By James Hall, Retail Editor

Alliance Boots, the pharmaceutical retailer and wholesaler, is to offload about £300m of retirement fund liabilities to Pension Corporation, a specialist buyout vehicle.

The deal will see Pension Corporation assume the management of the old Alliance Unichem defined-benefit pension scheme. Alliance Unichem merged with Boots to form Alliance Boots in 2006.

The scheme has about 3,000 members and about £300m in liabilities, according to Sky News.

Parent company Alliance Boots is not considering outsourcing the management of its much larger Boots pension schemes, according to people close to the company.

It was reported that the deal, which could be announced this week, will take the value of the assets managed by Pension Corporation’s insurance arm to about £4.5bn.

In January, Alliance Boots closed its gold-plated final-salary pension scheme for existing members in a move that affected 15,000 employees.

At the time the company denied that the move was a cost-cutting measure and said it had started consultation with all staff on a new defined-contribution scheme. It said the new scheme will be designed to provide pensions for all UK employees “on a more sustainable basis”.

The company was the latest company to switch its final-salary members to a different retirement plan. Last year, Barclays and supermarket Wm Morrison axed their final-salary pension schemes for existing members.

Under its plan, Alliance Boots closed its UK defined-benefit pension schemes to future accrual for active members.

The move did not affect benefits already earned by employees through past service, nor did it affect the pension entitlements of former employees, the company said at the time.

Source: http://www.telegraph.co.uk

iReport —

Morgens Nørgaard is a well established businessman in the IT industry and the Founder and Managing Director of Miracle A/S, one of the leading IT companies in Denmark.

We talked about the IT market, the solutions they provide, outsourcing, and the impact of the global financial crisis on the IT sector.

Watch the video…

Source:http://ireport.cnn.com

LONDON -(Dow Jones)- Capita Group PLC (CPI.LN), a U.K. outsourcing company, said Tuesday it has acquired the National Dental Plan group of companies, or NDP, for a cash consideration of GBP30 million on a cash-free, debt-free basis.

MAIN FACTS:

-NDP is one of the largest providers of corporate dental plans in the U.K..

-NDP made a consolidated operating profit for its financial year to March 31 of GBP4.1 million on turnover of GBP13.4 million.

-NDP has circa 20 staff, all based in London.

-Shares closed Monday at 704 pence.

Copyright © 2010 Dow Jones Newswires

Source: www.foxbusiness.com

Ever since the government announced its massive cost cutting initiative the people I have spoken to all seem to agree on one thing. Costs can be cut by offshoring work to India.

There is certainly scope for more offshoring because there are no Indian companies in the government’s top 20 suppliers.

It does seem to make sense to offshore to cut costs but there are some strong counter arguments. There is an example from a reader below.

I write this blog because Ovum has become the latest analyst firm to suggest that now that the government has the drive to cut costs jobs will most probably be offshored to lower cost regions.

I wrote about this in February and got some interesting comments from IT professionals in the public sector.

Here is an example of the reaction the government should be prepared for. This was a comment left in the blog post I wrote in February. See this link for the blog and reaction to it.

“There is no justification whatsoever for the UK government using UK taxpayers’ money to subsidise the export of skilled jobs from the UK to the Indian IT industry. Any moves to do so would destroy career opportunities for UK-based IT staff, eliminate skilled jobs, reduce tax revenues from people working in those jobs, increase the numbers of unemployed IT workers having to claim benefits, and contribute to the permanent long-term decline of the IT skills base in the UK.

Nobody who has seen the colossal amounts of money already wasted on government IT projects managed by New Labour’s favourite consultancies, much of which has already flowed offshore to the Indian subsidiaries of those same consultancies, would believe that any savings on salary costs through yet more outsourcing to India will be translated into genuine savings for the end client – the UK taxpayer. After all, it’s never happened in the past, despite plenty of offshoring and onshoring by government-subsidised consultancies.

So I’m damned if I see why our taxes should be used to support the Indian IT industry instead of our own. Any government that pursues this path had better count on losing a lot of votes – and tax revenues.”

Source: http://www.computerweekly.com

By Martin Kuebler

Employees of Germany’s Federal Printing Works have demonstrated in Frankfurt against the outsourcing of a euro note printing contract. Germany’s central bank is courting offers from France and the Netherlands.

Around 250 employees of Germany’s Federal Printing Works demonstrated in front of Germany’s central bank, the Bundesbank, in Frankfurt on Tuesday, protesting a plan to outsource the printing of German euro notes to foreign firms.

According to the German union Verdi, 180 jobs in Berlin are on the line. About 400 jobs at Giesecke & Devrient, a supplier of banknote paper with offices in Munich and Leipzig, are also at risk.

The union said the decision would also jeopardize research and development work worth millions of euros.

The Bundesbank tendered the printing contract for the 2011 bank notes across the European Union, attracting the interest of printers in France and the Netherlands.  Giesecke & Devrient has only been awarded a part of the contract.

The Bundesbank has said it’s required by German and European law to advertise the tender EU-wide.

The awarding of the contract, initially expected August 2, has been delayed as the Federal Cartel Office investigates the matter. A final decision is expected by the end of the month.

Source: http://www.dw-world.de

The companies, which began working together in 1995, will incorporate new features of CSCs CyberLife, Customer Service Accelerator and Claims Management Accelerator software to provide additional e-delivery and self-service capabilities and enhancements to claims processing, according to a release.

Having worked with CSC for 15 years, we know the team understands our unique strategic goals, Donna Kinnaird, president, Swiss Re Life & Health America, says in a statement. Our renewed agreement positions Swiss Re to continue pursuing Admin Re acquisition opportunities and to benefit from CSCs insurance processing expertise and system capabilities.

Source: Offshoringtimes.com

By Kelly Fiveash

A preliminary appeal brought by Accenture against British Gas was rejected last week, after a judge ruled that a £182m lawsuit connected to the failure of a new billing system shouldn’t be obstructed.

As a result of that ruling the case will now be heard in court in October next year. It was first brought by British Gas in May 2008.

Problems with the SAP-based system, put in place by Accenture in 2006, led to a massive increase in complaints against the gas supplier. Centrica – British Gas’s parent company – wrote off £200m, following errors with the system.

British Gas noted in an official statement last week that “The Court of Appeal has upheld the previous judgment on nine out of 10 preliminary issues, on which the High Court ruled in November 2009”.

The judge did, however, support Accenture’s claim that there was a definable difference between system glitches that caused problems and those that “could” lead to cockups.

British Gas is seeking multi-million pound damages for the installation of the billing system, which it said “caused huge disruption for the company and its customers.”

It claimed the system caused “millions of errors” and added that hundreds of thousands of punters left British Gas following the failure of its billing tech.

“We are pleased with the progress of our claim against Accenture. Both the High Court and the Court of Appeal have now found in our favour during these important early stages,” said British Gas managing director Phil Bentley.

“British Gas is now one step closer to holding Accenture to account for the disruption caused to our customers.”

The Register asked Accenture to comment on this story, but the consultancy firm hadn’t got back to us at time of writing

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

Esteem Systems is gunning for £100m turnover in the next two years through a mixture of organic and acquisitive growth.

The Microsoft, IBM, Citrix and Oracle VAR last week acquired managed services and support firm SiRViS IT Holdings for an undisclosed sum. The Primary Capital and Lloyds TSB-backed buy was Esteem’s second acquisition this year after it snapped up Oracle service provider Midas IT in May

Speaking to CRN, Joe Connolly, chief executive of Esteem, said: “When I came along, our original plan was for a buy-and-build strategy, but prices were too high at the time so we developed a three-year business plan.

“We planned to focus our acquisition strategy on the South, based on contracted revenue and a strong customer base, and SiRViS fitted that bill. We do not want companies that are overexposed to one customer.”

Connolly added that SiRViS will continue to operate as a separate division under the same management team – a similar strategy to its Midas IT acquisition.
He added that the growth plans are paying dividends.

“We are already around the £50m to £60m mark and over the next two years we want to hit the £80m to £100m turnover figure,” he said. “It may even happen over the next 12 months as we continue to acquire, and that is when we would look to bed the business in.”

He added that Esteem will continue to look at managed services firms, but that it is also keen to build its networking offering.

Kay Bruen, director of channel consultant Clipsham IT, said the market was ripe for acquisitive companies such as Esteem.

“I am advising a couple of firms at the moment on their acquisition strategy,” she said. “Two years ago companies for sale were looking for multiples of between 10 and 12 times EBITDA as an asking price. Now they are looking at between five and six times EBITDA.

“Prices are coming back up, but are nowhere near what they used to be,” she added.

“It is a buyers’ market and there are definitely bargains to be had, particularly with fears over public sector spending cuts.”

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

By Dave Bailey

The UK is falling behind on quality rather than quantity of IT graduates compared with overseas applicants, according to Orange Business Services UK & Ireland manager Mark Kenealy.

Speaking to Computing in London recently, the ex-head of EMC services explained that the IT education in countries such as China, Egypt and India is producing graduates with skills way ahead of those in the UK.

“Although the UK has a good calibre of IT graduates, there are pockets of real talent coming from these markets.

“Cairo is fast becoming a leader in the market for IT talent. We have offshore facilities in Cairo, and the staff there are just brilliant,” added Kenealy.

Kenealy argued that the offshoring industry as a whole was shifting, with the most talented graduates demanding higher salaries whatever their country of origin.

“We’re seeing some of the prices [for offshoring services] going up in India for example [because of the quality and aspirations of the IT graduates].”

Asked whether it was a drive by these governments to produce quality IT graduates or a determination by the people themselves to succeed, Kenealy said, “I think it’s a bit of both.”

“There has been a drive by governments, but IT skills are a great route out of a difficult country. they can make you globally saleable,” said Kenealy.

“When I advertised for two managerial jobs internally, I had two applications from people in the UK, six from Egypt and two from India,” said Kenealy.

Meanwhile, the quality of IT staff from countries such as India has been causing problems for the UK government as it battles with capping immigration from non-EU countries.

Last month, Home Secretary Theresa May set a temporary limit of 24,000 skilled non-EU workers allowed to migrate to the UK.

However, thousands of UK-based Indian IT staff were exempted from that limit, pending a decision on whether they should be included in the permanent cap scheduled to be imposed next April.

The problem of how to deal with skilled non-EU IT people in relation to the UK’s own IT graduates is complicated by an increase in demand for IT staff in the UK.

Recent figures from employment web sites CWJobs.co.uk and JobsAdWatch.co.uk show demand for IT staff rising by eight per cent in the past three months, despite a 21 per cent fall in the number of public sector IT jobs being advertised.

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

By Leo King

IT and outsourcing costs went up at HSBC last year, as work progressed on a new phase of the bank’s global standardisation plan.

The SAP-based bank, which is standardising products, processes and technology under the One HSBC programme, said global general and administrative expenses for the six months to 30 June rose 17 percent to $4.9 billion (£3.1 billion), compared with the same period the year before. This was attributed largely to a growth in outsourcing and marketing spending.

In Europe, where the bulk of these expenses were incurred, general and administrative spending grew 13 percent to $3.1 billion (£2 billion). In a statement to investors, the bank said that the rise was “driven by higher services contracted out and IT costs”. Increased rental expenses following the sale and leaseback of the bank’s head offices in Canary Wharf also played a part.

Read More

Source: http://www.computerworlduk.com

IT maintenance costs go down as outsourcing expenditure up year-on-year.

Investment bank UBS increased its expenditure on the outsourcing of IT and other services by 20 percent in the second quarter of this year.

The bank spent 260 million Swiss Francs (£158 million) in the quarter to the end of June, up from 216 million Swiss Francs (£131 million) in the quarter to the end of March.

This is in contrast to the first quarter of 2010, when the bank cut £158 million from its IT and consultancy costs, in order to produce its first quarterly profit for more than a year.

So far, UBS has spent seven percent more on IT outsourcing this year (£289 million) than it did in the first half of 2009 (£269 million).

The increased spend on IT was one reason why UBS’s total operating expenses increased to £246 million in Q2, compared with £234 million in the last quarter. Furthermore, despite the bank reporting a two percent growth in revenue in the second quarter, to £5.6 billion, it suffered a fall of £0.1 billion in operating profit, to £1.6 billion in Q2.

Read the Complete Article Here.

Source: Computerworlduk.com

As we announced yesterday, Mark Quartermaine has left his post as President of BT Global Services UK (BT GS) to become CEO at Azzurri. Quartermaine looks well suited to the role with 15 years at IBM but also a stint at running a smaller company –

NSB Retail – between 2001 and 2005, before he joined BT. I worked closely with Quartermaine when I was on BT GS’s UK Advisory Board and, more recently, as a committee member of the Prince’s Trust Technology Leadership Group. Quartermaine first ran the UK public sector at BTGS and, more recently, the whole UK. I had a lot of respect for his performance during the most turbulent period in BT GS’ history as first Andy Green, then Francois Barrault and, more recently Hanif Lalani departed as CEO and, indeed, Quartermaine’s immediate boss, Tim Smart, left too. It doesn’t get more turbulent than that but Quartermaine kept a cool head whilst all around were losing theirs!

I also understand that Patrick O’Connell has also departed. O’Connell was President of Delivery and Services at BT GS and was MD of BT Health. If you remember this highly respected ‘large, complex’ programme manager was parachuted into BT in Feb 2005 to attempt to rescue BT’s troubled NHS projects.

These departures come just six months after Jeff Kelly was appointed CEO of BTGS. An American, he came to BT from EDS. We are still sceptical about what BTGS raison d’etre actually is. See our May 10 post BT GS gets its knitting in a twist. As BT’s Chairman Sir Michael Rake said at the AGM yesterday, “We have seen cost transformation at Global Services leading to a marked improvement in profitability.” We don’t dispute that. Cutting out cost at BT GS was not the world’s most difficult thing to do. Driving revenue growth and securing a profitable, higher margin and growing future will be much more difficult.

I understand that Jeff Kelly is using the departures to make some UK organisational changes.

Neil Rogers (who we have known and respected for a decade at BT) takes on a new Government & Health division which combines all of BT’s UK Public Sector operations. Looks a very good move.

Clay Van Boren becomes COO for Government & Health (he’s currently President of Health) reporting to Neil, I assume Clay takes on Patrick’s responsibilities.

Emer Timmons takes responsibility for BTGS’s private sector (ie non public sector) business in the UK. She also takes on the ‘President BTGS UK’ mantle – ie the titular ‘UK country rep’ role. Strangely, Emer continues her responsibilities leading the MNC UK unit reporting to Michael Boustridge – we are always sceptical of split loyalties.

Source: http://techmarketview.com

“Offshoring and Working Conditions in Remote Work” presents the first in-depth study of the workplace in the Business Process Outsourcing (BPO) industry, which can broadly be divided into “voice” services, such as call/contact centres, and “back office” services, like finance and accounting, data processing and management, and human resource development.

“This is a rapidly growing industry worth an approximate US$ 90 billion”, says Jon Messenger, Senior Researcher with the Conditions of Work and Employment Programme of the ILO and co-editor of the study with Naj Ghosheh. “A lot has been written about this phenomenon and its implications for economic growth and employment. However, very little is known about the working conditions in the BPO industry”.

The book presents case studies in four major “destination” countries: Argentina, Brazil, India and the Philippines. It examines remote work, its impact on the labour market in general and the workforce in particular, and the possible implications for working and employment conditions in countries where the BPO industry is growing.

A mixed picture emerges when analyzing the working conditions in these countries. “On the positive side, and unlike previous assumptions, remote work jobs are of a reasonable good quality by local standards. For example, wages of Indian BPO workers are nearly double the average wages in other sectors of the Indian economy. In the Philippines, BPO employees earn 53 per cent more than workers of the same age in other industries”, says Mr. Messenger.

On the other hand, night work is common to serve customers in distant time zones in ‘real time’ and work is generally stressful. “BPO employees face heavy workloads backed by performance targets combined with tight rules and procedures, all this enforced via electronic monitoring. This type of high-strain work organization is well-known to produce high levels of job-related stress”, adds Mr. Messenger.

Another negative aspect of the BPO industry is the high rate of staff turnover, which in some companies can reach as high as 100 per cent or more annually.

The book by Messenger and Ghosheh finds that “back office” positions tend to be of higher quality than call centre positions in terms of their wages and other working conditions. In addition, workers serving outside markets appear to have better quality jobs than those focused on domestic markets, mainly as a result of the higher skills required in international positions.

Analyzing the impact of the global economic crisis on the BPO industry, the book says that some companies – particularly in the banking and insurance sectors – have suffered a considerable blow which could affect the industry as a whole, but only in the short term.

The study goes on to explain that the factors driving the industry’s expansion – such as the continuous search for cost savings and increasingly sophisticated and inexpensive technologies – are unlikely to diminish and could even accelerate in the medium to long term.

The book describes the BPO workforce as young, generally well-educated and predominantly female. With a few notable exceptions, most prominently India, women constitute the vast majority (60 per cent or more) of BPO employees in nearly all countries with a substantial BPO industry.

The book concludes by offering some suggestions for government policies and company practices that could further improve the quality of jobs in the BPO industry and increase productivity.

These changes include stronger measures to protect the health and safety of night workers, in line with the ILO Night Work Convention; a redesign of work processes, especially in call centres, so that BPO employees have more freedom to make use of their often considerable qualifications, as well as greater latitude in when to take rest and toilet breaks; and policies and practices aimed at improving workers’ collective voice and promoting social dialogue in the industry – which ultimately would benefit both workers and employers alike.

“The BPO industry has at times been heralded as the wave of future knowledge work in a service and information economy, and alternatively, demonized as a ‘brave new world’ of electronic sweatshops. The reality, as one might imagine, is far more complex. The bottom line is that this is an industry with the potential to offer a model for a future of good quality service sector jobs and high-performing companies in the global economy”, concludes Mr. Messenger.

For more information or to arrange interviews, please contact the ILO’s Department of Communication and Public Information on +41 22 799 7912 or write to communication@ilo.org

Source: www.ilo.org

BANGALORE, 7 JULY 2010 – Europe has always been a difficult market for Indian outsourcers, because some of the countries on the continent have been slow to adopt offshore outsourcing. The market has however worsened this year for the Indians because of a weak euro and tighter IT budgets in Europe, according to Forrester Research.

Large Indian outsourcers currently earn less than 30 percent of their revenue in Europe. The figure is far lower if the U.K., which has been faster in adopting offshore outsourcing, is excluded. The U.K. accounted for 16.2 percent of the revenue of Tata Consultancy Services (TCS), India’s largest outsourcer, in the Indian fiscal year to March 31, 2010. The share of its revenue from the rest of Europe was far lower at 10.5 percent.

In some countries in Europe, the labor laws set limits on what can be outsourced by companies, Siddharth Pai, a partner at outsourcing consultancy Technology Partners International (TPI), said on Tuesday.

Cultural and language differences, and discomfort with sending work far away, have also made many European companies avoid offshoring to India, Pai said. These companies would prefer to outsource to European services firms like Capgemini and T-Systems, or to large multinational services companies like IBM and Accenture that have large operations in Europe, he said.

The ongoing debt crisis in Europe, and its impact on the euro and the economy, may now make the continent less interesting for Indian outsourcers, said Sudin Apte, principal analyst at Forrester. Indian outsourcers realize that their margins in Europe will be far lower, so they are looking only at some select deals, he said.

A large number of Indian outsourcers are shifting their focus back to the U.S., their largest market, where business has started to pick up, Apte said. During the recession in the U.S., they had tried to diversify their markets to other countries, including in Europe.

The European market for corporate IT products and services fell by 6.3 percent in 2009, when measured in euros, according to Forrester. The recovery in the European IT market is likely to be slow this year with the IT market growing at 4 percent over last year, which means that European firms will continue to face budget cuts in 2010 and possibly even beyond, Forrester said.

The debt crisis could have a longer-term effect on IT spending in Europe as public-sector organizations try to balance budgets and shed debt, activities that would in turn have an effect on private businesses by a “ripple effect,” Gartner said this month.

Offshore outsourcing business from Europe has slowed down after the debt crisis, according to TPI’s Pai. Even some deals that seemed close to closure 18 months ago are now delayed, he added.

Indian outsourcers that are targeting European IT markets are also hit by the falling value of the euro, Apte said. Between Jan. 1 to June 30 this year the euro depreciated by over 15 percent against the Indian Rupee, which meant that there were fewer rupees available to outsourcers to meet costs in India.

Although a number of Indian outsourcers have set up services delivery operations in Europe, their main services delivery, and hence the key component of cost, is still from India, Apte said.

Costs in India are going up, as salaries have moved up because of renewed demand for staff from Indian outsourcers and subsidiaries of multinational services companies. Some of these companies had reduced hiring and even cut staff after the recession in the U.S. hit offshore business. Companies have started hiring again, and staff attrition is likely to go up to over 15 percent in the current quarter, Apte said.

The European market is likely to continue to be difficult for some time with companies cutting IT budgets, and resisting increases in services rates, Apte said. Some large customers are in fact trying to negotiate reduced rates, but Indian vendors will be able to reduce rates by a maximum of 2 percent, he said.

Vendors will have to start looking at options such as standard services, benefits of scale, and engagements that have a larger component of reusable code, in order to offer lower costs to European clients, Apte said.

Source: http://mis-asia.com

Headed by His Excellency Mr. Samer Asfour, Commissioner for investor services and development at the Development Zones Commission (DZC), the delegation included representatives from the King Hussein Bin Talal Development area, the Information Technology Association of Jordan (int@j), Jordan Investment Board, and the USAID Jordan Economic Development Program (SABEQ), as well as a number of rising private sector outsourcing companies.

In recent years, Jordan has become more proactive in showcasing itself as one of best destinations for investment in the region. The country’s progressive government has recently launched a new development zones strategy, encompassing multiple specialized zones targeted at specific industries. These Development Zones offer aggressive financial incentives to complement existing economic advantages of operating in Jordan. A prominent part of this strategy is the launch of an Outsourcing campaign entitled “Turn to Jordan…Your Smart Shore Destination.”

The strategy and effort are paying off. Acknowledging the favorable investment and outsourcing climate, analysts from AT Kearney ranked Jordan no. 9 in its Global Service Location Index.

“With a neutral Arabic dialect highly favored in the region, true public private partnerships, dedicated business parks, a well-educated workforce, reliable infrastructure and aggressive financial incentives, as well as a central location for a regional hub, Jordan is uniquely positioned to be a leader in the outsourcing industry in the region” said H.E Mr. Asfour.

Source: http://www.ameinfo.com

By Sudip Kar-Gupta

French software group Atos Origin (ATOS.PA) has pulled out of a bidding race for Royal Bank of Scotland’s (RBS.L) WorldPay payment-processing arm, French newspaper La Tribune reported on its website on Sunday.

La Tribune did not cite any sources for its report and officials at Atos Origin could not be immediately reached for comment.

People familiar with the matter have told Reuters that parties interested in WorldPay, which is valued at $4 billion, include Clayton; Dubilier & Rice (CD&R); American Express (AXP.N) and Permira [PERM.UL]; Advent International and Bain Capital; Canada’s Moneris Solutions; and TPG [TPG.UL].

Source: http://www.pehub.com

NIS Holdings SARL (Northgate) is pleased to announce that it has completed its acquisition of the HR Management division of Convergys (NYSE: CVG), a publicly-held company headquartered in Cincinnati, Ohio and a global leader in relationship management.

This business will be integrated into NorthgateArinso, the Northgate division that is a world leader in Human Resources (HR) software and services. Funding for the acquisition has been provided by additional equity funding from funds managed by KKR, the majority shareholder in Northgate.

NorthgateArinso announced its intention to acquire the HRM division of Convergys on March 4, 2010. The acquisition supports the company’s growth strategy and goal to be the number one focused provider of HR software and services globally, and substantially boosts its North American operations. The division now employs 8,000 people in 35 countries worldwide, of which a third are based in North America. Total Northgate Group employees now exceed 12,000.

Following the completion of the acquisition the division will move its North American headquarters from Atlanta to the former Convergys facility in Jacksonville, Florida. Trey Campbell will continue to lead the combined NorthgateArinso North American operations.

The expanded company will give organizations worldwide access to a complete portfolio of HR services, from payroll to talent management, delivered via the model that best suits their business needs: OnPremise, OnDemand, BPO (Business Process Outsourcing), or any combination thereof. Customers will continue to benefit from NorthgateArinso’s global delivery model and consultancy expertise, as well as its focus on innovation and commitment to delivering superior customer value.

“This deal is an important part of our plans to build the world’s number one provider of HR services, building on our existing strength and our focus on delivering excellent value for customers. Completing this deal today takes us a step closer to achieving that,” said Mike Ettling, Chief Executive of NorthgateArinso. “Since we announced the intention to acquire the HR Management division of Convergys we’ve received very positive feedback from customers and the wider marketplace.”

“Through the acquisition of Convergys’ HRM division, we’ve brought together great people, great technology and a world-class delivery model. This is a big step forwards in our mission to continually challenge, improve and transform how HR is delivered worldwide,” added Ettling.

About NorthgateArinso

NorthgateArinso is a leading global Human Resources software and services provider offering innovative HR business solutions to employers of all sizes, including global Fortune 500 companies and many public sector organizations. NorthgateArinso helps HR executives optimize their HR service delivery through smarter processes and more efficient technology, supporting key HR areas like workforce administration, payroll, benefits, recruitment, learning, and talent management.

NorthgateArinso’s 8,000 employees in 35 countries are dedicated to delivering HR excellence through HR consulting, HR outsourcing and HR technology.

Source: Northgatearinso.com

Paris, 25th May 2010 – Atos Origin, a leading international Information Technology (IT) services company today publishes its first Corporate Responsibility report in line with the guidelines from the Global Reporting Initiative (GRI) – the international standard for sustainability reporting. The GRI has rated the Atos Origin 2009 report Level B+.

“I am pleased to announce the publication of our first sustainability report demonstrating our commitment to reporting our economic, environmental and social performance. It is an important way for us to manage our impact on sustainable development and to further improve our performance in the coming years. The report shows how we are implementing sustainable best practices throughout our organisation and how we are working with our clients to help them be more sustainable”, says Thierry Breton, Chairman and CEO of Atos Origin.

Sustainability at the core of the Group’s strategy

IT service providers such as Atos Origin have an important role to play by contributing to make a difference for both businesses and the environment. Within its transformation program TOP (Total Operational Performance), the group has committed to establishing sustainability at the core of its strategy and business processes. In 2009, Atos Origin delivered a number of key commitments in the business, social and environmental levels, including:

Joined the GRI – the first IT services company to do so in 2009;

Designed a worldwide Carbon Footprint Abatement Program and submitted the results of its carbon footprint study to the Carbon Disclosure Project;

Conducted a Carbon Audit in partnership with ADEME & O2 in France to evaluate the global carbon footprint of the Group’s largest datacenter. In 2010 the audit – a groundbreaking initiative in the IT market – is being carried out at all the Group’s major datacenters;

Implemented a Group-wide environmental management system (EMS) (ISO 14001): 22 sites are already certified in Spain and The Netherlands and the process is being rolled out in other countries during 2010;

Deployed sustainability policies across the Group including those on Green Travel, Waste Management, Green car Fleet and sustainable Purchasing.

Driving Clients towards Sustainability

Atos Origin has developed a scientific and technological expertise to improve the sustainability of its operations, and through its Sustainability Solutions and IT services, to help its clients to improve their own sustainability.

“Sustainability represents a major shift in business approach for the IT industry, as well as for our clients. With our Sustainability Solutions, we can help our clients maximize the opportunities that sustainability offers them and accompany them in transforming to a more sustainable organization.”

Based on its internal commitments and achievements, Atos Origin offers its customers solutions that respond to sustainability challenges. To help organisations become more sustainable, Atos Origin has developed a new portfolio of services that can be tailored to individual businesses. It includes its new Ambition Carbon Free solutions, launched in January 2010 as part of its innovative strategy, and a range of services to reach the level of sustainability excellence required. These cover the entire cycle of Sustainable business transformation, enabling organisations to address large strategic question (eg. sustainable strategy, new range of smart products) or to act on targeted areas (e.g. carbon traceability of a process, virtualisation, green data-center…), what ever is the maturity level of the company.

The Global Reporting Initiative (GRI) is a network-based organization that has pioneered the development of the world’s most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide. Find out more on GRI here.

An online version of the Corporate Responsibility Report can be viewed here

www.atosorigin.com/sustainability

About Atos Origin

Atos Origin is a leading international information technology (IT) services company, providing hi-tech transactional services, consulting, systems integration and managed operations to deliver business outcomes globally. The company’s annual revenues are EUR 5.1 billion and it employs 49,000 people. Atos Origin is the Worldwide Information Technology Partner for the Olympic Games and has a client base of international companies across all sectors. Atos Origin is quoted on the Paris Eurolist Market and trades as Atos Origin, Atos Worldline and Atos Consulting. For further information, please visit www.atosorigin.com

For further information, please contact:

Emilie Moreau

+33 1 55 91 24 74

emilie.moreau@atosorigin.com

Copyright Hugin

The appendixes relating to the press release are available on:

http://www.hugingroup.com/documents_ir/PJ/CO/2010/166814_88_7950_corporateresponsibilityreport.doc

This announcement is originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

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

By Dawinderpal Sahota

A law firm has splashed out £583m on a 10-year agreement to outsource its middle office services.

CMS Cameron McKenna’s decision to outsource its middle office services is part of an ambitious strategy to establish a new business model for law firms. The firm argues that the unprecedented scale of the deal will make the legal industry stand up and take notice.

The law firm will outsource non-billable tasks, such as reports, letters, research and technology functions, to business solutions provider Integreon’s team in India.

It is outsourcing substantial portions of its IT, accounting and finance, human resources, marketing, research and development, library and information services, facilities and other services to Integreon.

This will leave CMS Cameron McKenna to focus on its core competency – providing high-end legal and tax services. However, the law firm confirmed that it will be making staff changes across the board, but detail regarding the number of staff cuts were not divulged.

Legal industry expert professor Richard Susskind regards the move as “a hugely significant development that sets the pace for the global legal market”.

“The scale and ambition of the arrangement is remarkable, and the business case is compellingly strong – by outsourcing many of its non-core activities to Integreon, CMS Cameron McKenna should achieve major cost savings and free itself to focus more strategically on its clients and services,” he said.

Source: http://www.computing.co.uk

ID card project and future outsourcing schemes under the spotlight

The IT industry has been left with an uncertain future after the General Election resulted in Britain’s first hung parliament in decades.

Conservative leader David Cameron insists Gordon Brown’s Labour party has “lost its mandate to govern”, but without a clear Tory majority, efforts to form a coalition with the Liberal Democrats continue.

Any coalition government, or a minority administration, could add not just to uncertainty affecting the country generally, but the IT industry in particular.

In the run up to the election all the parties insisted on major cuts in public sector spending with IT-driven efficiencies being counted on to protect service levels. Some existing projects are also likely to be axed – including the expensive and controversial ID card scheme. Shares in outsourcing companies have fallen heavilly since the result was declared.

Source: www.macworld.co.uk

The UK spent less than €800m, 50% less than last year, compared with more than €1bn in Germany and €2bn in France as a result of a massive SNCF deal.

TPI said one mega-deal in Sweden meant the country doubled its total value of outsourcing contracts. It would not name the customer, but Swedish engineering company ABB recently signed a big deal with IBM.

This was on the back of a 7% increase in the total Emea market to €7bn.

TPI’s Index measures commercial outsourcing contracts valued at €20m or more.

Contract restructuring accounted for a massive 40% of the total value of deals in the Emea region, which was significantly more than the previous record of 24% set in 2006.

New scope in deals in Europe was down by 22% and the number of contracts awarded in the region also declined by 24%.

“Even though this is only one quarter’s results, it does appear that the key countries contributing to Europe’s outsourcing performance are shifting to the less mature continental markets,” said Duncan Aitchison, president at TPI Emea.

Source: http://www.computerweekly.com

“Our collaboration with Cisco to enable us to deliver Steria “Infrastructure On Command” is a strategic evolution of our multi-tiered service delivery model. For the first time, utilizing the automation of Steria’s outsourcing operation and the innovation embedded in the Cisco Unified Computing System platform, customers will have access to incremental computing power and associated infrastructure services “on command”, at the click of a button,.” said Francois Enaud, CEO, Steria.

Infrastructure on Command enables IT platforms to be purchased as a straightforward ‘pay as you need’ service – requiring no investment in physical IT infrastructure – which is automatically provisioned via an online portal affording customers a flexible and adaptable platform that can be scaled up or down to reflect changing business requirements. Infrastructure On Command allows customers to pay for the computing power they use, when they need it, whether they are looking for a short-term solution to rapidly develop, test and deploy new applications and services in the cloud, or a longer-term production environment over a fixed period.

Source:  www.cxotoday.com

One of a small number of applications that Apple pre-approved for the iPad’s launch, this is the latest development in the Group’s strategy of becoming the leading digital innovator in the recruitment industry.

Albert Ellis, CEO, commented “Harvey Nash has long recognised the importance of developing relationships with our candidates and clients online, and increasingly we are seeing this is happening beyond traditional websites. Our mantra is “to be where our candidates and clients are” and whether that is on websites, mobile devices, social networks or beyond, our digital strategy is proving key to how we deliver our knowledge and expertise to our stakeholders.”

Source: www.onrec.com

One of the biggest winners from New Labour’s outsourcing boom, he says things can only get better for the FTSE 100 group – no matter which party wins the general election.

Companies that supply the £80bn market for UK public services are eagerly awaiting the government spending cuts that others worry could tip the country into a double-dip recession.

Shares in Serco and Capita, two of the largest companies in the sector, rallied to multi-year highs last week as Gordon Brown stepped out of Number 10 Downing Street to launch the campaign.

As the drive for “efficiency savings” becomes an increasingly important election battleground, the industry is confident it will emerge in a strong position.

Yet, after a decade of growth, some analysts warn that significant risks lie ahead. “It’s a real mixed bag,” says Mark Howson, analyst at the Royal Bank of Scotland. “It’s going to be very volatile for these companies.”

Read the Complete Article Here.

Source: FT.com

By Rupert Neate

Ivan Seidenberg said there is no compelling reason for a merger, but confirmed that the companies are constantly discussing strategic options. Vodafone owns 45pc of Verizon Wireless while Verizon Communications owns 55pc.

“There’s no compelling reason for investors to think this is an exciting thing to do,” he said of a possible merger. “In the long term… minority-interest partners in your business, you’d probably like to resolve that.”

However, he added, that his position is not final. “Absent new information, a merger doesn’t seem to have a lot of appeal,” he said at a conference in New York.

Vodafone has been trying, without any luck, to get Verizon Wireless to restart dividend payments. Verizon Communications has blocked the mobile arm from paying dividends since 2005 in order to cut its debt.

Analysts believe dividend payments may restart at the end of 2011, when Verizon Wireless is expected to be debt-free.

Mr Seidenberg said he is not keen on a merger because Vodafone does not have a fixed-line telecoms business.

It is understood that Vodafone does not favour a merger because there is little scope for savings between the two groups, which do not compete.

A full merger of Vodafone and Verizon Communications could create a company worth more than £120bn.

Shares in Vodafone closed down 2 at 149.6p.

Source: telegraph.co.uk

The firm acquired 12 companies totalling 177 million pounds in 2009. “We were evaluating possible targets for acquisition in India. But we found the BPO valuations too high,” Piling said. Additionally, the BPOs here, according to Piling, are “too US focused” while Capita’s clientele is confined only in UK.

“Taking a stake is also an issue. The question we ask is how do you create value from an acquisition? We look at 100 opportunities a year for acquisition. The criteria that we adopt is can the acquired entity generate sustainable quality revenues by itself in the sense that how many contracts it has which will remain for a number of years. If yes, we then think of how we support it on an ongoing basis,” Piling said.

However Capita, with a total workforce of 36,000 people, is looking to hire another 1,200 people to take its India employee strength to 5,000.

The company has an order-book worth about 2 billion pounds, of which roughly half is from public sector entities in UK. Capita, with annual sales earnings of about 2.7 billion pounds, has a 27% market share in the 95 billion pounds UK outsourcing market.

In the life and pensions business, which earns Capita most of its revenue, it is the biggest player in UK followed by Diligenta, a Tata Consultancy Services subsidiary.

In 2008 HCL Technologies acquired Liberata Financial Services, a UK-based BPO provider for the life and pensions industry.

Besides competition from Indian BPO firms in UK, political protests against offshoring of work and jobs in recent times were thought to pose challenges for Capita.

“We don’t see that happening. Neither do we see Indian BPO players entering in a big way, other than a couple of them. We have jobs in UK. We have jobs in India,” Piling said. The firm believes new government that will come to power after May 2010 election in UK will act fast in favour of offshoring.

“We see pressure for cost reduction to increasingly make UK public sector units to go the offshoring way. We would make sure people understand that offshoring is a key component for quality efficiencies. So, the next 12 months will be interesting in terms of how public sector handles some of the cost pressures.” Piling said.

Source: dnaindia.com

For the last two years, Accenture has engaged the Kenyan government and explored ways to improve market and technical conditions that would lead to the first Accenture outsourcing center in East Africa.

“It means a lot to Kenya for Accenture to set up its base here; it is a leading outsourcing company and is likely to pull other outsourcing companies,” said Paul Kukubo, CEO, Kenya ICT Board.

Jessica Long, head of IT strategy and Innovation at Accenture, has been in Kenya for the last two weeks, engaging with local BPO companies as part of the NetHope summit, which brought together 29 leading international NGOs and global IT companies. NetHope helps humanitarian agencies with outsourcing and shared solutions.

The new pilot project will be part of NetHope, where Accenture will have a chance to work with local BPO and call center services companies to deliver to humanitarian agencies in the region.

Kenya’s BPO sector is set to get a boost in six months when the government opens up one of the BPO parks along Nairobi’s Mombasa Road. In addition, the largest technology park in East Africa is set to open in two years in Malili, approximately 60 kilometers from Nairobi.

However, the sector is still in early stages compared to countries like India, which has led Accenture talk to local BPOs about global trends, what major companies look for, and how to tie the deals and future prospects.

“Apart from costs, businesses look for bundled services; for instance bundling infrastructure, application and business process outsourcing; companies can generate more revenue and create jobs,” Long said.

In spite of the economic downturn, Long said, companies continued to spend in 2009. While cost containment remained a major issue, other aspects of ICT such as green IT and corporate social responsibility pushed more companies to outsource.

“There is need to structure the deals in a way that they appeal to the customer; green IT and social outsourcing projects that benefit communities are major issues globally,” Long added.

Rural communities and marginalized poor in India have been able to earn a living through the sustainable social enterprise, noted Dipak Basu, founder and chairman of the Anudip Foundation, in a presentation at the NetHope summit.

“Rural graduates need extensive soft skills training, but once they get training, they provide services that generate income in the rural areas,” Basu said.

India’s challenges — including of stable construction, power, connectivity, management skills, politics and cost of operations — sound similar to Kenyan issues, but the fiber optic and national fiber back bone has eliminated connectivity problems for many businesses.

To address the power problem, Kenya has embarked on US$1 billion wind power project in the remote Lake Turkana region. The 66,000 hectare project is funded by a Dutch consortium to take advantage of the winds from the Kenyan and Ethiopian highlands.

In the 2010 outlook, Accenture projects that the demand landscape will be more challenging and buyers will demand multicountry options, a broader range of globally delivered services, and a shift from exclusively labor-based IT.

The growth will be driven by continental Europe’s adoption of global delivery, emerging and growth economies in Asia such as Japan, while India will remain the leading offshore location.

The growth of Japan as an important offshore growth market is likely to divert part of Kenya’s marketing efforts to Asia; currently its focussed on North America and European markets.

Source: http://www.thestandard.com

Dan Senor, co-author of “Start-Up Nation: The Story of Israel’s Economic Miracle”, spoke at a sold out Israeli Chamber of Commerce function where he talked about the amazing story of how Israel has become the second largest producer of publicly traded companies on the NASDAQ and is home to the largest Google, Intel and Microsoft research and development facilities outside the United States. Mr. Senor, who is an adjunct senior fellow for Middle East studies at the Council on Foreign Relation and a founding partner of Rosemont Capital, talked about his book and Israel’s successful entrepreneurial culture. This is a must-read book for government officials at all levels that deal with economic development and business innovation.

Why did you write this book?

Dan Senor: Originally, the idea was not to do a book. When I was in my second year of Harvard Business School in 2001, I took a group of 30 students to Israel, three of them were Jewish, twenty-seven were not, and had no connection to Israel. The idea was to look at the economic opportunities in Israel and also study the history and the politics. It was at a pretty depressing time  — there was a good entrepreneurial economy story there — it was during the Second Intifada.

I took all these students — to their credit, none of them pulled out even though literally the day we were leaving, things were blowing up — and my classmates were all saying to me, “I get it. There’s huge economic opportunity here for people who are willing to invest here and do business here.” But, even more than that, I was struck by the question of how they pulled it off. It’s a very young country [and] a very difficult environment. There are no natural resources, no access to regional capital or regional markets. If you were to paint a picture of the circumstances under which you’re not going to have a successful economic developing country, it would be Israel.

Israel represents the highest concentration of innovation and entrepreneurship in the world today: the most start-ups per capita; the highest percentage of GDP invested in civilian R&D; more companies on NASDAQ than all of Europe, Korea, Japan, India, and China combined; and the biggest destination for global venture capital per capita. Israel raises 2.5 times as much global venture capital as the U.S., 30 times more than Europe, 80 times more than India, and 350 times more than China — and these numbers are from 2008, when the world was in the midst of an economic meltdown. Israel all but escaped the crisis that ripped through economies everywhere else. No one has told this story before of what makes Israel so economically successful.

What is in the Israeli DNA that makes them so entrepreneurial?

DS: Our book dives into many interacting factors, but one of the most important is the training and battlefield experience that most Israelis receive in the military. The military is where many Israelis learn to lead and manage people, improvise, become mission-oriented, work in teams, and contribute to their country. They tend to come out of their years of service — three for men, two for women — more mature and directed than their peers in other countries. They learn “the value of five minutes,” as one general told us. They even learn something more uniquely Israeli: to speak up — regardless of ranks and hierarchy — if they think things can be done better.

What is the difference between Israel’s entrepreneurial culture and the U.S.?

DS: It’s partly derived from the military, of course, but it’s also the result of “spin-offs” of military R&D and the companies created by Israeli engineers who have passed through the special military tech program. More than that, however, the military in Israel promotes innovation and entrepreneurship, it’s a country of immigrants who, by nature, are natural risk-takers and entrepreneurs.

While there has been a burst of clean-tech ventures in Israel, most exciting to us are the companies and sectors that one would least likely expect in Israel — from a world-class digital animation studio in Jerusalem to a next-generation asset management industry in Tel Aviv.

Israel itself is a start-up. While the book deals to some extent with elements of Jewish identity, it tends to focus more on exploring Israeli traits. But sometimes the two overlap. It’s very Israeli to be constantly questioning, arguing and not accepting, but challenging authority.” Israelis are not worrying about hierarchy and ranks. All these things are Israeli traits, but some of them have Jewish antecedents.

The Israeli emphasis on education is a Jewish trait and has also become an Israeli thing — Israel’s universities were founded in the 1920s before the state was founded. To extract the most basic elements from the recipe, Israel has a perfect balance between innovation and entrepreneurship, and it is this balance between the two that make it very competitive with other “smart” countries like Finland, Singapore and Ireland.

What are some of the great success stories to come out of Israel?

DS: The great irony of the Start-Up Nation story is that Israel has transformed the challenges it has faced into assets that form the cornerstones of its culture of innovation. Adversity of all kinds, such as being under attack, small, isolated, and lacking resources, have forced Israelis to be resourceful, to do more with less, to innovate, and to be global from day one. The fact that Israel specializes in adversity is most dramatically seen in downturns.

When the tech bubble burst and the peace process fizzled in 2000 to 2001, one might have expected the Israeli tech scene — then only a few years old — to evaporate. Instead, Israel garnered a larger market share of the global venture capital pie in 2005 than it did in 2000. Similarly, in the current downturn, Israel has been among the least affected and the first to recover among developed nations.

The tendency to tinker, question and improvise that often begins in the military leads to a particular Israeli specialty: technological “mashups.” Israel leads the world in medical device patents, partly because when Israelis discover a technology, they can’t help considering applications to solve unrelated problems. Just look at a company called Given Imaging, whose founder realized that the miniaturized sensing systems in the nose cone of a fighter jet could serve a medical purpose.

He adapted the sensor to produce a swallowable camera, the size of a pill, to beam out a movie from inside a patient’s intestines. This is making some highly invasive and painful diagnostic surgeries all but obsolete. As with so many Israeli start-ups, PillCam is now a major company and has spawned a new industry.

Do you think Israel’s entrepreneurial spirit changes people’s perceptions of the country from one that some feel is oppressive?

DS: People find it refreshing to have a discussion about Israel that is not conflict-centric. While so much of the debate is about the threats and the moral obligation that the world has to Israel, there’s another part of the narrative: what the world can learn from Israel.

Israel’s economic success has been a key component in convincing the Arab world that its existence is permanent in the region, which is the threshold incentive for the Arab world to end its attempts to destroy Israel. The moment the Arab world is ready for peace, the opportunities for economic cooperation are great, and Israel could play a pivotal role in helping regional economies advance.

What type of support does the government provide that other countries don’t?

DS: A key lesson from Israel is that innovation is not just something that goes on inside companies; it comes from a wider culture that fosters both innovation and entrepreneurship. Israel is a country of immigrants — there are over 70 nationalities represented in this tiny country. Two out of every three Israelis are newcomers, or the children or grandchildren of newcomers. The Israeli battery-operated car grid company Better Place was founded by the son of an Iraqi immigrant. The Israeli company Koolanoo, the third-largest social networking site in China, was founded by the child of an Iranian immigrant. The Internet music start-up FoxyTunes, which was recently sold to Yahoo for tens of millions of dollars, was founded by a young Ukrainian immigrant. Walk around Israeli neighborhoods, and you’ll find yourself dealing with Israelis from Ethiopia, Poland, Yemen, Russia, and Australia, to name a few.

Immigrants are natural risk takers since they were willing to uproot themselves and start over. In particular, the great wave of immigrants from the former Soviet Union in 1990 to 2000 brought to Israel a tremendous boost in engineering talent just as the tech sector began to take off. Israel is also the most pro-immigration country; politicians there actually compete with each other with campaign promises to bring in more immigrants, not fewer.

Another key lesson is to learn to leverage the business talents of young people with military experience. In Israel, employers look for and value the leadership skills of young officers who have already received tremendous management skills by age 21. By age 25, they have both military experience and a university degree. In the U.S., by contrast, too many corporate executives are illiterate when it comes to reading a military resume. We heard one story about an Iraq-war vet being interviewed by a corporate recruiter. The vet walked through all his incredible leadership experience from the battlefield. But, at the end of the interview, the interviewer said, “that’s all very interesting, but have you ever had a real job?”

American businesses need to embrace, not spurn, this incredible reservoir of ex-military talent. This does not mean that other countries need the military conscription model that Israel has been forced to take to become entrepreneurial. Other frameworks, such as national service programs, could also provide the management and maturation experience that Israelis get, but in a civilian context. Finally, the Israeli experience shows that countries that want to be more entrepreneurial should welcome immigrants as a great resource for rebooting their economies.

Has Israel become a mature technology power or is there still a lot of upside?

DS: Israeli entrepreneurs have been too busy building their start-up companies and their start-up country to step back and piece together exactly how they pulled it off and, even more importantly, what others can learn from their experience. We thought that this was the right moment for this kind of book because western countries are desperately looking for ways to re-boot their own innovation economies. The world needs innovation; Israel’s got it. There’s no better time to look at the Israeli model. The next phase for Israel’s economy is not just building start-ups that are quick to exit, but building self-contained, stand-alone institutions more in the mold of Teva.

What could Israel do to leverage their entrepreneurial success to possibly bring peace to the Middle East?

DS: Israel’s economic success has been a key component in convincing the Arab world that its existence is permanent in the region, which is the threshold incentive for the Arab world to end its attempts to destroy Israel. The moment the Arab world is ready for peace, the opportunities for economic cooperation are great, and Israel could play a pivotal role in helping regional economies advance.

What is the biggest misconception of the Israel “economic” miracle?

DS: Many people conjecture that there is something specifically Jewish at work. The notion that Jews are “smart” has become deeply embedded in the Western psyche. We saw this ourselves; when we told people we were writing a book about why Israel is so innovative, many reacted by saying, “It’s simple — Jews are smart, so it’s no surprise that Israel is innovative.” But pinning Israel’s success on a stereotype obscures more than it reveals.

For starters, the idea of a unitary Jewishness — whether genetic or cultural — would seem to have little applicability to a nation that, though small, is among the most heterogeneous in the world. Israel’s tiny population is made up of some 70 different nationalities. A Jewish refugee from Iraq and one from Poland or Ethiopia did not share a language, education, culture, or history — at least not for the two previous millennia. As Irish economist David McWilliams explains, “Israel is quite the opposite of a uni-dimensional, Jewish country. . . . It is a monotheistic melting pot of a Diaspora that brought back with it the culture, language, and customs of the four corners of the earth.”

While a common prayer book and a shared legacy of persecution count for something, it was far from clear that this disparate group could form a functioning country at all, let alone one that would excel at — of all things — teamwork and innovation.

Indeed, Israel’s secret seems to lie in something more than just the talent of individuals. There are lots of places with talented people, certainly with many times the number of engineers that Israel has to offer. Singaporean students, for example, lead the world in science and mathematics test scores. Multinationals have set up shop in places like India and Ireland, too. “But we don’t set up our mission-critical work in those countries,” an American executive from eBay told us. “Google, Cisco, Microsoft, Intel, eBay … the list goes on. The best-kept secret is that we all live and die by the work of our Israeli teams. It’s much more than just outsourcing call centers to India or setting up IT services in Ireland. What we do in Israel is unlike what we do anywhere else in the world.”

What does Israel need to do to continue to foster entrepreneurship?

DS: For the global economy to recover and thrive, it is not enough for individual companies to cultivate innovation. What is needed is for countries to build a comprehensive culture of innovation that welcomes risk-takers from all over the world; encourage young people to improvise, to be mission oriented, question established business models; and institute sensible regulations and monetary policies that do not create perverse “easy money” proxies for growth.

While Israel has much to learn from the world, other countries need to look at how Israel has produced the world’s most innovative start-up economy. The non-tech portion of the Israeli economy is over-concentrated, overregulated, and overtaxed, and has, consequently, performed at a mediocre level. If the conditions that have allowed the high-tech sector to flourish were applied to the rest of the economy, Israel could grow even faster. If Israel also were to address the low labor-force-participation rates in certain demographics, we agree with Prime Minister Netanyahu that Israel could become one of the top ten largest economies in the world.

Source: www.kramercommunications.com

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