Industry news

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.

Logicalis, has been awarded a 4-year managed service contract with high-street retailer, Marks & Spencer. Logicalis will be tasked with improving the efficiency and agility of M&S' IT network as well as supporting the cost-effective deployment of innovative ICT services that will help maintain M&S' competitive position.

Logicalis' Managed Service Centre (MSC) and onsite teams will provide engineering, design and development support, for the management of wired and wireless network infrastructure across M&S' 591 UK stores and regional offices. The service will optimise the performance of M&S' existing ICT estate, and support M&S' IT team in delivering critical IT and business processes such as transaction services and PoS.

During the course of the contract, Marks & Spencer will open a number of stores, all of which will be migrated onto the network monitoring service.

Damone Quigley, head of infrastructure and application services for Marks & Spencer comments: “It wasn't simply a case of finding a supplier that could deliver technology services. We sought a partner with the ability to align IT performance to the needs of the business, can demonstrate innovation in service delivery, can share in risk and reward, and is flexible enough to adapt to the future demands of the retail environment.”

Tom Kelly, managing director of Logicalis UK, adds: “Marks & Spencer required a partner that had a clear understanding of their business imperatives, and could align services to provide tangible commercial and operational value. Logicalis will act as a seamless extension to Marks & Spencer's IT team, with a strong cultural fit and understanding of the pressures of operating in the retail industry.”

The Housing Corporation has signed a three-year managed IT infrastructure deal with Steria worth £7.5m.

The government agency funds and regulates housing associations. Its infrastructure will serve 520 Housing Corporation staff across nine offices and 2,000 external users from registered social landlords and local authorities who have access to housing investment and regulatory systems.

Under the terms of the deal, Steria will manage core infrastructure services, including servers, storage security and applications. The IT services firm will also manage and upgrade the corporation’s desktop infrastructure.

NCS Group, a leading regional information technology and communications engineering service provider in the Asia Pacific and Middle East regions, has successfully implemented the Mobile Banker System, enabling the two subsidiaries of Ceylinco Consolidated, Seylan Bank and The Finance Co. Ltd, to offer banking and financial services respectively for its customers.

This concept will revolutionise the manner in which banking and financial services is done in Sri Lanka, and is in line with the vision of its Chairman, Deshamanya Dr. Lalith Kotelawala to bring banking and financial services to the people anywhere, anytime. With this new system, both Seylan Bank and the Finance Co Ltd’s customers now have the choice of conducting banking and financial transactions at the home or work place instead of going to a branch or near-by ATMs. This system will revolutionise the way of conducting banking and financial transactions especially in developing countries where customers in villages may need to take hours to commute from home to a near-by branch for banking or financial services. It also provides the bank and the finance company a new channel that can be used to expand the customer base and enhance loyalty. The contract was awarded to NCS in January 2007. NCS is responsible for the design, development and implementation of the Mobile Banker System. It only took NCS less than 10 months to implement the Mobile Banker System. The system will be rolled out on a progressive basis across the island from today. The Mobile Banker System enables the business development officer (BDOs) of the Seylan Bank and the Finance Co Ltd to carry out secure banking and financial transactions on the Personal Digital Assistant (PDA). Each BDO will be equipped with a PDA and a small portable printing device. They can perform functions such as cash and cheque deposits, cash withdrawal, remittance disbursement, loan application and account opening at this stage. Additional services will be introduced in the future. Through the Mobile Banker System, the BDO is able to retrieve relevant customer information, aiding his understanding of the customer’s total relationship with the bank or the finance company. If a customer wishes to apply for a loan, the BDO can submit the loan application electronically, and the system will perform customer credit checking. Once the customer creditworthiness is ascertained, he will be able to provide an in-principle approval to the customer on the spot. Dr Chong Yoke Sin, CEO, NCS Group, said: “With mobile devices being truly ubiquitous, banks can now deliver mobile banking services to the consumers. NCS’ solution provides Ceylinco Consolidated a convenient new channel for conducting banking and financial business, giving it an advantage over the competition by being first to market. With the mobile device becoming the branch, it will allow Ceylinco Consolidated to reach out to the customers beyond the current branch network rapidly and without the burden of physical infrastructure. The Mobile Banker System offers anytime, anywhere information and services for its people on the go and provides reliable, secure transaction service - the ultimate in banking convenience in a secure IT environment.” “NCS has consistently delivered the reliability, availability, and performance demanded for mission-critical applications, backed up by solid support. The launch of Mobile Banker System further reinforces NCS’ position as a top tier IT services provider status in both the Asia and Middle East regions with best-in-class technology and differentiated solutions for business,” she added.

US companies signed fewer outsourcing contracts in 2007 and committed less time and money to those they did purchase, according to the most recent TPI data.

TPI recently released findings from its study of the first three quarters this year and found that the number of outsourcing contracts awarded globally declined 16% when compared with the same period in 2006. The total contract value of deals worth more than £25m awarded in the past nine months reached about £24bn, which is 17% less than the comparable period in 2006. And annualised contract value – contracts valued at £25m or greater – also decreased by 18% over the same time last year.

Patni Computer Systems, a leading global IT services provider, announced a multi-year US$200 million deal with The Carphone Warehouse.

Patni will become a key technology partner providing integrated services across consulting, systems integration, application development and maintenance. In addition, Patni will also be a key partner to The Carphone Warehouse for developing next-generation systems for its global telecom and retail operations. These services will be delivered across pan-European locations by Patni’s global consultants and global delivery centres in India. Commenting on the partnership, Simon Post, CTO, The Carphone Warehouse said, “The Carphone Warehouse is undergoing a rapid transformation of its business. It is critical that we are able to react rapidly to changing market conditions from a technology and operational perspective. We see Patni as a strategic partner who will enable us to create a competitive advantage in the market.” “We are delighted to announce this strategic deal with The Carphone Warehouse”, said Mrinal Sattawala, COO, Patni. “In today’s world, customers want innovation and agility coupled with operational excellence and cost leverage. We have delivered value to CPW across a set of large, complex engagements involving multiple service lines, and this contract creates the opportunity for both firms to drive sustaining mutual value through a strategic, multi-year engagement structure.” Patni’s telecom business offers end-to-end solutions to its customers including consulting, package implementation, systems integration, application development and maintenance, testing services, business process outsourcing and infrastructure support services. It contributes 14.1 per cent to Patni’s revenues. Patni recently acquired Logan Orviss International - a telecoms consulting firm, to strengthen the Company’s consulting and advisory capabilities for its telecom clients.

Sutherland will architect a custom solution, maintain a detailed and centralised database, generate MIS reports and perform data analytics to help ensure Deutsche Bank meets certain NASD and NYSE regulatory requirements.

According to Deutsche Bank, Sutherland Global Services was selected due to its global service delivery capabilities and marquee Fortune 100 client list, which demonstrated success in supporting business processes in global corporations.

Sutherland Global Services CEO Dilip Vellodi added, “Deutsche Bank is one of the most renowned financial institutions in the world. We are pleased to have the opportunity to leverage our proprietary application platform and domain expertise to develop a customised solution for their specific needs.”

North-shoring is a possible geographical shift in the outsourcing market to the North West of the UK.

Liberata, a private equity-backed firm which specialises in public sector services, will create 300 new jobs in Pendle, a former industrial centre in Lancashire, through its new business and payment processing centre to supply a contract with Pendle Council. The centre is expected to open towards the end of the month.

In July, the firm also announced a six-year £75m deal with the Learning and Skills Council (LSC) to assist delivery of the Learner Support Programme and made a commitment to create 300 jobs in Barrow-in-Furness through its Shared Services Centre, which opened in March 2006.