Industry news

  • 16 Jul 2008 12:00 AM | Anonymous

    The Brønnøysund Register Centre, a trade and industry body in Norway, has awarded Accenture a new contract to continue development and operation of Altinn, Norway’s citizen-centric online portal.

    The new phase of development, known as Altinn II, includes a three-year contract valued at approximately $44.4 m (230 million Norwegian Kroner) covering application development and continued management of the e-government portal, with the option for three one-year extensions.

    Under the new contract, Accenture will provide a new phase of application development and management of Altinn encompassing implementation of a simplified user interface, collaboration services, an advanced security solution, and operation of the company’s portal service.

    The Altinn portal service was initiated by the Norwegian government in 2002 to simplify the interaction between government, businesses and citizens by providing a single electronic channel for written communications with the public sector, enabling businesses and citizens to communicate with multiple government agencies through a single point of submission.

    Roy Grønli, managing director of Accenture’s Public Service practice in Norway, said: “The Altinn II solution adopts a business and citizen-centric, value driven approach that will continue to transform the way the Norwegian government interacts with both businesses and citizens. We look forward to building on our successful relationship with the Brønnøysund Register Centre with the development and implementation of Altinn II”.

    The Altinn portal became fully operational in the spring of 2004.

  • 16 Jul 2008 12:00 AM | Anonymous

    Convergys Corporation, a global leader in relationship management services, has appointed of Jim Goetz as Chief Information Officer. Goetz will report to Earl Shanks, Convergys’ Chief Financial Officer.

    As part of the role, Goetz will be responsible for strategic planning and global implementation of the information systems and technology function for Convergys including programming, systems development, database management, computer operations, telecommunications, and outsourcing. Goetz will also interact with clients as the strategic leader for Convergys’ technology solutions from an internal and outsourcing perspective.

  • 16 Jul 2008 12:00 AM | Anonymous

    Analyst house Pierre Audoin Consultants (PAC)'s latest figures for the UK telecom industry show outsourcing expenditure surpassing that of project services for the first time: outsourcing accounted for £860 million and project services £841 million in 2007. This trend was driven in particular by EDS's applications deal with Vodafone that saw the Texan firm jump from fourth to first largest IT outsourcer to the UK telecom market.

    The UK telecom sector has historically been slow to outsource IT compared to other sectors such as financial services. However, Vodafone's landmark applications management deal with EDS and IBM in November 2006 set the tone for change. The BT group was already actively outsourcing IT, but 2007 saw a step up in pace. It outsourced infrastructure management to Computacenter in March 07, F&A processes to Xansa in August 07 and HR processes to Accenture in September 07. Other examples include T-Mobile's infrastructure management deal with T-Systems in November 07 and THUS's application management deal with Nortel in May 07.

    This growing appetite for outsourcing results from the saturated UK telecom market. Operators can no longer rely on 'greenfield' customers, and must fight for the existing market. This requires operators to drop prices to remain competitive, and cut costs to protect their profit margins. An emergent trend in the UK telecoms market in order to achieve this is BPO, and BT is a company that has taken the concept to heart. It was amongst the first telecom operators off the mark in implementing BPO on a large scale, the deal with Accenture mentioned above being an expansion upon an initial deal signed in 2005, and the later deal with Xansa shows that it has the appetite for more. Other telecom operators are likely to follow suit in the hunt for further efficiencies.

    Another key trend is the growing acceptance of offshore IT. Where until recent years UK telecom operators were reluctant to outsource at all, they are now keen to make use of the reduced labor costs available offshore. This is helping offshore specialists like Xansa (now owned by Steria), TCS and Wipro to thrive.

  • 16 Jul 2008 12:00 AM | Anonymous
    The rise of India continues apace as global IT services provider HCL Technologies, part of the $4.9 billion giant HCL Enterprise, has announced the acquisition of the UK's Liberata Financial Services (LFS) for an undisclosed sum.

    The British BPO specialist provides end-to-end administrative and customer services for the life and pensions industry.

    LFS' parent company Liberata Ltd. will now focus anew on its public-sector business, where demand for its services is strong and growing, as pressures intensify to cut costs.

    Fulfilling predictions from sourcingfocus.com and other industry commentators that the strength of Indian outsourcing would inevitably mean acquisitions in the UK and Europe during the downturn, HCL will acquire four delivery centres in the UK, together with 800 staff who come to HCL with both domain knowledge and technical expertise.

    Acknowledging the significance of the deal, Ovum analyst Peter Clarke said: “The logic of the deal is clear. HCL Technologies has the capacity to take forward Liberata's financial services platform, using it to develop its LP&I business.

    “Liberata has done well to win business in this space but has constantly faced questions from clients about its ability to sustain its interest in the long term, given its relatively small scale in this highly competitive market.”

    HCL’s insurance practice will be strengthened by LFS’s core capability to manage complex transactions, as well as a number of multiyear contracts with its customers which include blue-chip names.

    Ranjit Narasimhan, president and CEO of HCL BPO, said: “This strategic acquisition of LFS enhances HCL’s ability to become an end-to-end provider of business process outsourcing services in the financial services space.

    “This acquisition will equip HCL with a ready capability across the value chain by providing access to an existing revenue stream of policy management, actuarial and analytics catapulting HCL to become a leading service provider in the UK market for the life and pensions industry.”

    It may also, of course, give HCL some leverage with a UK parent business that has embedded connections with many local authorities – as well as the obvious long-term revenue streams from within the more stable end of the financial services market.

    For Liberata Ltd, the deal offers some relief from the private sector uncertainties of the Western money markets, while also allowing it to focus on public-sector deals where both local and central government make promising medium-term customers.

    Robert Gogel, CEO of LFS' parent Liberata Ltd, confirmed this view, saying: "We are pleased to have found an appropriate buyer for this business, thereby assuring its long-term future development. We have made significant investments in people, platform and service line development which has allowed our clients to benefit from high levels of service excellence.”

    Of Liberata's plans for a stronger focus on the public sector, Ovum analyst Peter Clarke said: “Liberata has clearly convinced its private equity parent General Atlantic that this is sound logic.

    "Its recent wins at the Local Government Association [the body representing all local authorities in the UK], where Liberata now runs the LGA's whole back office, and at Rushcliffe and Charnwood District Councils, where it won preferred supplier status for a revenues and benefits shared services contract against old rivals Capita, clearly strengthen this argument.

    “Liberata recently demonstrated its long-term intentions in the public sector by becoming a Gold Partner with SOLACE, the Society of Local Government Chief Executives.

    “If the FSA approves [the HCL] deal, it looks like a win for all concerned and sends some important signals to the market.”

    Although LFS' new owner HCL has built a thirty-year business from private-sector areas such as retail, telecoms, and media – along with financial services, of course – the public sector might be a logical next step for it too as it seeks to build a long-term outsourcing base in the UK.

    But for now, there is money to be made in the downturn for ambitious Indian outsourcers.

  • 16 Jul 2008 12:00 AM | Anonymous
    Attending this week's NOA Global Sourcing event, sponsored by legal firm Lovells, one of the highlights (alongside lots of in-depth practical advice) was the 'War of the Worlds' debate.

    This pitched China, the Philippines and India against each other in a good-natured battle for customer hearts and minds, given voice by Todd Russock, Rob O'Malley and Roop Singh – each of whom has estimable experience of building success in their chosen regions.

    First up was Russock, who advises UK organisations about doing business in, and with, China.

    The Chinese saw 2007 GDP growth of 11.4%, said Russock, who had many other sobering statistics to hand: for example, four million new Internet users there every month, and a PC or laptop sold every second.

    Russock went onto describe a massive drift of the rural populace towards the cities and their suburbs – akin to how the UK's own industrial revolution created a sprawling urban middle class.

    In 2035, 70% of China's billion-strong population will be urban, he said. By contrast, roughly 60% of the population today is rural.

    In other words, in twenty-five years' time, China's metropolitan population will have increased by 300 million people – quite a government-backed opportunity for outsourcing in the future, he suggested (perhaps neglecting the downside of 300 million fewer people to farm the land and grow food).

    Nevertheless, Beijing now sees outsourcing as being the next big opportunity for China, after being the world's manufacturing powerhouse, he suggested.

    The downsides, however, remain the levels of English spoken, and the prevailing political and human rights climate, said Russock – although no-one seems to bring up Guantanamo Bay or extraordinary rendition when choosing a US outsourcing partner.

    Next up was Rob O'Malley, whose successful track record in the English-speaking Philippines call centre market is not to be (even very politely) sneezed at.

    O'Malley has set up a useful website called www.callcentreuk.com, which (rather confusingly) is all about working with call centres in the Philippines.

    This, though, is a big deal: during his five minutes onstage, O'Malley portrayed a Philippines economy that seems almost completely reliant on supplying English-speaking call centres to survive. If you are a graduate, he said (and just over half the population speaks English), you either go to work in a BPO or call centre company, or you work overseas. Even the Philippines president is not above attending the opening of a 500-seat contact centre, said O'Malley, such is his country's investment in the sector.

    Again, outsourcing seems central to a country's future prosperity: BPO has transformed the Philippines economy more than any economy in the world, said O'Malley, and voice has been the key (88% of BPO revenue comes from the voice market). Eight-five percent of overall BPO work is US based, he said.

    Downsides for the Philippines remain weak data security laws, rising numbers of poor-quality or unaccredited vendors (unsurprisingly, given the limited opportunities to do anything else, it seems), and the lack of direct flights from the UK.

    Again, the trend is that of an educated population drifting towards increasing numbers of urban centres on the back of outsourcing's influence on the economy, if O'Malley's viewpoint is correct.

    It seems to me, though, that O'Malley may have missed something obvious: the potential for legal process outsourcing in the Philippines: an area where higher education and good English would be a boon – and a good way to raise the profile of its legal processes to boot.

    Finally, batting for India was Wipro's Roop Singh, who made the only good joke of the day (something about homegrown software programmers and their companies' CEOs flying on aeroplanes, but I won't repeat it here).

    Singh spoke with the confidence of the representative of a country that has got it right so far. That said, he acknowledged, domestic labour costs have been rising 12% per annum for the past three years, so the attractions of labour arbitrage seem to be fast disappearing.

    Nevertheless, few offshore locations have India's potential to scale, said Singh, and China lacks India's English-speaking advantage in the market outside its own shores and territories.

    That said, as India's traditional IT workforce rises to 2.3 million in the near future, again the picture emerged of a country looking further afield for educated staff, in this case from smaller metropolitan centres. Outsourcing is redrawing the map of all major offshore locations.

    All in all an entertaining session, and one that highlighted the importance to various countries of making a national investment in offshore and inshore services work for the good of their local economies.

    All of which brings me to my next point: the potential for the 53 countries of Africa to make names for themselves in the offshoring markets.

    With Ghana, Morocco, Egypt and Senegal surely becoming fixtures in analysts' 'ones to watch' tables over the next decade, that continent surely has so much to offer: many highly educated populations, speaking English, French, and dozens of other languages, and the potential to build a world-class communications infrastructure, essentially from scratch in many parts of the continent.

  • 15 Jul 2008 12:00 AM | Abbie Lunn (Administrator)

    Aviva Plc, the leading provider of life and pension products in Europe, has sold its Indian offshoring operations to outsourcing services provider WNS Holdings Ltd. for £115 million.

    As part of the deal, an all cash arrangement, Aviva has also entered into a master services contract with WNS, who will provide offshoring services to Aviva's UK, Irish and Canadian businesses for the next nine years.

    In a statement, Aviva said that the deal gives it protection against inflation and foreign exchange rates, and added that by combining a sale with a long-term agreement it will continue to benefit from the expertise it has developed in this field.

    Cathryn Riley, chair of AGS and chief operating officer of Norwich Union Life, said: "We're proud of the significant offshoring capability that we've built over the past five years and we remain firmly committed to offshoring. After an extensive review, we've chosen one of our current suppliers to be our long-term partner, allowing us to build on the strength of our existing relationship to increase the flexibility and cost-certainty within our operation. WNS are a great partner; they understand our business and have demonstrated their commitment to helping us develop our customer experience and shared services model."

  • 15 Jul 2008 12:00 AM | Anonymous

    A major new survey from Oracle, conducted across 12 countries reveals that the CEE is underperforming in terms of innovation. As a result the region could compromise five years of economic growth as its status as a low-cost labour base begins to erode, says the IT giant.

    The survey, conducted by the Economist Intelligence Unit (EIU) on behalf of Oracle, examines current and future innovation performance and the overall ‘innovation environment’ in 12 countries: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia and Ukraine.

    The report found that, while the CEE area has benefited economically from innovation over the past five years from foreign multinational investment, there have been insufficient ‘spillovers’ of technology and know-how, meaning that these innovations have largely failed to permeate the domestic business environment.

    The research also determined that innovation and the development of new products, services, business models and management techniques will be vital to the continued economic success of the CEE area as its status as a low-cost labour base begins to erode. This follows regular commentary about the changing role of India as costs continue to rise.

    Alfonso Di Ianni, Senior Vice President, Oracle Eastern Europe and CIS Region, commented: “The advantage of low-cost labour, initially a short-term catalyst for economic growth in the region, is being eroded and must be replaced with a more sustainable and long-term strategy for success. A structured approach to fostering innovation is what differentiates the successful economies, and collectively governments, educational institutions and businesses can create a dynamic environment which allows the untapped wealth of domestic talent to flourish. Information Technology today forms the foundation for a high percentage of the world’s most innovative solutions and can have a transformational effect on economic development – ideas, innovation and IT, an unbeatable combination.”

    The report found that Slovenia showed the highest levels of innovation performance in the region, while the Czech Republic was the most favourable environment for innovation. Romania had the least favourable performance, while the most challenging environment was to be found in Ukraine.

    The region possesses many talented home-grown entrepreneurs and innovative companies that are being held back due to less than optimum innovation environments. Several of these companies are profiled in the study.

    Paul Lewis, Managing Editor, Executive Briefing, Economist Intelligence Unit, added: “The post-communist economic transition of the CEE countries has been remarkable, but it has relied on investment from foreign companies. Governments need to be aware that it is no longer enough to imitate and assimilate innovation from abroad – they must encourage a favourable environment for home-grown innovation, or the long-term growth potential of the region will suffer.”

    The report provided some recommendations for turning the dearth of innovation around. ‘Governments, businesses and academia can work together to improve the environment for innovation in their respective countries. The report offers specific recommendations including investing in skills, research and IT infrastructure, and relaxing bureaucracy, taxation and labour laws.’

    The report can be seen in full here: A Time For New Ideas

  • 11 Jul 2008 12:00 AM | Anonymous

    NXP, the independent semiconductor company founded by Philips, has awarded a five-year outsourcing contract to international IT services company Atos Origin for the management of its global datacenters.

    As part of the new contract, Atos Origin will manage all infrastructure services for NXP’s core business to help consolidate and optimize all global manufacturing and engineering data centres.

    Louis Luijten, CIO of NXP Semiconductors, said:: “Our strategy focuses on increased efficiency by returning to our core activities, and Atos Origin will be our long-term partner to strengthen our competitive presence and increase our output”.

    The new contract follows an existing business ITO agreement signed last month between the two companies. The combined contracts are worth €155 million. NXP recently signed another outsourcing contract with TCS.

  • 11 Jul 2008 12:00 AM | Anonymous

    Hydro One Networks Inc., a large North American transmission and distribution electric utility company, has extended its agreement with Capgemini to provide Smart Metering services for the company’s Automated Metering Infrastructure (AMI) programme.

    Under the terms of the agreement Capgemini will provide a range of services including, programme management, process design, systems, integration and infrastructure management.

    The project will employ approximately 100 Capgemini staff, including global subject matter specialists and a large team of local project delivery professionals, providing the following services to Hydro One over the four-year project lifecycle:

  • 11 Jul 2008 12:00 AM | Anonymous

    National Australia Bank plans to send 400 information technology jobs to India by the end of the year.

    On the shortlist for the new deal are Infosys and Oracle who will compete for a billion-dollar, next-generation platform, which will form the key pillar in the bank's technology transformation plan, Program NEOS.

    NAB Chief Information Officer Michelle Tredenick told technology staff this week that it was ramping up its offshoring initiatives as part of Program NEOS, in an email quoted by 'The Australian' newspaper.

Powered by Wild Apricot Membership Software