Industry news

  • 18 Oct 2010 12:00 AM | Anonymous

    Alstom SA, the world’s second- largest trainmaker, said Indian sales growth may surpass local economic expansion as the government works on a 14 trillion rupee ($317 billion) plan to expand and modernize railroads.

    The company has to be prepared for India growth “which is equal to if not higher than GDP,” Sunand Sharma, 61, Alstom’s local head, said in an Oct. 15 interview at his office in Noida, near New Delhi. He declined to give specific sales numbers.

    Alstom, which also makes power-plant systems, expects to eventually get a third of India sales from transportation as the government expands the railroads 10 percent a year to support economic growth. The Paris-based company has been shortlisted with General Electric Co., Bombardier Inc. and Siemens AG as a possible partner in an Indian trainmaking venture and is considering building a rail-car plant in the country.

    “India is an opportunity but not without hiccups,” said Jagannadham Thunuguntla, chief strategist at SMC Global Securities Ltd., which manages $100 million in assets in New Delhi. “For companies, it may be better to sacrifice profit margin for scale because whoever comes in now will have first- mover advantage.”

    The planned trainmaking venture will produce about 120 electric locomotives a year, according to the rail ministry. Bids have to be submitted by Oct. 25, A.K. Saxena, a ministry spokesman, said by phone Oct. 15 in New Delhi. He declined to say when a decision will be made.

    Railway Expansion

    Indian Railways, the state-owned rail operator, has proposed to add 25,000 kilometers (15,534 miles) of new lines by 2020, compared with the 10,000 kilometers added in the past six decades, according to the rail ministry. The nation’s economy, Asia’s third-largest, will probably expand at a 9 percent annual pace by the year ending March 2012, Prime Minister Manmohan Singh said in June.

    Alstom may build an Indian rail-car factory after last month winning a 14.7 billion-rupee contract from Chennai Metro Rail Ltd. to supply 168 carriages, Sharma said. He declined to say where the factory may be built or when a decision will be made.

    Alstom’s India operations have mainly focused on the power sector to date. Alstom Projects India Ltd., a subsidiary, generated 97 percent of its 20.4 billion rupees of sales in the year ended March from its power division and the rest from transportation, according to data compiled by Bloomberg. Alstom has other ventures and businesses in India. Sharma declined to comment on local sales numbers.

    Alstom’s power operations may boost India sales to more than 1 billion euros a year from several hundred million euros, Denis Cochet, senior vice president of sales and marketing for Alstom’s power division, said Oct. 12.

    The company is building two factories with Pune, India- based Bharat Forge Ltd. that will make equipment for so-called super-critical power plants, which use less energy and generate higher pressure for greater efficiency than traditional plants. The factories will start operations in phases from April 2012, Bharat Forge said in its annual report for the year ended March.

    Source: http://www.bloomberg.com/news/2010-10-18/alstom-says-sales-growth-in-india-may-outpace-economy-on-rail-investment.html

  • 18 Oct 2010 12:00 AM | Anonymous

    President Barack Obama said the U.S. tax code shouldn’t benefit companies that create jobs in other countries, as he criticized Republicans for “rewarding corporations that create jobs and profits overseas.”

    “For years, our tax code has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries,” Obama said in his weekly address on the radio and Internet. “We should be using our tax dollars to reward companies that create jobs and businesses within our borders.”

    With less than three weeks to go until U.S. congressional elections, Obama defended steps taken by his administration to spur hiring and help the economy grow, such as legislation signed last month to provide tax cuts and credit help for small businesses. Obama said that measure has already helped “thousands of business owners” get access to government loans.

    “When more things are made in America, more families make it in America, more jobs are created in America, more businesses thrive in America,” he said.

    About 8 million jobs have been lost during the recession and the unemployment rate, after reaching a 26-year high of 10.1 percent in October 2009, was 9.6 percent last month.

    Obama said the nation remains in a “tough fight” to help the economy recover. He said government has an “important responsibility” to help business grow.

    “That’s to create an environment in which someone can raise capital to start a new company, where a business can get a loan to expand, where ingenuity is prized and folks are rewarded for their hard work,” he said.

    Republican Address

    In the Republican address, U.S. Representative Mike Pence, of Indiana, said Congress should take immediate steps to extend current income-tax rates to remove doubts that are damaging the economy.

    “Uncertainty is the enemy of our prosperity,” he said.

    Tax cuts passed under the administration of President George W. Bush are scheduled to expire at the end of this year.

    Obama and most Democrats have backed extending the lower tax rates only for households making more than $250,000 per year. Republicans support an across-the-board extension.

    “No American should see a tax increase in January, and Republicans are determined to oppose any effort to raise taxes on any American in this difficult economy,” Pence said.

    Source: http://www.bloomberg.com/news/2010-10-16/obama-says-tax-breaks-shouldn-t-reward-companies-for-creating-jobs-abroad.html

  • 18 Oct 2010 12:00 AM | Anonymous

    “Never assume anything,” Visa chief information security specialist warns about one of the common pitfalls of outsourcing.

    One of the common pitfalls of outsourcing software development is not clearly defining and communicating the business's security requirements to the supplier, a panel of security experts have warned.

    "If you outsource then don't tell the development partner what data the application will be processing, they just don't know anything different. The contractor will develop the application as required and nothing else," said Gunter Bitz, head of product security governance at SAP, speaking at the RSA security conference in London yesterday.

    "The biggest thing to take into account is to never assume anything," she said. "For example, if they [the suppliers] advertise that its service is used by the DoD, or DoD-blessed, forget it. It does not mean it is secure."

    "Say, for example, with software for a [fixed-term] marketing campaign - there should be specific guidelines for what is going to happen when the software reaches end of life, how it is going to go away."

    In order to manage the software lifecycle, Lane said that it would be a good idea to keep a high quality, up-to-date inventory of outsourced development, with details such as who contracts are.

    "It's very important from a security perspective," she said.

    Lane also warned about increasing security of web-based administration websites.

    "Watch out for QA [quality assurance] sites on the internet. If there's an administration website open over the internet it's just asking to be hacked. They need to have at least IP filtering. Make sure they go away when production goes away," she said.

    Meanwhile, John Sapp, director of product development standards - security, risk and compliance, at medical software company McKesson Corporation, said that in the health sector, security issues are often related to legacy applications.

    "Generally, security is not a consideration for software developers. Also, risks can be inherited from web-enabling legacy applications," he said.

    Sapp also recommending making security requirements part of the software development outsourcing agreement.

    "We [McKesson] are starting to contractually require suppliers to have a foundation security standard. I would suggest that with any contract, ensure you have security as part of your acceptance criteria. If it does not meet our standards, we just won't accept it," he said.

    Source: http://www.networkworld.com/news/2010/101510-rsa-security-requirements-must-be.html?hpg1=bn

  • 15 Oct 2010 12:00 AM | Anonymous

    Luxoft, a provider of application and product development services, has opened a new development centre in Krakow, Poland.

    Luxoft said that the new Polish facility provides it with an opportunity to better serve its European clientele and strengthen its delivery network.

    The new facility will offer a mix of application and product development services for large enterprise and product development companies and will specialise in offerings for the travel, automotive and finance industries.

    In addition, it offers yet another option in delivering optimal cost structure, offshore/onshore capability, communications and processes to existing customers and new customers throughout Europe.

    Luxoft president and CEO Dmitry Loschinin said the new development centre will leverage the talent provided by Krakow and will only further improve quality and value customers have come to expect from it.

    The new centre will be headed by Przemyslaw Berendt, who has years of business development, operation start-up, and management experience.

    Source: http://www.cbronline.com/news/luxoft-opens-new-development-centre-in-poland_151010

  • 15 Oct 2010 12:00 AM | Anonymous

    SAP’s release of NetWeaver 7.3, announced at the company’s TechEd event, demonstrates SAP’s increasing commitment to the cloud.

    The new release offers customers the ability to manage cloud operations and provides shared tools for building applications on-premise, on-demand or on mobile devices.

    The company has already said it plans to build more on-demand applications for customers. Currently, its Business ByDesign software, based on NetWeaver technology, uses a cloud model to provide SMEs with business management tools.

    Thomas Otter, Gartner’s lead analyst on SAP, said: “Business ByDesign will be the primary method by which SAP will build new applications, and it will also be the place where partners and ISVs will extend SAP’s Business ByDesign offerings.

    SAP is quietly confident that it has the architecture right this time; it feels it has the underlying technology right to support it and the margins and operating costs under control to scale it.”

    The other part of SAP’s cloud strategy is based on River, the company’s codename for an environment in which to develop cloud-based applications for larger companies.

    Its first River application, Carbon Impact, is already available on Amazon’s Elastic Compute Cloud, and other line-of-business applications, such as such as Sales On-Demand, are expected to follow. “SAP foresees customers and partners using River to build lightweight applications that extend the business suite,” said Otter.

    Adrian Simpson, SAP’s head of BI and platform, said that he expected customers increasingly to use a mix of on-premise and cloud-based applications. While SAP was traditionally associated with large on-premise implementations, he said, this was changing.

    “A few years ago we re-architected our application platform to be a services-oriented architecture, and put in place the foundations that made it a lot easier for us. You may think of SAP as a big monolithic application, but it’s fully service-enabled.”

    Although SAP has been a slow starter in the cloud market, it is catching up rapidly, said Otter: “SAP has lagged behind the best-of-breed vendors in specific niches and it has been slow to articulate a cloud strategy, and it has been doing a lot in the background to figure this out itself. I think it has learned a lot in terms of running Business ByDesign over the last couple of years.”

    The transition to cloud was a challenging one for SAP, he added: “SAP is having to do a balancing act of keeping the existing environment growing and innovating, and delivering functionality in the existing environment while preparing for a different world.”

    Simpson said that SAP would be making announcements in the next few months about the certification of partners in the provision of cloud services.

    Source: http://www.computing.co.uk/computing/news/2271555/sap-furthers-cloud-strategy

  • 15 Oct 2010 12:00 AM | Anonymous

    The simple thought of next week's announcement of the Comprehensive Spending Review (CSR) is certainly sending shivers down the spine of IT suppliers.

    The key government IT providers have been asked to help out and several have already signed memoranda of understanding with the government as Cabinet Office minister Francis Maude presses ahead with his plan to cut costs.

    Despite the fact that many suppliers had already seen a lot of change even before the election, a senior executive at a large IT firm told Computer Weekly there will be further developments ahead.

    "The previous government was reviewing outsourcing and procurement routes. They have spotted that a lot of contracts were not value for money and I know that some of out competitors use very low margins and don't add any innovation. Long-term outsourcing contracts will be terminated and the government will go out to non-traditional vendors," said the source, who requested anonymity.

    The public sector has for some time been the single largest vertical within the UK IT market so the current circumstances will inevitably have some impact on the overall market as the latest growth statistics reveal, according to Charles Ward, chief operating officer at industry group Intellect.

    Ward pointed out statistics from the European Information Technology Observatory (EITO), which predict shrinkage for software and IT services of approximately 1% in 2010, as opposed to an expectation of modest positive growth of a similar amount.

    "Forecast growth for 2011 has been dampened by the expectation of public sector spending reductions resulting in a decrease from 3.8% to around 1.0%. Beyond this the picture is unclear until details of the CSR are known," said Ward.

    "The IT industry has a major role in supporting the public sector in realising efficiencies and it is hoped that the CSR will also contain some positive news for the industry depending on the government's investment priorities."

    Source: http://www.computerweekly.com/Articles/2010/10/14/243357/Comprehensive-Spending-Review-Suppliers-brace-for-IT-spending.htm

  • 15 Oct 2010 12:00 AM | Anonymous

    Ministers have been accused of reneging on promises to start a “bonfire of the quangos” and of simply moving many functions elsewhere in Whitehall. In a Coalition announcement on the semi-independent bodies, Francis Maude refused to say how many jobs might be at risk.

    Instead, the Cabinet Office Minister claimed his main intention was to restore accountability to swathes of government.

    From now on, he said, elected representatives rather than faceless quango bosses would take responsibility if something went wrong.

    Labour called Mr Maude “the most expensive butcher in history” who appeared to cut but offered few savings.

    In total, 192 public bodies, including the Film Council, the Audit Commission and the Human Fertilisation and Embryology Authority (HFEA), are to be abolished. A further 118 will be merged and 40 are still under consideration.

    But analysis of the 192 shows just 29 will disappear altogether. Some 30 will turn into “committees of experts”.

    Mr Maude said: “For too long this country has tolerated ministers who ducked the difficult decisions they were elected to make. For too long we have had too many people who are unaccountable with a licence to meddle in people’s lives.”

    He said pay was out of control, citing seven Audit Commission executives earning more than £150,000 a year. But where abolished bodies’ functions were important they would return to government departments, he said.

    Business welcomed the cull. Miles Templeman, director-general of the Institute of Directors, said: “The Government now needs to ensure that eliminating and reforming quangos is just the beginning of a wider process of moving to a smaller state.”

    But Liam Byrne, the shadow Cabinet Office minister, said: “The Tories need to tell us whether their desperation for headlines and faster cuts means the cost of closing quangos is actually bigger than the savings.”

    There was dismay at some changes. The chief coroner’s office, established this year, will be scrapped.

    Chris Simpkins, the Royal British Legion’s director general, said it was “absolutely central” to ensuring that deaths of Service personnel were properly investigated.

    The Environment Department will lose 90 arm’s length bodies. Natural England and the Environment Agency will be shaken up. The Office of Fair Trading and the Competition Commission will merge and the Teenage Pregnancy Independent Advisory Group will be scrapped.

    Ofsted, the schools inspectorate, and Ofqual, the exams regulator, survive. The functions of the HFEA, which regulates fertility clinics, will move to other regulators.

    Quangos whose functions return to Whitehall include the Disability Living Allowance/Attendance Allowance Advisory Board and the Appointments Commission.

    George Osborne’s spending review next week will be “a shower, not a hurricane”, according to a report by economist Tim Morgan for the Centre for Policy Studies. It will be “both modest and essential”.

    Source: http://www.telegraph.co.uk/news/newstopics/politics/8065436/Bonfire-of-quangos-is-a-smokescreen-that-will-cost-money.html

  • 15 Oct 2010 12:00 AM | Anonymous

    Webinar 1: Strategic Operating Model Design:

    FusionExperience, the specialist service provider to the financial services community, will be running a series of webinars to assist asset management companies to adopt a strategic approach to operations management. The free webinars will be open to all individuals within financial services who are involved with operations implementation, and can be accessed via its website.

    There are four sessions planned throughout October, November and December. The first – scheduled for Monday 18th October at 1pm- will address the issue of strategic operating model design. It is increasingly apparent that it has become vital to have a Strategic Operating Model Design, and the risks of not having a strategy are sometimes dangerously overlooked. The webinar will then look at the very significant changes in supplier capability over the last five years and the implications for asset managers, before looking at a case study of a rapidly growing asset manager that has transformed their operating capability at the same time as making very significant cost savings.

    The importance of a strategic approach to operations management has never been more crucial.

    As the entire financial services industry seeks to make substantial cost savings in many different areas, having a clear idea of how your business can run more efficiently, which areas of your business are suitable for outsourcing, and how to get the best out of existing outsourcing contracts is absolutely key. The purpose of these webinars is to encourage the financial services industry to think seriously around these issues and to hopefully introduce ideas to attendees about how to streamline processes and operate in a more time, and cost efficient way.

    The webinars will be run by Gordon Easden, a leading expert in Operating Models and Outsourcing in financial services. A summary of the webinar with the key highlights will be available once it has been completed, along with further written commentary on the themes and issues raised.

  • 15 Oct 2010 12:00 AM | Anonymous

    Webinar 1: Strategic Operating Model Design:

    FusionExperience, the specialist service provider to the financial services community, will be running a series of webinars to assist asset management companies to adopt a strategic approach to operations management. The free webinars will be open to all individuals within financial services who are involved with operations implementation, and can be accessed via its website.

    There are four sessions planned throughout October, November and December. The first – scheduled for Monday 18th October at 1pm- will address the issue of strategic operating model design. It is increasingly apparent that it has become vital to have a Strategic Operating Model Design, and the risks of not having a strategy are sometimes dangerously overlooked. The webinar will then look at the very significant changes in supplier capability over the last five years and the implications for asset managers, before looking at a case study of a rapidly growing asset manager that has transformed their operating capability at the same time as making very significant cost savings.

    The importance of a strategic approach to operations management has never been more crucial.

    As the entire financial services industry seeks to make substantial cost savings in many different areas, having a clear idea of how your business can run more efficiently, which areas of your business are suitable for outsourcing, and how to get the best out of existing outsourcing contracts is absolutely key. The purpose of these webinars is to encourage the financial services industry to think seriously around these issues and to hopefully introduce ideas to attendees about how to streamline processes and operate in a more time, and cost efficient way.

    The webinars will be run by Gordon Easden, a leading expert in Operating Models and Outsourcing in financial services. A summary of the webinar with the key highlights will be available once it has been completed, along with further written commentary on the themes and issues raised.

  • 14 Oct 2010 12:00 AM | Anonymous

    Outsourcing is second nature in the UK. But across the channel, in the major economies of Germany, France, Spain and Italy very different views prevail, which ultimately will be paid for in increasingly uncompetitive back-office operations, says Paul Morrison.

    Ask any outsourcing supplier about their goals for the year ahead, and you will certainly hear "sell more in Europe". At least since the turn of the millennium, continental Europe has been seen as the next major business process outsourcing (BPO) growth area. But one decade and a credit crunch on, it has yet to fulfil its promise. What is Europe playing at?

    BPO is rather old hat in the US and UK. If your organisation is not already outsourcing and offshoring to a third party at least some of its payroll, finance, HR or procurement functions, then it is in a distinguished and dwindling minority. On the continent, au contraire - or so it would appear.

    The UK remains by far Europe's largest BPO market, and although Switzerland, Benelux and the Nordics punch above their weight, the French, Germans, Italians and Spanish still don't appear to be all that excited. Many BPO suppliers - even a leading French supplier selling to French customers - complain of a crushing lack of interest in their outsourcing wares.

    Different world view?

    That reluctance might be explained away as a difference of world view: while cold-blooded Anglo-Saxons would outsource their grandmothers if they could, those conservative and consensus-driven Europeans prefer to keep the back offices close to home.

    Don't forget about the works councils, the unions and the Acquired Rights Directive. And isn't all BPO based on offshoring everything to anglophone India - which simply wouldn't work for my French, German, Italian or Spanish back office?

    Finally, there's also the small matter of the credit crunch and economic recession. Net result: no BPO please, we're European.

    A simple, persuasive picture - but it is also nonsense. In reality there is a breed of global firm - often British, Dutch, Nordic or particularly American - that have been doing European BPO for years, and who are now accelerating down this path.

    Top of the list come businesses working in the most global industries such as financial services, manufacturing and energy, but every sector has seen BPO success of some sort and their common trait is that they have been conducted at a pan-European level.

    Local versus global

    It seems concerns about BPO's incompatibility with Europe have real currency at a local level, and as a result many local French, German or Italian organisations instinctively baulk at the prospect of externalisation. But the likes of Philips, Axa or American Express have proven that the barriers can be overcome.

    They have seen shared services, BPO and offshoring work elsewhere within their operations; they have accumulated the skills to know how to deploy them; they know that complex European language requirements can be handled well by low-cost east European locations.

    In short they know that BPO works, and that there are only imagined barriers to it working well in Europe. As a result pan-European BPO is alive and well, while French, German or Italian BPO is not.

    So European companies choose to play by European rules - so what? Well, in the short term, that tendency is perhaps no big deal. BPO is not a panacea, and it can still be complicated to get right.

    Lower operating costs

    However, more and more companies are finding that they can get it right, lowering operating costs and improving back-office quality and compliance as a result.

    European companies can opt out of this potential if they choose. But in the long-term this stance will condemn them to ever less competitive back-office operations, and the alternatives to BPO are not compelling.

    Internal transformation is almost always botched or unfulfilled, and despite claims to the contrary, insourcing - in other words, taking outsourced work back in-house - is a rare beast indeed. Then there is always the do-nothing option, which is how many European businesses are responding to the challenge of BPO now.

    Inaction will not help European businesses to compete. Global companies have shown that BPO works in Europe. Now it's Europe's turn.

    Source: http://www.silicon.com/management/cio-insights/2010/10/12/outsourcing-no-thanks-were-european-39746455/

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