Industry news

The Financial Services Authority (FSA) has fined the UK branch of Zurich Insurance £2.27m for failing to have adequate systems and controls in place to prevent the loss of customers’ confidential information.

This is the highest fine levied to date on a single firm for data security failings.

Zurich lost the personal details of 46,000 customers, including identity details, and in some cases bank account and credit card information, details about insured assets and security arrangements.

The loss could have led to serious financial detriment for customers and even exposed them to the risk of burglary; however there is not evidence to date to indicate that the data has been misused.

Zurich UK outsourced the processing of some of its general insurance customer data to Zurich Insurance Company South Africa Limited (Zurich SA).

In August 2008, Zurich SA lost an unencrypted back-up tape during a routine transfer to a data storage centre. The absence of proper reporting lines meant Zurich UK did not learn of the incident until a year later.

As Zurich UK agreed to settle at an early stage of the investigation the firm qualified for a 30% ‘discount’, without which the fine would have been £3.25m.

Comms vendor Avaya and telco BT have extended their global partnership for a further three years.

The telco firms are looking to deepen their partnership which covered contact centre equipment and services and explore new areas including voice and unified communications (UC).

As part of the relationship, BT will provide integration and consultancy services to support the Avaya product suite. Avaya and BT will jointly market and sell the products and services to businesses around the world.

The new agreement between the two companies covers next-generation contact centres, unified communications and services, and complements BT's portfolio of networked IT services.

Both firms have been working together for the past 10 years.

Following Avaya’s acquisition of former rival Nortel, its relationship with BT has been under close scrutiny from the comms industry.

Nortel, which entered Chapter 11 in early 2009, had a longstanding relationship with BT, signing a four-year partnership as recently as May 2009 – Avaya agreed a deal two months prior to that.

Global consulting and IT services provider Mahindra Satyam, the brand identity of Satyam Computer Services has appointed Gaurav Gupta as associate vice president, Strategic Partnerships in Europe for the Aerospace and Defence sector.

In this role, Gupta will lead development of customised partnership arrangements in the sectors of Aerospace and Defence. He will focus on building new business opportunities and, using the synergies of the Mahindra Group, convert them into large global relationships.

His appointment comes as Mahindra Satyam looks to strengthen its focus on specialty offerings for this sector and to meet the specific challenges facing the industry, namely; cost, time to market, and a need to maintain research and development at reduced costs.

Gupta has more than a decade’s experience in the industry which began when the Aerospace and Defence sector first started looking at outsourcing and off-shoring in a major way.

Prior to joining the Mahindra Group, he worked as a director of Business Development with HCL, based in the UK.

Unisys Corporation has been awarded a five-year extension on its contract to provide end-user support services to oil & gas supply manufacturer Flowserve Corporation.

Under the new agreement, valued at close to $37m, Unisys will provide ongoing and expanded services to support approximately 10,000 of Flowserve's employees in more than 50 countries worldwide for five years beyond the originally contracted 2011 expiration date.

The ongoing services include service desk support in nine languages, desk-side support, equipment maintenance, and installs, moves, add and changes for desktop and laptop PCs, BlackBerry smartphones, servers and printers.

Expanded services to be provided –from 2011 –will see Unisys implement its Converged Remote Infrastructure Management Suite service offering for Flowserve.

The solution provides a single, unified view of an entire IT infrastructure. It will enable Unisys to provide integrated monitoring and management of some 500 servers deployed in Flowserve locations around the world.

In addition, Unisys will implement an IT Services Management framework, based on the ITIL v3 standard, for continuous improvement in service delivery.

Unisys will also enhance both the self-service portal for Flowserve employees and the knowledge management solution that stores information about prior service events so that end users and service personnel can anticipate and more quickly resolve potential equipment problems before they lead to potentially costly downtime.

Recent media reports have been insisting that a number of suppliers have been ‘going bust’ this year. But how accurate is this?

Yesterday’s online editions of The Guardian, The Telegraph and the FT – amongst others - reported a 47% increase in the number of public sector suppliers affected by the degraded economic environment.

The figures derive from research attributed to accountancy firm Wilkins Kennedy, which claims that H1 2010 saw an increase to 168 insolvent companies, up from 114 in the same period last year.

However, it would be interesting to put that 47% increase into context.

A few figures:

According to statistics reported in February’s HM Treasury speech on government procurement:

• There are 4.7 million small and medium sized enterprises (SMEs) in the UK, representing 99.9% of UK business

• At the time the government was spending 95% of £220bn of public sector procurement in UK-based firms.

Needless to say, that by its size the well-being of SME space is fundamental to economic recovery, which is perhaps why the news of a near 50% increase in the insolvency rate made such news.

I do not mean to down play the meaning this increase has for individuals whose livelihoods depend on the jobs created by insolvent companies. However, it’s clear that £209bn (95% of £220bn) has been spent in UK-based procurement suppliers, which begs the question - how much of this percentage actually goes to SMEs?

“There’s no doubt that public sector work is of major importance to small businesses” said Chris Gorman, Private Business Forum (PBF) spokesman.

“Countless small firms up and down the country rely on bodies like local authorities, health trusts, police forces, schools and colleges for business. If these important contracts suddenly start disappearing, I think it’s safe to say many smaller businesses are going to suffer and may even go to the wall.”

It is probably not much although according to the Government, in 2004/2005, SMEs won 59% of the total value of local-authority contracts and 22% of central-government contracts.

Similarly, around 10% of members consistently report concerns about public procurement-related issues, according to proprietary research conducted by the Forum of Private Business.

It is something the coalition government has promised to address and the ‘supply2gov’ website is supposed to be part of the answer. The website, designed to make it easier for micro-business to tap into public contracts, originally launched in 2006 it is expected to re-launch later this year.

The portal in theory, allows SMEs to gain free access to contracts worth £10,000. Higher value deals, with tender documents worth more than £25,000, would follow, in order to meet the target of allocating 25% of all state contracts to small businesses..

The current 'supply2gov' portal does not seem to delivery. Let’s hope the portal re-launch changes that.

The stats presented may have been a bit misleading, having omitted the size of the business community – however, they do depict the reality.

While many will say that any economic downturns serves to ‘cleanse the system’ and rid it of inefficient players, the fact remains that some competitors are too small to absorb the shock caused by unfavourable trading conditions which makes them more likely to go bust than larger players.

“Although small business owners traditionally favour low taxes and low spending, many are very wary of calling for ‘slash and burn’ public spending policies from the new government,” noted Gorman.

The question in everyone’s mind is: will the measures taken by the government succeed in rebooting the economy as well as boosting investor confidence?

It would seem that uncertainty remains close to the only certainty – aside from taxes and death!

A team from Sheffield Hallam University working on data search technology that has the power to change the World Wide Web has secured €370,000 funding from the European Commission with help from Enterprise Europe Yorkshire.

The funding is part of a €4m collaborative project lead by German technology leaders, SAP, that will focus on how improved data searching will impact on business.

Dubbed the ‘Semantic Web’ by father of the Internet, Sir Tim Berners-Lee, the next generation of the World Wide Web will allow users to search more data than ever before, return more relevant results and save users time surfing the web.

Currently only a proportion of data posted on the Internet can be ‘read’ intelligently by computers and users have to visit multiple websites to find the information that they want.

The project will develop methodologies and a platform that combines essential features of semantic technologies and business intelligence.

It is understood that Hewlett Packard (HP) is seeking to invest $1bn to transform its end-to-end information technology services. Similarly, part of the investment will be directed towards retiring legacy assets and building new, modernised facilities.

The multi-year transformation and investment, will allow HP to consolidate enterprise services' commercial data centres, management platforms, and networks tools.

HP also intends to enhance applications to create a more scalable modernised and automated IT infrastructure.

The firm is also seeking to capitalise on the Asia Pacific region encouraged by the region’s growth rate which albeit slower in the past quarter continues to surpass that of other markets.

Indeed, figures recently put out by consulting firm Everest Group indicate that the region is ahead of both Central and Eastern Europe – perhaps affect by lower demand due to economic crises in Greece, Spain and Portugal; and Latin America.

The State of Texas' Department of Information Resources (DIR) has announced it would be taking over the multi-year project’s management and re-soliciting bids for completing parts of the project from other companies.

Last month, representatives of the DIR sent an eight-page letter to IBM expressing its discontentment and citing its various reasons and giving the contractor 30 days to come up with a plan to address the issues.

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Last week DIR sent another letter to IBM stating the contractor had failed to produce a an suitable plan; also informing IBM that it would be taking over the project management while launching re-soliciting tender.

The seven-year project aims to consolidate the IT infrastructure of 28 state agencies into two data centres.

Texas will be searching for new bidders to complete each of the smaller tasks into which the four-year-old IBM contract will be broken into.

The legal battle continues as IBM is disputing Texas DIR right to terminate the master service agreement.

HP has submitted an offer to 3PAR Inc for the acquisition of all of the outstanding shares of 3PAR for $24.00 per share in cash, valuing the business at $1.6bn.

The deal which counters Dell’s offer made last week– which was until now considered a done deal.

The proposed transaction, which is not subject to any financing contingency and has been approved by HP’s board, represents a 33.3% premium above the price proposed by Dell.

If approved by 3PAR’s board, the transaction would be expected to close by year’s end.

Under the terms of last week’s deal between Dell and 3Par, Dell has the right to match HP’s price. The original transaction also included a termination fee of $53.5m.

The move by HP comes weeks after the allegations brought up against Mark Hurd, its former CEO caused his ousting.

India domestic process management services (PMS) segment forecast to reach $683m in 2010, a 31.1% increase from 2009 revenue of $521m, according to global consultancy Gartner.

The market will experience steady growth through 2014 when process management services revenue in India will reach $1.6bn.

Large scale outsourcing of process management will bring in the next wave of growth in the Indian domestic IT/IT-enabled services (ITES) industry. High economic growth, competitive pressure, agility, time to market, innovation and adoption across verticals and breadth of services will be driving this high growth rate in this segment.

In 2009, the Indian IT Services/business process outsourcing (BPO) market showed resilience with greater interest from corporate level executives in outsourcing decisions. Prioritisation for outsourcing spending aligned with organisations' agility, scalability and cost focus. Cautious buyers, cost containment were evident in mature verticals.

Currently process management services are restricted largely to telecommunications and banking and financial services sectors.

However moving forward it is likely to be adopted in verticals such as government, utilities, healthcare and retail. These are high growth sectors with high degree of transaction processing work requirement.

Such transactional processes, although crucial, are not core to the activities of those organisations. There are high degrees of inefficiencies built into the system.

Outsourcing of such processes to third party specialists would bring in advantages of efficiency, efficacy and cost thereby increasing the competitive edge.