Industry news

At a meeting of the London Assembly budget and performance committee, members and guests were invited to congregate and discuss whether the Met should opt to outsource more of its back office services.

Metropolitan Police Commissioner Sir Bernard Hogan Howe has called for savings of £800 million to be found by 2020. The force has already decided to outsource HR, finance and procurement, but is now also considering whether to outsource command and control, and transport services.

A number of speakers were called upon to share their points of view. Kerry Hallard, CEO of the National Outsourcing Association, used Cleveland’s police force as an example of how public sector outsourcing can be done correctly:

“Cleveland Police outsourced its command and control centre – and its overall objective was to take 40 officers from behind their desks and put them back on the street. It wasn’t just about how quickly it could get the phone answered or about money. It’s about the softer things as well.”

John Tizard, former director of the Centre for Public Service Partnerships added: “The first thing to do is to know exactly what things are currently costing, what providers would be able to deliver and what you would expect.

“You need to be absolutely clear about what you need to achieve from outsourcing – quality, resilience and price.”

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Related: Metropolitan Police Outsources 700 IT Roles to Save $800m

Rumours have emerged that Wipro is considering the acquisition of UK-based back office service provider Equiniti in a deal valued at well over £1 billion.

Equiniti is owned by private equity firm Advent International and currently employs roughly 3,000 people. The story was broken by Sky News on Monday 9th June 2015, in a report claiming that Wipro will have to compete with “a clutch of prospective bidders.”

The two companies have revealed nothing - when asked for a statement, a spokesperson from Wipro responded: “We don’t comment on market speculation.”

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Related: Wipro Introduces Wage Hikes to Stay in Line with Infosys and TCS

Capgemini has announced that it will be launching a 500 million euro ($563.60 million) capital increase in order to fund its acquisition of IGATE.

Seven million new shares will be issued up, representing roughly 4.2 per cent of Capgemini’s capital, which will be financed by surplus cash and an equity portion.

A statement issued by Capgemini said: "The capital increase launched today ... aims primarily at early refinancing part of the $3.8 billion bridge loan implemented in the context of the IGATE acquisition, which is still expected to close in the second semester 2015.”

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Related: Capgemini Acquires IGATE: Hear from the CEOs

NHS Shared Business Services (NHS SBS) has announced the acquisition of McKesson Shared Services for an undisclosed sum.

NHS SBS is a 50/50 joint venture between the Department of Health and French service provider Sopra Steria. McKesson Shared Services is the outsourced HR, Payroll and Pensions arm of McKesson UK.

The NHS claims that this acquisition will enable NHS SBS to extend its employment services to support the NHS centrally.

David Morris, NHS SBS managing director said: “This strategic acquisition complements our existing service provision particularly as MSS mirrors our own approach of working closely in partnership with clients to help them achieve greater efficiency rather than the function being merely a commodity transaction.

“In the face of immense budgetary pressures and tight resources, it is vital that NHS back office functions such as recovering overpayments, processing the monthly payroll run or processing expenses payments are carried out smoothly and accurately.

“We have already proven our capabilities in this respect and now with this acquisition we can broaden the support we provide across the NHS that can ultimately free-up more funds and resource for frontline care.”

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Related: NHS, Serco and Teleperformance among NOA Professional Awards Winners

HMRC has issued a £20 million tender for consultants to advise it on how to shift away from its Aspire outsourcing arrangement with Capgemini and Fujitsu, which is due to come to an end in 2017.

The government department plans to contract its future IT work out to over 400 smaller IT service providers, with no single supplier receiving a contract worth more than £100 million.

The news was revealed as the tender went out in a recent issue of the Financial Times.

Claims have been made that HMRC’s current approach towards IT has “stifled innovation and flexibility”; it is hoped that this new approach will help HMRC gain more of its own expertise, as many suspect that the department is currently solely reliant on the knowledge of its service providers.

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Related: Government Clamps Down on NHS Procurement, Consultant and Agency Spending

Recently Sourcingfocus noted that Egypt is revitalising its aim to contend as a top destination for outsourcing. Now Daily News Egypt has reported that “a spate of new agreements with a number of large investors” has given Egypt’s ITO potential a further boost.

Multinational companies such as IBM, HSBC, Procter & Gamble, Nestlé, Teleperformance and many more have signed agreements to extend their partnerships with the Egyptian government’s Information Technology Industry Development Agency (ITIDA).

“Egypt can become a multilingual hub in the region for BPO. This is what many international companies are looking for, but the industry has not been fully exploiting this opportunity,” said Giorgio Modesti, CEO of Teleperformance Egypt.

Nevertheless, a report by Everest Group has confirmed that Egypt’s offshore global services industry is growing at 7.5% annually as a result of the country’s renewed political stability.

Further reports on Egypt’s outsourcing potential can be found via “Offshore Outsourcing: Egypt is back On”, a blog post on the National Outsourcing Association’s website.

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Related: Egypt Revitalises Aim to Contend as Top Outsourcing Destination

Accenture has signed a multi-million dollar contract with Etihad Airways, confirming that Accenture will support the airline with the implementation of its business transformation programme to improve efficiency, productivity and growth.

Accenture will also provide strategy and management consulting services in departments such as HR, finance, and procurement and supply management. The company will be working alongside Etihad’s staff and its existing airline technology partner SAP.

Etihad’s Chief Information and Technology Officer, Robert Webb, commented: “To sustain Etihad Airways’ current and future growth, we need to achieve operational and organisational efficiency by creating an integrated approach to business processes, underpinned by a scalable, common technology platform.

“We believe that working with world-class business transformation and technology companies like Accenture and SAP will help us realise this goal and prepare our business for years to come with an increased focus on the guest.”

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Related: Accenture Reveals Where High Performers and Typical Performers in BPO Differ

G4S’s annual general meeting on Thursday 4th June 2015 descended into chaos after a number of protestors disrupted proceedings and had to be forcibly carried out of the venue by guards.

On the day of the meeting it was announced that all electronic devices would be banned from the venue; despite this, parts of the protest were successfully filmed by one activist.

On the YouTube page where the video was uploaded, those behind the demonstration claim that they were “protesting against [G4S’s] profit from oppression, state violence and human rights abuses everywhere… From G4S-run prisons in Israel where Palestinians are tortured and held without charge, to the killing of Jimmy Mubenga during his deportation from the UK by G4S security.”

A G4S spokesman recently told IBTimes: "The G4S board has already announced that the company does not intend to renew these contracts [in Israel] as they expire over the next two years."

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Related: G4S to Confiscate Shareholder Mobile Phones at Annual General Meeting

Executives at Wipro have announced that the company will be introducing average wage hikes of seven per cent, keeping it in line with rival Indian service providers Tata Consultancy Services and Infosys.

Wipro also said in April that it would reward top performers with double-digit salary hikes.

Earlier this year, TCS increased the wages of its employees by an average of eight per cent, while Infosys introduced salary increases of six-and-a-half per cent.

“The average salary hike would be seven per cent for offshore employees and two per cent for onsite employees, respectively, with high performers being rewarded with substantially higher increases in their compensation," said Saurabh Govil, Global Head of Human Resources at Wipro.

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Related: Wipro, Infosys and TCS See Europe as an “Achilles Heel”

European datacentre Telecity has agreed to be bought by US datacentre giant Equinix for £2.3 billion, rejecting its planned merger with Interxion which was agreed back in April in the process.

After German regulators had given the green light, it was expected that Telecity and Interxion Holding would be going in for an all-share merger, creating a new company with a combined value of over £3 billion.

There is now speculation that Interxion itself is a potential acquisition target. Digital Realty Trust and CoreSite Realty Corp have both been tipped as potential buyers for the Amsterdam-based firm.

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Related: Telecity - Interxion Merger Gets the Green Light