Industry news

The UK’s national postal service Royal Mail Group Ltd (RMG), has signed a six-year IT contract with consulting, technology and outsourcing services provider Capgemini UK, a subsidiary of Capgemini group.

The agreement aims to transform its business and consumer online services, help to reduce its annual website IT costs and support expansion and diversification into a wide range of new web-based business opportunities without the delays and expense of traditional IT.

The cloud computing a technology which will be deployed will enable IT-on-demand to be piped into an organisation as a ‘smart utility’ on a money-saving pay-as-you-go basis.

The new technology can be quickly and easily reconfigured to support RMG in launching new business ventures and bringing new services to market as quickly as possible.

Areas seen as strong candidates for expansion and diversification at RMG include services for personal and small or medium business customers, and high-quality, innovative parcel delivery services to meet the needs of the UK’s boom in online shopping.

British business process outsourcing (BPO) firm Xchanging Plc is expanding its back office operations at Shimoga in central Karnataka to a 2,000 seat facility.

The centre will be located on a six-acre space in the new special economic zone (SEZ) at Shimoga.

The London-based BPO firm has been operating at Shimoga, about 270 km from this tech hub, from rented premises since 2008, employing about 300 people from the region.

The £750m back office firm also operates from Bangalore, Chennai and Gurgaon.

Consulting, technology and outsourcing service provider Capgemini has appointed Aloke Paskar as head of the capital markets sector for North America and the UK.

In his new role, Paskar will be responsible for overseeing business operations and client relationships, as well as sales and delivery.

Prior to taking on this position, Paskar served as vice president of India and China operations for Capgemini Financial Services.

Paskar brings to Capgemini over 20 years of global experience in the financial services industry, including co-founding capital markets IT services company, TechSpan.

He joined Capgemini in 2005 as North America delivery head for the company’s Rightshore operating model, 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 business needs.

In 2008, he joined Capgemini’s financial services business unit as head of Asia Pacific before becoming the head of operations for India and China.

Paskar’s appointment comes on the heels of Capgemini’s announcement of its acquisition of Strategic Systems Solutions (SSS), a global IT services and business process outsourcing firm (BPO) focused on the financial services industry.

Chemical and pharmaceutical company has finalised a five-year global enterprise agreement (GEA) with SAP AG.

Under this agreement, SAP will support close collaboration in the globally standardized implementation of SAP business applications at Bayer.

A fully unified, global IT strategy is of central importance to Bayer in order to increase market share and profitability in an environment of global supply chains and a high degree of international competitive pressure.

Bayer wants to profit in the future from reduced operational costs by means of a scalable and efficient software landscape within the company.

With this agreement, the two companies will focus on supporting Bayer’s IT strategy based on the comprehensive, long-term deployment of standardized SAP® solutions across Bayer’s worldwide operations.

Under the contract, Bayer will primarily rely on SAP software for IT processes, which underscores the great strategic significance of SAP for the company’s IT.

The close partnership between these two companies has existed since 1984. As part of a developer partnership agreement in 2000, SAP became Bayer's most important strategic software partner.

IT solutions provider LuraTech has opened a subsidiary in the UK appointing Gary Hodkinson as managing director.

Hodkinson possess an important track record of successfully establishing companies in the document conversion market. His previous positions include European partner manager at ActionPoint (subsequently purchased by Captiva and EMC), and the MD for Paradatec Ltd.

The Luratech has its headquarters in Berlin, Germany and offices in the USA and provides integration platforms and production-level document conversion software solutions.

Founded in 1995, the company provides two major product lines are the LuraDocument PDF Compressor Enterprise - a production grade application for compression, conversion to PDF(/A), OCR, classification and form data extraction, and DocYard - a complete platform integrating all the functions of document conversion in workflows, which can be managed centrally.

Gaming specialist William Hill Online (WHCL) is to establish a new telephone betting operation based in Gibraltar; the move will also see the firm close the group’s telephone betting subsidiary in the UK, William Hill Credit Limited (WHCL).

The company’s existing telephone betting business made losses of £1.8m in 2009, while it expects a small operating loss in the first half of this year.

The move is expected to result in cost savings of approximately £4-7m per annum expected to commence from the start of 2011. However, it added the move would cost a one-off cost of £7m.

The agreement will see business processing outsourcing (BPO) and customer management outsourcer Vertex, take over the Sheffield-based call centre currently run by WHCL and that William Hill Online will also manage customers from Gibraltar. Customers will be able to use their telephone betting account for online transactions.

WHCL’s second call centre in Leeds will close, with all staff being offered alternative positions.

William Hill will continue to have a substantial presence in the UK and Ireland, including more than 2,300 licensed betting offices and around 16,000 employees.

Spanish restaurant and retail operator Grupo Vips, has picked UK telecoms operator BT to renew its current communications network.

The five-year contract valued at €8.2m includes the migration to the new iVPN service, and the highly advanced voice and data services needed between all of its restaurants across Spain, including TGI Friday’s and Starbucks.

It also comprises voice and data services via BT’s iVPN service for Grupo Vips’ 350 establishments including six restaurant chains and 10 fine dining restaurants, and more than 10,000 employees.

The new contract builds on the existing relationship between BT and Grupo Vips and is expected to directly contribute to the efficiency and quality of their communications, their management and the efficiency of their cost structure.

The government has sacked the supplier responsible for delivering the £750m e-Borders contract, due to serious concerns about the running of the much-delayed programme and confidence in the US defence and security firm’s ability to address these delays.

It has been reported that the project was singled out for early attention by the cross-government “efficiency and reform group” headed by Francis Maude at the Cabinet Office and Danny Alexander, chief secretary to the Treasury.

While, immigration minister Damian Green said in a written statement to Parliament that Raytheon Systems has been in breach of contract since July 2009 and extensive negotiations had failed to produce a resolution.

The Government now is seeking for a supplier to replace Raytheon and, according to reports, Raytheon's sub-contractors on the project, which include Detica, Qinetiq, Serco and Accenture will also be changed.

The Home Office signed the deal with Raytheon, lead contractor in the Trusted Borders consortium, in November 2007.

The programme is designed to track the movement of people in and out of the UK's borders, and will involve checks being made against incoming passengers at their point of embarkation to see if they are on police and security watchlists.

The project was initiated by the Labour government, but has always been supported by the Tories. At the time the agreement was valued at more than £650m.

In his fourth installment on 'critical intangible' in the sourcing process Alex Blues, Head of IT Sourcing at PA Consulting Group considers the advantages and disadvantages of either being prescriptive or open to market influences in dealing with suppliers.

This is the fourth in a series of blogs about the role of ‘critical intangibles’ in the sourcing process. Critical intangibles are the fine details that are often overlooked by those concerned with the pricing and the legal framework of a sourcing relationship, but which have the potential to make a significant difference in the outcome of the sourcing relationship.

Today, I would like to consider the advantages and disadvantages of either being prescriptive or open to market influences in dealing with suppliers. If you want to be driven by process, then being prescriptive is definitely for you – you tell a supplier exactly what you want in terms of scope, service levels or even price. Then the role of the supplier is just to respond and answer the questions.

On this basis you can easily set-up an evaluation matrix, you decide on how you will weight different factors and you agree a scoring system. The result is an ‘apples with apples’ comparison and you make your decision based upon clear quantitative criteria. This can work extremely well for commodity type sourcing arrangements. However, many organisations are not looking at prescribing the solution, especially in complex situations, they are looking for outcomes.

In such cases it is better to describe what the solution will deliver and let the market use its skills and experience to help shape and define the solution. One of the reasons for considering outsourcing in the first place is because you believe that the market understands the solutions better than you, so why tell the market what to do to. You will not get an ‘apples with apples’ comparison, but you will receive a range of solutions - some perhaps more innovative than others - that can be evaluated against the outcomes you require.

This may make the financial comparisons more complex and it may make the contract construction somewhat more complicated, but it will without doubt be much better for the business and offers the potential for suppliers to provide innovative approaches that you might not even have considered.

Credit Suisse Asset Management in Germany has outsourced its fund administration business to Société Génèrale Securities Services (SGSS); under the terms of the agreement SGSS will provide Credit Suisse Asset Management in Germany with comprehensive fund administration services including front-office services (ASP), funds administration and reporting services.

This new model allows Credit Suisse to implement a more flexible organisation to meet the requirements of an increasingly complex and continuously changing market and regulatory environment.

As part of the new set up, SGSS will acquire the legal structure of Credit Suisse's Asset Management Kapitalanlagegesellschaft mbH which it will incorporate into its existing local structure, SGSS Deutschland KAG mbH.

The transaction is expected to close on 30 September 2010, subject to local regulatory approval. Credit Suisse (Deutschland) AG's Private Banking will not be affected by the transaction. The Portfolio Management, Client Services and Fund Distribution will also stay unchanged.

In Germany, SGSS is responsible for €62.2bn under administration through nearly 500 funds and benefits from more than 50 years of experience in the fund administration industry.