Industry news

Capgemini has announced its ‘Business Aware Application Outsourcing’ model.The consulting, technology and outsourcing services company says that the new approach, which combines software as a service (SaaS) and Web 2.0 elements, takes application outsourcing "beyond its traditional focus as an IT cost-reduction mechanism towards a business services focus and a platform for innovation".

Now that businesses are demanding that their CIOs drive more value from their IT, with systems that are managed and evolve in line with the business that they support, application management is becoming increasingly important as it is at the intersection of IT infrastructure and business processes. Capgemini’s application outsourcing service framework ties traditional services, such as applications management, testing and modernisation, with new offerings such as ERP utility and 'mashup' applications development.

Paul Spence, head of Outsourcing Services, Capgemini, said: “Our clients want an outsourcing partner who can not only help them to contain their IT costs, but also help them to take advantage of technology developments such as SaaS and Web 2.0 to deliver more flexible and responsive IT that evolves in line with their business needs. This helps companies effectively apply emerging technologies to create opportunities for business growth, while continuing to manage IT costs."

Cleaning and maintenance company Mitie Group has reported a 21 percent rise in annual profits, citing increased customer outsourcing activity as companies struggle to cut costs.

Mitie said pretax profit for the year ended March 31 increased to £70.6 million pounds on revenues of £1.4 billion. Mitie's guidance for fiscal 2008 included an upbeat assessment of future outsourcing opportunities as the financial climate worsens.

Hart District Council has selected Capita Local Government Services in a BPO deal worth £9.6 million. The deal, lasting nine years will see Capita deliver the council’s revenues and benefits services.

Under the contract, Capita will assume responsibility for the collection and administration of revenues, council tax and housing benefits using innovative, effective technology and processes. The council hopes to save £500,000 through the deal whilst working with Capita to improve service delivery.

Viv Evans, Corporate Director of Hart District Council, said, “Local authorities across the country are continually looking to make service enhancements whilst achieving integral cost savings. As a rapidly improving district, our partnership with Capita will help us to harness the best technology, processes and people for the modernisation of our revenue and benefit service.”

23 of the Council’s employees will transfer to Capita under TUPE regulations. The combined Council and Capita team will review current processes and IT systems, working towards the development of greater choice for citizens in how they liaise with the revenue and benefits team. The Council will also consider the introduction of mobile technology for visiting Council officers.

Capita, the UK’s leading BPO provider, has unveiled plans to double its workforce in India by the end of 2008, according to its annual corporate responsibility report.

The company, which provides a range of BPO services to public and private sector organisations, said 2,600 staff would be moved offshore by the end of the year.

Capita’s report estimates the UK and Ireland BPO market to be worth an approximately £5.1bn but Ovum figures indicate it is a hugely nascent industry with the potential to reach £94.8bn per annum.

In 2007, group turnover increased by 19% to £2.07bn, with pre-tax profit rising 19% to £238m.

BT Group has handed a £175 million outsourcing deal to Tech Mahindra, a leading provider of solutions and services to the telecommunications industry. Under the contract Tech Mahindra will take over application support for the next five years.

Application support will be delivered from Tech Mahindra’s Indian ‘Centres of Excellence’ and from a new dedicated facility being set up in the UK to monitor BT’s core business processes.

Clive Selley, Managing Director, Wholesale Service Design for BT, said: “This deal links our Application Portfolio performance to our business performance. Tech Mahindra’s experience and expertise on both, the business process as well as IT Systems makes it the perfect partner for value realisation and achievement of BT’s objective to become number one in customer service. The five year period and confirmed business will enable Tech Mahindra to take a long term view on innovation and service excellence."

French IT services company Steria has reported first-quarter revenues of €438.5 million (£349.7 million), up 38.3%. Domestic revenues were down 3.8% at €129.8 million (£103.5 million), while business in the UK was also down, by 2.5% – mainly because of the non-renewal of two major contracts. Germany, however, grew by 14.4% to €58.4 million (£46.6 million).

Outsourcing and BPO revenues increased by two percent to €175.7 million, (£140 million) accounting for 40% of overall business.

Ovum said that Steria's performance during the last quarter was still being affected by the integration Xansa, which it acquired last year.

Offshore business process outsourcing (BPO) services provider WNS has announced results for the fiscal year ended March 31, 2008 and released its guidance for 2009.

Revenue for 2008 was $459.9 million, a year-on-year increase of 30.5%. However, net income for the year was $9.5 million, a decrease of 64.3% from 2007. The decrease was primarily due to a one-time impairment charge of $15.5 million in respect of goodwill and intangible assets and also costs related to the redeployment of resources associated with the bankruptcy of First Magnus Financial Corporation, said the company.

“WNS has ended fiscal 2008 on a strong note with our profitability back on track and our sales engine gaining momentum,” claimed Neeraj Bhargava, group CEO. “In spite of challenges in the mortgage area, we have accomplished 32% growth in our revenue less repair payments, expanded our global footprint, diversified our client base, delivered significant value to our clients and strengthened our industry-focused BPO businesses.

WNS also provided guidance for the fiscal year ending March 31, 2009: Revenue less repair payments is expected to be between $373 million and $378 million. Net income (excluding share-based compensation and related fringe benefit taxes, amortization and impairment of goodwill and intangible assets) is expected to be between $44.0 million and $46.0 million.

Release Consulting, an independent IT consultancy specialising in the music and entertainment industry, has finalised an agreement with Universal Music Group (UMG), one of the world's leading music companies, to service its international IT Digital Initiatives (ITDI) department.

Release was previously the in-house unit at Universal Music Group International (UMGI) in London, managing its ITDI and digital supply chain programmes. UMGI is responsible for Universal Music's businesses in the world outside North America.

The new company, based in West London, aims to offer programme and project management, business analysis, technology solutions and support services to the wider industry, whilst continuing to provide Universal Music with such services.

Will Lovegrove, managing director, Release Consulting, said, "The IT skills and business analysis expertise that have delivered good results for Universal Music Group International will be in demand from other media and entertainment companies who are facing, or will face, the same challenges that the music industry is facing today. I believe Release Consulting is well placed to help those companies with those challenges."

Rahmyn Kress, managing director, supply chain management at Universal Music Group International said, "The ITDI team under Will Lovegrove has had a successful track record in designing, constructing and supporting a number of UMGI's IT systems. Now Release Consulting will provide project management and support services, and we're pleased to have the continuity and expertise that Will and his team represent.

Lloyds TSB will offshore up to 445 UK IT positions to low cost Indian locations by the end of the year.

The deal, the details of which have not been formally announced, will see Lloyds TSB offshore 250 permanent staff and up to another 195 contractors and temporary staff from their IT function.

The decision has not gone unnoticed by unions with Unite issuing a statement stating that: ‘the decision by Lloyds TSB…is unjustified and represents a lack of faith in the IT skills of their UK workforce’.

The Union believes that the decision will affect IT workers at various UK locations including London, Manchester, Birmingham, Cardiff, Bristol, Haywards Heath, Gloucester, Andover, Edinburgh and Brighton.

John Bancroft, Unite Official said: "Unite the union is disappointed by the offshoring announcement today by LTSB to go ahead with the transfer. We do not believe that the business case for this decision has been made; we are challenging the bank to consider alternative options."

BT's CEO Ben Verwaayen has stepped down on the day the telecoms and services company released on-target fourth-quarter earnings and higher revenues than the market had anticipated.

Verwaayen will be replaced by BT retail chief Ian Livingston at the beginning of June.

The company's revenues rose two percent to £5.4 billion, ahead of forecasts of £5.3 billion.

Global services revenues were up 10 percent year on year, the highest quarterly growth for more than two years.

Verwaayen has presided over a successful, 21st century reinvention of BT as a serious player in the broadband, Internet and services space, which many critics believed was a high-risk strategy.