Industry news

  • 23 Apr 2013 12:00 AM | Anonymous

    Cloud adoption has seen strong adoption within the public sector, with the month of March seeing record figures for service adoption via the G-Cloud.

    Services procured by public sector agencies through the CloudStore portal and G-Cloud framework during March more than matched all of the services procured through2012.

    Sales reached £6.5 million through the G-Cloud in the month of March, an increase of 300 percent from February 2013.

    The government have set the target of transitioning half of all public sector IT procurement onto cloud based procurement services by 2015.

    Current spending on IT procurement is believed to around £18 billion. Total sales through the public sector procurement framework have now reached just over £18 million

    Businesses find cloud migration costly

    Cloud computing: let’s work together!

  • 23 Apr 2013 12:00 AM | Anonymous

    Paymon Khamooshi discusses how the rise of new IT technologies including the development of automation applications is set to revamp the onshoring services industries.

    In a recent blog post for Sourcing Focus I eluded to new technologies that will soon make onshore IT outsourcing as competitive as its offshore competition. Programming technology, especially web application design, is on the verge of a revolution in automation which will have far reaching consequences for the outsourcing industry. These developments are in the very early stages, and are little understood by the wider industry, but change is definitely coming. IT outsourcing will soon be a very different environment than it is today.

    Offshore outsourcing’s major competitive advantage has always been its lower labour costs. Cheaper manpower, especially in India and China, has created opportunities for enormous savings, especially in the IT sector. This savings has not come without trade-offs, though. The internet may have killed distance for some aspects of IT work, but managing a team of people from thousands of miles away in different time zones with different business customs still creates plenty of headaches. The vastly lower cost normally makes these challenges worth tackling, but automation in the IT sector will soon be rebalancing this equation in favour of high-value onshore IT providers.

    The reason why labour costs are still such an important factor in IT development is the continued reliance on third generation programming languages like C# and Java. Third generation methods date back half a century, require extensive manual coding, and are therefore vulnerable to human error. Fourth generation programming languages, which attempted to overcome these problems, failed to live up to expectations and were never widely adopted. The result is that software coding is still a largely manual profession, dependent on large numbers of junior programmers to carry out necessary but repetitive tasks.

    After a long wait, breakthroughs that bring the benefits of automation to IT without the loss in quality and flexibility have finally started to appear. New hybrid languages that combine the best aspects of third and fourth generation technologies are set to dramatically change the programming landscape. Monotonous, repetitive tasks can now be automated, but without sacrificing any flexibility or control over the final product.

    One example of this new hybrid language is called M#. M# creates .NET web applications, but automates 90% of the coding, effectively cutting production time by nearly three quarters. The remaining 10% of the project requires the attention of an experienced senior programmer, but this is the area where onshore outsourcing normally has a competitive advantage over its offshore rivals. The time-consuming elements of coding, which favour outsourcing to markets with lower labour costs, have been eliminated. Without its pricing advantage, the argument for offshore outsourcing is significantly diminished.

    These developments in IT should come to a surprise to no one. In the last half century almost every facet of our daily life has been changed by software as it has automated one time-consuming activity after another. It was only a matter of time before software engineers found a way to automate the development of software itself.

    It will take time for these new developments to spread through the IT sector and for new working practices to be developed. IT designers located offshore may have little to fear in the very short term. The clock is ticking for labour-intensive programming, though. The clever business manager should be expecting new technologies such as M# to make onshore outsourcing the most competitive option before long.

    For increased security, consider moving outsourcing onshore

  • 23 Apr 2013 12:00 AM | Anonymous

    Analysts anticipate that Source to Pay software will see a rise in adoption amongst SMEs this year and beyond. To quickly recap, Source-to-Pay takes the legwork out of the entire sourcing and purchasing cycle. I see it addressing five critical purchasing pain points which are the essential components of success and ROI from bringing this software on board. In my first post on this topic I discussed the initial pain point in the cycle – selecting your preferred suppliers. In this second post I will outline the next two pain points and remedies.

    Once an organisation has sourced its preferred suppliers its next challenge is ensuring it enters into sound and acceptable contracts and then manages the adherence to these contracts on a continual basis. Contracts should not be simply left to run - managing them ensures that both parties meet their agreed obligations.

    But contracts are frequently complex and may involve multiple products or services or last a long time and consume many resources. Keeping a constant check on whether they are being adhered to manually throughout every purchase and payment is complex and very time consuming, often resulting in slippages of service such as delivery or pricing, or payment terms on the side of the buyer.

    If suppliers become aware that they are not being monitored against their contractual obligations they may make less effort to comply. Equally the buyer organisation might find itself purchasing services outside of the terms agreed in the existing contract.

    Because Source to Pay electronically captures the supplier selection process, which involves the agreement and setting of terms, the software can then also help the organisation to police adherence to those terms. They are stored in the system and so they can be used to automatically check that purchases are payments are within terms and flag occurrences when they are not.

    With effective contracts in place employees are ready to begin buying the agreed products and services they need. Here lies the next pain point requiring remedy. People can be resistant to change and may not want to use newly agreed suppliers or products when they have a relationship with a supplier already. The challenge here is to gain the trust of the buyer to ensure they purchase goods and services in a compliant way and avoid maverick spending with unapproved suppliers.

    A well designed Source to Pay platform enables this by providing an intuitive and simple to use buying system that acts very much like an online shopping website or Amazon. This means people need no training and can pick up the system quickly, soon realising it actually makes their lives easier, not harder. The system also ensures that people buy in line with agreed policies. For example buyers might be required to gain three competitive quotes on spend items over a certain value.

    Cost effective and low risk purchasing requires a joined up process from supplier selection to final payment. Source to Pay software remedies a number of common pain points that exist along the way, creating costs and resource bottlenecks for the business. In my final post I’ll be talking about the last two remedies – overcoming manual financial processes and implementing a continual purchasing improvement cycle.

    Source to Pay: five procurement remedies for small to medium enterprises

  • 22 Apr 2013 12:00 AM | Anonymous

    Data has become an inescapable reality of modern business, and the sheer volume of it poses huge problems to the enterprise. Recent research by Cisco predicts that by 2016 data centre traffic will have increased six-fold on the amount of data handled in 2011. That’s a startling statistic, and enough to keep any data centre manager awake at night.

    Traditionally, there have been two options for organisations that require a data centre: build your own, or, rent rack space from a data centre colocation provider. Both have their distinct advantages and disadvantages; however, the size of an organisation has often proved to be the deciding factor with the most influence.

    The biggest advantage of building your own data centre is exactly that. You designed it, you built it, you control what goes on in there. You can custom design your infrastructure to handle whatever systems you need to run. Upgrades to new technology can be carried out at the pace you need to go at, as slow or as fast as you like. Control also extends to security, and managing your own data on-premise means that physical security is less likely to be compromised.

    This level of control, however, comes at a price. Quite literally. Building a data centre is not cheap, and it’s not exactly cheap to run manage and maintain when operational either. Between unpredictable property prices and the rising cost of energy, regardless of the size of the organisation, committing to build your own data centre amounts to a significant outlay of capital.

    The other option is to use a colocation facility. There are many attractive and obvious benefits to this solution, not least the lower initial outlay involved and ability to buy more capacity as needed. This is a perfect solution to many organisations but the restrictions put in place in terms of available technology, ability to run custom systems and compromises to physical security mean that this is not a viable option for many companies.

    With data traffic skyrocketing, a very real dilemma for many organisations that manage their own data centres is what to do when they exceed capacity. Finding a service provider that can handle legacy systems can be a real challenge. My own experience as a technical data centre engineer in the financial services sector taught me that many of the traditional outsourcing options were not really fit for purpose.

    Recently, however, we’ve seen a different third model emerge, providing a viable alternative for those in need of rapidly expanding data handling capabilities. The advent of the modular wholesale data centre provider offers, in a way, what is the best of both worlds. Customers can lease what is essentially a managed data centre environment, providing a secure location, network connections, as well as power and cooling infrastructure, but critically, what happens inside this environment is completely down to the customer.

    The environment can be exactly what they make of it, and is not restricted to the hardware put in place by the datacentre provider, preventing compatibility issues that may have arisen using a traditional colocation provider. This approach lends itself to phased expansion, and the modular technology associated with this type of offering allows tenants to increase their capacity in the same footprint as they need to.

    For organisations that need more than just rack space, this is a godsend. In essence, it provides what is, for all purposes, a self-controlled data centre, while avoiding the outlay associated with building and maintaining your own. In a time when raising capital for infrastructure investment is becoming more and more difficult and budgets are being cut left right and centre, any opportunity to turn the data centre into an operational expense rather than a capital expense will be music to the ears of any IT decision maker.

    Businesses find cloud migration costly

    Cloud computing: let’s work together!

  • 22 Apr 2013 12:00 AM | Anonymous

    The MOD (Ministry of Defence) has awarded IT services company Atos with a leadership position in coordinating defence communication network services (DCNS).

    Atos as a MOD strategic partner will lead a team consisting of several other companies to deliver communication services with support from the MOD’s information services programme (ISS).

    The new service is expected to generate cost savings alongside increased flexibility aimed at supporting UK armed forces services throughout global operations.

    The contract itself is valued at £25 million over three years, with a clause for an extension to seven years if desirable.

    “The Atos Team solution brings world class commercial best practice in delivering information and communications, set within a comprehensive understanding of the operational and business needs of Defence”, said Commodore Jamie Hay, Head of the UK MoD ISS Programme Team.

    Concern raised over MoD’s reliance on foreign firms

    MOD rushed air movement procurement

  • 22 Apr 2013 12:00 AM | Anonymous

    IBM have reported a 5 percent decline in revenue for the first quarter of 2013 after the IT giant was unable to close on several major contracts by the end of the quarter.

    IBM reported revenue of $23.4 billion for the first quarter as the company feels the impact of the market slump for PC products and services, as mobile devices and tablets compete for sales.

    The business saw strong revenue decline in Asia-Pacific regions in comparison to U.S. and European markets, with a 7 percent loss in first quarter revenue.

    Ginni Rometty, IBM chairman, president and chief executive officer, said in a statement: “Despite a solid start and good client demand we did not close a number of software and mainframe transactions that have moved into the second quarter".

    Due to the inability of IBM to sign several large deals by the end of quarter results deadline, expectations now lie on reports of strong results from the second quarter of 2013.

    IBM opens new European datacentre aimed at driving social business technology uptake.

    IBM to move cloud software to open source platforms

  • 22 Apr 2013 12:00 AM | Anonymous

    An offer of £912 million from CVC Capital Partners and partner investors has been rejected by betting firm Betfair.

    The online site said that an offer at 880 pence per share “fundamentally undervalues” the business.

    Investors partnered with CVC include Richard Koch who already owns a 6.5 percent stake in Betfair.

    Chairman Gerald Corbett said: “We have a unique business with a market position, profitability, cash flow and prospects that this proposal fails to recognise."

    The company will now move to enact costs savings and develop its market performance, with shares opening up at 818 pence.

    CVC enters into talks on Betfair takeover

  • 22 Apr 2013 12:00 AM | Anonymous

    George Osborne is set to boost lending for SMEs as the government seek to push economic growth, with an extension to the Funding for Lending Scheme (FLS) run by the Bank of England.

    The FLS scheme has so far be credited with reducing mortgage costs for small businesses with the Chancellor admitting that an extension may have “merit”.

    The scheme established in August was originally set to expire in January 2014, but is now expected to be extended after the IMF have raised concern regarding the UK’s efforts to promote growth and current austerity measures, with another major credit ratings agency downgrading the country from triple-A last Friday.

    Expectations are on a FLS extension being announced before the arrival of an IMF delegation in May

    UK prepares for 2013 budget

    Government increases business innovation fund to £60 million

  • 19 Apr 2013 12:00 AM | Anonymous

    Chinese firm Huawei is looking to employ more than 5,000 workers for projects with Europe over the next four to five years.

    The planned increase employees would bring the phone and network provider’s European workforce size to around 13,000.

    The planned workforce increase comes as Huawei seeks to expand into the European marketplace, with expectations on the company’s ability to carve out a strong market from its ability to provide fast services at a competitive price.

    Hirings come at a time when telecomm businesses situated in Europe are making employee cutbacks.

    Ken Hu, Huawei chief executive officer and deputy chairman, said to Bloomberg: "We will continue to increase our investments in this market. If we can be successful in Europe and have a virtuous circle, we can invest more."

    Huawei set to generate over $2.4 billion in net profit

    Huawei records strong profits and revenue over 2012

  • 18 Apr 2013 12:00 AM | Anonymous

    Changes to the H-1B visa by the US Comprehensive Immigration Bill are expected to lead to increased costs for many Indian IT companies.

    The bill itself has been delayed in light of the events surrounding the Boston marathon explosions, but expectations are on increased costs for H-1B visas which most Indian IT firms use for local employees, restrictions on their use are also expected to come into force.

    The US Comprehensive Immigration Bill is expected to promote the employment of domestic workers, while the quota of H-1B visas for skilled workers has been increased, added costs and restrictions will decrease the attractiveness of investing in U.S. industries from an overseas-outsourcing perspective.

    India and Germany boost links through language education program

    Cameron signs cyber security deal in India leading the way for trade expansion

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