Industry news

Harrow Council will announce who has won their new five year ICT outsourcing deal in April. Steria, HCL and Fujitsu have been shortlisted for the contract which is valued between £30m and £100m.

The chosen supplier will be providing applications, infrastructure and service transformation and management.

Harrow is also currently looking into the possibility of entering into a shared services agreement with other councils for back office functions such as HR and revenues services.

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Read this next: Havant Borough Council Faces Outsourcing Dilemma

'The functions and resources focused on the Met’s strategic business needs will remain within the Met and the functions and resources associated with solution development, deployment and service delivery will be outsourced.'

Yesterday, Computer Weekly broke the news that the Metropolitan Police plans to outsource 700 roles related to software development and IT services. This information came out over the course of two February issues of the Digital Policing Newsletter, s regular internal email newsletter sent by the Met to its employees.

It's expected that, of the 500 full time IT employees and 300 IT contractors working at the Met, just 100 will remain in-house after changes are complete. The Met announced that it plans to retain those in leadership and strategic positions, with the hope that their IT operation will evolve into an efficient, seamless outsourced operation headed by in-house employees.

Computer Weekly reported that the Met Police must save £800m from its annual budget (£3.2bn for 2015-16) by 2020.

The Met is no stranger to outsourcing. A year ago they moved away from their ITO relationship with Capgemini in favour of a 'tower model', where non-core services are broken up and outsourced to a number of third part specialists. The tower model has since been widely cricitised by the UK government.

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Read this next: IT Industry Clashes with UK Government over 'tower model' outsourcing

Business process outsourcing (BPO) is becoming increasingly popular as a method to bring down costs among US healthcare companies.

Eight of the 10 largest US health payers now outsource major portions of their operations. The most popular operations for outsourcing among these companies include analytics, claims modernisation, alternative payments services, security, and sales and marketing.

74 per cent of the managing representatives from these companies said that they were likely outsource the development and management of new payment models because their own technology, staff or resources are currently inadequate.

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Read this next: NHS England Suffers Huge IT Funding Cuts

Orange may have recently terminated its beloved ‘Orange Wednesdays’, but the mobile network operator clearly has its eyes on a much bigger prize.

At the Mobile World Congress yesterday, Orange’s technical strategy director Yves Bellego announced that the company is considering offshoring with a move into Africa, shortly after the success of a major deal with Sweden’s Ericsson closed late last year.

The Ericsson contract was announced on the same day, and will cover five European markets where the Swedish multinational communications provider serves over 30 million customers.

The arrangement is expected to economically benefit both companies and improve service provided to customers in Spain, Belgium, Romania, Slovakia and Moldova.

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Read this next: IBM Expands into Egypt’s Technology Sector

United Airlines revealed on Tuesday that they expect non-fuel costs to fall by almost $800 million by the close of this year, as it seeks to cut annual costs by $1 billion within two years.

The American airline, headquartered in Chicago, suggested that the cuts were driven in some part by the outsourcing of 1150 positions across 16 airports in the USA.

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NHS England has had their public funding for integrated digital care cut to £43m instead of £240m. This may result in several NHS IT projects having to be severely scaled back or cut altogether.

The funds are believed to have been cut to accommodate hospitals that have been struggling.

The first round of the integrated digital care fund was open to NHS Trusts to support the transfer of paper-based clinical record-keeping to integrated digital care records (IDCRs).

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Read this next: IT Industry Clashes with UK Government over Public Contracts

On Monday 2nd March 2015, Infosys broke the news that it had signed a five-year outsourcing deal with TNT to help improve the Dutch company's technology applications.

Infosys is an Indian business technology consulting, IT solutions and IT services company, specialising in both BPO and ITO. TNT is a courier business offering global express distribution, logistics and international mail services, founded in the Netherlands.

The new business transformation strategy, dubbed by TNT as 'Outlook', involves overhauling the company's IT capability in order to reduce its complexity and boost its flexibility.

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Read this next: Indian Giant Infosys Buys US Tech Firm for $200m

The Ayala group, the holding company for one of the oldest and largest business groups in the Philippines, has announced that it has launched a search for digitally-based companies to take over.

Affinity Express Holdings Ltd, a business which Alfredo I Ayala himself heavily invests in, is hoping to acquire a company based oversees this year. Mr Ayala said he was on the look out for 'anything that can accelerate [Affinity's] digital transformation' and that his company was looking for 'inorganic opportunities'.

Affinity Express specialise in digital and print marketing production, as well as media solutions, on behalf of SMEs. The company recently made the transition from being primarily print to digital, hence the search for digital acquisitions.

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Read this next: Over A Quarter of the Government’s Procurement Budget Spent with SMEs

One of India’s biggest engineering outsourcing companies, Quest Global Engineering, has purchased the automotive engineering firm EDF for an undisclosed sum.

Following a spate of acquisitions, the Indian company has gained a firmer foothold in the European market. Through EDF, Quest is now a supplier to a roster of manufacturers including BMW, Ford and Chrysler.

Commenting on the news, Quest co-founder Ajit Prabhu observed that his company would “use EDF to expand our offerings in Europe”, allowing it “do a lot more for our clients in the region like Airbus, Rolls Royce and Siemens”.

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Read this next: EDF renews outsourcing deal with Capgemini

In the build up to the UK general election, the IT trade association TechUK has called out the UK government over its public procurement policies.

The trade body has accused the government of casting too much uncertainty over the procurement of its public contracts, mainly regarding alleged plans to reduce the number of large-scale IT contracts that the government outsources.

TechUK emphasised that contracts between the government and tech industry are responsible for a £100bn contribution to the UK economy and 500,000 jobs; further uncertainty could put both factors in a precarious situation.

This controversy was sparked in late 2014, when government digital chief Mike Brackan publically criticised the ‘tower model’ of outsourcing, whereby IT contracts are broken down and outsourced to a number of third party specialists. This stance was followed up in a Government Digital Service (GDS) blog post written by deputy director Alex Holmes, who stated that ‘the tower model is not condoned and not in line with government policy’.

The proceeding argument spilled over onto social media. TechUK pointed out that the tower model had previously been favoured by certain bodies in the public sector, and that it was not helpful that this nebulous stance had been announced in a blog post rather than in any official capacity.

Holmes responded on Twitter that he was only outlining current policy, to which TechUK retorted that the government’s policies clearly lacked the clarity which will be key to the success of future public-private outsourcing relationships.

Late in February, the UK government changed its procurement laws to be more in line with the EU, with a number of rule changes intended to simplify the bidding process and make public contracts more accessible to small and medium-sized enterprises (SMEs). It is yet to be seen whether these rule changes will also help the government achieve a level of clarity that TechUK and others in the IT outsourcing industry will find acceptable.

Holmes’s attack on the ‘tower model’ is reminiscent of plans outlined by Labour Policy Chief Jon Cruddas earlier in the year, who called for public contracts to go to companies with a ‘social purpose’ rather than those that are purely driven by profit.

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Related content:

The New EU Public Procurement Laws: What you need to know

Labour’s Outsourcing Plans Put Public Sector at Risk