Industry news

North East Lincolnshire council has ditched a planned 12-year IT and business services outsourcing deal with Capita after the two parties failed to agree on costs.

The council selected Capita as its preferred bidder for the programme, which was estimated to be worth £175m, in September.

A deal would have seen the two parties set up a joint venture company with 350 staff seconded from the council to provide business transformation, improved customer services and regeneration.

But a council cabinet meeting voted to call an end to negotiations after the two parties failed to agree commercial terms.

The council is now drawing up alternative plans to improve its services.

North East Lincolnshire is not alone in pulling out of an outsourcing partnership on cost grounds. Earlier this year, Swansea council axed the planned second phase of an e-government contract with Capgemini, saying the proposals were too expensive. Swansea later agreed a shared services IT tie-up with Cardiff council.

The Resourcelink self-service product will provide Body Shop with HR, allowing staff to fill in time sheets and holiday or training request forms online - which are then managed entirely by Northgate HR.

IBM, Capita and Fujitsu will battle it out to secure an outsourcing contract to provide IT and other services to Sheffield City Council in a deal that will be worth hundreds of millions of pounds.

Sheffield is to outsource its IT, revenue and benefits, human resources, payroll, financial business transactions and business transformation services under its seven-year “Outstanding Sheffield” programme.

An evaluation panel has now recommended a shortlist of the three IT services giants in a report that will go to the council’s cabinet committee.

The council will also consider IBM and Capita, along with Mouchel Parkman Services, for a second package of outsourced services covering property and facilities management.

Sheffield is expected to finalise its decision on contractors to supply both packages by July next year. The council attracted 96 expressions of interest in the early stages of the tendering process.

Sheffield’s IT and communications, revenues and benefits, payroll and some financial transaction services are currently provided by Liberata, under a £30m contract that ends next year. The deal saw Sheffield and Liberata unveil a new integrated council tax and benefits system in February 2006.

hiSoft Technology International has established a strategic partnership with globally known Japanese IT developer, Media Knowledge, and breaks new ground in the field of third-party testing. The partnership is expected to focus on the growing trend of third-party testing in Japan’s software testing industry. Media Knowledge plans to leverage hiSoft’s expertise and experience in Software Product and Application testing for global US and European companies.

The concept of “third party” testing during critical stages of a system integration or implementation minimizes the risk factors of system failure in the final stages of an application implementation project. The combined team provides in-depth knowledge in the areas of professionalism, testing and technical expertise, project management, and domain/industry experience. Both companies look forward to providing innovative, ground breaking testing and maintenance solutions for the Japan market. “As one of the leading IT Outsourcing providers based in China, hiSoft is recognized as a pioneer in Application Testing, with over 11 years of experience in this field, working with some of the largest global software companies in the world. We at Media Knowledge want to take advantage of this type of testing and maintenance expertise,” said Yamada Takanobu, President of Media Knowledge. “For most Japanese enterprises, the challenge is weighing the risk of finding lower cost providers while maintaining high quality. The partnership enables hiSoft and Media Knowledge to provide to the Japan market a lower cost structure without compromising high quality. hiSoft has been in the Japan market for over 11 years and understands the unique needs of the Japanese customer.” Li Jinsong, President of hiSoft Japan.

UK business class airline Silverjet introduced a second route to Dubai City this week, nine months after becoming operational with flights to New York. The airline attributes its rapid growth in large part to its IT outsourcing strategy.

By outsourcing hosting for the airline's website, reservation data system, internet booking engine, automatic call distribution, and departure control system, Silverjet was able to provide business services within four months for less than £100,000.

CGI Group Inc. has been awarded a 3-year, $91.8 million contract by Public Works and Government Services Canada. The agreement entitles PWGSC to extend the contract by four 1-year extensions. In total, the services provided could achieve a potential contract value of more than $400 million when considering growth and service transformation. The contract is for the provision of engineering and technical management services to the Information Technology Services Branch of PWGSC.

CGI will work with PWGSC’s ITSB to provide the expertise and resources required to maintain and manage ITSB’s government-wide infrastructure domains. In collaboration, ITSB and CGI will evaluate and implement technology enhancements to these operating domains over the life of the agreement to transform current service delivery to a results-based managed services model as part of PWGSC's ITSB Shared Services vision.

“We are delighted to have been recognized for our technology management capabilities,” said Hicham Adra, Senior Vice-President and General Manager, National Capital Region and Western Canada for CGI. “We are proud that our global expertise that has helped other commercial and public sector clients transform their business can be leveraged to assist ITSB.”

With over 5,000 professionals dedicated to the public sector and more than $1 billion in revenue from this sector, CGI is one of the largest IT and business process services providers to government in Canada and the United States. The company serves the federal government and 75% of provincial and territorial governments in Canada. This deep expertise enables public sector clients to modernize and transform with services and solutions that improve the citizen experience, increase efficiency and improve accountability.

Patni Computer Systems, a leading global IT services provider and member of the Oracle Partner Network, announced a comprehensive portfolio of Enablement Services to help independent software vendors (ISVs) make the transition to a 'Software as a Service' (SaaS) platform.

Patni's service offerings are designed to help ISVs make a rapid transition from an on-premise, licensed model to a SaaS model. They include assessment and technology consulting services that address the scalability, performance and security aspects of an implementation that need to be considered in making the transition to this new model.

"SaaS is an exciting new business model which is beginning to penetrate the enterprise market. Oracle's rich web 2.0 platform, along with Patni's strong consulting and development services, will help ISVs deliver a competitive and differentiated service offering for the marketplace," said Harish Bhat, Senior Vice-President, Global Strategic Alliances, Patni.

Based on Oracle's proven infrastructure software - including Oracle Database, Oracle Fusion Middleware and Oracle Enterprise Manager - the Oracle SaaS Platform enables SaaS providers to deliver secure, scalable and customizable online services to their customers. Oracle has partnered with hosting service providers and systems integrators with expertise in SaaS enablement and the Oracle SaaS Platform to assist ISV's looking to deploy 'Software as a Service'.

"The standards-based, secure, and scalable Oracle SaaS Platform enables partners to rapidly build, deploy and manage applications in a 'Software as a Service' delivery model," said John Gawkowski, Vice-President, Oracle Platform Technology Solutions. "We are pleased to support Patni's move to provide SaaS enablement services to help customers transition to the Oracle platform and leverage the full power of SaaS as a business solution."

Research from Martec International finds that the UK's top 100 retailers are turning to outsourcing to improve the effectiveness of their IT budgets, which have remained static at 1.3% of sales for the past three years.

The report, based on interviews with the UK's top 100 retailers, found that nearly all are expanding their use of outsourcing, and 8% of the respondents had outsourced all their IT. They include Matalan (to Capgemini), Somerfield (to Tata Consulting Services), and DSG (to HCL Technologies).

Accenture will provide Thomas Cook Group plc with application management, technology infrastructure management, finance, accounting and human resources services under a US$400 million outsourcing agreement the two companies signed recently.

The contract, which supersedes an agreement the two companies signed in early 2002 for similar services, is designed to enable Thomas Cook to integrate a range of MyTravel plc functions into existing Thomas Cook outsourced operations following the merger of the two companies this past June.

The services Accenture will provide under the new contract include: application and infrastructure management services to support a range of Thomas Cook’s operational back-office systems, including its SAP-based enterprise resource planning solution, as well as network management and technical services; finance and accounting services, including accounts payable and receivable, general ledger accounting support and management reporting; and human resources (HR) services, include HR administration and payroll services for Thomas Cook’s U.K. employees.

Accenture will deliver the services through a shared services center in the United Kingdom, leveraging additional resources from its Global Delivery Network.

“We are delighted to further extend our successful strategic outsourcing relationship with Accenture,” said Manny Fontenla-Novoa, joint chief executive of Thomas Cook Group plc. “The relationship has and will continue to support our delivery of back- office operational excellence.”

Kevin Campbell, Accenture’s group chief executive–Outsourcing, said, “High-performing companies like Thomas Cook have found they can be more strategic, streamline operations, reduce risk and improve overall business performance by outsourcing several business processes to a single provider.”

“Our award-winning, multi-process outsourcing relationship with Thomas Cook continues to drive world-class efficiencies and flexibility into our client’s operations," said Alex Christou, a senior executive in Accenture’s Transportation & Travel Services practice. “Our partnership reduces business complexity, enables Thomas Cook to focus on excellent customer service and accelerates the delivery of the back-office benefits resulting from its merger with MyTravel.”

Xchanging, the fast-growing international pure-play business process outsourcing company, takes operational control of the Hof-based Fondsdepot Bank GmbH effective from 01 November 2007. At the end of August, Xchanging signed an Enterprise Partnership contract with Allianz Global Investors Kapitalanlagegesellschaft mbH to provide retail investment account management. Xchanging holds a 51 percent share in the company. Mike Margetts, Executive Director of Xchanging Financial Markets and Thomas Runge, Group Production Director, will take over the management of Fondsdepot Bank to work alongside Gerhard Lugert. Dr. Claus Stickler has resigned from his current management position to join the supervisory board of Fondsdepot Bank. He has also been appointed a member of the executive board of Allianz GI.

“Having taken operational control, we will now start to analyse Fondsdepot Bank’s processes and results through our standardised approach“, Mike Margetts comments. “We will then focus on improving the processes and increasing the efficiency.”

Fondsdepot Bank currently manages 1.3 million active securities accounts with an asset volume totalling € 19 billion. Through the vehicle of Enterprise Partnership, the parties want to increase this volume. Fondsdepot Bank is one of the leading providers in the area of retail investment account management in Germany and offers its customers a portfolio approaching 6,500 public funds of more than 150 investment companies.

The strategic goal of the partnership is to strengthen and grow the bank’s position as a high-capacity, neutral provider in retail investment account management by building on the open fund platform. “We will achieve our goals by combining Fondsdepot Bank’s expertise in investment account management with Xchanging’s core competencies in process optimisation.” Furthermore, Xchanging wants to generate third-party business for the cost-effective platform. The partners will focus on expanding their business with financial consultants, broker pools and asset managers.