Industry news

Virgin Trains and Capgemini are entering into a three-year multi-million pound contract which will see Capgemini manage the train company’s entire IT infrastructure, it was announced today.

The contract is a further renewal of a relationship between the two companies that started in 1999.

Under the deal, Capgemini will look after financial and key operational systems such as train and crew scheduling and rostering, and the catering management system.

It also includes desktop and laptop management and support services for approximately 1,000 Virgin Trains staff at 42 locations across the UK.

Francis Jellings, Head of IT at Virgin Trains, said: “We continue to be impressed by the quality of the Capgemini people working with us and by their ability to work in full collaboration with our own teams.

“They have an excellent appreciation of our business and IT needs and I am pleased that we are to work with them for a further three years.”

The recession has created a clear divide between SME customer service success and failure, according to a Cisco survey.

Out of the 1,000 business polled in the survey, 57 per cent had refocused their business on customers to steer their way out of recession, while the remaining 43 per cent had failed to implement changes which would enhance customer loyalty.

Nearly one third of businesses agreed that customers are more likely to shop around than they were 12 months ago, underlining the need to focus on customers. Social media has also helped UK business engage more effectively, with 43 per cent of those using sites such as YouTube and Twitter to communicate seeing a growth in custom as a result.

David Critchley, head of SME and commercial for Cisco UK and Ireland, said the results indicate that ‘customer kings’ will thrive in 2010, by ‘remodelling their business around the needs of their customers, embracing new technology, routes to market, and ways of communicating with their audiences, these customer kings are set to thrive in 2010’.

Security giant G4S has predicted that it will benefit from the increasing popularity of electronic tagging of criminals around the world.

According to the company the tagging trend, popular in Britain, will continue to grow as other governments outsource their requirements this year.

Chief executive Nick Buckles said budget pressures meant governments are cutting spending and the firm was poised to scoop big contracts.

“Other countries are starting to adopt the UK's approach to outsourcing,” he said.

“The initial service that tends to be contracted out is electronic tagging, because it's seen as politically acceptable — it's a major growth area. And if we win those contracts, bigger ones to supply prison security and manage immigration centres will often follow.”

Revenue growth is in decline for many telcos, and slowing for those in emerging markets, even though the economic downturn hasn’t resulted in the expected downward pressure on top lines, research has indicated.

A global consumer survey conducted recently by Ovum’s parent company Datamonitor revealed that over a quarter of consumers surveyed indicated that they either would, or consider cutting back on their telecoms spending, with a further 24 per cent undecided. When asked which services they would look to cut back on, over 30 per cent indicated that they would consider downsizing their mobile phone tariff, while 24 per cent saw fixed voice as an area where they could make cuts.

Ovum believes those that prudently managed their finances during the downturn will grow, but should be wary of initiating M&A programs designed solely to grow top-line revenues. Targeted mergers, acquisitions and partnerships that fill key skill-set gaps will be the flavour of telecoms going forward.

Ovum’s principal analyst Clare McCarthy said “While the recession accelerated revenue decline, challenges such as market saturation, increased competition and regulatory intervention on roaming and termination rates won’t disappear just because the economy picks up”.

PayPal has announced plans to extend the number of its employees in Asia Pacific to over 2,000 by the end of the year, with the creation of more than 100 new jobs at the company’s headquarters in Singapore.

The new vacancies will be across all seven of PayPal’s offices including, Australia, China, Hong Kong, India, Japan, Singapore and Taiwan.

The plans for growth can be seen as a direct result of the company’s 38 per cent growth since 2008, processing more than $6 billion of total payment volume within the Asia Pacific region in 2009.

Both PayPal and Singapore are excited about the company continuing and expanding its presence in Asia;

“We are excited that PayPal has chosen Singapore as the center from which to double its business in Asia. This is another example of how Singapore plans to stay at the forefront of technology and innovation,” said Mr. Leo Yip, chairman of the Singapore Economic Development Board (EDB) said.

An architectural group is waving the flag for outsourcing after announcing it has cut costs by 60 per cent since outsourcing its accountancy.

Red Box Design Group, based in Newcastle and Darlington moved its monthly accounting practice from an in-house financial director to an external chartered accountancy firm, it was reported in nebusiness.co.uk

It also managed to cut 50% of annual auditing costs thanks to the changeover.

Alan Smith OBE, managing director of Red Box Design Group told nebusiness.co.uk: “Cost control is more important than ever in this climate so to achieve 60 per cent savings on accountancy, such as cashflow, profit and loss and the balance sheet reporting, and another 50 per cent on the auditing, is pretty good going.”

Malaysia Airlines seals outsourcing deal with TATA Consultancy Services

Under the five-year agreement, Indian consultancy TATA will provide the Malaysian Airline with IT services.

In a statement, the company announced the partnership was part of its wider strategic IT outsourcing programme designed to transform the airline’s IT operations, in hope of delivering seamless internal customer experience.

“One of the key initiatives is fine-tuning our IT outsourcing strategy to deliver the required business results at lower cost,” said the airline’s chief information officer, Faridah Abdul Rahman.

Danish IT company, KMD, has signed a new four year offshore contract with Mahindra Satyam in a deal worth approximately $48 million.

The new agreement is an extension of a previous contract that was due to expire this year which involved the supply of application development, testing and application support services particularly in the area of SAP which is a growing business for the Danish IT company. Offshore work will be conducted in a development centre in Bangalore, India.

Lars Monrad-Gylling, CEO of KMD said: “We have chosen SAP as a strategic technological platform for our development work and consider it a common cornerstone to enable coherence between systems, global market standards and to offer our customers greater openness and freedom of choice.”

Virgin Atlantic, the transatlantic airline, has confirmed plans to open a new call centre this autumn creating more than 200 jobs.

The new centre will be based in Swansea, Wales, and will run in conjunction with the airline’s existing site in Crawley, West Sussex.

Julie Southern, Virgin Atlantic chief commercial and financial officer said: ‘Virgin Atlantic is pleased to be opening a new customer service centre based in Swansea, particularly at a time when few companies are announcing an expansion in job opportunities in the UK.

‘We know that Swansea has many experienced customer service staff and we look forward to being able to use their valuable experience to support Virgin Atlantic’s customers.’

The airline will start recruiting for the 200 later this month and hopes to fill them all over the next two years.

HM Revenue & Customs (HMRC), the UK’s tax authority, has signed an outsourcing agreement with Accenture to strengthen its in-house IT capability. The consultancy will develop a new IT strategy for the authority in an attempt to reduce costs.

Under the £10m agreement, Accenture will also make services available to other organisations involved in enforcing tax and customs laws, such as, the Revenue and Customs Prosecution Office, the Serious Organised Crime Agency, the UK Border Agency and the Home Office.

This deal marks an important step for HMRC in light of new powers granted to the Information Commissioner's Office allowing it to fine departments and companies in breach of data protection laws.