The remaining companies awarded places are: Hitachi Consulting, Insight Management and Systems Consultants, Jefferson Wells, Mazars, Methods Consulting, Moorhouse Consortium, Mott MacDonald, Mouchel Management Consulting, Parkhill, PA Consulting, PricewaterhouseCoopers, Qi Consulting, Quadrant Consultants, Quatrosystems, RSM Tenon, SCOM Group, Serco Consulting, The Engine Group and Tribal Consortium.

According to a notice published in the Official Journal of the European Union on 15 March 2010, a number of vendors including Atos Origin, Methods Consulting and Booz & Company have won places in more than one category. Deloitte has won places on all but one lot apart, while Tribal Consortium is included in all but two.

The contract is split into 13 consultancy lots: business strategy, business strategy (health), business strategy (local government), organisation and change management, organisation and change management (health), organisation and change management (local government), human resources, procurement, programme and project management, marketing communications, financial and economic, accounting advice and services, audit and assurance advice services.

Buying Solutions has said that the contract is on behalf of central government departments and its agencies, as well as local government, NHS bodies and any relevant non-NHS organisations.

A spokesperson for Buying Solutions told GC News: “The £4bn spend published in the OJEU notice, which covers the whole of the public sector, is an estimated figure for the four year life of the framework to give suppliers an indication of what the spend might be. It does not represent a commitment for the public sector to spend this amount and suppliers know that it will be influenced by economic and political factors.”

Source: www.kable.co.uk

Oil giant BP is aiming to remove a total of $7 billion (£4.7 billion) from annual operational costs, aided by a huge overhaul of IT, processes and project management.

Under a strategy taking place over a total of five years, the company began by successfully removing $4 billion (£2.7 billion) from operational costs since 2008, a spokesperson confirmed today. BP has now said it will now target a further $3 billion (£2 billion) removal of costs “over the next two to three years”.

Source: www.thestandard.com

For hundreds of years contract law has been clear – fraud is outside the bounds of a contract. If you commit fraud, you will not be protected by a contractual provision that limits liability for direct damages or excludes indirect damages.

The recent ruling against EDS on a claim of fraudulent representation has shocked many in the outsourcing community. The shock comes from the bursting of the erroneous presumption that companies would only be liable for breaching explicit provisions in the contract, and upon such a breach that damages would be capped at the amount in the contract. This presumption is contrary to well established contract law.

In an effort to win bids, sales and marketing teams too often make promises that their companies cannot possibly keep. The result is financial waste and inefficiencies, and a devaluation of the company’s brand. If the sales marketing hype rises to the level of fraud, then we are outside the bounds of the contract. And BSkyB clarifies that recovery for damages flowing from fraud will be applied regardless of the size of the parties or the amount of money at stake.

What is fraud? A fraudulent representation occurs when a person makes a statement, verbally or in writing, knowing it is false. Another type of fraud, negligent misrepresentation, occurs when a person makes a statement without a reasonable expectation that it is true. Therefore, if you make a statement, you must at least have a reasonable expectation, or a reasonable belief, that it is accurate.

In the EDS case, the court found that EDS knowingly made false statements to BSkyB regarding EDS’ capabilities, the project’s time frames and the milestone completion dates. The court found EDS had fraudulently represented and negligently misrepresented information to BSkyB. As noted above, fraud is outside the bounds of the contract; and from my point of view, its outside the bounds of proper business behavior.

Services Provider Practice Notes: During a bid process, make sure that you have a reasonable expectation that you can fulfill the claims and promises that you make. Write every bid, respond to every RFP, as if what you were writing is going to be incorporated into the contract. Make sure you have a thorough understanding of your company’s capabilities. If you knowingly make false representations or if you negligently misrepresent something in order to win a piece of business, don’t think you are doing anyone a favor, not your customer, not your employer, and ultimately not yourself. That said, if you have a reasonable expectation that you can fulfill the claims and promises you make, then the agreed upon limits of liability in the contract will hold in the event there is a breach.

Customer Notes: Trust but verify! In entering into a large project with a vendor, you must do your due diligence. I always suggest that customers discuss the project in detail with the vendor’s operations team, not just the salesforce. And you must control the bid process to maintain your leverage. In that regard, BSkyB made many mistakes. While that doesn’t excuse EDS’ fraud, BSkyB could have protected itself better – hopefully to be the subject of another post.

Gary S. Greenstein is an attorney who specializes in technology transactions and outsourcing deals. He is Special Counsel to Technology Practice Group, a boutique law firm whose clients include global entertainment companies, international investment banks and financial institutions. www.technologypracticegroup.com

It means that Sir Vivian Ramsey, the judge in the case of BSkyB versus EDS has ordered HP, EDS’s owner, to pay a total of £270m to BSkyB. But the judge gave no immediate decision on HP’s request for permission to appeal. He’ll give his decision in writing.

Nobody will be surprised if the judge rejects HP’s request for an appeal.

After spending nearly 18 months working on his 468-page judgment, the judge may see the document as having left no legal gaps through which HP could appeal. If the court rejects HP’s appeal request, lawyers for the supplier would probably appeal directly to the Court of Appeal.

The next hearing is on 23 April.

EDS “misrepresentation” in BSkyB case – some comments by the judge – IT Projects Blog

Lessons from BSkyB case – CIO

Find out what the BskyB/EDS court case means to outsourcing contracts – Inside Outsourcing

Source: www.computerweekly.com

HP has been ordered to make a further interim payment of £70 million to broadcaster BSkyB, over a failed EDS software implementation.

The new order, by the Technology and Construction Court, which must be paid within 14 days, takes HP’s total payments to £270 million, over a system originally pitched by EDS to cost £48 million. . .

Read More.

Source: www.computerworlduk.com

BBC IT services contractors, employed by Siemens, are balloting on strike action.

The contractors are concerned about a pay freeze, announced in recent weeks, as well as redundancies. In the four months to January, 70 Siemens contractors working at the broadcaster were made redundant. The media trade union Bectu believes 50 further staff who work on server management could now be at risk as Siemens considers offshoring their roles to Romania.

The vote is for a one day strike to take place in late March or early April.

The contractors work on a £2 billion outsourcing agreement, signed by the BBC five years ago after the sale of its own technology wing. Siemens provides all IT, technology and transmission services to the broadcaster.

Calling the pay freeze and redundancies a “double whammy” for staff, Bectu said it was “not even as if a pay freeze is safeguarding jobs”. The ballot runs until 19 March.

Suresh Chawla, national official at Bectu, criticised the pay freezes. “Whilst colleagues within the BBC, and in other service partner companies, are receiving modest pay increases and with inflation now hitting 3.7 percent, Siemens’ position is untenable,” he said.

The trade union had “no option but to ballot our members for industrial action”, he said, urging Siemens to return to talks.

It is not the first time the staff have considered strikes. Three years ago, around 3,400 IT and business processing staff employed by outsourcing firm Siemens secured four percent pay rises after threatening industrial action.

Siemens’ work at the BBC has also been heavily criticised in the past. In 2007, the BBC set up a technology partnership board to monitor the outsourcer, following a report by MPs that revealed 60 percent of the key technology projects in the deal’s first year suffered delays or went over budget.

Reprinted with permission from Computerworld UK. Story copyright 2010 Computerworld UK Inc. All rights reserved.

Source: www.thestandard.com

According to Forrester companies in all Western European countries apart from the UK prefer to use contract IT staff over offshoring work.

This according to a report as is to ensure they fit in with the local social fabric and adhere to Labour rules.

But why is the UK so different?
Continue reading here

Source: http://www.computerweekly.com

HP has paid broadcaster BSkyB a £200 million court damages payment, over a failed customer system built by EDS.
The interim payment was made last week, ahead of the deadline set by the judge of 4pm today. HP acquired EDS in 2008, during the court case, and has inherited the problem….

Read More

Source: http://www.computerworlduk.com

Atos Origin has reported a 40% increase in profits in 2009 despite a 3.7% fall in revenues after its cost-cutting strategies paid off.

The French IT service provider made €32m last year compared to €23m last year. During the same period revenues fell from €5.324bn to €5.127bn.

The company’s Total Operational Performance (TOP) Programme attempts to reduce costs through strategies such as standardisation across the company.

The company, which is supplying IT to the 2012 Olympic Games in London, said its in-depth reorganisation and the TOP programme will help it increase profitability this year.

Atos Origin this week signed a 10-year contract worth more than £50m with catering industry supplier Brakes Group.

Source: www.computerweekly.com

LISBON, Feb 8 (Reuters) – Portugal Telecom (PT) (PTC.LS) said on Monday it had agreed to buy Brazilian information technology firm GPTI in an all-share deal as part of a drive to reinforce its presence in Latin America’s largest country.

PT did not say how much the deal is worth, saying only that its Brazilian contact centre company, Dedic, will issue shares for GPTI’s current shareholders to take a 12.5 percent stake in Dedic. GPTI has a debt of some 80 million reais ($42.6 million), PT said in a statement.

“This acquisition makes part of PT’s strategy to consolidate and reinforce its presence in Brazil and invest in assets where PT can create value, complementing its current portfolio,” the company said.

PT owns half of Brazil’s largest mobile phone company Vivo (VIVO4.SA), which is a joint venture with Spain’s Telefonica (TEF.MC).

PT said it will integrate GPTI into Dedic, creating an integrated IT and services outsourcing player mainly for the telecommunications sector. (Reporting by Andrei Khalip; Editing by Rupert Winchester)

Source: Reuters.com

BSkyB hired IT company EDS to build it a £48m customer relationship management system in 2000. Relations between the companies broke down in 2002 and Sky ended up building the system itself at a cost of £265m.

BSkyB sued EDS, claiming that the company had lied about the development and timescale of the project during the sales process.

The contract signed by the two companies contained a limitation of liability clause which would apply if the project faced difficulties. That cap would not apply, though, in the event of fraud.

BSkyB claimed that EDS’s behaviour involved a fraudulent misrepresentation. The High Court has agreed, introducing the prospect of damages far in excess of the liability cap. The claim is for £700m and expected damages are likely to run to £200m.

The case was keenly watched by IT companies concerned that it could force them to change the way they sell their products and services.

Mr Justice Ramsey found that an employee of EDS had made a fraudulent misrepresentation, and that EDS was also liable for negligent misrepresentation and breach of contract. He rejected many of BSkyB’s other claims of fraud in his ruling, though.

The ruling said that one of EDS’s managing directors, Joe Galloway, told BSkyB that the system could go live within nine months and be completed within 18 months. The statement was made without any basis or assessment of the actual time it would take and was made purely to ensure that EDS won the contract and to advance Galloway’s own career.

“He proffered timescales which he thought were those which Sky desired, without having a reasonable basis for doing so and knowing that to be the position,” said the ruling. “He knew that no proper analysis of time had been carried out and he knew that he had no basis for saying that go-live could be achieved in nine months and complete delivery in 18 months. Indeed, he said that he did not consider the timescales to be sufficient.”

“In my judgment his conduct went beyond carelessness or gross carelessness and was dishonest. I consider that he acted deliberately in putting forward the timescales knowing that he had no proper basis for those timescales. At the very least he was reckless, not caring whether what he said was right or wrong,” it said.

Mr Justice Ramsey said that Galloway committed perjury in evidence he gave in relation to his academic qualifications and gave dishonest answers in the same confident way that he delivered the rest of his evidence. “He therefore demonstrated an astounding ability to be dishonest,” said the ruling.

David McIlwaine, an IT law expert at Pinsent Masons, the law firm behind OUT-LAW.COM, said that this focus on one individual lessens the significance of the judgment for the broader industry, though the judgment will make salutary reading for all involved in IT procurement.

“It was widely anticipated that a finding in favour of BSkyB would trigger a large-scale review of sales processes. However, given the emphasis in the judgment on the dishonest conduct of one man, and that only one of the five allegations of fraud against EDS succeeded, the ramifications for the IT industry may be less significant than expected,” he said. “Importantly there were no findings in Mr Justice Ramsay’s judgment of more systemic or widespread internal failures or recklessness in relation to EDS’s sale processes.”

The Judge’s approach may have differed had EDS’s employee purely been reckless in putting forward the timescales. However, the extreme nature of his deception (extending to sustained perjury in the witness box) tainted the balance of his evidence, including about the relevant representations.

HP, which now owns EDS, said in a statement that the company did nothing to deceive BSkyB and that it would seek permission to appeal the ruling.

The case began in 2004 but the ruling has only now been published and it is thought to be one of the most expensive in UK legal history. The judgment itself, at almost 500 pages, is also one of the longest ever.

Sky had initially sought £700m in damages, and now says that it will be seeking an amount “in excess of £200m”.

McIlwaine said that companies looking to avoid being caught in the same position as EDS must take great care when choosing sales staff.

“Suppliers can do little other than tighten recruitment processes to protect themselves against rogue employees,” he said. “Provided that suppliers have confidence in their employees, i.e., that they will be honest, the judgment should not be cause for wholesale review of sales processes.”

Source: http://www.theregister.co.uk

INTERNATIONAL. Over the past five years, the IT outsourcing and offshoring industry has grown significantly and it is expected to grow even further in the coming years.

As a result, the landscape of the outsourcing and offshoring industry has changed, rapidly expanding from IT to other sectors including banking, human resources and even pharmaceuticals.

It has grown geographically – once heavily connected with India, outsourcing has now become a global phenomenon with countries in Africa, the Middle East and Latin America all emerging as outsourcing hot-spots.

With so much change happening, ITIDA brought together thought-leaders from some of the world’s biggest organisations including McKinsey, NASSCOM, Credit Suisse and IBM, at a workshop on Global ICT Services Sourcing Post-Crisis in Sharm el-Sheikh.

Topics discussed included current trends and the prospects that lie ahead in the international sourcing of ICT services. We also talked about how industry stakeholders have reacted to the economic crisis and how the industry is being re-shaped.

Cost-competitiveness remains a big attraction for western companies looking to outsource and this was evident from the presentations given by some of the industry’s leading bodies, but increasingly, talent is becoming a key factor in investors’ decision-making process.

We firmly believe that for emerging markets looking to establish themselves as a global destination, talent must be nurtured through training, education and government support.

It is the human capital element that is increasingly being recognised by both investors and service-providers alike as being the back-bone of successful outsourcing.

A recent report by India’s NASSCOM highlighted that between 2004 and 2008, the global IT sourcing market grew to $US93 billion, and the addressable market is likely to increase from US$500 billion in 2008 to a staggering US$1.5 trillion by 2020.

This is no surprise, as investors and service providers are increasingly recognising the benefits associated with outsourcing.

Low operational costs, good infrastructure and skilled workforces are some of the factors attracting investors to the O&O industry.

Alongside the booming growth of the industry, the overall landscape is being shaped by the needs of investors.

Three significant trends that emerged from our workshop as affecting the landscape are multi-servicing, multi-shoring and competency-sourcing:

• Multi-servicing: No longer is the O&O industry being dominated by IT services – it is expanding vertically, tapping into other sectors such as healthcare, business, finance and travel. Also different countries are increasing their services offering, thereby influencing an investor’s decision of where to locate.

• Multi-shoring: The number of countries emerging as O&O destinations is growing, providing an expanding range of services. This is especially true for developing countries, which are recognizing the positive attributes associated with outsourcing and what it can do for their overall economic, social and educational development.

• Competency-sourcing: This is perhaps the biggest change to the O&O landscape. Investors are recognizing the diversity of skills and competencies across the globe and there is a move towards capturing the benefits of such localised talent.

Similar to multi-servicing, different countries are becoming synonymous with certain skills which are proving increasingly attractive for investors. Examples of such localized skills include administration, research and analytics, financial planning and IT support.

With the O&O industry growing, investors are naturally looking more closely at the skills base being offered by locations and what other benefits they have available. Talent is wielding a significant influence on investors’ decisions along with government support, cost-competitiveness and infrastructure.

In order for any country to succeed, particularly in the area of talent, it must have strong government support. A good education system, supported by government training initiatives, is one of the main ways countries are nurturing talent.

It is through providing dedicated training programs, encouraging further education in the IT and outsourcing industry and encouraging local and multinational companies to invest in skills that countries can truly become global players in the O&O market.

However, government support should not end there. Gaining support at one level in the O&O industry often means that other areas will be included. Indeed, the role of the government is proving vital in supporting the development of the O&O industry. Benefits of such backing include the development of software technology parks, tax exemptions and venture capital support. Government support does not stop at tangible benefits – it is becoming widely regarded that a nationally branded outsourcing operation goes a long way in attracting investors.

Here in Egypt, we receive great support from the government to develop and expand our ICT sector. Investment in training, education and the overall industry means we are able to grow our industry extensively.

Several recent industry reports have declared the Middle East and North Africa region as an emerging area of excellence in the O&O industry, with Egypt firmly leading the way. It offers a large, multi-skilled, multi-lingual talent pool, strongly supported by the government through the Ministry of Communications and Information Technology (MCIT) and, of course, the Information Technology Industry Development Agency (ITIDA).

Egypt’s talent pool is becoming widely recognised within the O&O industry for its diversity, language capability and readiness.

Egypt delivers a large number of graduates annually, with a strong command of foreign languages and high employability skills, making them highly sought after by investors. Such talent is fostered by government support which drives innovation, research and development, human capital development and IT specific talent programs, not to mention direct university curriculum interventions.

ITIDA’s support also infiltrates into the wider IT O&O industry, promoting investments, supporting research and development and helping increase exports. Such government support has resulted in excellent IT infrastructure, including the development of Smart Village and wide cable connectivity.

What makes Egypt stand out even more in the O&O industry is the fact that not only does it possess a great talent pool and benefit from exceptional governmental support, but it also offers low operational costs, great accessibility and a convenient time zone with key trading markets.

It is these factors, that I believe, positions Egypt as a prime site of investment in the IT O&O industry and one which will receive much interest over the coming years.

The landscape of the O&O industry is changing, as investors seek to optimize the different skills and competencies on offer across the globe.

The combination of talent and government support is proving to be most important within this and is likely to dictate the decisions of investors. Egypt’s embodiment of this powerful combination, together with other attractive features, positions it as a leader in the O&O industry, and is certainly one to watch.

Source: BI-ME

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Source: http://www.m2.com

Procat, an Istanbul-based solution provider for call centers, has opened a “call center hotel” in the city. It aims to provide services to call center companies on a periodic basis.

The hotel aims to cover the demands of the call center sector, which has been growing rapidly in Turkey. The hotel call center complex has a Bosphorus view and a capacity of approximately 1,500 seats in two buildings in Istanbul’s Kavacık district, easily accessible from both the Asian and European sides of the city. Operation centers include all the infrastructure and technology needed for a call center organization, as well as a cafeteria, terrace, training halls, and recreation and entertainment sites.

Turkey’s call center market has reached an annual market volume of $300 million, said Procat Chairperson Tarkan Ersubaşı. Despite the negative impacts of the recent global crisis, the market managed to attain 25 percent growth in 2009, Ersubaşı said. He added that grabbing robust and efficient growth trend is among the basic problems of the sector.

“In economies with limited resources such as Turkey, the difficulties in envisaging the return on investment appear as the basic obstacle for growth and efficiency,” he said.

“The fact that the projects to be transferred to foreign resources generally do not cover the long term, results in the institutions’ being cautious about investments necessary for growth. We have observed through our studies that our business partners are seeking different solutions to acquire flexibility to develop such short-term projects,” he said. “Besides, we have realized that many call centers are in need of full-fledged disaster management centers for possible earthquake, flood and terror incidents. With these thoughts in mind, we have opened the Call Center Hotel, Turkey’s first such hotel. We expect the hotel to undertake an important function for the sector’s rapid and efficient growth.”

Competitive advantage

Institutions willing to benefit from the hotel in the short or long term have the chance to properly manage their projects and needs, such as emergency coordination. This helps to boost operational efficiency, offers the ability to focus on core business and obtain competitive advantages through capabilities such as speed and flexibility.

Not limiting service options to fixed packages, the Call Center Hotel can also offer alternative tailor-made solutions. The customers of the hotel include call centers aiming to increase capacity, institutions that aim to implement periodic projects without investment cost and global call center companies that are willing to enter Turkish market.

Procat operates in various sectors, including telecommunication, transportation, airline, technology, retail, service, e-commerce and construction. Procat provides value-adding, customized customer care, contact center consultancy and project outsourcing services inside Turkey, Europe, the Middle East and Africa, and the Commonwealth of Independent States regions. It provides consulting services on design, planning, management, development, infrastructure, advanced technologies, system interaction and telecommunication products and services for contact centers. In addition to the consultancy services for existing operations and increasing the efficiency of current systems, Procat also offers turnkey contact center installation, management and monitoring services.

Source: http://www.hurriyetdailynews.com

Barclays’ decision to end supplier contracts and take two IT functions in-house is an interesting one. Why has Barclays taken this route?

Last month Barclays decided to end a desktop management contract with Getronics and take it back in-house. The bank then decided not to renew a six year contract with Accenture. The contract included application development and support for UK banking systems.

One CIO told me that banks are always looking at the numbers and if outsourcing contracts get more expensive over time they may in fact be cheaper to in-source.

While this is true for many contracts it could not have been the case for the Getronics contact. A source of mine tells me there is no way Barclays would get a cheaper deal. Getronics was apparently 15.8% cheaper than its predecessor on the contract which was EDS.

Another contact said the financial trouble that Getronics found itself in 2007 before it was taken over by KPN could be one of the reasons for the Barclays decision. He questioned: “Is this the fiurst of many of the Getronics clients that change suppliers?”

Source: http://www.computerweekly.com

The India-based Economic Times is sure to add fuel to the UK offshore debate with the publication of the number of H-1B (US non-immigrant worker) visas granted to the top Indian players last year. According to the ET, Wipro headed the list in 2009 with 1,964 H-1B visas though, oddly, TCS did not seem to figure in the rankings. Infosys scored 440 visas and even Satyam got 219. More interestingly perhaps, Microsoft was the second largest ‘winner’ with 1,318 visas, Intel had 723, IBM got 695 and Google, 211 – so it’s not just the ‘offshore’ players ‘causing the problem’, folks!

Now compare these numbers to the UK. According to Home Office figures (see Do we need 10,000 Indian imports?), last year TCS brought in 4,465 staff, Infosys, 3,303 and Wipro, 2,350. But before we start howling to man the barricades, let’s delve a little deeper. First, according to the ET, the Indian H-1B visa numbers were much higher in 2008, with TCS at 1,539, Infosys at 4,559, and Wipro at 2,678, albeit still behind the 2009 UK visa numbers for these companies. Then there’s the big unknown (at least to me – and I will try to find this out) which is how many ‘transient’ Indian IT workers are actually in-country. Remember, these are the numbers for new visas granted; H-1B visas are valid for up to six years, so there may be many more Indian IT staff already working in the US than in the UK. And, arguably most importantly, we have little idea what types of jobs they are actually doing.

But in any event, arguing over the numbers is the least constructive thing we can do. As I said in my December post, the offshore worker story is not a ‘black and white’ case of ‘exporting British jobs’ by any means. I repeat my call to both the UK IT industry and in particular to the UK subsidiaries of the India-based players – as well as the interested employment bodies such as APSCo – to come together to get some real clarity on the facts and the detail behind the facts and then work out how they can all work together mindful of everybody’s interests. As I said, “not easy, but surely more productive”.

Source: http://techmarketview.com

The bad news is that IT jobs took a disproportionately high hit in job cuts in 2009. Worse, high-tech advisories such as the Hackett Group are advising companies not to hire back U.S. or European IT workers but instead fill any needs overseas, which Hackett says will mean a jobless recovery in 2010 as far as IT is concerned.

The good news is that not everyone’s predictions are as dire as Hackett’s, and there are several pockets of demand for skilled IT workers, even if many jobs such as those in support and systems administration remain under threat. One recent indication: a Goldman Sachs study predicting a 4 percent rise in IT spending, which indicates some positive momentum among large companies at least. That follows similar surveys by IDC and Gartner, both also predicting slight upticks in IT spending in 2010.

[ See the IT salary trends for your position and area with our interactive salary survey. | Check out available IT jobs at InfoWorld's IT jobs service. | See InfoWorld's slideshow on key IT job trends for 2010. ]

For example, demand for cloud-oriented tech experts is way up, as my colleague David Linthicum has reported. And tech placement firm Robert Half Associates has projected it sees strong demand for network administrators, security managers, and systems engineers.

Other hot areas are software architects, Java and .Net/C++ developers, quality assurance pros and project managers, agile-capable developers, and SAP consultants. Mobile app development has also gotten a lot of buzz, though whether this is a profitable area or long-term need remains to be seen.

Overall, according to Michigan State University’s annual survey on recruiting trends, engineering and tech jobs will stay stable in number in 2010, with no overall losses or gains. And despite the recession and effects of outsourcing, a survey of HR pros still puts tech as one of the top fields of study for students to pursue (the other is health care).

What is clear is that journeyman positions — help desk support, software coding, Web production, code testing, software and server administration, and even software development — is increasingly being moved overseas or to automated systems. That poses near-term risks to people with such jobs, as well as long-term ones for the United States, Canada, and Europe, as fewer people enter engineering and tech fields for fear that there will be no jobs, exacerbating the shortage that already exists in these regions for qualified engineers.

Of course, not all these jobs will be outsourced — collaborating over 12 time zones and 12,000 miles is difficult, and many outsourcing efforts have failed due to the time, distance, language, and cultural challenges. But many will, and as nations such as India, China, and the Philippines reap the rewards of their intensive engineering education efforts, they’ll want to move up and begin taking work for project management, architecture, software design, and other more advanced skills typically handled in the United States, Canada, and Europe today.

Source: www.computerworld.com

Synetrix was founded in 1998 by its six current directors and employs 193 staff. It seems very well entrenched in local government and particularly in education – a point which won’t be lost on RM. Synetrix also plays in central government and the private sector, with a client base of well known brands such as Honda and Thompson Travel.

This looks like another really canny buy by Capita, boosting both its IT services credentials and its local government/education presence at a very reasonable price. Capita has been picking up a few ICT services firms of late, including Computerland (June 2008), ABSNet (Oct. ’08) and Carillion (June ’09). Synetrix will add another useful string to its bow.

But the deeper dive into IT services is a volte face by Capita, which for years insisted that it was purely a business services company (for example, see Capita buys Computerland. Why?). Now that many IT services players are well entrenched in the UK BPO market – and increasingly those from India – perhaps Capita feels it needs to bolster its defences, if not mount a counterattack. And it’s probably right!

Source: Techmarketview.com

By Bob Sherwood

Moves to create multi-billion-pound public sector outsourcing and property companies, which could eventually be floated, are being considered by Whitehall insiders.

Gerry Grimstone, the businessman charged by the Treasury with finding ways to raise cash from public sector assets, has launched a review to consider how the government could set up companies along the lines of Capita and Serco, which handle huge government information technology and service contracts.

So far the work done under the government’s review of its asset portfolio has focused on existing businesses that could be sold, including the Tote, the Dartford Crossing and the High Speed 1 rail line.

But Mr Grimstone, the chairman of Standard Life and Candover who was Margaret Thatcher’s privatisation guru, is looking to go further and group activities from across a range of departments, such as IT functions, data processing and operating centres, into commercial entities.

“There are a lot of things within the public sector that could loosely be described as business activities,” he told the FT. “We are just embarking on what could turn out to be a radical piece of work on identifying business activities within government and corporatising them.”

He said there was no reason such activities had to be done in the “vertical silos” of individual departments, and pointed out that the likes of Capita and Serco had already capitalised by taking parts of business from across government and combining them into “horizontal” businesses.

He denied it was “far-fetched” that such public sector businesses could eventually compete with the existing service companies.

Ministers plan to give the Shareholder Executive, which manages state investments in businesses, the ability to create companies from parts of different departments. Mr Grimstone said the activities could be “turned into large companies and transferred to the private sector with wide public participation”.

A report released last week on the government’s operational efficiency programme, said the Shareholder Executive would consider “creating one or more property companies” that could own and manage portfolios of public sector properties.

The report said: “The development of new public property and service companies will broaden the range of asset types that the government plans to assess. This in due course is expected to provide opportunities for value realisation and for private sector participation.”

Last week the government appointed John McCready, a senior partner at Ernst & Young, the accountants, to head a new property unit within the Shareholder Executive which will review the government’s £370bn ($600bn) property portfolio, raising expectations of the creation of real estate investment trusts.

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web.

Source: FT.com

The Association of Professional Staffing Companies has sparked a fierce debate after accusing Indian outsourcing companies of bringing thousands of IT staff from the sub-continent to the UK each year in a move which was “damaging” the job prospects of British workers.

The claims have been rebuffed as an oversimplification of an “emotion-charged” issue where recession hit companies are still cutting thousands of staff posts.

Using Freedom of Information requests, Ann Swain, chief executive APSCO, said Indian outsourcers were bringing foreign workers to the UK on an “industrial scale”. The suppliers should be legally obliged to “tap the UK labour market”, she insisted, before employing overseas staff.

Seven of the top 10 companies bringing non-EU workers into the UK were from India, she said, with Tata Consultancy Services, Infosys and Wipro temporarily importing a total of nearly 10,000 staff in the last year.

But Anthony Miller, managing partner at analyst firm TechMarketView, said the issue was “never as clear cut” as it was being portrayed.

While there was probably “abuse of the [temporary visa] system” by some outsourcing firms, it was not clear how much this was happening or who was responsible, he said.

It was wrong to assume that bringing overseas IT workers to the UK meant British jobs were being lost, he said. “Of course many jobs being offshored could be done by UK staff, but the cost-savings often mean companies can undertake more IT projects to help the business grow, or indeed remain profitable.”

A more informed debate was needed, he said, where the above aspects are considered, as well as the importance of maintaining the development of British IT skills by assuring jobs are available to local staff.

Miller said “there is an obligation on the UK IT industry”, including the UK divisions of Indian outsourcers, “to ensure that we are building sufficient local skills so that we do not become entirely dependent on offshore talent”. Additionally, the government needed to monitor closely any visa abuse.

But the recruitment of British staff by Indian outsourcers was being ignored in the debate, he said. Part of the problem was that Indian outsourcers “haven’t got their act together individually, or more importantly as a group, to get a coherent message out”.

Rather than “toss grenades over the transom”, Miller said, it would “surely make more sense” for both sides of the debate to look for “real clarity on the facts and the detail” to solve the issue.

Some employment regulation is due to change. Temporary workers will soon not be able to stay in the UK after their contract ends, and they will not even be able to enter the country for work if they have not been at their company for over a year.

Phil Woolas, immigration minister, told the Financial Times that “intra-company transfers” were an “important part of making the UK an attractive place in which to do business”. The authorities would take action against employers found to be deliberately undercutting local wages, he said.

Source: http://www.computerworlduk.com

LONDON (Reuters) – British outsourcing group Capita on Sunday denied an allegation it had overcharged schools for IT services by 75 million pounds , saying it had a good relationship with its clients.

School software provider Bromcom said in a statement it had complained to the Office of Fair Trading (OFT) over Capita’s Children’s Services business. Bromcom said it had made the complaint over what it called anti-competitive practices, including tying and bundling together software products which should be sold separately and charging inflated annual software maintenance charges to schools.

It said it believed schools had overpaid over the past 12 years.

In response, Capita said it had already rebutted the allegations via its solicitors and had had no contact from the OFT.

“We have served the education market for a number of years and grown our business through supplying innovative products to meet the changing needs of the market, maintaining good client relationships and working successfully with other suppliers,” the group said in a statement.

Source: http://www.nytimes.com

Dell, based in Round Rock, Texas, said its employees at the plant will continue in their roles when Foxconn takes over.

Source: AP – Google News

By accomplishing this alliance with HPI, Steria will gain comprehensive procurement service and new industry skills and will be able to provide enhanced BPO services to its international clients. HPI will have access to Steria’s new service delivery organisation in Germany and to Steria’s industrialised integrated delivery model.HPI provides excellent sourcing skills together with category management expertise for optimising direct and indirect costs. These are highly complementary to the Steria’s existing Procurement and Purchase to Pay services. Together HPI and Steria can provide an end to end service portfolio on Procure to Pay encompassing Quote to Contract, Procurement and Payment cycles.

BPO is one of the most important business areas for Steria. Within this, the procurement sector being one of the fastest growing segments, this alliance will enable the company to expand its position in the European BPO market through in depth and complementary sourcing skills of HPI.

Juergen Sponnagel, Member of the Executive Committee and Head of BPO of Steria Group said: ” For Steria’s clients with international operations, our partnership with HPI will bring enhanced operational efficiencies in their procurement operations, saving them costs and time that they can reinvest within their core-business.”

Steria is acknowledged as a European leader in BPO. Its portfolio of services reaches into the very heart of the business support activities that underpin its clients’ organisations. These include Finance & Accounting, Procurement, Human Resources and processes tailored to individual sectors and organisations (Life and Pensions, Customer Services etc). Since entering the BPO market in 2001, Steria has been recognised as a key player in the top-value chain in BPO service delivery.

For the second consecutive year, Steria has secured the No. 1 position as the purchase-to-pay (P2P) business process outsourcing (BPO) supplier of choice across Europe. Steria’s P2P (accounts payable) BPO ranking was unveiled in the NelsonHall BPO Market Assessment, 2009-2013 published on November 12.

In addition, the NelsonHall BPO rankings follow Steria’s recent announcement that it has been awarded ‘Best BPO Project’ by the British National Outsourcing Association (NOA) for its landmark achievements as one-half of the joint venture with the UK Department of Health, the NHS Shared Business Services, established in 2005.

This included positive acknowledgement in the 2009 UK Budget report and the achievement of world class finance accreditation by benchmarking firm, Hackett, earlier this year.

About HPI:
HPI belongs to the leading Procurement Services Providers (PSP) in Germany. Spun-off from Hoechst AG in 1998, as their former Central Purchasing Department, HPI manages a spend of about €5bn on behalf of approx.170 companies with more than 200 employees (group) and offices in 12 countries (UK, NL, IT, Es, G, Cz, Slo, CH, Pol, China, India, Dubai). HPI’s service portfolio covers sourcing, management and transaction of all procurement relevant processes, category management, strategic alliances management and sourcing projects.

Source: http://www.steria.com

As timing goes, it was curious at best, coming just before the Eid el Adha holidays in the region and the long Thanksgiving break in the United States. Adding to the intrigue is that Dubai successfully raised $5 billion in a bond offering taken up by two Abu Dhabi government controlled banks the same day

This left investors scratching their heads wondering what the motivation was. I spoke to a number of fund managers and bankers with investments in the Emirate and, like most politics in the region, there is more to it than meets the eye.

As one fund manager said, Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and Prime Minister of the UAE, is playing hardball. He is out to “teach a lessons to his boys.” His “boys” are the names which have become well-known power brokers in the build up of Dubai Inc. over the past two decades.

It has been a busy week for Dubai Inc.

Sheikh Mohammed cleared out his advisory board at the Investment Corporation of Dubai and pushed out the respected head of the Dubai International Financial Center who also served as Vice Governor of the UAE Central Bank.

The names on his advisory board included Sultan Bin Sulayem the Chairman of Dubai World and its property arm Nakheel. This I am certain was not an easy move by the Ruler.

Dubai’s rapid development was closely linked to the Palm and World property developments. I am sure we have all looked at their images offshore on Google earth at least once. Dubai World was also the force behind the high profile dust up in Washington with the P&O ports buyout.

Many I spoke to believe Dubai World is being singled out for good reason. Of the total $80 billion debt on the books, $59 billion of that comes under its leaky umbrella.

In fact, others within Sheikh Mohammed’s inner circle seemed to think it is only right for Dubai World to clean up their books like everyone else has been asked to do. That task is underway today with the help of accountancy firm Deloitte.

The other question being raised amongst global investors is the level of bench strength for Sheikh Mohammed or who he is turning to during this shake-up. Names at the forefront today include Mohammed Ibrahim Al Shaibani, Director-General of Dubai Ruler’s court and Ahmed Humaid Al Tayer, Governor of the Dubai International Financial Centre.

They were in Sheikh Mohammed’s delegation during this week’s visit to London and the response to their moves has been positive so far, according to bankers and investors I spoke with.

There is a sense of irony after what has gone on this week. British Prime Minister Gordon Brown congratulated the Dubai ruler for the actions taken to respond to the debt challenges during the bi-lateral meeting. It is something the PM knows a great deal about, with U.K. government debt soaring to 12 percent of GDP.

That nod of goodwill came before Dubai’s request for a standstill agreement, and left investors wondering what is next. As one regional economist said this was a “disappointment in a way.” Dubai Inc. had cleared all the hurdles on the path to recovery but appears to have stumbled on this one.

Source: CNN

The pan-European Dow Jones Stoxx 600 index closed down 3.3% at 239.85, a level not seen since early November.

The U.K. FTSE 100 index closed down 3.2% at 5194.13, the French CAC-40 index ended down 3.4% at 3679.23 and the German DAX index closed down 3.3% at 5614.17.

Source: http://online.wsj.com/

That is according to a new study by the financial analyst Plimsoll, which forecasted a rise in mergers and acquisitions (M&A) in the industry as cash rich companies prepare to purchase rivals at discounted valuations.

The Plimsoll Industry Analysis, which researched the health and prospects of 462 outsourcing firms, identified 100 organisations within the sector that have a sizeable cash reserve on their balance sheets.

David Pattison, author of Plimsoll, explained that change management skills will be in high demand over the next 12 months.

He said: “With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being it really is a buyers market out there for cash rich companies.”

Earlier this week, an Ernst & Young’s transaction advisory services revealed that one-third of international businesses are likely or high likely to acquire other companies in 2010.

Source: http://www.odgersinterim.com

Equitable Life has signed a ($200 million) £120 million deal for administration services with Indian outsourcer HCL.

The life insurance firm, which closed to new business in 2000 after a prolonged legal battle, will use the new contract to manage its policies until the last one ends, expected to be in over 30 years’ time.

HCL will take over from existing administration services provider Lloyds Banking Group when that deal expires in March 2011, and will focus on managing call centres and other administrative functions affecting policy holders.

Under the deal, Equitable Life expects to make £8 million worth of savings in the first year, and to cut overall costs through the lifetime of the deal by over £100 million.

Some 100 staff at Lloyds Banking Group will transfer to HCL when that company takes over the work, and HCL said a “small number” of the remaining 240 posts for that deal will move to its other locations in the UK and India.

Chris Wiscarson, chief executive of Equitable Life, said the contract signing was “one of the most important decisions” in the society’s history. “I want to help restore policyholders’ savings and this is an important step in that direction,” he added.

Wiscarson also said he “very much” regrets the “concern, uncertainty and disruption” that the outsourcing may cause to Lloyds staff currently working on the administration.

It also emerged today that a further 570 life, pensions and investment administration jobs will be cut at Lloyds Banking Group. Ged Nichols, general secretary at the Accord trade union described the cuts as a “a body blow” for the workforce.

Source: Computerworlduk.com

Capita insisted on Wednesday that there was no let-up in the trend for businesses and public bodies to outsource back office jobs, but the shares fell sharply amid concerns over a slowing rate of contract wins.

Although the group said it had secured £1bn of deals so far this year, some £814m of that was derived during the first six months, meaning the win rate has slowed significantly since.

Many support service sector groups have fared relatively well during the recession as government and companies farm out more work to cut costs, but some analysts have raised concerns that the pace could slow.

Earlier this week, Paul Lester, chief executive of VT Group, said the public spending squeeze could dent margins and delay contracts over the next year, although he forecast the market would rebound strongly.

Andrew Gibb, analyst at Oriel, said: “Maybe the days of double-digit organic growth are becoming more difficult to achieve.”

However, Paul Pindar, chief executive, said Capita’s slower pace of contract wins in the second half did not concern him since they “don’t tend to fit into nice monthly increments”.

“What I’m much more interested in is what the medium – and long-term prospects are – and I continue to believe they’re very healthy indeed.”

Capita, which manages TV licensing, runs the criminal records bureau and manages teachers’ pensions, said the forthcoming general election had put a dampener on business from central government.

Overall, though, Mr Pinda remained confident that there were “vast areas of opportunity” for the group to take on more jobs from Whitehall.

Moreover, said Gordon Hurst, finance director, there was little evidence that private or public bodies were demanding cheaper deals even as budgets came under pressure.

“Competitors have priced low and, to put it bluntly, it hasn’t worked,” he said.

Citi, which is Capita’s joint broker, edged down its sales forecast for 2009 by 1.5 per cent in the wake of the trading statement on Wednesday but still forecast that pre-tax profit would rise from £277.2m to £323.9m.

The shares fell 32½p, or 4.3 per cent, to 728p.

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web.

Source: FT.com

The software giant has launched a fully localised version of its Bing search engine in the UK

From Friday, Microsoft will go head to head with Google in the UK, when it launches a fully localised version of its Bing search engine, taking the UK site out of the Beta testing stage it has been in since launch in June.

With the launch, the UK will become the third country after the United States and Canada to receive a tailor-made version of Bing.

“We have had a dedicated team of 50 people working hard since June to make our results work better for people in the UK,” Ashley Highfield, Microsoft’s managing director of consumer and online products told The Times. “In particular, we want to excel in e-commerce because British people outweigh the US in terms of online shopping, and we wanted to make sure it could help you find a TV or camera in time for Christmas.”

In the United States, where the full version of Bing has been available since June, the search engine has been steadily building market share, though it still trails the market leader Google by some distance. The latest figures from Hitwise, for October, show Bing’s share of search climbing to 9.57 per cent, up from 8.96 per cent in September. In the same period, Google’s share fell to 70 per cent from 71 per cent.

In the UK, Bing’s share of search currently stands at around 3 per cent, roughly the same amount as its predecessor, Windows Live Search.

“We have held our market share since June,” Mr Highfield said, “without any marketing or promotion. We know that at present 50 per cent of people searching the internet spend 30 minutes doing so, which perhaps explains why 33 per cent are unhappy with current search results. The important thing to realise is that we are not trying to build a ‘me too’ product here. We have put a tremendous amount of research and development into pooling available information into one place for our users.”

Bing’s approach to search is based on a more visual approach than that offered by its rivals. Searches for a major company will return not only a direct link to the site in question, but a precis of useful information from that site, including telephone numbers and even search boxes. Maps are also integrated into the search results, as is the ability to search Twitter feeds.

“We want to bring an end to the current ‘in out’ nature of search,” Mr Highfield said. “Where you click through to a result, find it’s not what you are looking for and then go back and search again. Our unique selling point is to give you the answers that you want in one page.”

Microsoft has so far spent $2 billion on rebuilding and rebranding its search effort, but it is unlikely ever to dominate the market in the same way as Google, one search expert told The Times. “The difference is that Google began as a search engine, producing results that people liked, whereas for Microsoft, it’s just another weapon in their armoury.”

The biggest challenge for Bing is breaking the Google habit. Nowhere outside Microsoft HQ does anyone talk of “Binging”, rather than “Googling” something online.

“We know it’s a slow process,” said Mr Highfield. “But Bing is landing extremely well as a cool brand with early adopters. And in this situation, we are the cool underdog. We are the Apple brand. We have a similar market share in search as Apple does in PCs. We are the alternative choice at the moment, and that will help us build a following. I believe that the popular conception of Google is shifting, the idea that Google equals cool and Microsoft equals nerdy is on the way out, a process that is being helped by our other well received products, such as Windows 7.

“We’re not really in this for clever marketing. We want to build a relationship with people who use this tool for research. Once you treat it like that, Google starts to look really old-fashioned and clunky. If people use Bing to aggregate decisions about what to buy, that’s when we start to build relationships. We expect numbers to climb gradually over the next 12 months.”

Source: TimesOnline.com

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Source:http://whitepapers.zdnet.com