Industry news

A report from the NAO has slammed Department for Transport (DfT) shared services initiatives, branding initial department plans to be ‘unrealistic’ and ‘over optimistic’.

The report looked into DfT plans made in 2005 to implement a comprehensive shared services arrangement between the Driver and Vehicle Licensing Agency, Driving Standards Agency. Initial plans projected savings of £112.4m with a set-up cost of £55.4 million.

However, the report stated that: “Inadequate contract management and poor initial implementation of the Programme have meant that the Programme as originally envisaged will not achieve value for money”. The failings mentioned in the report elevated costs profoundly which the NAO expect to reach £121.2m in 2008 achieving savings of just £40.1m by March 2015.

IBM was named as the principal supplier in the deal but appears to have played little part in any of the failings that took place. The report blamed the DfT for ‘insufficient management’ and ‘poor specification of requirements’ in its dealings with the ITO giant.

Accenture has expanded its worldwide reach with the opening of a new delivery centre in Mexico.

Sharing the same methodologies, tools and architectures that Accenture uses across its Global Delivery Network, Accenture will use the new site to complement and extend its ongoing relationships in North America.

The move marks Accenture’s second foray into Mexico after it set up in Mexico City in 2004. Accenture now has six delivery centres across Central and South America in Mexico, Brazil and Argentina bringing the total number of delivery centres in Accenture’s Global Delivery Network to 51.

“The ability to serve the needs of our clients using a global capability is a key feature of Accenture’s global sourcing approach,” said Keith Haviland, senior managing director, Delivery Centre Network for Technology. “We bring together the right mix of people, skills and common standards to provide our clients with price-competitive and cost-effective solutions and services. Our global network offers the flexibility of multiple locations for the integrated delivery of services to clients.”

The move takes Accenture’s global staff to 76,000 across more than 50 delivery centres worldwide.

Centrica, the utilities group and parent company of British Gas, has awarded Fujitsu Services a £2.1 million IT outsourcing contract.

The new three-year contract will see Fujitsu manage a portfolio of applications supporting British Gas’s residential and business customers. Under the terms of the contract Fujitsu will provide 365x24 application maintenance and support services.

Fujitsu plans to use its bespoke portfolio management approach to optimise Centrica’s legacy and future applications portfolio. Centrica expects the deal to reduce their application maintenance costs by 50%.

Neil Coop, senior commercial manager, Centrica, says, “We are delighted to have appointed Fujitsu to continue to help us modernise our legacy systems using its extensive skills and resources in application management and development.”

The agreement comes as part of the latest chapter in a 30 year history in supporting Centrica and enhancing its IT systems.

Apple's iPhone has reignited the debate over consumerisation - when new technologies are introduced into the consumer market and then brought into the enterprise market - with employees determined to integrate their personal devices with their enterprise applications. However, IT managers are reluctant to take on the responsibility of managing these devices.

This is according to a new report by Datamonitor. The report Enterprise Mobility: Trend Analysis to 2012, predicts global enterprise expenditure on mobile devices will grow from $6 billion in 2008 to an estimated $17 billion by 2012, which highlights the need for IT managers to begin to implement mobile device policies as ever more enterprises look to expand their mobile workforces. "Enterprises are fighting a losing battle against employees when it comes to mobile devices and they should consider supporting a limited selection of devices rather than banning them outright", says Daniel Okubo, technology analyst with Datamonitor and the report's author. "Allowing a range of the most popular devices will improve employee satisfaction and encourage more of them to embrace mobile devices and improve their productivity when away from the office." Enterprises are understandably concerned about ensuring the security of their data. In a survey conducted by Datamonitor to establish issues that are currently preventing enterprises from investing in mobility solutions, the majority of the 467 respondents rated security as the greatest barrier to adoption of mobility solutions. Traditionally enterprises have allocated devices, such as the Blackberry, to employees to enable them to check their email and be responsive when they are away from the office. However, as other mobile devices like the iPhone are increasingly popular among end users, enterprises are finding that employees want to be able to integrate their personal device with their corporate email account and other applications. For many people their mobile device is a personal thing which they want to customise and keep on their person. They do not want one device for personal use and an IT issued device for work. So far very few IT departments have yielded to these requests and are refusing to be responsible for managing such a wide variety of mobile devices. However, the iPhone has set a new standard for device usability and the trend of consumerisation is going to continue. "There is an element of fear of the unknown," says Okubo. "Enterprises question how security will be managed and whether mobility technologies will fit into their current IT infrastructure. Technology vendors have a role to play by properly addressing enterprise pain points." The key issue is that regardless of device, IT managers need to ensure they have a clear policy on mobile devices and at least the basic security capabilities to lock devices remotely, wipe them back to their factory setting and block certain applications being loaded. Employees must be made aware that it is important to report lost or stolen devices immediately, and they should not use their mobile devices to transfer sensitive company data. Carriers such as Vodafone have started realising the problems that many enterprises face in managing devices and have started offering hosted device management solutions. This means that if an employee loses their phone they can call their operator and they will wipe or lock it. Similarly if their phone is broken they can contact their operator who can remotely diagnose and fix their device and install updates. IT managers should ensure they have these capabilities either through traditional security vendors such as Sybase or for smaller enterprises, perhaps a hosted solution from a carrier is more efficient. Okubo concludes: "As more enterprises look to expand their mobile workforces and equip their employees with mobile devices, the issue of device management is going to become increasingly important. The popularity of mobile devices in the consumer markets is forcing enterprises to consider how best to manage these devices in the workplace and they need to ensure they have clear policies in place to manage employee expectations."

CSC has announced its fourth quarter results. Revenues were $4.48 billion, up 11% (or 7% on a constant currency basis). Its fourth quarter EBIT margin was 9.2%, compared to 9.5% in the same quarter last year. CSC signed major contracts worth $2.5 billion in the quarter, which took its total for FY08 to $13.3 billion.

Ovum analyst Phil Codling said: "This was a solid financial performance from CSC to round off a solid year. For FY08 as a whole, the revenue growth metrics were the same as for the quarter (i.e. 11% topline growth, 7% in constant currency). However, if we take out the c$500 million that CSC's acquisitions contributed to FY08 revenues, organic growth looks more like four percent. That is, nonetheless, an improvement on the flat performance we saw in FY07, a fact that reflects contract revenue timings and better execution from CSC, rather than any pick-up in the market more generally.

"CSC's deal signing performance raises some question marks, however. The sum of $13.3 billion in total contract value for the year is down on the $16.9 billion bagged in FY07. Bear in mind that $11.2 billion of the FY08 signings came from the public sector, which means just $2.1 billion came from CSC's global commercial interests. CSC says some signings have slipped into FY09 and reports a reasonable start to the year, but the low level of major commercial signings is undoubtedly a weakness the company needs to address.

"In attempting to do this, it faces a tough market environment with few new opportunities for the kinds of big wins that have traditionally underpinned CSC's outsourcing business. That said, a number of developments at CSC should give the company a chance of improving its position. Not least, its acquisition of Covansys last year means it now has a 15,000-strong workforce in India, a vital resource for competing effectively in the commercial sector in both North America and Europe. Secondly, under its 'Project Accelerate' strategy, the company has begun to align itself under targeted vertical markets which, in the private sector, should give it a better focus in financial services and manufacturing in particular. Finally, CSC is also focusing attention on what it terms 'mid-sized' deals (i.e. those typically $50-350 million in value) and appears to be gaining some traction here as the outsourcing market continues to fragment.

"There is also a positive sign in the fourth quarter numbers that CSC can do better in the commercial sector. Global commercial revenues actually counterbalanced a flatter quarterly performance in the federal sector with an impressive 16% top-line growth (or 11% in constant currency) to $3.0 billion. CSC's improved and expanded consulting and projects capability accounts for much of this growth, not least in Europe (where the company's performance has remained significantly better than in FY07).

"Overall, CSC is right to be aiming a little higher in the coming year (with a projection of 5-7% organic growth), particularly as CEO Mike Laphen appears to think he can capitalise on a likely wobble at major competitor EDS as it undergoes its integration with HP. (Whether such a wobble occurs is of course in the hands of EDS, HP, their partners and their customers, not CSC, but we acknowledge that it's a possibility.) The last two years have seen CSC put some key strategic pieces in place to improve its performance. Having restructured and refocused the business, it's now time to show that CSC really can accelerate. And in a competitive landscape that is about to be shaken up by the merger of HP and EDS, CSC needs to make it clear that it provides customers with a long-term alternative to its much larger competitors."

PizzaExpress, the popular Italian restaurant chain, has signed a contract with enterprise software provider Alphameric to implement its web-based ERP software, Caterwide.

The system will be rolled out across 335 UK restaurant locations in August 2008. According to Alphameric, the project will see features such as web-based ordering and stock control integrated with application modules such as cash control and advanced business intelligence offered by Caterwide.

The order module offers transaction processing features such as ordering, supplier confirmation, recommended substitution, delivery confirmation, short delivery, returns and wastage control. The feature enables clients to eliminate the need to re-key information at every outlet, supplier or the head office.

John Sullivan, director of group IT for Gondola, PizzaExpress’ parent company, said: "Having conducted an extensive review of the marketplace we selected Alphameric based on the strength and depth of its products, level of services and ability to deliver a smooth deployment of its web based software, tilling and hardware to our PizzaExpress restaurants."

The increase of workstations in Polish call centres between 2005 and 2006 was at the level of 23.2%, and between 2006 and 2007 at 35.7%. This means that the call centre market is now increasing nearly 6.5 times faster than GDP in the country, according to research by callcentre consultancy MasterPlan.

The increase is clear evidence that the call centre industry in Poland is developing fast, despite the moderate level of foreign investment. Favorable factors include: the dynamic development of e-business in Poland, sales development in direct systems (communication, insurance), the increased development of services targeted at so called 'time poor' people – as well as the continual decrease of the cost of telephone connections, says the report. • A PDF of the full report is available in our Whitepapers section.

BT Ireland has launched a new remote IT management service, BT Innovate, which caters for IT management in the SME space. Managing director of BT business, Liam O’Brien, says the launch is the result of five years of tactical acquisitions in the space and is aimed at offering smaller businesses cost-effective resilience.

A study by IT Recruitment specialist CV Screen has found that permanent IT Salaries in the UK have risen by 4.1% over the last 12 months.

The research, which monitored over 11,000 advertised positions in the UK during Q1 2008, concluded that the average advertised salary for an IT professional in the UK is now £34,217.

CV Screen’s Matthew Iveson commented “The continued high demand for IT professionals has continued to put upward pressure on IT salaries.” “There are certain technical skills where there is still a considerable war for talent with candidates with strong skills in areas such as .Net, C# and PHP inundated with opportunities” continued Iveson. With regards to the outlook for salaries in 2008, Iveson commented “The IT Jobs market is holding up well in spite of the wider economic problems. It is likely that as a result of the rising costs of living in the UK that more candidates will seek to move for financial reasons, thus putting further upward pressure on IT salaries.”

Hewlett-Packard has confirmed strong second-quarter results in the wake of its industry-shaking acquisition of EDS last week. The technology and services giant reported net revenues of $28.3 billion for the quarter, an increase of 11% year on year.

HP Services revenues increased 12% year on year to $4.6 billion, with strong growth in Outsourcing (14%). 70% of the company's revenues now come from outside the US, with business growing particularly fast in Brazil, Russia, India and China.

During the conference call, CEO Mark Hurd batted aside industry concerns about the complexity of turning the massive deal into a well-integrated and managed cultural fit and said that the EDS deal would extend HP's reach into enterprise accounts, encourage new business and bolster outsourcing margins.

Analyst firm Ovum said: "We still have some serious questions regarding the forthcoming EDS integration, but we suspect that in the short term HP's consistent financial performance of the last year, coupled with Hurd's continued focus on cost savings, effective execution and streamlined operations, will lead many to give HP some leeway as it leads EDS down the path toward 'the HP way'.”