Industry news

Despite the fact that organisations worldwide are deferring capital expenditures, outsourcing continues to be the number one tool chosen to drive organisational change, according to EquaTerra’s 3rd Quarter Pulse.

The report also showed a positive growth in outsourcing, with 40 percent of market sectors citing increased demand levels. Interestingly, the results show that the focus in outsourcing is shifting from longer-term initiatives, aimed at improving end-to-end business processes, toward efforts that deliver quick return on investment (ROI) and/or facilitate short-term business objectives.

A summary of the report can be found at: http://www.equaterra.com/EquaTerraRelease10_28_08.htm

The results of the 5th annual National Outsourcing Association (NOA) Awards (NOAAs) were announced this week at a special ceremony in central London.

Over the last five years, the “NOAAs” have become a landmark in the acceptance of outsourcing as a legitimate business practice and recognise the efforts of companies or people who have shown excellence in the field of outsourcing.

Martyn Hart, chairman of the NOA commented: “The downturn in the economy has made it a very challenging and interesting year for all industries. Despite this, outsourcing has still retained steady growth and has seen significant positive performance. With outsourcing being such a fundamental part of the business landscape we feel it’s critical to raise awareness of how important best practice in all aspects of outsourcing is and these awards have become an essential part of that.”

The 16 categories, which encompass every area of outsourcing, attracted hundreds of applications and were judged by a panel of outsourcing experts. The winners of this year’s NOAAs are as follows:

• BPO Project of the Year sponsored by Steria

WINNER: The Co-operative Financial Services & Capita

• IT Outsourcing Project of the Year sponsored by Financial Sector Technology magazine

WINNER: Lloyds TSB

• Financial Services Outsourcing Project of the Year Sponsored by Homeloan Management Ltd

WINNER: CSC & Zurich Financial Services

• Public Sector Outsourcing Project of the Year sponsored by NelsonHall

WINNER: Capgemini UK & Welsh Assembly Government

• Utilities, High Tech and Telecommunications Outsourcing Project of the Year, sponsored by sourcingfocus.com

WINNER: Luxoft & Aepona

• Offshoring Operation of the Year sponsored by Buffalo Communications

WINNER: Exigent Group Ltd

• Outsourcing Professional of the Year sponsored by Outsource magazine

WINNER: Barry Matthews, Head of ITO, Alsbridge plc

• Outsourcing Service Provider of the Year sponsored by Invest Northern Ireland

WINNER: bss

• Outsourcing Contact Centre of the Year, sponsored by Invest Northern Ireland

WINNER: bss

• Outsourcing Advisor of the Year sponsored by Capita HR & Payroll Services

WINNER: Eversheds Ltd

• Offshoring Destination of the Year sponsored by Cognizant

WINNER: Egypt (ITIDA)

• Outsourcing End User of the Year, sponsored by The OUT group

WINNER: The Co-operative Financial Services & Capita

• Award for Innovation in Outsourcing sponsored by Capgemini

WINNER: VocaLink & The BankGiroCentralen

• Award for Best Practice in Outsourcing, sponsored by ITIDA

WINNER: OPAL & HBOS

• Best Academic Achievement, sponsored by NOA Qualification Pathway

WINNER: Matthew McNeil

• Lifetime Achievement Award, an NOA award

WIINNER: Roger Barber, Senior Consultant, Equaterra

• Special award for consistent excellence for outsourcing practice across all disciplines, an NOA award

WINNER: Infosys

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.”