Industry news

Recently published research from Ovum, "Outsourcing in the Middle East - focus on the UAE (market dynamics)", is now available at Fast Market Research.

The United Arab Emirates (UAE) is one of the most prosperous countries in the Middle East and one of the region's largest IT service markets. While the recent global recession brought an abrupt end to a period of unprecedented growth in the UAE, there remains significant potential for expansion in the IT service sector. It is therefore unsurprising that a growing number of foreign vendors are setting up operations in the key business centers of Dubai and Abu Dhabi. This report aims to provide an overview of the current state of the UAE's IT service market, including a close look at the competitive landscape. It will also identify key points regarding the UAE's economy as a whole, of which all firms looking to do business in the region should be aware.

For more information or to purchase this report, go to:

http://www.fastmr.com/prod/72683_outsourcing_in_the_middle_east_focus_on_the_uae_market_dynamics.aspx

London - Outsourcing contract puts focus on security, reliability and scalability.

Leading UK insurance company esure has completed a comprehensive migration of its IT platforms and hardware away from former joint venture partner, Lloyds Banking Group, through a £26m ‘build and run’ outsourcing contract with Capgemini UK plc – who will now manage the majority of esure’s IT infrastructure for the next five years.

Launched in 2001 by Chairman Peter Wood to offer competitive insurance cover online and by phone, esure became one of the fastest-growing insurance brands in the world, attracting over a million customers in its first five years and launching the ground-breaking Sheilas’ Wheels brand. Its staff numbers have grown from 50 to over 1200 since launch.

Comprehensive new IT has been deployed by Capgemini following esure’s management buy-out in February from Lloyds Banking Group, which had previously provided IT support. Capgemini was selected by competitive tender because of its commitment to fully collaborative working and its track record of success in large-scale IT and outsourcing assignments. A partnership approach was used throughout with Capgemini working as an integral part of the project team.

Peter Wood, Chairman and founder of esure, said: ‘We needed a managed IT solution that would match the levels of quality, reliability and security that we require for all aspects of our business, and that is what Capgemini have delivered. They have fully met our requirement to effect this major transition with virtually no disruption to our business, and we are pleased that our relationship is now set to continue for a further five years.’

The transition managed by Capgemini involved migration of the esure IT infrastructure from Lloyds Banking Group (HBOS) facilities to Capgemini secure data centres at London City and London Southbank, and the implementation of new hardware and systems software including a new Sun Solaris environment, Unix systems management based on IBM Tivoli Workload Schedulers, and a new Wintel estate involving Microsoft Exchange, Active Directory, Blackberry and content management. Under the contract esure will also receive help-desk and incident management support from Capgemini service centres in Inverness and Nairn, Scotland.

The infrastructure managed by Capgemini runs all the esure core applications including finance systems and its customer-facing online and call centre policy administration and acquisition systems such as sales, marketing, website content, quotations and claims management. Capgemini is also managing esure’s telephony systems including call management, via a subcontractor.

A key feature of the project was the deployment of rigorous and comprehensive testing at all key stages, using the Testing Services methodology that has recently been launched by Capgemini as a Global Service Line. The process confirmed the capability of the new infrastructure to satisfy esure’s stringent requirements for security, reliability and scalability.

Greg Hyttenrauch, Chief Executive Officer of UK Outsourcing at Capgemini, said: ‘As a web-based business esure needs excellent IT support 24/7 and we are naturally delighted that the company has selected Capgemini to meet that need. We look forward to a long and effective collaboration with this dynamic company.’

About Capgemini

Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 30 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs 95,000 people worldwide.

More information is available at www.uk.capgemini.com.

Capgemini Outsourcing Services (OS) draws on the expertise of more than 25,000 employees to manage, innovate and improve the IT systems and business processes of its clients. Capgemini OS offers a full spectrum of services including Applications Outsourcing, Infrastructure Outsourcing, Business Process Outsourcing and Transformational Outsourcing.

For more information: www.uk.capgemini.com/outsourcing

Cognizant Technology Solutions Corporation, a leading provider of information technology, consulting and business process outsourcing services, has announced record-breaking second quarter 2010 financial results.

In addition to a 15% sequential rise in revenue, Cognizant has also topped the client satisfaction rankings in the 2009-10 Europe ITO Service Provider Performance and Satisfaction (SPPS) study carried out by EquaTerra.

Cognizant topped the study’s general satisfaction ranking with a score of 79%, also emerging as the only service provider with no dissatisfied clients among those surveyed. The study evaluated 25 service providers based on a variety of different assessments, and by using feedback from CFOs and CIOs from more than 750 of the top IT spending organisations in Europe.

"Second quarter results further substantiate the strength of the Cognizant model and the continued importance of investing in deep industry expertise, expanded geographic reach and emerging technologies," said Francisco D'Souza, President and CEO of Cognizant.

"During the quarter, spending levels were very strong across clients in all our business segments and geographies. Our clients are investing again in discretionary programs to foster growth and innovation. We saw particular strength in our financial services segment, which had previously been hard hit by the global credit crisis."

The Co-operative has brought 36 IT roles back in-house following its acquisition last year of supermarket chain Somerfield. The roles relate to helpdesk and store systems support, as the company opts to re-create jobs previously outsourced by Somerfield.

According to reports, 613 of the original 1,022 employees working at Somerfields Bristol headquarters, have already left, with most of the remaining staff expected to leave by Christmas. The Co-operative began its plans to close the Somerfield headquarters over a year ago in order to deliver cost savings.

Director of information systems food retail Mark Hale insisted that the grocery chain’s IT department will not be hit by the plans:

“What happened within Somerfield was that the vast majority of IT functions were outsourced to Tata Consultancy Services (TCS), which left a fairly small retained team of about 18 people. We’ve decided to take a number of services back in-house and so we’ve created some new roles.

“We’ve actually created a number of roles and brought a number of those jobs back from TCS into Manchester,”

Hale explained that Somerfield used a totally outsourced approach to IT, whereas Co-op had been selectively outsourcing IT functions, depending on where it could see value in outsourcing.

“We decided that our model of selective outsourcing is the model we wanted to use moving forwards, rather than a total outsource,” said Hale.

"We reviewed the cost. Our cost model was, broadly speaking, the same as Somerfield if not slightly better, and we didn't see any benefit of going down the total outsourcing model route."

CSC’s Business Process Outsourcing Services Help Reinsurer Optimize Operations and Improve Customer Service.

CSC (NYSE: CSC) today announced a 10-year extension to its business process outsourcing (BPO) services agreement with Swiss Re, one of the world’s largest and most diversified reinsurers. Under the extension, CSC will continue to provide industry-leading administration for Swiss Re’s direct life insurance business through July 2020.

Building on a relationship that began in 1995, CSC supports Swiss Re’s Admin Re® business unit in the United States, one of the highest growth areas for Swiss Re’s global life and health segment. Through its Admin Re® programs, Swiss Re provides capital and risk solutions to primary life insurance carriers by acquiring blocks of life insurance business, enabling these primary insurers to release capital and gain access to future profit streams from in-force portfolios. This strategic renewal solidifies the global market leadership and commitment of both organizations in providing cost-efficient alternatives for life insurance policy administration.

To strengthen the combined offering, CSC and Swiss Re have jointly outlined innovation strategies to drive even greater efficiencies in administration, improved customer service and enhanced system alignment across the business. As part of this initiative, the team will be incorporating new features of CSC’s CyberLife, Customer Service Accelerator and Claims Management Accelerator software to provide additional e-delivery and self-service capabilities and enhancements to claims processing.

“Having worked with CSC for 15 years, we know the team understands our unique strategic goals,” said Donna Kinnaird, president, Swiss Re Life & Health America Inc. “Our renewed agreement positions Swiss Re to continue pursuing Admin Re® acquisition opportunities and to benefit from CSC’s insurance processing expertise and system capabilities.”

“We continue to help Swiss Re achieve its business, service and cost goals through unparalleled levels of industry service and competitive pricing,” said Michael W. Risley, president of CSC’s Life Insurance and Annuity Division. “Insurers of all sizes can benefit from our dual focus on technology advancements and insurance industry expertise, which enable continuous process improvements and long-term cost performance.”

In December 2003, Swiss Re and CSC entered into a 10-year BPO arrangement that surpassed industry benchmarks for service capability and quality. To date, Swiss Re has successfully acquired and transitioned more than 40 U.S. life insurance blocks into CSC’s Life and Annuity BPO operations for full policy and claims administration.

According to reports, Accenture has been awarded a contract by The Singapore Ministry of Health to implement the National Electronic Health Record (NEHR) system, a key enabler of Singapore’s vision toward a national, integrated health care system. The NEHR is designed to improve the quality of healthcare for citizens, lower the costs of health services, and promote more effective health policies.

With an initial system release in April 2011, Singapore will be one of the first countries in the world to implement a national electronic health record system, which will allow key medical information such as patient demographics, allergies, clinical diagnoses, medication history, radiology reports, laboratory investigations and discharge summaries to be exchanged among healthcare providers.

“As the centerpiece of Singapore’s connected health vision, the NEHR is intended to provide a holistic view of a patient’s health information. With this market-leading offering, health care providers can have the right information at the right time to make the best care decisions,” said Stephen J. Rohleder, group chief executive of Accenture’s Health & Public Service operating group. “We congratulate the Ministry of Health for taking this bold step to create a new foundation to help support meaningful advances to Singapore’s health care system.”

Global software product engineering outsourcing services specialists Symphony Service Corp. today announced the appointment of Sanjay Dhawan as President and Chief Executive Officer, effective immediately. The move sees Pallab Chatterjee, Symphony Services' current Chairman & CEO, reverting to his role as Chairman of the company's Board of Directors.

Dhawan’s appointment comes after Symphony Services achieved impressive recent business results. The company's laser focus on Engineering Outcome Certainty has translated into 10 percent quarter-over-quarter revenue growth, with 30 percent EBITDA growth. The total contract value of new bookings is at 90 percent of the company's annual revenue run rate level in the June quarter.

"I'm very excited to welcome Sanjay Dhawan to Symphony Services," said Pallab Chatterjee, Chairman of the board of Symphony Services. "Over the last year we have virtually transformed the company to ensure we commit to delivering on business outcomes for clients that span multiple technology and industry sectors and Sanjay's leadership will help us accelerate growth in the ISV, embedded and engineering services markets."

Wipro Infotech, a leading provider of IT and business transformation services, has been selected as the Software Development Agency (SDA) for the Centre for Crime and Criminal Tracking Network System (CCTNS) project, a mission mode project under the National e-Governance Plan (NeGP), one of India’s largest e-governance projects to date.

CCTNS is a scheme from Ministry of Home Affairs, aimed at creating a nationwide networked infrastructure for the evolution of IT-enabled and state-of-the-art, criminal tracking system. The CCTNS will span across all 35 States and Union Territories and electronically link over 14,000 Police Stations and 6,000 Higher Police Offices across the country. The project includes vertical connectivity of police units (linking police units at various levels within the State and between States and Union Territories) as well as horizontal connectivity (linking police functions at State and Central levels to external entities). CCTNS will also present a citizen-interface to provide basic services to citizens.

As part of the scope, Wipro will develop the core application software to be used by the States and another core application to be used by the Center for digitization of crime and criminal records. Once implemented, the application will link the State Crime Records Bureau with the National Crime Record Bureau, thereby creating a database that can be accessed in real-time from any police station across the country. Wipro’s solution is expected to greatly enhance police efficiency in the detection and prevention of crimes.

Global consulting, technology and outsourcing services firm Capgemini has acquired Swedish IT and Business Process Outsourcing (BPO) service provider Skvader Systems AB (Skvader), specialising in the provision of smart meter deployment services and smart meter managed business services. .

As a part of the deal Capgemini will acquire a software solution developed by Skvader to support its managed business services contracts.

The software is sold to other utilities and utility service providers through SaaS contracts to support 1 million smart meter deployments. This software will enhance the solutions that Capgemini currently deploys in support of Smart Energy Services contracts in Europe and North America

Skvader is one of the delivery partners of Landis+Gyr, a leading provider of integrated energy management solutions, in Landis+Gyr’s contract for the installation and management of 400,000 meters in Sweden at power and gas company E.ON.

This will now be a part of Capgemini’s Smart Energy Services business, further extending the company’s share of both the Swedish and European smart energy market.

Capgemini estimates that over €300m of smart energy service contracts will come to the Nordics over the next three years, underlining the strategic significance of this acquisition.

Mid year results seem to be showing positive results despite on-going price pressures. During the first half of the year, Steria revenue increased by 1.4% on a like-for-like basis in the first half 2010. During the second quarter 2010, activity was stable, with consolidated revenue amounting to €417.5m (-0.1% like-for-like versus the second quarter 2009).

Indeed, Steria’s figures have been positive across most European geographies – Spain was perhaps the exception with results being ‘close to flat’ but given the difficulties the Spanish economies has faced in recent months, this is still good news.

In the United Kingdom, excluding currency, the trend in second quarter revenue exceeded initial expectations at -3.9% versus the second quarter 2009. The quarter was notably characterised by the signature, in June 2010 with the Cleveland Police Authority, of one of the largest contracts ever won by the Group for an inital amount of €211m over 10 years.

While some may be quick to point out that the optimism may be misplaced –it does take 18-24 months from the initial tender to the awarding and signing of the contract – Steria also recorded a 17.6% rise in new orders during the second quarter 2010, leading to a total increase of 3.2% in the first half 2010 versus the first half 2009.

Similarly, H1 has proven a good one for the Indian ITO sector, holding out the promise of higher perks for the millions of IT professionals. Results for HCL, showed a positive trend. While Patni showed a 10.7% year-on-year results despite a 2.8% drop in revenue quarter on quarter. The company’s revenues stood at $167.6m, down from $172.3m in Q1. The company attributed the revenue drop due to project delays by some of its BPO clients.

Wipro also beat estimates in the June quarter, though a softening in Europe's revenue contribution raised concerns about profits ahead. The software services exporter's Europe revenue share fell mainly due to currency volatility, but it continued to see a strong business pipeline from the region. Indeed, the company posted a 31% jump in profit and beat analysts’ estimates as demand for computer services rose.

Wipro’s results add to those of industry leader Tata Consultancy Services.