Industry news

Hindustan Aeronautics Ltd (HAL), the Indian state-owned aerospace and defence company, is to outsource the provision of aircraft components to smaller local manufacturers.

Currently, HAL outsources around 1,100 components to manufacturers throughout the subcontinent. However, the firm is attempting to increase the participation of smaller vendors in and around the city of Nashik to reduce delivery times and production costs.

GSR Prasad, deputy general manager of HAL, told the Times of India: "We are keen on outsourcing components to manufacturers in Nashik. We are also providing technology and other assistance to the vendors.”

For weekly news updates, subscribe to our email newsletter.

Read this next: Indian BPO to Bring 48,000 Jobs to Small Towns

The Welsh Government has suggested they will soon be appointing their first Chief Digital Officer (CDO) as part of their ‘Digital First’ strategy.

The CDO would oversee the government’s digital transformation on both a local and national level. Aims include a national open data framework, open source standards and national domain names.

The new CDO will collaborate with the Digital Public Services Working Group which is chaired by the minister for public services and the deputy minister for technology and skills.

For weekly news updates, subscribe to our email newsletter.

Read this next: North Wales Police Sign 5 Year Contract with CGI

After heavy speculation, Capgemini has announced a merger with IGATE worth $48 per share, amounting to a total of $4 billion.

As well as greatly boosting Capgemini’s staffing presence in India, the deal with IGATE will expand the firm’s market share in North America, which is expected to represent 30 per cent of the group’s combined revenues of €12.5 billion in 2015.

Paul Hermelin, Chairman and CEO of Capgemini, said: "I am very pleased to announce a very important transaction in Capgemini’s history. IGATE is a leading company that perfectly fits our strategic ambition. It will give us a new status on the American market, and take further our industrialisation journey to offer ever more competitive services to our clients.

“This will also give to the Group’s Indian operations a new scale, allowing us to compete on par with the best US-based and Indian-based companies. I am glad to welcome new talents and leaders to our Group, who share our convictions and professional culture."

Ashok Vemuri, CEO of IGATE said: "In Capgemini, we have found a partner that will advance our ability to innovate and build industry solutions that will enhance the value proposition we bring to our clients. In addition, this powerful combination will provide exciting opportunities for our employees to expand their capabilities."

For weekly news updates, subscribe to our email newsletter.

Read this next: eClerx Buys CLX Europe

OC&C Strategy Consultants, through new research and analysis, has found that the outsourcing of public services in the UK is set to grow by at least £20 billion by 2020.

OC&C’s research also found that departmental spending on outsourcing has increased from 22 per cent to 28 per cent over the course of this parliament. However, ISG recently released a report stating that the UK outsourcing market has been in decline this quarter, most likely as a result of uncertainty caused by the upcoming general election.

Of course, the growth of public sector outsourcing over the next five years could be largely dependent on which party (or parties) achieve political power: the Conservatives have demonstrated a brighter outlook on outsourcing, while certain representatives from the Labour party have scolded the industry as a whole.

Vivek Madan, a partner at OC&C Strategy Consultants, commented: “Controversial cases of public sector outsourcing risk overshadowing the overwhelming number of examples where outsourcing is working well. With innovation in technology and a new wave of research into areas like criminology, there is more opportunity than ever to reduce costs and increase the quality of public services.

“Outsourcing neither fundamentally guarantees nor fundamentally prevents the delivery of world-leading public services. What we’ve seen all too often is successive governments and organisations committing one of the three deadly sins of outsourcing – focussing on inputs rather than outcomes, devolving too much or too little control to the contractor, or letting politics rather than reason drive decision-making.”

For weekly news updates, subscribe to our email newsletter.

Read this next: ISG Finds Global Outsourcing Market in Decline

ISG has released its global Outsourcing Index – asides from revealing that the overall outsourcing market has declined this quarter, ISG has also brought attention to the most “watch-worthy” third party service providers around the world. They are as follows:

The Americas:

The Big 10 Sourcing Standouts

Accenture

Atos

BT

Capgemini

Dell

IBM

RR Donnelley

State Street

TCS

Xerox

The Building 10 Sourcing Standouts

Aon Hewitt

CBRE

CGI

Cognizant

CompuCom

Genpact

HCL

Infosys

Teleperformance

Wipro

The Breakthrough 10 Sourcing Standouts

Alorica

APAC Customer Services

EXL

Firstsource Solutions

ICF International

IGATE

KPIT Technologies

Luxoft

Syntel

TeleTech

EMEA (Europe, the Middle East and Africa)

The Big 10 Sourcing Standouts

Accenture

Atos

Balfour Beatty

BT

Capgemini

Fujitsu

HP

IBM

TCS

T-Systems

The Building 10 Sourcing Standouts

Cognizant

Capita

CGI

EVRY

HCL

Infosys

MITIE

Serco

Tieto

Wipro

The Breakthrough 10 Sourcing Standouts

Endava

HH Global

IGATE

InnerWorkings

Kuehne & Nagel

Luxoft

MAYKOR

Mindtree

NNIT A/S

Xchanging

Asia Pacific

The Big 10 Sourcing Standouts

Accenture

BT

Fujitsu

HP

Hitachi

IBM

NTT Data

Ricoh

TCS

Ericsson

The Building 10 Sourcing Standouts

Cognizant

HCL

Infosys

NEC

Orange Business Services

Tech Mahindra

Transfield Services

Unisys

United Group Services

Wipro

The Breakthrough 10 Sourcing Standouts

Aegis Limited

ChinaSoft

Hollysys Automation

Itron

Kratos Defense & Security

NGA Human Resources

Ramco

SITA

Vertex Group

WNS

For more information regarding the Index, see the "ISG Outsourcing Index – Global" slideshow.

For weekly news updates, subscribe to our email newsletter.

Read this next: ISG Finds Global Outsourcing Market in Decline

Despite only being on track to reach $1 billion in annual revenue by the end of this year, Wipro’s healthcare business expects rapid growth over the next few years and anticipates $2 billion in revenue by 2018.

This is due to Wipro’s healthcare business’s top customers, such as Johnson & Johnson and Catholic Health Initiatives, looking to increase their spend on technology in order to compete with Obamacare healthcare reforms taking place in the United States.

When asked whether Wipro’s healthcare business will reach this ambitious target, Sangita Singh, chief executive of healthcare and life sciences at Wipro, responded: “I think there’s tremendous momentum… it should be (quicker). We want to get there within the next three years.”

For weekly news updates, subscribe to our email newsletter.

Read this next: Indian BPO to Bring 48,000 Jobs to Small Towns

Sopra and its subsidiary, Sopra HR Software, have been chosen by the French defence ministry to provide a future payroll system for France’s military.

In a press release, Sopra Steria claimed that it “will be developing a solution based on a software system known for its reliability and perfectly adapted to the needs of business and large governmental structures alike”. Sopra HR Software systems are already used by 12 million people worldwide.

An initial version of the system will be unveiled at the end of 2015 - final implementation is expected in 2017, when the payroll system will be rolled out to service 250,000 armed service personnel.

For weekly news updates, subscribe to our email newsletter.

Read this next: Sopra Steria Signs £37m Contract with Harrow Council

The Times of India (ToI) has suggested that Capgemini is in talks to acquire BPO firm IGATE, in a deal that would likely rank amongst the largest acquisitions in the IT services market.

Capgemini has thus far refused to comment on the speculation, but multiple sources have informed the Indian paper that there is a high likelihood that the deal will go through. HP’s $13.9 billion acquisition of EDS in 2008 remains the biggest deal to date.

The ToI speculates that the acquisition will strengthen the Paris-based firm’s share in the North American market - almost 70 per cent of IGATE’s revenues are drawn from the USA, the largest outsourcing market globally. In comparison, only 20 per cent of Capgemini’s revenues come from the country.

"Capgemini has been trying to grow presence in tier II spoke-centres in India to price competitively, but hasn't gained the level of scale offshore as its primary competition. It has stated that it wants to grow offshore (not just nearshore), so IGATE's footprint will definitely help” said Phil Fersht, CEO of HFS Research.

For weekly news updates, subscribe to our email newsletter.

Read this next: Capgemini Receive Quality Award for Delivery Excellence from Cisco

North Wales Police have agreed a £17.8 million deal with CGI to provide ICT services and support for the next five years.

The contract is part of a wider transformation plan to maximise police time in the community, reducing the time personnel commit to conducting back office tasks.

According to Geoff Bradley, Business Services Director, the contract could produce estimated savings of £3.5 million. As part of the IT upgrade, the force will receive body-worn video cameras and mobile devices with GPS with built-in alerts and deadline reminders.

For weekly news updates, subscribe to our email newsletter.

Read this next: Metropolitan Police Outsources 700 IT Roles to Save $800m

The Green Party’s manifesto states that the party will increase the overall NHS budget by £12bn a year, in order to end the current funding crisis, end market-based commissioning and procurement.

The Greens claim this will also create 400,000 new jobs within the NHS and social care.

The Green Party is severely against outsourcing and privatisation, with plans to introduce an NHS Reinstatement Bill, restrict the role of commercial companies, stop the further sale of NHS assets and look for ways to buy out current private finance initiatives.

For weekly news updates, subscribe to our email newsletter.

Read this next: The Election Manifestos: What they mean for outsourcing