Industry news

HPs planned $12.6 billion purchase of EDS has received approval after a US government antitrust review.

While the two companies are still waiting for approval from European regulators, EDS plans to hold a shareholder meeting on July 31 to get clearance from its investors to close the deal.

The proposed merger, announced by the companies last month, is touted as a major challenge by HP to IBM’s dominance of the IT business services marketplace.

Oracle has finalised a deal to acquire Skywire Software, a leading provider of insurance and business applications. The deal will see Oracle acquire 1,450 new insurance customers to add to its existing cache of over 1,000.

Skywire Software's insurance software assists insurers in managing the life cycle of an insurance policy, including insurance policy creation, rating, insurance agent/broker management and information exchange solutions.

With this and the impending acquisition of AdminServer, another insurance software provider, Oracle plans to create the most complete software suite for the insurance enterprise.

Patrick Brandt, Skywire Software President and CEO, said: "Insurers look to software to speed policy implementation, accelerate new business acquisition, reduce costs and manage regulatory risk. The combination of Skywire Software's best-in-class insurance and document automation software applications with Oracle's solutions will drive innovation and leadership to ensure our customers' continued success."

The acquisition is expected go through in the second half of 2008. Until the deal closes, each company will continue to operate independently. The value of the deal was not available.

Atos Origin, the international IT services company, has announced plans to establish a new 'Competency Center' in Beijing to offer its portfolio of technical automation solutions to the civil nuclear industry and the oil & gas markets in the region.

Atos says the move reflects the growing demand from customers in China for expertise in IT services and the importance of the Asia Pacific and Chinese energy markets to the IT sector.

This ‘Energy and Utility Competency Centre’ will be launched in July 2008 to become fully operational by January 2009. This will provide domestic and global energy companies and nuclear operators with advanced technologies to meet the needs of China’s fast growing energy market.

Philippe Germond, CEO of Atos Origin, said: “This decision is a new step forward for Atos Origin to position the group as a worldwide provider of distinctive industry solutions. Atos Origin’s Digital Control System is widely recognized as a state-of-the-art reference by the most prominent nuclear operators in the world. Our solution is already implemented in three nuclear power plants in China and we are happy to reinforce our presence in this major market and to bring this expertise to the rest of the Asia Pacific region”.

Former CEO of Logica, Martin Read, has been 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. p>Read will report to Alistair Darling in the Treasury, where his role includes standardising business processes and cross-departmental compatibility, and improving procurement. Significantly, he will be able to abandon failed projects.

he 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.”

• See Editor's Blog for more on this week's public sector IT and data meltdown.

BBVA, one of the top 15 banks in the world, has partnered with Infosys Technologies and Finacle to implement a new universal banking solution.

The system, to be implemented across BBVA, will cover core banking, CRM, treasury and wealth management.

Francisco Gonzalez, Chairman and CEO of BBVA, said: “Our aim is to transform BBVA to a winning player in the global banking industry of the 21st century. We need to think different approaches to customers, and IT is a key element in our innovative business model. BBVA is strongly committed to its innovation and transformation plan, and the partnership with Infosys and Finacle is a big step in that way. We like to work with the best partners and Infosys is a very strong global partner”.

The Australian Competition and Consumer Commission (ACCC), the Australian equivalent of the UK’s competition commission, has awarded Getronics an outsourcing contract worth £2 million.

Under the terms of the agreement, an initial three year contract, Getronics will provide the ACCC with desktop, server and network support as well as database administration for the watchdog’s 700 strong workforce.

The contract will be serviced by Getronics Australia staff onsite at ACCC and will commence on 1 July 2008.

Getronics Australia managing director, Paul Timmins, said: “To be providing IT support to such an eminent body will energise my team and we look forward to a long and prosperous partnership with the ACCC”.

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.