Industry news

Wipro Technologies and Citigroup Inc (Citi), the leading global financial services company, have reached an agreement for Wipro to acquire Citi Technology Services Ltd., the India-based captive provider of information technology services and solutions to Citi entities worldwide, for an all cash consideration of approximately US$127 million.

As part of the transaction, Wipro and Citi will sign a Master Services Agreement for the delivery of technology infrastructure services and application development and maintenance services for a period of six years.

Based in Mumbai and Chennai, Citi Technology Services provides IT services to Citi and its affiliates around the world. Citi Technology Services has grown tremendously since its

inception in 2005, and today has approximately 1,650 employees trained in Citi processes and technologies, servicing Citi businesses in more than 32 countries. Citi Technology Services’ revenues are expected to be approximately $80 million in CY2008. Apart from strong competencies in TIS, Citi Technology Services has expertise in ADM for

Cards, Capital Markets and Corporate Banking.

Don Callahan, Chief Administrative Officer, Citi said , “This sale was the result of a thorough process to ensure we were partnering with the right company for our businesses and our clients . Wipro, with its wide range of services, extensive experience and broad global presence can play a significant role in meeting Citi’s objectives of productivity improvement, while our Citi Technology Services employees will join a larger information technology organization with additional third party growth opportunities. This transaction is consistent with our efforts to improve our operating leverage while we focus on our core banking competencies.”

Tata Consultancy Services has completed the acquisition of Citigroup Global Services Limited (CGSL), the India-based BPO captive. TCS paid US $512 million in an all-cash deal.

In addition to the sale, Citigroup has signed an agreement for TCS to provide process outsourcing services to Citigroup and its affiliates for a total of US$ 2.5 billion over a period of 9.5 years.

N.Chandrasekaran, COO and Executive Director, TCS, said: “This acquisition gives us the ability to offer a end-to-end, domain-led third-party solution for business operations to our large financial services clients. We will also work to create platforms for the future and integrate our strong domain expertise in operations along with our suite of products for the financial services sector.”

Sourcingfocus.com's first year has been an unprecedented year, with a perfect storm of an economic crisis, nationalised banks in the US and UK, and industry bailouts worldwide. Here's hoping that we are over the worst of the crisis itself – although the after-effects of rising unemployment and a further quarter or two of recession seem inevitable.

The outsourcing industry will doubtless be asked to help our business partners and customers, but we ourselves are not immune from the crisis.

But despite all the gloom, here's hoping that you have a merry, gloom-busting Christmas and that we all have a more prosperous, peaceful and optimistic 2009. The sourcingfocus.com blog will return the week beginning 5th January. Until then...

The Defense Information Systems Agency (DISA) and the Defense Information Technology Contracting Organization have appointed Unisys to maintain mission-critical applications for US defense organisations such as the Defense Logistics Agency, the Defense Finance and Accounting Service and the Air Force. DISA’s systems will be maintained from their management centre in Ogden, Utah. The contract is valued at approximately $15 million and will run for five years.

Jim Geiger, managing partner of Department of Defense, Unisys Federal Systems, said, “These support services will assist DISA in providing the secure and reliable IT services essential to the mission of the Department of Defense”.

CSC announced that it has acquired Log.Sec Corporation, a privately owned information technology and logistics engineering firm. Log.Sec will become part of CSC's Defense Division.

James W. Sheaffer, president of CSC's North American public sector divison, said, "The Log.Sec acquisition reinforces our growth strategy of acquiring select companies that complement our three-pronged strategy of growing our core business, investing in high-growth market segments and pursuing select state business."

Financial details were not disclosed.

English Heritage has awarded Atos Origin an outsourcing contract to provide IT support at over 120 of its Heritage sites and offices across the UK from Tintagel Castle in Cornwall to Hadrian's Wall in Northumberland. This new contract renews a contract first signed in 2002.

Under the terms of the agreement, worth £ 7 million over 2 years, Atos Origin will manage desktop, data centre, network, customer support centre, disaster recovery and application support services as well as providing training, maintenance and service management for English Heritage, the UK government organisation responsible for protecting the historic environment in England. This includes historic buildings, monuments, battlefields and archaeological remains.

Anne Ware, vice president for Public Sector at Atos, commented: “Since working with English Heritage we have completed a number of projects including relocation to a new head office in London, desktop and server technical refreshes. Building on this success we will continue to work closely together to ensure service excellence across its entire organisation and to improve their business processes.”

HCL Technologies has completed the acquisition of UK based consulting Axon Group for £441.1 million. In a statement, CEO Vineet Nayar said: “The merger of Axon and HCL SAP practice present a greater opportunity to bring new capabilities to the market with a global delivery model providing full life cycle suite of services.

HCL Axon said that they have revenues of USD 600 million and 4,500 SAP Consultants. The company added that Axon CEO, Steve Cardell, will be the President of HCL Axon.

AstraZeneca, one of the world's leading pharmaceutical companies, has awarded Infosys Technologies a five year, multi-million dollar global sourcing deal including elements of IT and BPO.

Under the agreement, Infosys will deliver end-to-end application maintenance services to AstraZeneca’s global operations in areas such as manufacturing, supply chain, finance, human resources and other corporate functions. The deal is a part of AstraZeneca’s transformation initiative to accelerate innovation and bring products to market faster, and will help improve its operational efficiency significantly.

"We chose Infosys as a strategic partner for its understanding of the rapidly shifting dynamics in the pharmaceutical industry," said Richard Williams, Global CIO at AstraZeneca. "The combination of Infosys’ outsourcing expertise, technology leadership and proven record in rationalizing and standardizing business process were all contributing factors to our decision. We have confidence in Infosys’ ability to deliver a flexible operating model to address our changing business needs more efficiently.

CSC has announced the acquisition of Object Builder Software (OBS), a Bulgarian IT services firm. In a statement, CSC said the acquisition would ‘expand CSC’s global delivery capabilities and complement the company’s network of lower-cost centres in Eastern Europe’.

The addition of OBS expands CSC’s financial services and high technology capabilities in Europe, offering clients a stable workforce with low turnover and competitive hourly rates. Under the terms of the agreement, all OBS employees are expected to transfer to CSC, providing software development and systems integration support to CSC clients in five languages, including English, French, German, Russian and Bulgarian. The majority of OBS employees are located in Sofia, Bulgaria, with the balance in Varna.

“Bulgaria’s reputation as a low-cost Eastern European country strategically positioned to serve both Western and Eastern Europe enables OBS to operate as a nearshore delivery center for CSC’s European clients,” said Mary Jo Morris, president of CSC’s World Sourcing Services organization. “This new Bulgarian centre complements our existing European sourcing capabilities in Spain, Lithuania and the Czech Republic, and adds substantial capability in three key industry sectors: insurance, healthcare and high technology.”

Financial terms of the deal were not disclosed.

The French Air Force has chosen Atos Origin to develop and implement a major personnel management system known as Orchestra. The project entails the design, development and deployment of a single unified SAP HR management system covering all HR and payroll applications for French Air Force military personnel. The four-year contract is valued at €9 million.

As part of a broader inter-ministerial move to revamp France’s public sector human resources information systems, the Orchestra project addresses the Air Force’s HR needs in terms of payroll management, manpower and career planning, consolidation of the restructured human resources function and support for the Air Force transformation process. Its objective is to rationalise, automate and simplify management tasks by the second half of 2009, while ensuring a seamless transition from three standalone applications to a centralised human resources information system, independent of any changes in the Air Force’s organisational structure.

As prime contractor for the project, which involves extensive organisational and functional content, Atos Origin is supporting the French Air Force in its comprehensive quality and resource pooling process. Deliverables cover all phases from development to operational deployment of the system. The systems integration project impacts more than 70,000 Air Force personnel (active and reserve, 2nd section general officers) at 40 air bases and Air Force units stationed in mainland France and French overseas dependencies.

“In addition to complying with the NCI’s functional and technical foundations and seamlessly integrating the Orchestra NCI solution in a global SAP environment, Atos Origin offered us a solution tailored to our project management environment,” said Lieutenant Colonel Roland Cauvin, Deputy Director of the Orchestra project. “This includes a mirror organisation and joint task groups of HR and technical experts. What’s more, the deep integration and collaboration across Atos Origin and Air Force teams is guaranteeing optimal sharing of critical issues and effective knowledge transfer.”