Industry news

LONDON, July 17, 2018 – The sourcing market in Europe, Middle East and Africa (EMEA) rebounded in the second quarter of 2018 as European businesses focused their attention on building their digital backbone, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The EMEA ISG Index™, which measures commercial outsourcing contracts with an annual contract value (ACV) of €4 million or more, shows that the EMEA market posted a combined second-quarter ACV of €3.7 billion, up 23 percent over the prior year. Traditional sourcing grew 11 percent to €2.5 billion, bucking a four-quarter downward trend. As-a-service ACV in the region surged, rising 50 percent, to €1.2 billion. Both Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS) gained record highs and contributed equally to the growth.

Steve Hall, partner and president of ISG, said: “The EMEA sourcing market rebounded strongly in the second quarter despite an economic environment focused on GDPR preparation and issues around BREXIT. Companies are now investing in technology to build their digital backbone. In the context of EMEA’s uncertain economic and political times, it’s encouraging that businesses are recognizing the strength that a strong digital backbone provides in allowing them to be agile enough to adapt with the times.”

Globally, second-quarter ACV for the combined global market advanced 31 percent to a record €9.9 billion. Demand for technology and business services continued to accelerate, with traditional sourcing ACV reaching €5.6 billion, up 19 percent, and as-a-service ACV up 51 percent to €4.3 billion. ACV in this space has almost doubled in the last two years, powered by new highs in both SaaS and IaaS.

Market Insights

Second-quarter traditional sourcing ACV in the UK rose 11 percent year-on-year. Despite this uptick, first half ACV in the UK finished down more than 50 percent compared with 2017’s exceptionally strong results. The number of UK contracts signed remained consistent at 112 but lacked the unusually large deals which lifted the market in the first half of 2017.

Traditional sourcing in DACH rebounded in the second quarter, following a notably slow start to the year, with ACV rising 70 percent compared to the previous quarter. Despite this rise, DACH ACV remained flat year-on-year, with the number of contracts reaching just under half of their total 12 months ago.

Traditional sourcing ACV in France grew 58 percent compared to the previous quarter, despite a sharp drop in the number of contracts signed. For the half year, France saw a decline in contract numbers and ACV, both down around 25 percent year-on-year.

The Nordics region showed robust growth in the first half of 2018, with ACV up 47 percent year-on-year and a 17 percent increase in the number of contracts. The smaller EMEA markets also showed strength with gains in Southern Europe, Russia/Eastern Europe and Africa/Middle East.

Sector Breakdown

As-a-service ACV grew substantially across all business sectors in EMEA, compared to the same period in 2017. The business services, financial services and telecom & media sectors all posted as-a-service ACV gains in excess of 50 percent.

The retail sector was the only vertical to show growth in both traditional sourcing and as-a-service, with combined ACV surging 90 percent compared to the first half of 2017. While traditional sourcing ACV in the manufacturing sector held steady, all other industries posted a decline.

Alpha Logistics, a specialist in managing equipment across Europe, has selected Real Asset Management’s (RAM) cloud-based fixed asset tracking solution in order to improve traceability of its equipment. Alpha Logistics decided to replace a spreadsheet system to benefit from a full audit trail and the ability to update the company’s asset register in real-time using the mobile app to scan Radio-frequency identification (RFID) tags.

Alpha Logistics supplies logistics solutions for its clients, helping with the management of a number of events across Europe simultaneously. An example of the service it provides can be seen in the company’s work with a leading online poker organisation, ensuring equipment is transported efficiently in preparation for tournaments. Alpha Logistics uses its articulated lorries to transfer the required assets.

Joe Page, Live Events Manager at Alpha Logistics comments, “We transport 4 articulated lorries full of equipment required to set up tournaments and events around Europe. This includes expensive items that are reusable as well as dispensable assets. RAM’s asset tracking solution enables us to keep a detailed catalogue of all items along with their locations and conditions.”

RAM’s software will help Alpha Logistics refine the services it provides. Page states, “A lot of the time, we have a number of live events taking place simultaneously and these will often be sharing equipment. The new software will enable staff from every department of the company to know the exact location of each piece of equipment at all times. In our line of business, traceability is incredibly important, so having a complete audit trail is imperative to us operating at full efficiency.”

Alpha Logistics has opted to utilise RFID labels in conjunction with the asset tracking solution, meaning that equipment can be recorded without the tag being in the scanner’s line of sight. This will save the company a lot of time when it comes to performing audits. This method of scanning will be particularly useful when searching for equipment within enclosed spaces, such as in the back of the artic lorries used to transfer required items.

The central database is hosted on RAM’s cloud platform, which ensures that the company’s IT department does not have to maintain the system internally. Storage of back-ups and other important files is completely managed by RAM, meaning that Alpha Logistics’ staff can focus on essential jobs whilst RAM’s support team completes administrative tasks.

“RAM’s customer support is always on hand,” Page concludes. “The team has always answered any questions we have had quickly and efficiently. It’s great to know that a service like this exists.”

Facebook is a major social media platform that is used worldwide by 2.13 billion people.

Cambridge Analytica have caused widespread panic to the 87 million people effected for political purposes. They were supposedly working for Donald Trump’s political campaign via an online survey that was created by a research associate at Cambridge University, Mr Kogan.

The ICO, Elizabeth Denham said "Facebook has failed to provide the kind of protections they are required to under the Data Protection Act, fines and prosecutions punish the bad actors, but my real goal is to effect change and restore trust and confidence in our democratic system."

Had this scandal occurred in May, they would have been fined 4% of their global turnover or £18 million depending on which one was most substantial. This half a million pounds fine is no financial burden to Facebook as statistics have shown that £500,000 revenue is earnt every 18 minutes.

Erin Egan, chief privacy officer at Facebook said, “We should have done more to investigate claims about Cambridge Analytica and take action in 2015.” In 2015 Facebook requested that both parties deleted all the data that was stolen, however they never followed through with their actions.

Facebook’s CEO, Mark Zuckerberg has been to meetings both with the US and EU lawmakers about this scandal.

Facebook has since edited their app to restrict the amount of data that people can harvest from it. Cambridge Analytica are constantly being reviewed by British Lawmakers.

There is speculation about a caution message being sent to 11 different political parties to inspect their data protection practices.

In business, power lies in partnerships. ‘Gatekeeper’ departments that drown employees in paperwork for little return garner less respect than those who team with others in the company to bring them real value. Sadly, many procurement departments find themselves dismissed as gatekeepers, which limits their traction with the rest of the business. Now, that’s changing.

Successful procurement teams are transitioning to a new role as business enablers. They are winning the hearts and minds of their business colleagues and carving out a new niche for themselves as a value centre in the business. This article describes a three-part strategy to transform the role of your procurement department and become a critical asset for the modern company.

Get what the business needs

A successful procurement team is adept at knowing what the business needs and going to get it in the best way possible. Many employees think that they can do this perfectly well on their own. The procurement team must show these employees the gaps in their abilities and persuade them that they can benefit by working with a central procurement function. The tricky part is doing this diplomatically.

Employees might well see a procurement department as an obstacle standing in the way of their goals, especially if they think that they are adept at getting a deal. Business managers will be used to a particular way of doing things. They will buy everything from office supplies through to online services and even computing equipment themselves. It isn’t uncommon for tensions to develop when people believe that they don’t need help.

These environments can be challenging for new procurement managers who struggle to change an organisation’s culture. Tackling this change requires a subtle mix of strength and understanding. They must acknowledge that employees traditionally worked in a certain way while being firm about the need to do things differently in the future.

The process starts with management support. Employees follow their managers’ lead, and without buy-in from senior executives, procurement teams will have a tough time establishing a new order. Getting the ear of the board and having senior managers promote and enforce the role of centralised procurement is a crucial piece of the puzzle.

A procurement team equipped with management support can begin demonstrating that it brings value to the business. It must show that it can find the right suppliers, vet them, and negotiate with them to create deals that make sense for the company. It must show that it can save money where appropriate and get products delivered on time, giving business managers a resource on which they can rely. In short, it must become a trusted advisor and a go-to partner that gets the business what it needs.

Get the best price, not necessarily the cheapest

Getting the business what it needs doesn’t always mean hammering suppliers for the lowest possible price. The procurement team will understand that any corporate purchase is a multi-dimensional transaction with more than the mere cost of goods and services at stake.

One dimension to consider is the quality and specification of the product or service. The cheapest possible product may not be the one that serves the business best. Vendors may offer a bargain-basement service, but a procurement department that has done its homework may realise that it won’t work for employees. Instead, it might choose a version for a slightly higher cost that will delight employees and save headaches further down the line.The other factor to consider is the supplier relationship. Successful procurement is about reaching a win-win outcome with a supplier that knows your business and is itself a valued partner. Companies that squeeze margins from every supplier eventually exhaust those relationships, making it difficult for vendors to bring any added value or build a deeper understanding of the customer. They will ultimately work their way through the top tier suppliers until there are none left of that quality, sacrificing the opportunity to create those rich, value-building relationships in the future.

The more complex and sophisticated the product or service in question, the more critical this understanding and added value becomes. A one-off purchase of office pens may not need a deep level of resonance between supplier and customer. A business process outsourcing project to manage your payment operations will. Most of the things that companies spend money on will need that level of detail and quality.

Mitigate organisational risk

The other way to build effective partnerships between procurement and the rest of the organisation is to mitigate risk. Employees assume they can handle purchases on their own, but often don’t manage or even see the associated dangers.

These dangers increase with the sophistication of the product. For example, buying software licenses may seem straightforward, but the devil is in the detail. If a vendor links a license to a specific laptop, then when the device fails, the company may incur unexpected costs.

Procurement risks also grow in line with regulations. The General Data Protection Regulation (GDPR) will force companies to vet suppliers’ compliance with it, for example.

Finally, procurement departments can better handle risks around long-term agreements, putting contingencies in place for eventualities such as the supplier going out of business or getting acquired.

A successful procurement team will highlight the risks that employees miss and will have plans in place to handle them adeptly. It will quickly become an ally, making people feel more comfortable that someone knowledgeable is watching out for them when they make a procurement decision.

The way forward

The days of the ivory procurement tower are over, and those that try to stay there will quickly find themselves marginalised and struggling for survival. After all, we don't have jobs if the rest of the company doesn't see a need for us.

This layered approach to building an effective procurement strategy is a way forward. Creating a platform based on these principles of partnership and demonstrable value will help to win procurement departments a seat at the table. Those that get there will be able to counsel forward-thinking companies on qualities such as risk protection, economies of scale, and long-term planning. Are you prepared to become a valued player for your business?

About the Author

Canda S Rozier is SVP Global Procurement & Real Estate at NTT Security, the specialised security company and center of excellence in security for NTT Group. She is responsible for establishing and leading best practices in corporate procurement, strategic sourcing, and global real estate strategy and management across Europe, Asia and the US. She is also the senior liaison with NTT Security’s parent company, NTT Holdings, on procurement-related matters as well as being on the Advisory Board for the Sourcing Industry Group (SIG). Since joining NTT Security in May 2011, she has achieved more than 20 per cent in procurement savings annually.

Global demand for technology and business services continues to accelerate, with as-a-service contract value climbing to another record high in the second quarter and traditional sourcing value reaching $7 billion for only the fifth time in history, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

Data from the ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show second-quarter ACV for the combined global market (including both as-a-service and traditional sourcing) surged 31 percent, to a record $12.4 billion. That figure includes traditional sourcing ACV of $7 billion, up 19 percent, and record as-a-service ACV of $5.4 billion, up 51 percent and nearly double that of two years ago. It was the first time as-a-service ACV surpassed $5 billion in a quarter.

The continuing surge in as-a-service value was fueled this quarter by a 58 percent increase in Infrastructure-as-a-Service (IaaS), to $3.9 billion, and a 35 percent increase in Software-as-a-Service, to $1.5 billion, as enterprises continue to move more workloads to the cloud.

"Global demand for outsourced IT and business services continues to expand, helped by robust economic trends and an unrelenting enterprise focus on all things digital," said Steve Hall, partner and president of ISG. "There were some initial concerns the as-a-service revolution would eat away at the market for traditional sourcing services, but that hasn't been the case. The combined global market is actually getting bigger, with steady quarter-over-quarter ACV growth during the last year bringing us to this new high-water mark. We're in a very strong, sustained market right now."

For the first half, global combined ACV reached an all-time high of $23.6 billion, up 17 percent over the same period last year. Growth was paced by record as-a-service ACV of $10.1 billion, up 39 percent. Traditional sourcing ACV was up 5 percent, to $13.5 billon, on record volume of 946 contracts. Most (61 percent) were smaller contracts – in the $5 million to $10 million range – up 17 percent over the prior-year period.

In the first half, financial services remained the largest global market for combined sourcing services, with ACV of $5.5 billion (up 28 percent), followed by business services, with ACV of $3.8 billion (up 30 percent), and manufacturing, with ACV of $3.1 billion (down 7.5 percent). The fastest-growing sector was healthcare and pharma, which saw its ACV climb 58.3 percent, to $2.5 billion. Retail was the second-fastest-growing sector, with ACV of $1.6 billion, up 57.9 percent.

Americas

The Americas, the world's largest combined sourcing market, generated combined ACV of $5.9 billion in the second quarter, up 33 percent. Traditional sourcing, at $3.1 billion, was up 25 percent, continuing a record string of four straight quarters above the $3 billion mark. Growth was fueled by applications outsourcing and industry-specific business process outsourcing. Meanwhile, records abound in the as-a-service space. As-a-service sourcing reached a record $2.8 billion, up 44 percent, and its share of combined-market ACV climbed to 48 percent, a new high. The two components of as-a-service – IaaS ($1.87 billion, up 50 percent) and SaaS ($951 million, up 32 percent) – both established new quarterly highs.

Europe, Middle East and Africa (EMEA)

The EMEA market rebounded from a soft first quarter to post combined second-quarter ACV of $4.6 billion, up 23 percent over the prior year. Traditional sourcing, which continues to represent the lion's share of the overall market, advanced 11 percent, to $3.1 billion, showing strength in the UK, the Nordics and Southern Europe. It was the first time traditional sourcing ACV topped the $3 billion level in the last 18 months. Although as-a-service represented only a third of the region's combined sourcing market, it was its fastest-growing segment, up 56 percent, to $1.5 billion, with both the IaaS and SaaS portions reaching record highs and contributing equally to the growth.

Asia Pacific

Asia Pacific's combined ACV rose 44 percent, to $1.9 billion, the best such total since ISG introduced this metric in 2016. The as-a-service market broke through the $1 billion level for the first time, with ACV of $1.1 billion, up 65 percent, the fastest growth of any region. Traditional sourcing, meanwhile, turned in its best quarter in four years, with ACV of $865 million, up 25 percent. Growth was paced by the banking, financial services and insurance sector and the transportation industry, application maintenance and design (ADM) services, and the Australia/New Zealand and North Asia markets.

Forecast

"The growth of public cloud is accelerating; we now expect growth to exceed 45 percent for the full year, contributing to the 30 percent growth we are forecasting for IaaS overall," said Hall. "We are also increasing our growth forecast for SaaS to 16 percent, up slightly from the 15 percent we forecast in April. We're also more bullish on traditional sourcing, raising our growth forecast for the year to 4.4 percent, up from 2 percent in April."

About the ISG Index™

Now in its 63rd consecutive quarter, the ISG Index™ provides a quarterly review of the latest sourcing industry data and trends for clients, providers, analysts and the media. For more than 15 years, it has been the authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider performance. In 2016, the ISG Index™ was expanded to include coverage of the fast-growing as-a-service market, measuring the significant impact cloud-based services are having on digital business transformation. ISG also provides ongoing analysis of automation and other digital technologies in its quarterly ISG Index™ presentations.

The 2Q 2018 ISG Index™ was presented during a conference call and webcast for media and analysts today. To listen to an audio replay of the call and view presentation slides, please visit http://www.isg-one.com/research/research-detail-page/isg-index.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including 75 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.

• Arvato CRM named as a Leader in latest Everest Group PEAK Matrix™

• Customer service provider recognized for its ability to cater to the evolving customer service needs of clients

• Investments in digital and artificial intelligence noted for providing the company with a competitive advantage

Arvato CRM Solutions has been named as a Leader for the second consecutive year, in an in-depth report from research and consulting firm Everest Group.

The global customer service provider was recognized for the consistency and flexibility of its service, and its ongoing success in expanding its portfolio of clients in high-growth areas such as retail and technology.

Arvato CRM’s ability to constantly adapt to the changing customer services needs of its clients was also highlighted in the report, as this has enabled the company to offer them a seamless omnichannel experience.

Ongoing investment in its digital and analytical capabilities also contributed towards Arvato CRM’s high ranking, with the development of technology, such as its conversational AI platform, giving the provider an advantage over its competitors.

Everest Group’s annual report, named the Contact Center Outsourcing (CCO) Service Provider Landscape with PEAK Matrix™ Assessment 2018, ranked 36 companies on their market impact, vision and capabilities. Arvato CRM ranked amongst just nine providers that Everest Group recognized as Leaders.

Andreas Krohn, CEO at Arvato CRM, said: “Arvato’s greatest strengths are in our ability to develop innovative solutions that are powered by both human and artificial intelligence.

“This means we can optimize customer service interactions and enable brands to stay ahead in a constantly evolving market.

“Being ranked as a leader by Everest Group is testament to our flexible approach to meeting client and industry needs.”

Skand Bhargava, Practice Director for Business Process Services at Everest Group, said: “Arvato has established itself as a leader in the CCO market with its flexibility to meet fast changing customer experience demand, delivering a seamless service and satisfaction – for both customers and brands – across multiple channels.”

ENDS

About the PEAK Matrix™

The Everest Group PEAK Matrix™ is a proprietary framework for assessing the relative market success and overall capability of service providers based on Performance, Experiences, Ability and Knowledge. Each service provider is comparatively assessed on two dimensions: market success and delivery capabilities. The resulting matrix categorizes service providers as Leaders, Major Contenders, and Aspirants. Companies that demonstrate strong upward movement in successive reports are recognized as Star Performers. Everest Group recently announced a recalibrated methodology, in which innovation, intellectual property and technology take center stage.

About Arvato CRM Solutions

We design, deliver and differentiate customer service on behalf of some of the world’s most respected brands. Arvato CRM Solutions has approximately 45,000 people at more than 100 customer service centers in 27 countries speaking 35 languages and is recognized as a ‘clear leader’ in the global customer services/customer experience (CX) sector1. It is a part of Arvato, the world’s third largest business process outsourcing (BPO) provider2 that provides customer services, supply chain solutions, financial services, and IT solutions, and has total revenues of €3.8 billion. 3 Arvato is a division of Bertelsmann.

1CCO – Service Provider Landscape with PEAK Matrix™ Assessment 2017 by Everest Group June 2017. 2’HfS BPO Top 50’ by HfS Research July 2017; 3 2016.

The company recently signed multiple new clients across the technology and manufacturing industries. TTEC also added 50 new employees to its Sofia location providing multi-lingual on-Call support with SLA compliance, service desk response, customer care and growth services across nine languages, including English, Danish, Finnish, German, Italian, Portuguese, Spanish, Japanese and Russian. A successful Q1 2018 for TTEC in EMEA was concluded with news of being shortlisted as a finalist for the Best Nearshore Team Award at the Global Sourcing Association (GSA) Professional Awards. This industry association and professional body for the global sourcing industry serves to share best practice, trends and connections across the globe through the annual awards program recognising service excellence.

“As an industry innovator and leader within the customer experience industry, it’s great to receive recognition that reflects our strong customer and partner relationships,” said Iain Banks, VP of International Markets, TTEC. “We have tremendous momentum at present, evidenced by our new client programs and team growth, strengthening our footprint in Europe and our leadership in transformative customer experience and engagement solutions.”

The company also confirmed three key appointments of seasoned industry players for Business Development, Solutions and Human Capital roles in the region.

• Nameer Rattansi joins TTEC as Head of Solutions EMEA. With over 15 years of experience leading customer care services and support for global brands, Rattansi will expand his solution consulting leadership and project manage cross-functional CX teams throughout the sales cycle to conclusion on UK, pan-EMEA and global offshore deals.

• An influential leader, Joanne Regan-Iles joins as Head of Human Capital EMEA where she will spearhead TTEC’s talent acquisition and human capital strategy. With 14 years of experience in leading Human Capital teams, Regan-Iles will be responsible for continued efforts in hiring, retaining and developing world-class people that serve as brand ambassadors for TTEC clients.

• Clare Lomax, VP Sales for EMEA, will be responsible for accelerating the company’s regional go-to-market strategies and local market expansion. With an impressive track record of personally winning more than £1B of outsourcing contracts globally, Lomax is a motivated professional with 25 years of experience in strategic outsourcing sales.

For more information on how TTEC is driving digital transformation and omnichannel customer experiences in EMEA, visit www.ttec.com/emea/

About TTEC:

TTEC (NASDAQ: TTEC) is a leading global customer experience technology and services provider focused exclusively on the design, implementation and delivery of transformative solutions for many of the world's most iconic and disruptive brands. The Company delivers outcome-based customer engagement solutions through TTEC Digital, its digital consultancy that designs and builds human centric, tech-enabled, insight-driven customer experience solutions for clients and TTEC Engage, its delivery centre of excellence, that operates customer acquisition, care, growth and digital trust and safety services. Founded in 1982, the Company's 50,500 employees operate on six continents across the globe and live by a set of customer-focused values that guide relationships with clients, their customers, and each other. To learn more about how TTEC is bringing humanity to the customer experience, visit www.ttec.com.

The cyber threat landscape can be a bemusing place for a business executive. A fast-moving, jargon-filled world of shadowy hackers, nation-state spies and bedroom-bound hacktivists, cyber is nonetheless a vital contributor to business risk. As such, whether you’re a global sourcing buyer or supplier, you must be able to understand where the online threats to your business lie, how they might impact risk, and how you can mitigate that risk.

The chances are you’re familiar by now with ransomware. Well, increasingly, the hackers are eschewing this money-making scheme in favour of another, far more insidious and covert strategy: mining crypto-currency using your own enterprise computing resources. It’s time to get familiar with a new trend in cybercrime: crypto-jacking.

Mining for money

Like every new cybercrime story, this one is based on a simple financial narrative. Unless they’re sponsored by nation states, or driven by notoriety or revenge, hackers will always go where the money is. And today there is a lot of it to be had from the burgeoning crypto-currency markets. The astronomical rise in value of digital currencies like Bitcoin, Monero, Ripple and Ethereum over the past year or so has led to a kind of modern-day gold rush, with technology at its heart.

There are various legitimate ways to make money from crypto-currencies — perhaps by investing in and trading Bitcoin, for example. One other way is to “mine” currencies. Crypto-mining is carried out today by computers which make complex calculations to ensure virtual transactions are entered onto the public blockchain-based ledger. In return for their efforts, the owners of these machines are rewarded with a small amount of virtual currency.

As the finite number of Bitcoins etc left to mine slowly reduces, these calculations get more difficult and require more and more electricity to power. It’s said that the energy used to power global Bitcoin mining efforts alone is equivalent to that of a small country: around 30 TWh per year.

Now this is where the hackers come in. They’ve found that by hijacking large numbers of consumer and business machines, they can tap the collective computing power to mine their own virtual coins. Mobile devices, PCs, Macs, servers, IoT endpoints: no internet-connected system is safe from this emerging crypto-jacking menace.

It’s claimed that crypto-jacking attacks soared by a staggering 8,500% in 2017. More recent stats have the number of malware detections in businesses increasing by a more modest 27% from Q4 2017 to Q1 2018. At NTT Security, we’ve also noticed a spike in activity in recent months. After collecting 12,000 samples of Monero mining malware dating back to March 2015, we discovered the vast majority (66%) dated from November and December 2017.

Firms under fire

With some security researchers claiming that hackers could make as much as $100m per year, it’s no surprise why this new trend has become so popular among the black hats. It’s much easier for them to run these botnets of compromised machines than it is to co-ordinate a ransomware campaign, for example, which requires interaction with the victim and the possibility of not being paid. With crypto-jacking, you simply infect a bunch of computers, sit back and let the money start flowing in.

The bad news, however, is that they’re increasingly likely to target business computer systems to assist in their covert mining activity, as there’s more computing power to hijack than consumer devices can offer. Crypto-mining malware affected 42% of organisations globally in February 2018, according to one vendor.

Contrary to popular belief, the potential impact on businesses extends beyond the costs associated with extra electricity usage. Crypto-jacking could also impair the performance of your systems, leading to wear and tear and potential downtime that could affect customer service and staff productivity. Infection could also be both indicative of deeper security problems in your networks and lead to additional cyber-attacks designed to spread ransomware, or harvest sensitive IP and customer data. One report claimed that of 4,000 Bitcoin mining detections spotted in 1H 2017, 20% triggered web and network-based attacks.

How to fight back

As long as there’s a financial incentive to do so, and corporate systems are exposed to attack, cyber-criminals will continue to target them with crypto-mining malware. So where are the key risks for global sourcing buyers and suppliers? NTT Security research indicates that malicious email campaigns are the primary means via which hackers are likely to access your systems. This can be difficult to defend against, as the tactic takes advantage of the credulity of your users to trick them into clicking on a malicious link or opening a malware-laden attachment. With Verizon claiming that 4% of users targeted by any given phishing campaign click through, improved security training is an essential complement to investments in security technology.

It’s not all about malicious email, however. The National Cyber Security Centre has warned in a new report that a new tactic could dominate over the coming year. “Popular websites are likely to continue to be targets for compromise, serving crypto-mining malware to visitors, and software is available that, when run in a webpage, uses the visiting computer's spare computer processing power to mine the digital currency Monero,” it claimed. Such an attack was spotted in February, with legitimate tool Coinhive found to be running on 4,000 websites including those of the Information Commissioner’s Office, United States Courts, and the General Medical Council.

So how can global sourcing stakeholders hope to mitigate this new cyber-risk? It will require a layered approach to security focused on people, process and technology and comprising best practices of the sort outlined by the NCSC. On the technology side this means investments in IDS/IPS, network monitoring, ad blocking, anti-malware and more. Combine this with regular risk assessments, user education and comprehensive patch management, and you’ll stand a good chance of success.

Cybersecurity is ultimately about making you a harder target. With crypto-jacking, the hackers are looking for the path of least resistance, so put enough barriers in the way and they’re likely to look for easier targets.

(Click here for the full NTT Security report...)

About the Author

Terrance DeJesus is a Threat Research Analyst at NTT Security.

A third of UK workers believe that their jobs will be automated within the next decade – and almost ten per cent think it’s likely to happen within two years - according to research by payroll firm ADP – and of those, over half think their employers are not doing enough to reskill them ahead of time.

Fears over automation are distributed unevenly amongst different demographics, according to the research cited by The Independent newspaper and others: just under 50% of employees aged between 16 and 35 see their jobs falling to automation within ten years, whilst workers in London are more fearful than those anywhere else: 46% of those surveyed in the capital worry about losing their jobs to automation over the next decade.

“Automation may seem like an issue for future generations, but our findings show that machines could replace thousands of employees in as few as five years… By starting to upskill and retrain workers now, employers can ensure they and their employees are as ready as possible to work side-by-side with the machines,” Jeff Phipps, managing director at ADP UK, told The Independent.

The global business process outsourcing (BPO) industry added fewer jobs last year than at any time since 2010, according to a report by India’s outsourcing trade body Nasscom. Net job growth in the $28bn BPO exports business stood at 36,000, with a global total in the region of 1.2 million, according to the Nasscom study. The annual average since 2011 has been in excess of 50,000 net new jobs.

While hiring growth has slowed, however, revenues are still strong, indicating that the shift to more automated work is accelerating. Earlier this year Cognizant became the first outsourcing major to hit 10% annualised growth whilst decreasing headcount, and several other leading players are expected to follow suit when their results are announced this month.

“This is, absolutely, not just a sign of things to come but of things that are already here,” said Jamie Liddell, Head of Content for the Global Sourcing Association (GSA). “Outsourcers of all shapes and sizes are scrambling to leverage the full power of automation and AI as quickly as possible to move away from the FTE-based model on which they’ve relied for many years. I’d be very surprised if we don’t see negative job growth this time next year, while revenues continue to rise.”