Industry news

The abuse and exploitation of child workers in the textiles and clothing industry could be virtually eliminated if a voluntary international textile testing certification process was adopted in the UK and across Europe, says one of the world's leading textile testing laboratories.

Manchester, UK, based Shirley Technologies (STL) is a member of the 'Made in Green' Group which tests and audits textiles and production processes for dangerous substances, and evidence of human rights abuse in the production chain.

Those products passing the tests and audit are awarded a 'Made in Green' (www.madeingreen.com) label, which can be stitched into clothing or textiles and indicates the product has been produced in respect of social responsibility, ecological and environmental guidelines.

Discussing recent news coverage about clothing chains such as Primark, most notably in the recent BBC Panorama programme about it, STL's Phil Whitaker sais: "The programme was interesting in that it showed up the problems in auditing and tracking supplier chains in the textile industry. The advantage of 'Made in Green' is that it tests the product range, audits the processing in the factory, audits the environmental impact and ensures compliance with social responsibility guidelines all at once," said Phil Whitaker of STL.

"Obviously, we are not party to all the detail, but we would offer the cautious observations that the social responsibility audit carried out in the factory shown in Monday night's programme appeared not to have 'cross referenced' to production processes and products. Obviously, handsewn items are going to be labour intensive and time consuming and so it seems to follow that in order to hand sew sequins or any other similar accessory on hundreds of thousands of garments in a very short time it would take a small army of people to complete on schedule."

The 'Made in Green' testing and audit process involves three elements: Oeko-Tex 100 certification which guarantees products do not contain substances harmful to health, Oeko-Tex 1000 which confirms current environmental legislation compliance, and CCRS-AITEX, which ensures compliance with corporate social responsibility guidelines including child labour.

However STL recently asked 2,000 UK shoppers did they recognise Oeko-Tex labelling (which can also be a stand-alone certification), and only six percent said they knew what it was.

Despite the worthy, voluntary initiative, the inclusion of textile labels within the manufacturing process is surely open to abuse at the manufacturing or offshore distribution end of the process – the very link in the chain where the problem originates. Given the vast global business in fake designer clothing and accessories – found on every street corner wherever there are tourists with money to spend – it would surely be routine to fake such a voluntary accreditation process, given that it is so poorly recognised and understood.

The real issue is one of simple economics: any Western superstore-style retailer able to sell in bulk apparently quality, pret-a-porter-inspired goods for the cost of a sandwich and a coffee must be sourcing the materials at next-to-zero prices from large offshore workforces. There is, after all, no such thing as a free (in any sense) shirt.

As labour costs rise on the back of high net worth industries in China, India, and elsewhere, labour arbitrage advantages become harder and harder to find at the lower-end manufacturing part of the market. In countries and regions where labour laws are decades behind those of the West – partly suppressed by European and American purchasing power – abuses within the workforce are the inevitable concomitant of low high street prices. Ethics come with a higher price tag – and it is one we must now bear.

The fallout from Fujitsu severing ties with the NHS National Programme for IT (NpfIT) continues, with the rumoured potential loss of some seven hundred jobs at Fujitsu. 1,000 Fujitsu employees work within the NHS programme.

Also at stake are £340 million in revenues. The company has until the end of this month to pay back the NHS £67 million of the £143 million it received in advance payments.

Fujitsu walked away from talks earlier this month, prompting the NHS to terminate the 10-year, £846 million deal as the South's technology service provider. Contract renegotiation terms had proved unacceptable to the Japanese company, which pressed the NHS for a return to the original deal.

Trade union Unite, which has been a highly vocal critic of several troubled outsourcing deals this year, has urged the Government to take action to prevent a haemorrhage of skilled workers from the programme.

“Government must act to ensure that the knowledge and skills gained in working for Fujitsu are retained, whoever the provider or providers are in the future, and ensure that the skilled staff can help the project continue to a successful conclusion in the interests of patients, the NHS and the health of the nation,” said Unite national officer for IT workers, Peter Skyte.

Last week the Public Accounts Committee (PAC) sat at Westminster to hear of central Whitehall mismanagement and local NHS tensions – a story that calls into question the viability of a central IT scheme imposed on local Trusts that have differing needs, skills and funding challenges.

Fujitsu executives told MPs that constant local modifications coupled with the withholding of funds forced the outsourcer's hand. The changing terms of the contract would have been unaffordable, claimed Peter Hutchinson, UK public services group director at Fujitsu Services, who said there had been over 600 such alterations.

"We withdrew from the re-set negotiations. We were still perfectly willing and able to deliver to the original contract," he said. “There was a limit beyond which we could not go,” he added, referring to the company's employees, investors and pensioners.

In turn, the termination of the deal has left the NHS with a "gaping hole", said the PAC chairman Edward Leigh. NHS COO Gordon Hextall said that BT was in the running to take over the eight former Fujitsu sites in the South of England.

• All hospitals in England and Wales were supposed to have had patient record systems installed by the end of 2006, but only 34 out of 169 have received their systems so far and, of these, 21 are reportedly outdated.

• See this week's Editor's Blog for more on public sector IT in crisis.

This week finds the Government's IT programmes and data security policies seemingly on the point of meltdown. A week is a long time in politics, as we all know, but is one year enough time to clear up decades of mess and mismanagement?

I ask as former CEO of Logica, Martin Read, is hired by the Government to cut public spending in the IT sector, at a time when some public sector IT projects either seem out of control, mired in controversy and recriminations – or both.

In his 12-month tenure, Read will report to the Treasury, in a role that includes standardising business processes and cross-departmental compatibility, and improving procurement. Significantly, he will be able to abandon failed projects. However, it's unclear if he will be able to prevent misconceived ones, such as the national ID card scheme, from starting.

With the Government under pressure to tighten its spending on, and control of, large-scale technology projects, Read's own appointment may itself be subject to controversy and potential recriminations. First, it will accelerate and deepen Whitehall's relationship with the private sector – conceivably touching upon the Government's involvement with venture capitalists in the funding of innovative start-ups (reported in Editor's Blog earlier this year).

“The private sector has made significant strides forward in this area in recent years, and my work will examine the scope for the public sector to benefit from this experience,” Read said in a statement.

But is the private sector the answer to Whitehall's ills? Ask Fujitsu. Last week the Public Accounts Committee (PAC) sat at Westminster to hear about the conract debacle that led Fujitsu to walk away from discussions with the NHS – a story that calls into question the viability of the National Programme for IT.

Fujitsu executives told MPs that constant local modifications coupled with the withholding of funds forced the outsourcer's hand. The changing terms of the contract would have been unaffordable, claimed Peter Hutchinson, UK public services group director at Fujitsu Services, who said there had been over 600 such alterations.

Away from the NHS specifically, the second problem with Read's appointment is organisational and personal: his remit clashes with that of Government CIO John Suffolk – at a time when Whitehall needs a firm hand on the tiller, not management fudge and infighting.

Add to this the further question: is he the right man for the job? New Logica CEO Andy Green, who took charge in January this year, has said he wants to reduce costs and minimise job duplication, suggesting he inherited an inefficient organisation – and one that Green is having to give a new focus to.

Now, while Read's appointment is belated evidence that Downing Street acknowledges the problem, the priority is surely a cultural, bureaucratic, and managerial one. Escalating budgets are the natural concomitant of that.

Put simply: we have a slow-moving, Victorian, centralised bureaucracy with a 21st century veneer of modernity. That Whitehall is attempting to force-feed poorly conceived, complex, fast-moving technology projects to local areas that have differing needs and financial strictures.

Allied to this is a problem that the idealistic Tony Blair created: the belief that Modern governments need Modern solutions. In other words, see everything as a technology problem (rather than a people one or a data one), and get specifying.

You only have to take a step back to see the bigger picture: also in the news this week are stories that local authorities have been warned against the widespread practice of using technologies installed to prevent serious crime to snoop on citizens going about their daily business.

It's a sad fact that if people can misuse IT systems in the public sector, they will and at the highest level, because the cost imperative of saving money mandates it strategically.

CC TV cameras are one abused technology, but a more insidious one is the local authority use of Citizen Relationship Management technologies (public-sector CRM) to withdraw essential services from antisocial or slow-paying residents.

The private sector isn't immune either: witness our story this week that one third of IT managers use Administrator access privileges to snoop on confidential data.

However, the cultural mismatch between people and technology usage is a real problem in the public sector in particular, because it is in the employ of the people. For example, the Information Commissioner has this week established that few Whitehall departments have any real idea of their legal responsibilities under the Data Protection Act, and fewer still have any idea of how to manage IT systems securely.

His findings were made public this week as two government departments face enforcement action under the Act: HM Revenue and Customs, and the Ministry of Defence. Both departments have been in the spotlight this year for serious breaches of data security, along with the Home Office and the NHS.

The Independent Police Complaints Commission (IPCC) and Poynter review found that there was a lack of meaningful systems, no understanding of the importance of data security and a "muddle through" culture at HMRC when it lost 25 million benefits records in internal post.

HMRC was described as having "an organisational design which was unnecessarily complex and crucially, did not clearly focus on management accountability".

The MoD's loss of 600,000 personnel details was slammed in a report by Sir Edmund Burton, who also blamed poor management. The MOD'S Chief of the General Staff has ordered an inquiry to investigate whether there are grounds disciplinary action.

Information Commissioner Richard Thomas, said: "The reports that have been published today show deplorable failures at both HMRC and MoD. Information security and other aspects of data protection must be taken a great deal more seriously by those in charge of organisations.

"It is beyond doubt that both Departments have breached Data Protection requirements and we intend to use the powers currently available to us to serve formal Enforcement Notices on them."

These are the three issues that Government really needs to consider, Mr. Read: people, people, and people.

No future, massive public-sector IT programmes should even be considered unless someone has put people at the 'coal face' first, followed by management and culture.

But the first questions to ask are: what is this project really for? Who will use it? And how? If no one has an honest answer to those, then abandon that project before you've called in the consultants and reached for the chequebook.

Driven by market capitalisation growth in emerging economies, the wealth of the world’s high net worth individuals (HNWIs) increased 9.4 percent to US$40.7 trillion in 2007, according to the 12th annual World Wealth Report, released today by Merrill Lynch (NYSE: MER) and Capgemini.

India led the world in HNWI population growth at 22.7 percent, driven by market capitalisation growth of 118 percent and real GDP growth of 7.9 percent. Although India’s real GDP growth decelerated from 9.4 percent in 2006, current levels are considered more stable and sustainable. India’s two largest exchanges – the Bombay Stock Exchange and the National Stock Exchange – ranked among the world’s top 12 exchanges by end of 2007, boosted by initial public offering markets and heightened international interest.

China experienced the second largest expansion of their HNWI population, advancing 20.3 percent – an increase fueled by market capitalisation growth of 291 percent and real GDP growth of 11.4 percent. Significant price increases and strong IPO activity propelled the Shanghai Exchange to become the sixth largest exchange in the world in terms of market capitalisation.

But while market capitalisation and real GDP growth rates were higher in China than India, the HNWI population of India grew faster in 2007. The Report suggests that as market capitalisation and real GDP in China were spread over a larger population, there were smaller per capita gains in China. In 2006, India had a larger market capitalisation growth than gross national income, significantly impacting HNWI population growth in India. In addition, China is currently experiencing explosive growth in its “mass affluent” population, which has yet to break the HNWI threshold of US$1 million.

Brazil enjoyed the third-highest HNWI growth rate in 2007, with a 19.1 percent increase, spurred by a wave of robust market capitalisation growth of 93 percent and real GDP growth of 5.1 percent. Net private capital flows to Latin America doubled in 2007, contributing to the Brazilian Stock Exchange’s fourth place ranking among the world’s largest IPO markets and 7.2 percent market share gain. This, according to the Report, lent support to the establishment and global integration of the Brazilian financial system.

Russia was home to one of the world’s 10 fastest-growing HNWI populations, despite growth deceleration from 15.5 percent in 2006 to 14.4 percent in 2007. Solid gains of 37.6 percent in market capitalisation and 7.4 percent in real GDP represented the growing international interest in the country as a global player, suggesting that the ongoing development of Russia’s external relationships will likely improve the economy’s fundamentals.

Green investing has become widely popular across the globe in recent years, offering investors lucrative returns and an opportunity to become actively involved in social responsibility. An array of vehicles through which to back green initiatives drove robust growth in green sectors in 2007, such as mutual funds, ETFs and other pooled products, or alternative investments. The total investment in clean technology, for example, increased to US$117 billion in 2007, up 41 percent from 2005, with notable strength in wind and solar.

The Middle East and Europe were the most environmentally attuned HNWI and Ultra-HNWI populations, with participation ranging from around 17 percent to 21 percent in 2007. In comparison, only 5 percent of HNWIs and 7 percent of Ultra-HNWIs in North America allocated part of their portfolio holdings to green investing. North America was also the only region in which social responsibility was the primary driver of HNWIs’ green investing. Among HNWIs worldwide, approximately half pointed to financial returns as the primary reason for their allocation to green investing.

Impressive growth of emerging economies was boosted by thriving exports and heightened domestic demand. The largest regional growth of the HNWI population occurred in the Middle East, Eastern Europe, and Latin America, with increases of 15.6 percent, 14.3 percent, and 12.2 percent, respectively. Gains in commodity exports, paired with growing international acceptance of emerging financial centres as significant global players, contributed to the growth rates of emerging economies.

The BRIC nations (Brazil, Russia, India and China) continued to play pivotal roles in the global economy in 2007, driven by impressive economic gains and robust market capitalisation growth.

“This year’s Report found that the number of high net worth individuals, and the amount of wealth they control, continued to increase in 2007, with the greatest wealth being created in the emerging markets of India, China, and Brazil,” said Nick Tucker. “While trends indicate opportunities exist for wealth management firms to tap into new growth markets, success will go to those that recognise their existing service, delivery and technology strategies must be adapted and tailored to meet the particular needs of these growth markets.”

With a significant portion of HNWI wealth invested in stock markets, market capitalisation performance is an important determinant of HNWI wealth generation. While traditional United States, European, and Asian stock market indexes experienced moderate growth, many emerging markets extended winning streaks of robust gains. Various Dow Jones Market Indexes, for example, had moderate returns in 2007, averaging 6.8 percent, far below the 17.3 percent average in 2006, and compared to 2006, market gains in 2007 failed to have as positive an impact on HNWI wealth generation.

Most major European and Asian indexes were contained to low single-digit growth; the world’s worst performer, the Nikkei 225, contracted 11.1 percent, while Europe’s best performer, the German DAX, was the only major traditional index to outpace its 2006 performance and sustain double-digit growth.

Fueled mostly by organic price increases, the Shanghai and the Shenzhen Stock Exchanges grew at 303 percent and 244 percent, respectively. India’s Bombay Exchange and National Stock Exchange had respective growth rates of 122 percent and 115 percent.

“The divide between market capitalisation growth in mature and emerging economies was significantly more pronounced in 2007 than in previous years,” said Chris Gant, Head of Wealth Management, Capgemini Financial Services UK. “Despite slowdowns in the growth of traditional stock exchanges and significant market volatility, several emerging market exchanges experienced robust gains in 2007, further accelerating global wealth.”

Emerging markets made significant contributions to record-level worldwide IPO activity in 2007. More than 1,300 IPOs raised about US$300 billion during the year—and emerging markets captured 7 of the top 10 issues. The BRIC nations exhibited particular strength in the area, accounting for 39 percent of global IPO volume in 2007, up from 32 percent in 2006.

Net private capital flows to emerging markets also increased in 2007. China attracted the largest absolute amount of private capital in 2007 at a country level, drawing in about US$55 billion. Emerging Europe was the most popular regional destination, attracting US$276 billion. Emerging Asia experienced a 20 percent drop in private capital flows, reflecting, in part, that equity flows helped policymakers accumulate foreign exchange reserves, which reached roughly US$1 trillion in China alone. Private capital flows to Latin America, however, more than doubled to US$106 billion in 2007.

Overall, hedge funds performed well in 2007 with average gains reaching 12.6 percent, down only slightly from 2006. Hedge fund returns outperformed traditional stock indexes in 2007, boosted by 20.3 percent average gains in emerging markets. In recent years, an increasing proportion of hedge fund assets have come from institutional investors, versus wealthy clients, shifting the main driver of the industry’s growth.

Fueled largely by the growth of capital-intensive sectors, venture capitalist fundraising and investing in 2007 reached their highest levels since 2001. New opportunities in life sciences and clean technologies expanded market opportunities and the renewable energy sector hosted a record IPO issuance last year led by the US$6.5 billion IPO of a Spanish utilities group and the US$1.2 billion IPO of a Brazilian sugar and ethanol producer. Total investment in clean technology increased 35 percent, boosted by numerous clean technology benchmark indexes gaining more than 50 percent for the year.

Effects from the downturn in the United States economy weighed on other mature economies – as evident by slowed GDP growth and weak equity market performances in parts of Europe and Asia – and were fueled by three main factors: a cooling housing market, tightened credit availability, and greater volatility and price declines in equity markets. This chain of events impacted both consumers and institutions, impeding their ability to maintain liquidity and operate businesses.

In line with housing market downturns, REIT indexes incurred significant losses globally – in marked contrast to robust gains in 2006. Worldwide equity market performances proved the divergence between mature and emerging markets – the MSCI Global Indexes recorded 0.1 percent and 3.2 percent contractions in Europe and the United States, respectively, in the second half of the year, versus gains of 10.4 percent and 6.3 percent in the first half. The Emerging Market MSCI Global Indexes excelled – led by Latin America in the beginning of the year and the BRIC nations in the second half. Equity market losses in mature economies reverberated throughout international credit markets in the second half of 2007. The economic slowdown in the United States drove a severe depreciation of the U.S. dollar against most major currencies worldwide – the dollar fell 10.5 percent, 15.8 percent, and 17 percent, respectively, relative to the euro, the Canadian dollar, and the Brazilian real.

Since the close of 2007, economic indicators in the United States have deteriorated further; notably: slowing consumer spending, cooling housing markets and softening labor market conditions. A flurry of developments in international credit and equity markets, all stemming from the United States’ economic slowdown, shaped the opening months of 2008. Early on, greater downside risks to growth in the United States, along with the far-reaching implications of tightening international credit markets, weighed heavily on equity markets around the globe. By mid-January, losses incurred in virtually all geographic markets exceeded 10 percent.[3] However, mature markets have stabilised somewhat, bringing average 2008 losses down to roughly 4 percent, and emerging markets have actually reclaimed and exceeded incurred losses, generating an average net gain by mid-April.[4]

The diverging macroeconomic environments at either end of 2007 helped define HNWIs’ asset allocation strategies. Building on the optimism of 2006, the early months of 2007 showed HNWIs betting heavily on riskier asset classes. But as the year wore on, and financial market turmoil and economic uncertainty intensified, HNWIs began to retrench, shifting their investments to safer, less volatile asset classes.

The Report found that cash/deposits and fixed income securities accounted for 44 percent of HNWI financial assets, up 9 percentage points from 2006. Fixed income securities saw a 6 percentage point increase in asset allocation, accounting for 27 percent of holdings, up from 21 percent in 2006.

Globally, HNWIs continued to decrease their holdings in North America and showed greater interest in domestic market investments, preferring more familiar ground amid heightened levels of economic uncertainty.

Despite heightened uncertainty regarding the near-term global outlook, still-strong fundamentals in emerging markets are likely to sustain high levels of growth. The balance between emerging market strength and mature market recovery will likely persist through 2008, with the short-term outlook subject to variability given that aspects of potential risk may still be unknown.

By and large, the global economy has two distinctive obstacles to overcome: inhibitors to growth in mature markets and high risks of inflation in emerging markets. How well these challenges are met will shape global HNWI growth prospects going forward. Given 2007 performances and taking into consideration recent developments in world markets, the Report suggests that global HNWI wealth will grow to US$59.1 trillion by 2012, advancing at a rate of 7.7 percent per year.

Successful relationships are built on trust and on mutual understanding. As with marriages, in a long-term IT outsourcing contract, if both parties are not communicating effectively and working together to reach the same objectives, there is a risk that it could all end with a costly and messy break-up.

Attitudes towards outsourcing have evolved over the years. In the early days, it was treated as nothing more than an afterthought, a cost-effective way of maintaining and possibly upgrading an enterprise IT function. But we have experienced significant changes in recent years. Gone are the days of the massive deals, the end-to-end model when entire IT functions were handed over to a single service provider. The reason being that one day companies woke up to the fact that they were no longer in control of key areas of its IT.

Enterprises decided to reduce the risk and switched to the new multi-sourcing model by using multiple vendors. And this has led to the trend towards companies looking for service providers that are focused on a particular industry sector.

In the current economic climate, the need for companies to streamline operations without losing their competitive edge has never been more acute.

With customers looking to reduce costs, and at the same time, transform their organisations, and IT outsourcers looking to secure deals that are commercially viable, how can both parties ensure that the relationship will be a successful one throughout the lifetime of the contract?

Both parties must work hard to set up a solid partnership based on transparency and an agreed roadmap with clear milestones and outcomes reflecting the aspirations of both parties. This must be established during the contract negotiations.

These issues can be addressed provided that the appropriate conversations occur from the outset at the negotiating table and throughout the negotiation of the contract. Tom Higgins, Managing Director, Commercial Solutions Europe at Perot Systems offers advice on how customers and outsourcers can ensure a sustainable long-term relationship from the outset.

Planning for the long-term: a five -step guide to successfully negotiating the best outsourcing deal -

1. Trust and transparency

As companies strive to reduce their costs, take advantage of new technologies and develop long-term IT strategies there is still confusion and lack of transparency when it comes to setting up outsourcing agreements. Trust is paramount in relationships, and there is no room for ambiguity when projects are undertaken.

It may sound clichéd, but the reality is that relationships between customer and outsourcer should be seen as a marriage where both parties are actively working together to ensure continuous, candid two-way dialogue. Failure to maintain the relationship will lead to a lack of trust and eventually result in problems.

2. Setting expectations

From the outset, the customer needs to define clearly what they want from an outsourcing relationship, if this is unclear or expectations are incorrect then the relationship will fail.

Both parties need to look very carefully at the details of the deal that they are signing up to and avoid falling into the trap of entering into an agreement that is based solely on the lowest, price. Contracts based exclusively on aggressive cost reduction can lead to problems further down the line when it becomes apparent that more investment was needed from the outset to achieve the transformation the customer was seeking.

Contractual agreements should be built on the principle that both parties will get something from the arrangement. The customer will gain a resilient partner that will help it to meet its business objectives and the outsourcer will be rewarded appropriately for supporting the customer’s ambition.

3. Joint responsibility

Despite the natural progression from the mega vendors to the smaller focused groups of specialist players that have more understanding of your business and are ultimately easier to manage, outsourcing is not going to transform a business overnight.

Change can be tough in any organisation and both parties have to be firm with each other about what they want out of the relationship. This applies to sharing responsibility for the management and delivery of the project. At the start of an outsourcing deal there is often a graduated level of dependency between the service provider and the customer. To avoid any confusion each party needs to know exactly who is responsible for what. This can be achieved through joint problem solving and a culture of working in collaboration rather than relying on the more traditional supplier-buyer relationship.

4. Good governance

From the customer’s perspective the whole point of entering into a partnership with an outsourcer is to make its business more streamlined so that it is agile enough to react to changes in the market or the business environment.

The outsourcer can make the most of the contract negotiations by applying good governance to really get under the skin of the customer’s organisation. It is one thing to be proficient in technology, but going that one step further by demonstrating a clear understanding of the customer’s business objectives and how to solve the problems it is facing in the market-place or internally is a great way to build trust and establish credibility.

5. Measurement and accountability

Many contracts require constant reassessment otherwise they will be scrapped before they come to fruition. The problems are mainly due to a misalignment of objectives at the start, the inability of the outsourcer to flex with the needs of the customer organisation or a failure to manage progress closely enough.

All too often contracts and deals can be convoluted and sometimes there are just too many SLAs for both sides to track effectively. The evaluation and review process should be scaled down to a more manageable level. The key to successful measurement is to focus on the five or six metrics that really matter during the lifetime of a project. This system will allow both parties to identify any problems should they emerge and make sure that key milestones are reached.

Ultimately introducing more transparency in to IT outsourcing agreements benefits both the customer and the service provider. It is also vital that both parties focus more on the commercial outcomes of deals and not dwell on the contract and the commercial terms.

As government data security falls once again under the spotlight, a survey has revealed that one third of IT managers across all types of organisation secretly look at confidential corporate and personal data. Snooped details include salary details, M & A plans, personal emails, board meeting minutes and other personal information.

Those are the findings of a survey of more than 300 senior IT professionals, mainly from companies employing over 1000+ people, by digital vaulting specialist Cyber-Ark Software. One third of respondents admitted to using their privileged or Administrator rights to access information that was confidential or sensitive, while nearly half (47%) said they had accessed information that was not directly relevant to their role.

This follows reports earlier this month on sourcingfocus.com that internal data loss and theft had affected over one-third of organisations.

Mark Fullbrook, UK Director of Cyber-Ark says “When it comes down to it, IT has essentially enabled snooping to happen. It’s easy – all you need is access to the right passwords or privileged accounts and you’re privy to everything that’s going on within your company. Gone are the days when you had to photocopy sheets of information with your customer database on it, or pick the lock to the salaries drawer."

Fullbrook's comments are well timed, coming hard on the heels of the Public Accounts Committee's investigations into public sector data security and the Information Commissioner's comments about the MoD and HMRC: "In some organisations," said Fulbrook, "there is little understanding or lack of controls in place to manage workers access to systems.

"For most people, administrative passwords are a seemingly innocuous tool used by the IT department to update or amend systems. To those 'in the know' they are the keys to the kingdom and if unprotected or fall into the wrong hands wield a great deal of power. This could include highly sensitive information such as merger plans, the CEO’s emails, company accounts, marketing plans, legal records, R & D plans, and so on.”

Of greater concern is the still extant fact that privileged passwords are changed infrequently – indeed, less often than user passwords. Thirty percent are changed every quarter, found the report, while a staggering nine percent are never changed – even when staff have left the organisation.

The report also revealed that half of IT administrators do not have to obtain authorisation to access privileged accounts, which shows a general lack of control of these power identities and indeed understanding over the power that these privileges command.

Other key findings, which might sound familiar to the oft-criticised public sector, include:

• Seven out of 10 companies rely on outdated and insecure methods to exchange sensitive data when it comes to passing it between themselves and their business partners, with 35% choosing to email sensitive data, 35% sending it via a courier, 22% using FTP and four percent still relying on the postal system. Twelve percent of senior IT personnel surveyed chose to send cash in the post.

"Companies need to wake up to the fact that if they don’t introduce layers of security and tighten up who has access to vital information, by managing and controlling privileged passwords, snooping, sabotage and hacking will continue,” said Fulbrook.

The Driver and Vehicle Licensing Agency has signed what it calls a 'ground-breaking' deal with a management consultancy to help improve performance and value-for-money in its operations over the next four years.

In the first agreement of its kind involving a large public sector body, the DVLA has appointed a single company to manage the support services it buys from external consultants – in effect acknowledging that it lacks the internal skills to manage such arrangements itself, and essentially employing consultants to manage consultants.

CMC Partnership, based near Monmouth in Wales, will act as a managing agent for the Swansea-based DVLA, whose 7,000 staff collect £4.9 billion in car tax and handle more than 24 million enquiries each year.

DVLA managers will use CMC as their first port of call for the provision of external consultants and interim personnel. CMC will manage a supply chain to deliver assistance in areas such as project management, business change, IT security, technical advice, commercial and financial management as well as providing temporary staff for busy periods.

A DVLA spokesperson said “Following a detailed look at existing procurement procedures, including cost-benefit analyses, use of management time and quality of service provision, we decided the case was strong to move to a new way of working which streamlines our supply chain.

“We are not spending additional money on this service – our budgets remain the same – we are simply working smarter. We believe the one-stop approach offers significant benefits.”

The Consultancy and Interim Managed Service contract, awarded through a competitive tender advertised through the European Journal, also allows other sections of the Department for Transport to use the service. The arrangement is expected to reduce the cost of procurement, improve response times and the quality of delivery.

CMC Partnership is a fast-growing consultancy with a portfolio of clients that includes the Welsh Assembly Government, BBC Wales and Bristol-based VOSA, the Vehicle and Operator Services Agency.

DVLA managers are currently working with a CMC project team to set up processes to ensure the right balance between quality and value for money and to support the adoption of software which will be used to track progress and evaluate benefits.

CMC director Chris Moore said “We are delighted to have been chosen by the DVLA to help deliver this pioneering arrangement. There are similar master vendor arrangements like this in use elsewhere but we believe that this contract is unique in its scope and nature.

“We have had a close and successful working relationship with the managers and staff at DVLA Swansea. CMC has built a strong team over the last eight years – winning this contract enables us to grow our business with experienced consultants and support staff, recruited locally wherever possible.”

Instrumental in CMC’s success is their collaborative relationship with Methods Consulting, a London-based consultancy, with whom CMC have partnered for more than 8 years. Methods are able to provide complementary services in IT, technical project management and e-procurement, says the DVLA.

Newsbite: IBM has announced a new global five-year ITO contract with Ericsson. IBM will manage application maintenance, development and operation for Ericsson, extending an existing contract signed in 2003.

Lars Stanghed, Managing Director to the Global Client Ericsson and Chairman of IBM Sweden, said: "During the last five years IBM has delivered IT services to Ericsson and we are delighted to continue this relationship and to further strengthen our position in the outsourcing market".

The new agreement was signed on June 19, 2008.

The Uganda Revenue Authority (URA), the organisation responsible for tax collection in Uganda, has chosen TCS to design and install a new integrated tax administration system.

The new system will manage all domestic taxes and duties for the URA, including income tax, value-added tax, withholding tax and other excise duties. The URA hopes the system will increase the level of tax compliance in the country whilst broadening the tax base and providing efficient services to Uganda’s tax payers.

Under the terms of the agreement a suite of applications will be developed for effecting and monitoring key activities of tax administration such as registration, returns, payments, assessment, tax-payer accounts, audit, compliance, objections, appeals and investigations.

Approximately £5.8 million of funding has been raised to pay for the system from such sources as the Department for International Development in the UK and the respective governments of the Netherlands, Belgium and Uganda.

N Chandrasekaran, Chief Operating Officer and Executive Director of TCS, said: “With our strong domain expertise in executing tax administration systems for various tax authorities across the globe, TCS will assist Uganda Revenue Authority in business process re-engineering, capacity building and change management to improvise and optimise the business process’ execution jointly with URA management. The new integrated system will reduce IT and operational costs and processing cycle times, while improving fiscal transparency and financial accountability”.

T-Mobile Netherlands has selected the Netherlands arm of Capgemini, to migrate its legacy billing platform to a new LHS model.

The system migration forms part of a strategic merger program between T-Mobile Netherlands BV and Orange Nederland NV and is designed to provide greater flexibility whilst reducing the company’s total cost of ownership.

Capgemini will be responsible for the integration and migration of the legacy system to the new platform. The project will be delivered cooperatively onsite in the Netherlands, in Paris and offshore in India. LHS, a long term partner of Capgemini, will provide the required customization and the necessary professional services to support this implementation as a subcontractor to Capgemini.

Gerrit Dekker, Executive Vice-President Information Technology at T-Mobile Netherlands BV, said: “This is a multi-faceted project, with great impact on our organization; billing is, after all, one of telecom operators’ core processes. Because of this, transparency and mutual trust between the parties is, to us, paramount.”