Industry news

Serco has today signed an agreement to acquire Intelenet, a leading provider of business process outsourcing (BPO) services to the private sector around the world and in the domestic Indian market, for up to £385m.

This acquisition is in line with Serco's strategy which is focused on driving organic growth, supplemented by strategic acquisitions of skills and capabilities to enter new markets and sectors.

Chris Hyman, Chief Executive of Serco, said: "The acquisition of Intelenet supports our ambitions as a leading global service company. The international BPO market is growing quickly as companies seek out new ways to improve their service and reduce costs. Intelenet's high value capabilities and customer base, together with its economies of scale, means we can access new markets and strengthen our existing propositions. I am particularly delighted that the Intelenet management team will join us to continue driving the business forward. Their passion for their customers and people, and their philosophy of service excellence, means they will be a great asset to Serco."

Socitm has published the full version of Planting the Flag: the Strategy for ICT-enabled local public services reform following launch of the summary version at the Socitm Spring Conference on May 11.

Planting the Flag is a Local CIO Council initiative led by Socitm's Futures group. It sets out how technology can enable public service reform across the whole range of local services

and deliver significant savings and better outcomes for people where they live and work.

The report advises local public organisations to jointly commission ICT and other infrastructure and services, pool budgets and share staff but it draws a distinction between sharing services between public organisations and the wholesale outsourcing of ICT components.

The full version of Planting the Flag is for CIOs, Heads of ICT, ICT specialists, and private sector ICT suppliers to local public services. Section one of the document sets out three core principles for reform of local public services - collaborate, redesign and innovate. Section two sets out six strategic capabilities (leadership, governance, organisational change, strategic commissioning, shared services and professionalism) and and section three, six key information and technology issues that will determine success. For each of these capabilities and issues the Strategy:

The six key information and technology issues identified in the document as key to redesigning better local public services for less, are:

•Business change

•Digital access and inclusion

•Local public services infrastructure

•Information governance

•Information management, assurance and transparency

•ICT polices of central government departments

Skyworks Solutions, Inc., an innovator of high reliability analog and mixed signal semiconductors enabling a broad range of end markets, has signed a definitive agreement to purchase Advanced Analogic Technologies Incorporated, an analog semiconductor company focused on enabling energy-efficient devices for consumer electronics, computing and communications markets.

Skyworks has entered into a definitive agreement to acquire Advanced Analogic Technologies for a nominal price of $6.13 per share, representing a 52 percent premium to Advanced Analogic Technologies' 30-day trailing average. The $6.13 nominal share price consists of $3.68 per share in cash and .08725 of a share of Skyworks common stock for each outstanding share of Advanced Analogic Technologies common stock.

"Skyworks' acquisition of Advanced Analogic Technologies will enable us to further capitalize on our strong smart phone, tablet, set-top box and infrastructure positions with an expanded and differentiated product portfolio while accelerating our entry into new vertical markets," said David J. Aldrich, president and chief executive officer of Skyworks. "At a higher level, analog power management semiconductors represent a strategic growth market for Skyworks as our customers increasingly demand both ubiquitous wireless connectivity and power optimization across seemingly every kind of electronic platform. With Advanced Analogic Technologies, Skyworks will be well positioned to address these massive twin market opportunities leveraging our broad customer relationships, innovative product portfolios and increasing operational scale."

Mahindra Satyam, a leading global consulting and IT services provider, and MasterCard, has announced the establishment of a Center of Excellence for testing in Kuala Lumpur, Malaysia. The center will provide support for global testing for MasterCard business applications, as well as application development in Java and Business Intelligence.

"At MasterCard, our focus as a company is to deliver innovative products and solutions for our customers and cardholders, and we look for the best organizations to help us deliver on this commitment,” said Sheryl Andrasko, Group Executive, MasterCard Worldwide. “We believe that working with Mahindra Satyam will enable us to continue deliver on these goals to meet the global needs of these key stakeholder groups.” she continued.

Mahindra Satyam’s Testing Center of Excellence for MasterCard will support the company’s efforts around research and development, and facilitate global collaboration.

“Establishing this Center of Excellence connotes the beginning of a valued relationship with MasterCard” said Lakshmanan Chidambaram, Senior Vice President – Sales & Operations, Mahindra Satyam.

ProcServe, a leading provider of eProcurement solutions, has announced that they are providing an end-to-end Purchase-to-Pay and eMarketplace service for all 43 police forces across England and Wales. The contract was signed on 31st March 2011 by the National Policing Improvement Agency (NPIA) and endorsed by the Association of Chief Police Officers (ACPO) and the Cabinet Office, to deliver a national Police Procurement Hub that will be used across all forces for purchasing goods and services.

The Police Procurement Hub will play a vital role in helping the police to become more efficient by collaborating on procurement across the police forces. This initiative will help to deliver the necessary cuts in spending that the police service faces over the next five years. The Hub will enable each force to buy from the best value centralised deals as well as from their regional and locally let supplier contracts. Roll out will take place over the next 12 months, as part of the Collaborative Police Procurement Programme. The contract with ProcServe will continue for a further five years.

Sue Moffatt, Head of Commercial and Procurement at the NPIA, said "The police service is committed to deliver £545 million pounds of savings per year by 2013/14. It is absolutely vital that those charged with buying goods and services have access to the tools that make them available quickly, and directly to their desktop."

The Hub complements existing procurement processes across the police service so forces do not need to invest in replacing current systems. It enhances existing processes and provides a simple online shopping system to access best value products and services."

Imec has announced the establishment of imec India in Bangalore, Karnataka, making a first step towards the Indian market with the signing of an R&D partnership agreement with Wipro Technologies, the Global Information Technology, Consulting and Outsourcing business of Wipro Limited.

Imec is a leading independent applied research organization that carries out research activities in semiconductor, nanotechnology and nanoelectronics, delivering industry relevant technology solutions.

Imec and Wipro have created a joint initiative to co-innovate and build next generation intelligent systems, called Applied Research in Intelligent Systems Engineering (ARISE). By bringing together an experienced team of system designers, user designers, process, software and system architects, this initiative aims to develop nanoelectronics and NEMS-(Nano Electro Mechanical Systems) based solutions for emerging markets like India.

The solutions will leverage imec's heterogeneous semiconductor process integration platform - CMORE - that offers design, prototyping and low-volume production of systems-on-chip that can combine logic with mechanical, chemical or optical functions.

"Our partnership with Wipro underlines our commitment towards providing solutions for emerging markets;" said Luc Van den hove, President and CEO imec. "I'm confident that Wipro's product engineering expertise, industry vertical presence and understanding of the emerging markets will augment our research capability to develop cost-efficient products for many new markets including India."

Cognizant, a leading provider of information technology, consulting, and business process outsourcing services, has announced that its Board of Directors has authorized the expansion of its existing share repurchase program by $150 million, bringing the total authorization under the current repurchase program to $300 million. In addition, Cognizant's Board has extended the expiration date for the repurchase program to June 30, 2012.

"The Board's decision to expand our share repurchase program reflects confidence in our growth strategy and in our ability to generate strong cash flows," said Gordon Coburn, Chief Financial and Operating Officer of Cognizant.

Repurchases under the program may be made through open market purchases or privately negotiated transactions in accordance with applicable federal securities laws, including Rule 10b-18. The timing of repurchases and the exact number of shares of common stock to be purchased will be determined by the Company's management, in its discretion, and will depend upon market conditions and other factors. The program will be funded using the Company's cash on hand and cash generated from operations. The program may be extended, suspended or discontinued at any time.

HP Enterprise Services and Healthways, Inc. has announced the signing of a 10-year, $380 million applications and technology services outsourcing agreement to support growth and expand value to Healthways’ customers.

With this agreement, HP will provide Applications Development and Applications Management services to further accelerate the transformational development of the well-being improvement company’s applications and technology infrastructure. As a result, Healthways’ mission-critical application, EMBRACE™, will be able to support an increasing volume of customers and increasing market demand for multiparty integration.

“With a primary goal of healthier populations in private- and public-sector programs, EMBRACE experiences increased membership that requires added functionality,” said Ben R. Leedle, president and chief executive officer, Healthways Inc. “HP’s deep healthcare expertise offered the best opportunity to enhance an already powerful platform with greater scalability and sustainable timely innovation at a lower cost for us.”

Managed services provider, Advanced 365, has announced that it has signed a strategic partnership with leading construction industry software and service provider specialist, COINS. Under the terms of the agreement, Advanced 365 will become COINS’ managed services partner for the delivery of COINS On-Demand a new cloud based service offering for the construction sector.

The new COINS On-Demand service is a key part of COINS’ business strategy and has been developed to provide a broader, more scalable solution through cloud based services. As part of the service Advanced 365 will be responsible for all aspects of the infrastructure architecture required to support the delivery of the COINS ERP solution, and will be a key strategic partner for COINS in the delivery of a broader managed service solution portfolio.

Simon Lewis, Director of Technical Services at COINS, comments, “Advanced 365’s experience in delivering reliable, end-to-end managed service solutions made them the clear choice. They have worked closely with us to ensure that we can now fulfil our customers’ increased demand for broader, more resilient and cost effective managed services solutions, designed to meet each organisations specific needs.”

Lewis says, “The 365 Fast-Start programme was one of the key areas that differentiated Advanced 365 from other prospective managed service partners. The provision of this solution will enable COINS to deliver IT projects to our customers in a timelier manner, irrespective of their final infrastructure platform.”

Neil Cross, Managing Director of Advanced 365, says, “This partnership will enable COINS to gain competitive advantage through using our flexible approach to service delivery, so that they can rapidly deliver their software as a service to their customer base. Our On-Demand service offers COINS and its customers the opportunity to take advantage of our innovative outsourcing solutions with minimal risk and upfront investment so that they can benefit from reduced costs and increased efficiencies.”

It’s been a tough week for those of us with a vested interest in the outsourcing industry - and not just because of the difficulty of returning to work after the recent spate of Bank Holidays.

Instead, those who had hoped that the government’s commitment to making savings would result in a boom in the outsourcing industry were in for a shock, after it was revealed that a document leaked to the BBC had cast doubt on the government’s willingness to embrace outsourcing as a means of delivering public services.

We’ve already seen Suffolk County Council decide to ‘pause’ its plans to outsource to the private sector…so how much should we be worrying about this apparent turn in events?

It’s interesting to note that at least one leading support services provider, Serco, has already taken the time to dismiss the importance of the reports, and even gone so far as to state that it expects more medium-term opportunities to come from outsourcing public services in the UK.

Meanwhile, software provider Infosys has rightly pointed out that the current negativity surrounding outsourcing could hurt the business prospects of British-based organisations. Perhaps, however, it might be more prudent to ask whether the government has a plan in place to find the level of savings it has promised by using charities, social enterprises and employee-owned organisations?

On the face of it, it’s easy to understand why Francis Maude could see use of wholesale outsourcing as a ‘political risk’, particularly given the somewhat hysterical, knee-jerk reaction we’ve seen from some quarters in recent months, many of whom have have delighted in painting all outsourcing suppliers - unfairly in my view - as self-serving, greedy ‘fat cats’.

However, I do think it’s worth raising the question of how big a political risk it will be for the coalition government NOT to use private sector organisations as much as they can.

Consider for a moment the political ramifications if, over the course of the next few years, the government discovers that not only has it not been able to make significant savings as a result of its determination to look for alternatives to the private sector, but that public services have also become less efficient as a result?

The choice to use private sector companies to supply public services is one which has to be made for the right reasons - not merely as a means of easing political pressures, and it’s clear that if the government really is serious about making cuts then it must find the best way of achieving its aim.

Of course, outsourcing all contracts might not be the best answer for all public sector departments, and it’s clear that charities and social enterprises have a role to play, where it is appropriate for them to do so.

However, if the government really is going to insist on scaling back use of outsourcing to provide public services, then it will be interesting to see what their plan is for the next few years, and whether or not they have one! If not, it may be a case of it cutting off its political nose to spite its face…