Industry news

World renowned diamond-mining and luxury Jewellery company De Beers have signed a global IT infrastructure deal with outsourcing provider HCL. HCL will supply De Beer’s global IT network where previously IT had been managed by regional providers. The agreement will see HCL run datacenter operations, a multi-lingual service desk, LAN Management, security services, service management, desk side support and project services. HCL will provide services to remote locations like Snap Lake mine in Canada which can only be reached via ice roads in the winter.

TCS and HCL disappoint whilst Infosys plays catch up

Philip Morris International (PMI) have picked Wipro to manage their IT infrastructure. The five year contract will include support for servers, storage, backup and applications with the aim to save costs and better be able to serve and support their workforce around the world. PMI owns seven of the world’s top 15 international cigarette brands including Marlboro.

IBM and Wipro in the running to win Rs 1,200 crore call centre deal

According to a recent article, the German airline Lufthansa is close to selling its IT infrastructure division and completing an outsourcing deal with IBM. It is due to result in a 240 million euro ($305.57 million) pre-tax charge in 2014. The airline has stated that the deal is expected to close at the end of the first quarter of 2015 and will yield an average of 70 million euros in annual savings.

Lufthansa plans to outsource ground staff

IBM pays $1.5bn in cash to offload its loss-making chip manufacturing division to GlobalFoundries. According to the article in the BBC news, IBM will now focus on cloud computing, mobile and big data analytics.

The sale coincided with the announcement that IBM had suffered a 17% drop in third quarter profit.

IBM and Wipro in the running to win Rs 1,200 crore call centre deal

Despite reporting net profits of $855 for Q3 – a 14% increase on Q3 2013 results – TCS’ shares fell 8%, as it seems clear that TCS will fail to meet its management pledge to exceed last year’s 16% revenue growth over the FY, dashing City expectations. HCL’s shares also fell 8% following disappointing results.

Infosys on the other hand has posted positive results under new CEO, Vishal Sikka, announcing quarterly net income was up by almost a third compared with the previous year’s performance.

3000 jobs at outsourcing centre for Saudi women

With continued pressure on local authorities to drive back costs and improve service delivery, it comes as no surprise that a recent report shows shared services and outsourcing are still high on the agenda to help them survive.

Top findings according to the senior managers risk report produced by Zurich Municipal for a recent SOLACE 'summit' meeting of local government chief executives in Liverpool include:

- Plans for progressive and transformative change are far more evident amongst local authorities in 2014 than in 2013

- UK seeing more innovation in local government than any time since the rebuilding of public services post World War II

- Commercialism high on councils’ agendas – finding new ways to turn capital into revenue

- Outsourcing grown in importance

- Smaller councils focused on shared services, larger councils can use economies of scale to benefit from extensive outsourcing

Local Council staff cuts and further outsourcing predicted

Transport for London (TFL) will go to tender later this month for a supplier to provide service integration and management (SIAM) services to support its transformational information management programme. The contract worth approximately £75m over five years is expected to be awarded by 2016. TFL plan for three service towers, end user computing, networks, applications development and applications management. A short list is planned to be announced in April 2015.

The Department for Work and Pensions (DWP) have also announced their plans to move to a SIAM model in plans to ramp up their IT following in the foot steps of Ministry of Justice and the Highways Agency who have outsourced to Lockheed Martin and BAE Systems respectively.

TfL award Cubic £660m outsourcing deal

The safety of NHS patients has been called in to question after a confidential report revealed dozens were left in server pain by botched eye surgeries carried out by private contractors. New figures obtained from the Health and Social Care Information Centre showed private providers carried out more than one in five NHS knee operations, one in six hip operations and 35,329 cataract operations between 2012-13. The report revealed several eye surgery patients had “very painful” experience, possibly due to anaesthetic not working properly. 37 out of 62 cataract patients seen by surgeons working for Vanguard Healthcare Solutions required follow-up care.

For more information please click here.

Aintree University Hospital NHS Foundation Trust appoints NHS SBS to provide payroll services

JLL’s research reveals that the UK’s return to favour is not exclusively driven by concerns about offshore locations but a combination of factors. For several years, advanced manufacturing and R&D clusters have flourished around UK university hubs such as Oxford, Cambridge and Manchester. The availability of talent is another influence. Additionally, the UK’s high level of transparency, its increasingly competitive corporate tax regime and business-friendly environment are combined forces that continue to drive growth. Government incentives, more widely available in Scotland, Wales and Northern Ireland also add impetus to encouraging corporate investment back into the UK.

Tom Carroll, Director - EMEA Research, said: “Recent changes in the global economic and business landscape have resulted in an apparent reversal of the offshoring location trend with a number of companies electing to move operations back to the UK. This trend is not only confined to manufacturing. The move to re-shoring and nearshoring is also impacting the services sector with a range of financial and wider professional services companies such as law firms exploring ways to expand their enterprise footprint in lower-cost UK locations. The trend is not simply preserved for multinational companies either. Many mid-market firms are in the process of scrutinising their portfolios and looking for low-cost or nearshore alternatives.”

NR7330_JLL_re-shoring_paper.pdf

Manufacturing industry brings work back to the UK

LGC research of 267 councils has revealed an expected 17% fall of directly employed workforce by 2020. The results of the research showed a rise in the number of councils that intended to outsource more services in the future, from 10% 2013 to 51% this year. The number of councils which believed they were moving towards a “commissioning council” rose from 33% in 2013 to 58% this year.

Graeme McDonald, director of Solace, told LGC: “Undoubtedly there are already far fewer people working in councils, and things are not getting any easier. The true test will be whether the sector is able to manage its own destiny.”

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Councillors put legal blunders at local council down to a consequence of outsourcing