technology-enabled solutions for Federal Student Aid’s partners including schools, lenders, servicers and guaranty agencies to operate fairly, honestly and efficiently.”

ConvaTec, the global medical device company, has signed a US$95 million IT outsourcing contract with EDS.

Under the contract, lasting five-years, EDS will manage ConvaTec’s IT infrastructure and communications network, enabling the company to focus its business growth in the wound therapeutics, critical care and ostomy care markets.

“Our relationship with EDS supports our strategic direction within information management of using external service providers to help speed service delivery and achieve economies of scale,” said William Compton, CIO at ConvaTec. “We look forward to building our relationship with EDS as it creates and provides the technology infrastructure for ConvaTec as a newly formed stand-alone company.”

Under the agreement, EDS will also manage ConvaTec’s information storage and server environments as well as the company’s voice and data communications network that connects its employees worldwide. EDS also will manage ConvaTec’s end-user computing environment, including desktop, service desk and on-site services.

IT managers across the UK see the current economic downturn as an opportunity to demonstrate their value and innovate, according to research.

A study published today by IT services provider Getronics has highlighted that only five percent of the UK’s IT managers are expecting their departments strategy to be less aggressive during the credit crunch.

200 IT managers across the UK were surveyed for their opinions of IT, its future and their current priorities. During a time when industry is tightening budgets and looking to cut costs, almost a quarter of IT managers across the UK are optimistic, expecting their strategy to be more aggressive. Optimism is most rife in the North of England and Scotland, with nearly one third of IT managers feeling positive.

Dave Baldwin, managing director at Getronics UK and Ireland, commented: “It’s been an incredibly turbulent few weeks for British business. But there is a clear opportunity for our community to bring out new ideas. IT managers are quite right to be positive and forward-looking in their strategies, this is a time for them to rise up and shine. Technology will always evolve and companies who truly offer something original, which saves time and demonstrates instant savings, will prosper in a downturn.”

“This downturn shouldn’t be doom and gloom for anyone associated with IT,” said Charles Ward, COO at Intellect. “The current economic situation is very different to the dot com bubble bursting in late 2000. Of course, there will be short-term pressures on costs and investment proposals, but it’s clear that the smart use of IT can support businesses in this uncomfortable economic climate.”

The research also highlighted the continued priority that IT managers are giving to security. Security is considered to be of critical importance to 92 percent of respondents. This figure was higher among the publishing and professional services community and considerably lower (63 percent) within the retail sector.

“A company’s data can be its biggest asset and protecting it has never been more important,” said Baldwin. “There is going to be a bigger fight to keep customers now that the effects of the credit crunch are making both people and business cut back. Both will reassess how secure and stable they are financially, physically and virtually, and security is vital for this re-assurance. Customers need to feel that their personal details are safe in the hands of every organisation. If they don’t feel it is, they consider moving elsewhere.”