Industry news

A recent Datamation report argues that, with the increasing importance of Big Data, companies should look to outsource the management of their databases.

As companies continue to collect huge volumes of data to glean insights on business decisions, some executives are struggling to manage the increasingly unwieldy operations on their own. As a result, the report suggests that Data Centre Outsourcing (DCO) is a valuable tool for businesses to utilise.

Datamation suggest the factors that will spur the uptake of third-party database management will include when in-house data management is too costly, when companies lack in-house expertise, when resources need to be freed up, when increased agility is needed and when regulatory compliance in required.

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Airbus has disclosed plans to raise its outsourcing spend in India to $2 billion, shortly after Indian Prime Minister Narenda Modi visited its offices as part of an international trip to France.

Modi’s trip was, in part, motivated by his desire to promote his country’s new ‘Make in India’ initiative. Airbus SAS, an aircraft manufacturing division of Airbus Group, is based in Blagnac, a suburb of Toulouse in France.

‘We are honoured to host Prime Minister Modi in Toulouse and convey to him our desire to forge a stronger industrial bond with India. India already takes a centre-stage role in our international activities and we want to even increase its contribution to our products,’ commented Tom Enders, Airbus Group CEO.

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The Reserve Bank of India (RBI) has suggested a number of outsourcing regulations for the country’s non-banking financial companies (NBFCs), in order to safeguard them from the ‘inherent’ risks of outsourcing.

The regulations include the proposal that NBFCs should not outsource core management and decision-making functions, along with a strict set of guidelines for how outsourcing should be carried out.

All of the proposals are documented in a draft report released by the RBI. ‘The outsourcing activities are to be brought within regulatory purview to protect the interest of the customers and to ensure that RBI has access to all books, records and information available with service providers,’ the report said.

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Northamptonshire Council is to reduce its core staff to 150 people, by transferring 4,000 employees to four new service providers. Under the plans, the council will remain the majority shareholder in each service provider.

Whilst the council already outsources services such as street lighting and road services to Balfour Beatty and Kier, the new plans mean that the council will be reduced to a commissioning role, purchasing services from external bodies.

A report by the Local Government Association last year suggested that of the 27 county councils in England, Northamptonshire was the ‘least able to fund itself’, in part because it charges the lowest council tax of any shire authority.

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The Southwest One (SWO) contract between IBM, Somerset County Council, Taunton Deane Borough Council and Avon & Somerset Police is due to end in 2017, and reports have identified that savings have not been as great as originally expected.

Savings of £10m were originally targeted; this has now been downgraded to £5m, with savings of just £3m having been identified to date.

The Councils involved are now reviewing their ICT options in order to make a decision next year that can support a transition.

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Gartner research has found that the use of Indian IT service providers in Nordic countries is growing by 20 per cent per year, while the growth in the traditional supplier market has only been 2-3 per cent annually.

Nokia, DNB and ABB all favour Indian providers. HCL Technologies and Wipro have both announced that they will be investing further in the region, which covers Finland, Iceland and Scandinavia.

Mika Rajamäki, a research analyst with Gartner, commented: ‘Sweden has the largest market, but Indian companies seem to have the highest market share in Finland, around 4 per cent.

‘In Denmark, Sweden and Norway, their market share is around 1 per cent, but these figures are from 2013 and there were some major deals last year, so the figures have definitely grown. Average market share for Indian companies in the Nordics is probably around 4-5 per cent, closer to 5 per cent, and in Finland it will grow to 6-7 per cent this year.’

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Health and safety training company Survivex has secured a contract with Hercules Offshore to provide an outsourced training management service (TMS).

Hercules Offshore, which provides a range of services to oil and gas providers ranging from drilling to decommissioning services, has signed a long-term contract worth more than £500,000 yearly.

The TMS team will be responsible for producing a comprehensive training matrix, identifying skills gaps and creating individual training plans for Hercules employees.

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The Shared Services and Outsourcing Network (SSON) has released a report covering the impact of five mega-trends on the shared services industry: optimised services, digital automation, data analytics-driven business intelligence, new skill sets and customer-orientated services.

The report initially revealed that over 40 per cent of European shared services organisations (SSOs) use shared services to improve business performance, while only 8 per cent do so predominantly to cut costs. However, the majority still measure the performance of their shared services with cost-based metrics.

In order to optimise service delivery, 69 per cent of the SSOs surveyed plan to bring in new technology, while 52.5 per cent want to add additional scope to the services they offer and 35 per cent plan to outsource more.

When the SSOs were asked which practices are relevant to their future digital strategies, 70.5 per cent including ‘Enabling end-to-end process flows’, while only 24 per cent answered ‘Robotic process automation’.

The vast majority of Europe-based SSOs are in the process outlining and implementing their data business intelligent strategies; the majority also saw service excellence as the most valuable skill to enhance, more so than leadership or subject matter expertise.

SSOs in Western Europe favour ‘Customer relationship management technology solutions’ to drive better customer service. However, those in Central and Eastern Europe believe that ‘Customer interaction frameworks’ are more effective.

To find out more, download the full report '2015 State of the Shared Services Industry Report: Focus on Europe' from the SSON website.

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The lower house of the Brazilian National Congress has approved the preliminary text on a bill that would pave the way for companies to outsource more work, in an effort to lift strict rules governing which roles can currently be outsourced.

While the bill was being discussed in parliament, protests sparked across 12 Brazilian cities, including the capital Brasilia, where police and protestors clashed outside the Congress building.

Despite this, the Chamber of Deputies has voted in favour of the measures. However, the bill still requires the approval of the Brazilian Senate and the signature of President Dilma Rousseff, whose party is opposed to the measures.

Deputy Arthur Oliveira Maia urged Brazilians to remember that outsourcing is a global practice and condemned the exaggerated warnings of those criticising the bill, saying ‘People are creating a terror scene and apocalyptic scenery that has not happened in other countries.’

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B. Rama Raju, founder of Satyam Computer Services, has been found guilty of embezzling millions from the company, as have two of his brothers and seven other company officials.

All ten will now be sentenced, and it is likely that all will be given life sentences. Investigators say that Raju and his fellow executives cost the company’s shareholders 140 billion rupees ($2.28 billion USD).

A year after the scandal erupted, Tech Mahindra bought a majority stake in Satyam Computer Services and changed the company’s name to Mahindra Satyam.

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