Industry news

The sale of Lloyds Banking Group has begun, with 6 per cent of the bank being sold to investors as the government places shares for sale on the market.

The sale comes nearly five years after the government carried out a multi-billion bailout of the failing bank, with shares selling at 77.36p at the close of Monday markets.

Chief executive of Lloyds, Mr Horta-Osorio, said: “I am pleased that the Government has been able to begin the process of selling its stake, and giving taxpayers the opportunity to get their money back. I believe this reflects the hard work undertaken over the last two years to make Lloyds a safe and profitable bank that is focused on supporting the UK economy.”

Treasury spokesman said: “We want to get the best value for the taxpayer, maximise support for the economy and restore the banks to private ownership. The Government will only conclude a sale if these objectives are met”.

Lloyds migrates IT services to India

Lloyds of London renew BPS contract

Outsourcing firm Genpact has partnered with global financial information services company Markit, in order to reduced illegal activities, including money laundering from the development of screening checks.

The partnership will see the creation of the first centralised service for end-to-end management of client skills and knowledge.

The service is expected to enable the industry to streamline operations, reduce costs and enhance compliance through better data management and quality.

HSBC and Morgan Stanley are the first banks to work exclusively with Markit and Genpact on the initial scope and design of the service.

David Burnett, chief operating officer, HSBC Global Banking and Markets, said, “We are pleased to be involved in the design of this service. An industry solution for client onboarding and KYC has the potential to deliver benefits to our clients and help drive higher standards, consistency and best practice.”

Global consultants Avasant have moved to acquire Sourcingboard, a leading sourcing advisory provider.

The acquisition comes as Avasant moves forward with its expansionist policy, having recently completed a series of purchases in the U.S., Europe and Latin America, and doubling its size over the last two years.

Avasant Global CEO, Kevin S. Parikh, said: “the acquisition of Sourcingboard was designed to support a marked increase in both client demand and our global expansion of the firm’s consulting offerings.”

Sourcingboard’s CEO Warren Gallant, said: “Avasant is an excellent firm with a clear strategy to provide global management consulting services. Sourcingboard is proud to join this fastgrowing and exciting team."

New industry report shows growth in IT testing

UK service sector activity reaches eight month high despite Eurozone recession

Public sector suppliers have expressed fears over the UK government’s move to privatise procurement services.

The running of the Defence Equipment & Support agency (DE&S), which delivers procurement services for the Ministry of Defence, has been offered up to the private sector.

U.S. groups Bechtel and CH2M Hill have emerged as the leading bidders for the management service, with other firms bidding for the contract including Serco and PricewaterhouseCoopers.

A major supplier to the MoD has reportedly raised concerns surrounding the privatisation of procurement services according to the Independent. The issues surrounded the ability of private procurement organisations to effectively negotiate with suppliers, when security details of the service could potentially be revealed, damaging both the stock position of the defence supplier and the security of UK defence capabilities.

The move to include the private sector in defence procurement agencies was promoted by Defence Secretary Philip Hammond, as a way to create greater cost savings, in keeping with the need to reduce public sector spending.

MoD found to have overpaid £11 million to suppliers

UK moves ahead with outsourcing MoD hardware procurement

The Public and Commercial Services (PCS) union has claimed that the Cabinet Office is set to outsource a range of department services to France based Steria.

Steria which provides outsourced IT services will provide services including IT, HR and finance, according to union.

Steria has previously been named preferred bidder as a private sector partner for the ISSC2 (Independent Shared Service 2) joint venture, which seeks to consolidate back office services.

The reported move to outsource department services would come as the government seeks to reduce costs and create efficiencies under the Civil Service Reform Plan.

Cabinet Office plan for new procurement service

Prime Minister David Cameron has admitted that there are a shortage of contract management skills within the civil service.

The acknowledgement came during a House of Commons Liaison Select Committee, with questions relating to recent outsource contract failures including the West Coast Mainline, in which civil servants failed to correctly manage the procurement process. The tendering process failure resulted in the expensive scrapping of the process and a £50 million bill to taxpayers.

Mr Cameron said: “I think there are skills shortages in the civil service that have to be addressed,” adding, “There are examples of good contracting and bad contracting,”. “I think the more general point is that the civil service needs to have more expertise across the piece on this.”

West Coast Rail Line procurement failure caused by ‘major’ public service failures

West Coast main line contract cancelled after flaws emerge

Data management firm QStar Technologies and media asset management provider Square Box Systems, have joined up to deliver a joint software platform to deliver file archive services.

The new product, CatDV, will provide date protection and management services, alongside metadata functionality and multi-site storage.

The delivery of the archive platform comes as analytic services uptake increases within cloud platforms as consumers seeks to optimise services.

CSC moves to extend data analytics capabilities with start-up acquisition

New research by CBI has revealed that businesses are divided over the future of the UK economy, with just 51 per cent of respondence saying that they expected conditions to improve.

The research revealed that 63 per cent of companies did not think that the government was strategic in how it used policy and investment to develop the countries competitive advantages.

The report from CBI concluded that: “Action should be focused on improving understanding of supply chains to help target weaknesses and reinforce strengths, promoting existing initiatives to support supply chain development, and encouraging and incentivising supply chain collaboration.”

UK can add £4bn per year to its economy

Last month a report from Whitehall thinktank the Institute for Government criticised the government for its setting up and management of outsourcers in areas such as schools and employment services. It observed that cost-effective services for users with multiple needs were often overlooked by commissioners focused just on their department’s narrow objectives. It also recommended that policymakers focus on developing a competitive market of service provision. While the government announced in 2010 that it would be looking to get more SMEs involved in supplying goods and services, this is proving to be challenging for a number of different reasons, from tender processes to delivery penalty payments, which could be disastrous for small businesses.

But the challenges the government faces in outsourcing these complex services are not unique to the public sector; private organisations also have a huge number of moving parts to monitor to ensure that they are achieving their objectives in outsourcing a contract. With the move to using multiple niche suppliers to get the best in breed service, it brings the challenge of managing the ‘white space’ in between the different suppliers and ensuring consistent oversight of the whole project. However, implemented correctly this model will create greater flexibility - one of the keys to this will be the ability to control and optimise all the moving elements in unison.

To help manage these multiple partners outsourcers are adding a layer of management. Called Service Integration and Management (SIAM) this layer brings together all the different suppliers to give an overarching view of how the contracts are operating. This layer can either also be managed by an outsourcer, or the client can manage it in-house if they have the necessary skills. However it’s managed, the key for it to work effectively is for the reporting to be relevant and linked to business objectives. Too many contracts rely on SLAs which do not give an accurate indication of how the business will be impacted by different actions. It’s not enough to look at the work contract by contract, a holistic view needs to be taken to get the most benefit.

Tying into this overarching view is the requirement for the relationship between client and outsourcers to be transparent. Transparency will mean that work can be performance managed to ensure that supply chain assets are managed and maintained at optimal cost, that evidence of the delivery of business value is accessible and that risk can be better managed across service delivery and commercial boundaries.

While this new way of working brings with it challenges, there are also huge opportunities for outsourcers to become true partners with their clients and effect real business transformation and innovation.

Major public sector procurement framework projects dropped

As Vodafone in Germany is hit by a serious data breach despite highly regarded security seems Mark Bower, VP at Voltage Security, discusses how this development should inform data security. The announcement of the security risk is possibly the first major breach to made visible under the new tough EU Telecoms rules on data privacy.

The data stolen includes “names, addresses, birth date, gender, bank sort code and bank account numbers for approximately 2 million applications from individuals seeking to sign up with Vodafone Germany”. The key word here is seeking to sign up. This is likely the web applications where customers fill out forms, send in credit and bank details for verifying identity. Ironically, while this streamlines a business process to get a new customer a phone, its perfect data to commit Identity theft.

So here, as far as notification is concerned, Vodafone seem to doing the right thing by being transparent. However, the fact the breach took place at this scale raised questions about how data is being protected in enterprise systems. This is also a significant breach and will certainly have high cost ramifications. Similar scale breaches at payment processors here in the US for example – networks processing payments – have cost in the $95m to $140m range. That’s a big slice of a budget to any enterprise. And it’s not just the fines from the regulators – it’s the remediation work: risk analysis and process breakdown discovery, heavy duty audits, and the cost of revisiting security strategies to ensure customer trust isn’t further weakened by another similar attack. Mobile customers are quick to change providers – so business losses from the revenue associated with 2 million customers is also a significant financial risk.

Telecoms networks are a huge target for attackers, especially the big players. They process massive amounts of data on a continuous basis, and much of it is sensitive. As a network provider, their data flies around everywhere – inside and outside the enterprise. While there aren’t details of the how’s and whys of this insider attack right now, many large organisations fall into the trap of utilising data at rest encryption which does absolutely nothing to protect data in use, in motion, or as its used by applications. I suspect that’s exactly where this breach took place – tapping into data as it’s decrypted (or not) off disk and on the network. It’s a common method of theft by advanced malware sniffing data either in memory or as it travels point to point, and of course, potentially low hanging fruit for an insider. In the US, both the payment processing and telecom industry leaders have adopted a completely new data protection strategy to mitigate these risks – data-centric security which renders any stolen data completely useless to the attacker, while still enabling the applications to function as before – at massive payment processor and telecoms carrier scale. That’s a big deal – especially when there’s a need to protect data across typical Telecoms infrastructure where you’ll find all sorts of platforms – HP Nonstop, IBM Mainframe, Open Systems, legacy and contemporary applications spanning both enterprise, Hadoop and Cloud. What’s consistent across these platforms is the data. That’s why data-centric security is the new frontier of mitigating attacks. Protect the data, not the server or disk. It’s the data attackers want.

This won’t be the last such breach. The new regulations will be putting more pressure on Telecoms firms in the EU and notifications will become more common for sure for those not taking a new approach to data protection.

The good news is the tools are already here to address this risk head on – at scale, and across the entire enterprise or network. Lastly, with government standards recognition of the approaches (such as NIST 800-38G – Format-Preserving Encryption), even the most demanding organizations have the assurance of independent validation and proofs of security necessary for standards process adoption and for assurance of reducing risk of a breach.

In the meantime, any customer affected should be monitoring their bank accounts very, very closely.

Vodafone moves to acquire stake in German telecoms market