Industry news

Outsourcing giant Capita will acquire AIBIFS, the international financial services business of AIB, its second acquisition in a fortnight.

The acquisition will be made for a cash consideration of £29m, on a cash free, debt free basis.

On completion of the acquisition, the business will integrate into Capita's investor and banking services division.

Martyn Hart, chair of the National Outsourcing Association, writes for the Guardian and says that better relationships and benchmarking can make government a smarter buyer of IT services.

Martyn comments :"Two documents emanating from Whitehall within days of each other last month – the Open Public Services white paper, and the Cabinet Office Guidance for Offshoring - point to an escalating level of outsourcing in government support services.

Last week, another document – the provocatively entitled Government IT – A Recipe for Rip Offs, was scathing in its opinions on how government lacks the requisite expertise to handle such deals, alleging that it is paying massively over-the-odds for IT services.

Sandwiched in between these documents was a report from the National Audit Office that told us, despite spending roughly £275m on training in 2009-10, the government had no accurate data on the timings, costs and benefits (if any) of its skills development programme. If government manages its IT outsourcing deals in the same equivocal fashion, it is no surprise that there has been a repugnantly thoughtless waste of exasperated taxpayers' cash."

Genpact Expands Operations into Brazil

Genpact Opens Center in Sao Paulo to Serve Anchor Client Astra Zeneca, Other Global Clients and the Brazil-to-Brazil Market

Genpact Limited, a global leader in business process and technology management, has announced the opening of operations in Brazil, its first location in South America. Located in São Paulo, Genpact is now providing services for Astra Zeneca, with plans to serve additional global corporations for their Brazilian businesses as well as establish business operations for the burgeoning Brazil-to-Brazil market.

Genpact has begun providing finance and accounting (F&A) services to Astra Zeneca from this center and is also providing IT services to a financial services client. Genpact is aggressively training and recruiting for additional employees so that it can continue to grow its broad portfolio of business process management services from this location. In line with its strategy in all global locations where it operates, Genpact will rely on local leadership hires to lead its growth and staff client projects, thus creating jobs in the surrounding community.

In conjunction with the inauguration of the center this week, Thomaz Bonato, CFO, Astra Zeneca Brazilsaid, “We are pleased to work closely with Genpact to get this center established in São Paulo and running seamlessly and are confident that they will continue to provide best-in-class F&A services for Astra Zeneca along with many other companies. We know that Genpact shares our vision of the business growth potential here in Brazil, so this will be an exciting journey for both companies.”

“Genpact’s expansion into Brazil is in line with our growth strategy to bring our global business practices and expertise to rapidly growing emerging economies to serve global corporations expanding there as well as local growth companies,” said Tiger Tyagarajan, president and CEO, Genpact. “We are thrilled to partner with our key client Astra Zeneca in establishing our center in São Paulo and we look forward to growing our Brazil business with them and many other clients. We will immediately be able to bring our global knowledge of managing end-to-end business processes to drive better outcomes for our clients.”

L’Oréal, a leading global cosmetics and beauty company has awarded a three-and-a-half year procurement co-sourcing contract to Xchanging, the business process and technology services provider and integrator. As part of the contract, Xchanging will manage a significant amount of indirect procurement on behalf of L’Oréal across five countries – France, the UK, Germany, Italy and Spain. The contract runs to 31st December 2014.

Xchanging will operate on a co-sourcing basis working alongside L’Oréal’s purchasing team to streamline purchasing processes and improve overall quality and cost. The contract spans various categories of indirect spend including: Information Technology and Telecommunications, Facilities Management, Human Resources, Light Transport and Logistics Supplies, Travel, Industrial Supplies & Services, Utilities and Laboratory Supplies. Xchanging will also provide procurement management activities including reporting, supplier and contract management.

L’Oréal is present in over 130 countries, with 67,500 employees world-wide. Its brand portfolio includes: L’Oréal Paris, Garnier, Maybelline, Soft Sheen Carson, Matrix, Redken, L’Oréal Professional, Kérastase, Vichy, Diesel, Inneov, La Roche-Posay, Lancôme, Biotherm, Khiel’s, Shu Uemura and Armani, Cacharel and Ralph Lauren fragrances. The company acquired The Body Shop in 2006.

Denis Royer, Managing Director, Xchanging Procurement Services Europe, added, “We are delighted to have won this contract with L’Oréal after a rigorous competitive process, enhancing our leading position in the European procurement services market. We look forward to working closely with the L’Oréal team and delivering the savings and benefits they expect from Xchanging”.

Xchanging Procurement Services manages annual indirect spend of over €4 billion on behalf of large corporations and services customers across a range of industries globally. We help maximise the value our customers receive from the money they spend and simplify the administration involved in the purchasing process. Offering a complete suite of procurement services, Xchanging deliver through a combination of high-calibre supply market specialists, technology and process expertise.

MphasiS, a leading IT services company, has announced it has entered into a definitive agreement to acquire Wyde Corporation, an international software vendor and creator of Wynsure- an industry leading Insurance Policy Administration Solution.

This investment is the second acquisition by MphasiS in the Insurance industry vertical, after acquiring AIGSS (AIG Software Systems), the AIG captive center in India in 2009. Under the terms of the agreement, MphasiS will hold a 100 per cent equity stake in Wyde. The closure of the deal is subject to completion of customary conditions.

Headquartered in Minneapolis, USA, with a modern Research & Development (R&D) centre in Paris, France, Wyde has developed and deployed Wynsure, a proven software platform, at many of the leading insurance carriers in North America and Europe. Wynsure is a multi-language, multi-currency, easily customisable software that offers policy administration, claims and billing solutions across Life & Annuities (L&A), disability, health, and Property & Casualty (P&C). Wynsure platform can be deployed at an insurance carrier either one business line at a time, or as a complete end-to-end solution. Wyde has over 200 employees who possess significant domain expertise.

Wyde was founded in 1997 by Pierre Barberis, Chairman, and Jean-Rene Lyon, CEO, both distinguished leaders from the insurance industry. Pierre Barberis, a graduate of Ecole Polytechnique and Institute of French Actuaries, has held executive leadership positions in several global corporations including being the Deputy Chairman and CEO of AXA. Jean-Rene Lyon, a graduate of Stanford University and Centrale Paris, has held CIO roles in leading financial services and insurance companies.

Wyde caters to a robust customer base which include Tier I as well as mid-market insurers across the US, France and Canada. Wyde’s Wynsure platform complements MphasiS’ current insurance practice by offering customers a range of software, business consulting and professional services. The acquisition of Wyde will extend MphasiS’ insurance footprint in Life & Annuities segment and strengthen its existing capability in the Property & Casualty segment. MphasiS’ offering will encompass a broad range of IT, platform based BPO and integrated services in areas such as policy administration, claims and billing while branding Wynsure as a market leader in the insurance industry.

“This acquisition demonstrates our focus on strategy execution. Enhancing our value proposition to insurance companies was central to our thinking in this case. I am thrilled to find such a partner for this acquisition. Wyde brings with it world class IP, world class people and a marquee customer base. This IP holds tremendous potential across both mature and emerging markets” said Ganesh Ayyar, CEO MphasiS.

“We are excited about the prospects of growing our global footprint. MphasiS’ strategic focus on the Insurance vertical combined with Wynsure a powerful,full functional, scalable, and easily customisable insurance policy administration system will enable us to elevate Wynsure as a game changer for many more clients. MphasiS will provide Wyde with access to new markets andscale to provide implementation and integration services to our clients” said Pierre Barberis, Chairman of the Board of Directors – Wyde Corporation.

Oracle has announced that it has entered into an agreement to acquire InQuira, a leading provider of best-in-class service knowledge management software that supports web self-service and agent-assisted service.

InQuira is a privately held company with headquarters in the San Francisco Bay Area with over 85 blue-chip customers. Companies need the ability to provide a high-value, differentiated customer experience online and in the contact center.

“The acquisition of InQuira provides Oracle with a complete knowledge management suite, integrated with self-service support, online customer forums and agent-assisted CRM,” said Anthony Lye, SVP of Oracle CRM. “We expect InQuira to be the centerpiece for Oracle Fusion CRM Service. With InQuira, Oracle will provide an integrated suite of proven solutions that deliver a comprehensive and highly personalized experience for every customer, across all channels.”

“With integrated knowledge management, companies have the ability to capture, create, understand and deliver the right answers when customers need it,” said Mike Murphy, CEO of InQuira. “We are excited to join Oracle and offer a comprehensive cross channel customer support solution.”

Cabinet Office calls for government departments to move to shared services model

In line with this, the Cabinet Office had a commitment in the Cabinet Office Business Plan to publish a model for Whitehall shared services in July 2011.

According to the document, the Department for Work and Pensions, the Home Office and the Ministry of Justice have already made respective savings of £35m per year, £13m and £20m through their back-office shared services centre.

"To ensure we maintain our trajectory to reduce the deficit, by achieving sustainable savings and making government efficient, we must simplify and standardise back office services and functions," the Cabinet Office says in an introduction to the strategy.

The Cabinet Office's lessons learnt from shared services to date:

Independence is important to incentivise a better quality of services at a lower cost.

Delivery of shared services is not a core government skill and bringing in operational and commercial expertise is vital to improving current capability.

Smaller organisations need an affordable solution as recruiting a bespoke service can be expensive.

Shared services should be thought as comprising a range of key components that influence cost and require standardisation, such as infrastructure, IT platform, ERP, business change, and business processes.

Strong governance is essential and efficiency gains are proportional to the level of mandation in the use of shared services.

India's HCL Technologies has been questioned by the parliamentary Home Affairs Committee around the phone-hacking scandal at News International.

The move follows allegations in parliament that the outsourcer was involved in destroying data on behalf of News International and its News of the World newspaper.

Proposals for Northamptonshire Police and Cheshire Constabulary to share a number of non-frontline services have been agreed by Northamptonshire Police Authority.

The decision - which will result in elements of Human Resources, Finance and Procurement being shared between forces and delivered from a single location - means that the Authority will now proceed to the contract stage with Cheshire Police Authority and technology provider Capgemini, before moving into the design and build stages of the technology.

The decision re-enforces the Forces’ position to protect front-line services to the public as much as possible during this challenging time. Shared services will mean working differently behind the scenes, however crucially there will be no change to the way our communities can access our front-line services.

Deirdre Newham, Chair of Northamptonshire Police Authority, said:

“Today is a milestone in the history of both police authorities and forces and the Police Authority considered this matter in great detail before reaching a decision today.

“The challenge set by government is that, by March 2015, Northamptonshire Police will have to operate on a budget that is reduced by nearly £20m compared to the 2010 position.

“Our responsibility is to respond positively to this challenge, ensure the Force prioritises frontline services and identifies opportunities to make savings in areas that will not jeopardise those services. The proposals agreed today mean that a number of ‘back office’ functions can be delivered at a significantly reduced cost – essential if we are to balance the budget in the months and years ahead.”

Business IT security is a perennially favourite topic of discussion. From SMEs to multi-national corporations (and even in government circles), the security of IT systems is much discussed and yet there is a feeling that maybe it is not always given the consideration it deserves. At a recent conference, CompTIA CEO Todd Thibodeaux suggested that it would be sensible to allocate 10% of a company’s IT budget to providing security, and yet the evidence suggests that in reality this is often not the case.

For example, a Gartner survey recently found that the industry average spend on IT security is only about five percent. Perhaps even more startling is a report by the Ponemon Institute, Cenzic and Barracuda Networks which found that 88% of companies surveyed indicate they spend more on coffee than they do on securing Web applications!

In my experience this isn’t unusual. If we took a poll across a cross section of small businesses I suspect many would say they either don’t have a specific budgetary allocation for IT security or that it is a minimal amount. So why is there a shortfall between the professionally suggested levels and the reality of IT security within the business world?

Having spoken to and worked with countless IT managers and business owners the anecdotal evidence is that providing IT security is, to many, a task with somewhat intangible benefits. Like buying insurance, investing in IT security doesn’t give an immediate, visible, business benefit in the same way that purchasing a smartphone or company car does. In fact, very much like insurance, it’s a purchase that will only really remind you of its worth when disaster strikes – and then it will also make it very evident whether you have bought the right or wrong product for your needs.

Whilst failing to find the right level of protection could potentially leave your business open to serious problems, paying over the odds for products you don’t need makes equally bad business sense. So like most business decisions, finding the right balance is vital. The suggested 10% of budget may be a good guide, but naturally all organisations are different and the appropriate amount will vary depending on a wide range of factors, including the type of business and the potential threats to it.

When considering IT security for a business it is vital to understand the types of threats that could be a problem and the weak points in the organisation that leave it vulnerable. For companies that run an online ordering or sales system this could mean a specific threat to customer’s account or financial details by IT-savvy criminals. Most businesses hold personal details on their systems and there is a potential risk that these can be hacked remotely without proper protection being in place. At the most basic level, all businesses are open to threats via email viruses or lax security at the organisation’s premises, both on a physical level and also with regards to IT safeguards.

The physical security of premises is a vital, if sometimes overlooked consideration with regards to information security. Allowing unauthorised people to enter the premises opens up the likelihood that a malicious visitor could infiltrate systems and pilfer valuable information or even remove hardware. Despite the ability to remotely hack business systems, physical intruders are still a very real danger.

Businesses often forget the protection they already have through existing IT investments, which may not be fully utilised. Business systems often incorporate a certain degree of security built in, such as password protection which is vital to IT security. A robust policy that ensures employees and the management use unobvious and hard-to-break codes will significantly tighten security, as long as users don’t just keep the details on their desk!

Despite all the planning, in my experience many organisations lapse in their IT security from time to time, often when security software needs upgrading or renewing. Being an ‘out of sight, out of mind’ technology, cash-starved businesses may let this important stage slip and undoubtedly this can be one of the most vulnerable periods for IT security within an organisation.

Much like insurance, IT security is something that will cost a business dearly if it doesn’t consider the potential ramifications of not having the right cover in place. Whilst additional financial outlay is never welcome, IT security should be seen as a necessity much like other critical business expenses such as telephones or an office. After all, you wouldn’t do without fire alarms and fire extinguishers just because you haven’t had a fire!