Industry news

Building on 25-plus years of experience working with more than 1,000 clients, IBM is officially unveiling a ‘pre-engineered technology services model’ that can cut deployment time by more than 60 percent, and slash costs by up to 50 percent. Big Blue’s new services capabilities are based on a set of server, storage, networking and help desk services ‘assets’ that integrate process, software, industry expertise and IBM research to create reusable building blocks. The company says that by ‘baking’ its expertise, software capabilities, experience and best practices into its services offerings in a standardized, systematic way, it can speed up the time it takes to build the basics.

IBM says that most IT organizations have been dealing with massive growth and less-than-ideal results over the last few years. The challenge was to come up with how to dramatically increase its outsourcing business in a way that would enable future growth for their clients, sort of “a gift that keeps on giving”.

While each customer engagement tends to be unique, IBM says that they tend to involve 80 percent standard solutions and 20 percent customization. The company started putting the concept together about two years ago, and a year later used itself as a test bed, deploying its entire storage infrastructure using the standardized asset-based approach, which is expected to lower its storage costs by nearly 50 percent.

According to the InformationWeek Analytics 2010 Business of Outsourcing Survey, nearly six of 10 IT shops outsource some critical function–management, engineering, or development; almost one-fourth keep executive and management functions in-house but look to outsource everything else. However, 29 percent of the 530 business technology professionals surveyed have fired a vendor within the last 12 months.

Last year HP launched its Cloud Start service, which includes everything for a cloud deployment such as application and virtual machine sizing tools, deployment scripts, processes and work flows to new, on-board applications and training for HP’s Cloud Service Automation software. The offering was based on taking a standardized approach to the company’s consulting and build-out services, and offering a quicker turnaround.

Bill Martorelli, principal analyst, sourcing and vendor management, Forrester Research, thinks that IBM’s new offering, as well as cloud service initiative’s like HP’s, are in line with the trends he’s following in the outsourcing market. “I think it is broadly consistent with the trend in this market that is focusing on services that are more packaged, more bound up as building blocks as opposed to custom one-offs.” This market has tended to be characterized by a lot of customization, he says, and this is an attempt to bring in more standardized, pre-engineered solutions.

There is growing commoditization in the outsourcing market, as well as an increase in the number of companies competing with IBM, says Martorelli. It’s been a very competitive market which finally looks like it’s growing again. He expects that the move to cloud services will become more prevalent and that IBM’s latest announcement is a step in that direction.

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Sri Lanka’s information technology and business process outsourcing sector is positioning itself as a niche player targeting finance and accounting, telco, travel and aviation sectors, an official said.

“We will focus on SMEs (small and medium enterprises), more that 90 percent of us are working with SMEs in other countries,” Dinesh Saparamadu, head of Sri Lanka Association of Software and Service Companies (SLASSCOM).

“We want to be known for quality and ethics, which will be the differentiator.”

SLASSCOM has 120 members who account for 90 percent of the exports.

Saparamadu said IT was now the country’s fifth largest export and the industry wanted to push revenues to a billion dollars by 2015.

SLASSCOM was working with universities and higher education institutes to expand capacity and was also increasing awareness is schools with students and parents about opportunities available in the sector.

Saparamadu said the association has engaged a public relations firm in the UK to build international awareness about the country.

Recently a sector report on financial and accounting services outsourcing had been released which potential investors who want to set up shop can use.

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Thames Water, the largest water company in the UK, has signed a five-year contract with procurement specialists Efficio to manage £500m worth of spend a year.

The deal, which takes effect on April 6th, will mean Efficio providing a full procurement managed service taking responsibility for sourcing and contract management of all Reading-based Thames Water’s direct and indirect spend.

Thames Water head of supply chain Ian Bolger said: “We are confident Efficio will build on our existing staff expertise to take us to a higher level of procurement effectiveness.”

The London-based consultancy had previously led an 18-month procurement transformation project with Thames Water to improve efficiencies and generate savings in both capital and operational expenditure.

Efficio chief executive Jens Pedersen said: “We are delighted to have won this contract with a major UK company and look forward to delivering excellent results for Thames Water.

“Having worked with Thames Water in the past we know they understand the contribution we can make to their continuing success.”

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The Ministry of Justice (MoJ) has signed a £14m five-year deal to have its ERP system hosted in the cloud.

It is expected that this will deliver annual savings of £28m a year by 2014.

Cloud infrastructure company Savvis will provide the MoJ with access to its Government Wide Service (GWS) platform.

GWS is an infrastructure-as-a-service (IaaS) platform that has been made available to all government departments and third-party suppliers in the UK.

It was developed to help the government achieve its ambition of creating a G-Cloud – a hosted environment for public sector IT operations and services.

The MoJ will use GWS for its ERP system, which is being designed by Steria, and will be implemented by Accenture.

The ERP system will deliver transactional and professional services to more than 80,000 users, including functions such as human resources, finance, purchase and payroll.

It is expected that this will be fully operational by spring 2013.

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Spanish telecom giant Telefonica plans to invest 24.3 billion reais (some $14.7 billion) in Brazil between 2011 and 2014, CEO Cesar Alierta told Brazilian President Dilma Rousseff.

That amount represents a 52 percent increase over the previous four years, the company said Wednesday in a statement.

The funds will be used to modernize and expand the company's telecom network and launch products and services in the fixed and mobile telephony, mobile and fixed broadband and cable television segments, as well as acquire operating licenses.

Alierta, who was received here Wednesday by Rousseff at the Planalto presidential palace, also announced that a new innovation center will be established in Sao Paulo - Telefonica's first outside Spain - to develop technological solutions for video and fiber-optic platforms.

"We are investing heavily in expanding our services and networks with the aim of covering close to 100 percent of Brazil's municipalities with our telephone and broadband internet, both fixed and mobile," Alierta was quoted as saying in the statement.

Telefonica has invested a total of 57.4 billion reais (some $34.6 billion at the current exchange rate) in Brazil since launching operations there in 1998.

Including projected investment through 2014, that total would climb to 82 billion reais (some $49.4 billion at the current exchange rate).

Telefonica is the fixed-telephony market leader in Sao Paulo state, Brazil's wealthiest and most heavily populated, with close to 12 million customers. The company also has 3.3 million fixed broadband subscribers in that state.

Its mobile phone unit in Brazil, Vivo, is the country's market leader with close to 60 million subscribers, or roughly a 30 percent market share.

Telefonica last year took full control of Vivo by buying out the stake held by then-joint venture partner Portugal Telecom for 7.5 billion euros.

The Spanish company's fixed-telephony unit in Brazil, Telesp, posted net income of 2.4 billion reais (some $1.4 billion) in 2010, an 8.8 percent increase with respect to the previous year.

Vivo's net income came in at a record high of 1.9 billion reais (some $1.1 billion) last year, up 115.7 percent compared to 2009.

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Krispy Kreme Doughnuts has revealed plans to seal a supply chain distribution agreement with Sysco Corporation, a food marketing and distribution company.

Under the terms of the proposed agreement, Sygma, a Sysco subsidiary, will distribute proprietary doughnut mixes, other ingredients and supplies to Krispy Kreme franchise and Company shops in the eastern United States.

Sysco subsidiary IFG will be responsible for export of Krispy Kreme goods to the 20 foreign countries in which the company's international franchisees operate.

Krispy Kreme outsourced distribution to shops in the western United States in 2008. The anticipated transition to Sysco in the eastern US and internationally is expected to take place in the second and third quarters of calendar year 2011.

Upon completion of the transition, the company will have outsourced all of its domestic and international distribution operations.

The deal means Krispy Kreme will benefit from Sysco's buying power and the size and reach of its distribution network, said Brad Wall, senior vice president of supply chain and off-premises operations for Krispy Kreme: "By completing the outsourcing of delivery of doughnut mixes, ingredients and supplies, we expect to further simplify our supply chain operations and add capabilities and services for our franchisees."

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Alcatel-Lucent (Euronext Paris and NYSE: ALU) today announced it has been selected by MTN Nigeria, the country’s leading telecom operator with over 30 million subscribers, for the transformation of its DSL access and aggregation network. Alcatel-Lucent’s solution will enable MTN Nigeria to cost-effectively transform its TDM-based transport networks into an all-IP powered network.

By transitioning from legacy TDM to next-generation IP, MTN will realize a simplified, lower cost, reliable and highly scalable infrastructure that will grow as they do. Alcatel-Lucent’s IP/MPLS-based solution and a rich set of comprehensive services will also enable MTN Nigeria to generate new revenue streams by leveraging broadband IP to deliver video rich content and multimedia data services and application awareness to deliver premium and managed services to enterprise customers.

This new network is based on Alcatel-Lucent’s High Leverage Network™ (HLN) architecture, which combines an all-IP network infrastructure, underpinned by MPLS and pseudowire technologies, with embedded intelligence and application awareness in order to improve the end-user’s experience and bring new services to market more efficiently on a common IP platform.

According to Ahmad Farroukh, CEO of MTN Nigeria: “Since its inception, MTN Nigeria has invested in cutting-edge technology in order to deliver world-class products and services to our customers. We are pleased to partner with Alcatel-Lucent to deliver a solution that will improve customer experience. Our customers are kings and we are committed to deploying the latest advances in technology to serve them better”.

“Alcatel-Lucent is fully engaged to help customers drive their transformation and business in the most cost-effective way”, said Adolfo Hernandez, President of Alcatel-Lucent’s activities in EMEA. “In this regard, we will ensure MTN Nigeria will save on OPEX due to the simplicity of common operational processes and procedures and they’ll have a network in place which supports a smooth transition to Long Term Evolution (LTE) if they choose to do so.”

Under the terms of the agreement, Alcatel-Lucent will deploy its industry-leading IP/MPLS solution, including its 7750 Service Router (SR) and 7705 Service Aggregation Router (SAR) along with the Alcatel-Lucent 5620 Service Aware Manager (SAM). The Alcatel-Lucent IP portfolio will allow MTN Nigeria to deliver scalable, evolvable, cost-efficient and fully-managed IP-based transport allowing the leading operator to reduce operating expenditures and quickly deploy advanced, revenue-generating services.

Alcatel-Lucent will provide MTN Nigeria with a set of comprehensive professional services including project management, engineering, training, survey, installation, and cabling as part of the agreement.

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Hewlett-Packard Co.'s Mexican unit said Monday that it signed a $100 million technology outsourcing services contract with Coca-Cola FEMSA, the Coke bottler in Mexico.

The five-year agreement will support Coca-Cola FEMSA's Latin American business. Hewlett-Packard Mexico will handle the consolidation of 348 locations to a single data center in Mexico as well as migrate some applications and server monitoring and management to locations in Brazil and Argentina.

“After experiencing sustained growth across Latin America, these additional efforts to centralize and standardize will give us the support we need to find new opportunities to put beverages in the hands of the Latin American people,” said Hector Calva, chief information officer, Coca-Cola FEMSA. “HP knows our business and industry well. With the team’s extensive experience in data center consolidation, we will have the technology foundation and support critical for our growth plans and future success.”

“In a region such as Latin America with its many opportunities for growth, companies that develop an efficient technology infrastructure and business procedures to support an ‘Instant-On’ enterprise will be better able to take advantage of those opportunities,” said Octavio Marquez, managing director, HP Mexico. “Our industry knowledge and decade-long relationship with Coca-Cola FEMSA, as well as our ability to scale when and where the client grows, will continue to help the company achieve its goals.”

In a world of continuous connectivity, the Instant-On Enterprise embeds technology in everything it does to serve customers, employees, partners and citizens with everything they need, instantly.

Hewlett-Packard will continue to provide data center services and storage services to manage and support Coca-Cola FEMSA's data center environment.

Last week, Hewlett-Packard, the world's biggest technology company by revenue, received investor approval for the 13 directors it put up for election. The company is trying to move past the scandal over the ouster of CEO Mark Hurd in August.

Crossrail, the high-speed passenger railway line, is looking for an IT provider to implement technology to co-ordinate the construction of the line.

The provider is expected to implement a system to organise traffic co-ordination services and a vehicle movement booking system (VMBS). The company has put out an Official Journal of the European Union (OJEU) notice for a deal worth £14m.

The technology will be used to coordinate all logistics relating to the construction of the Crossrail expansion.

The deadline for bids is noon on 18 April 2011.

The Norwegian Public Roads Administration has chosen Steria to further develop its vehicle and driving licence registration system, Autosys. The contract is worth an estimated 44 million euros (NOK 350 million).

The new Autosys system will be one of the biggest and most complex ICT solutions in the Norwegian public sector. The contract with Steria includes systems development and subsequent management and further development. Four companies - Accenture, EDB Business Partner, IBM and Steria - accepted the invitation to tender for the comprehensive development contract at the end of a prequalifying round.

Jon Harald Holm, project manager for the Norwegian Public Roads Administration, explains, "This is an important milestone. We are now in a position to move forward towards the new Autosys, from the preparatory stage to the development work itself. Following an extensive evaluation process, we are confident that Steria is the right partner for this work."