Industry news

Digicable announced it has appointed IBM in an $83m outsourcing contract.

Under the ten-year agreement, IBM will support the integration of Digicable's digital media content delivery and services applications with its business technologies and processes whilst providing IT infrastructure services, and network support.

The technology company will also be responsible for facilitating the launch of Value Added Services such as Video-On-Demand (VOD), Push-VOD, interactive TV, internet service on TV and gaming and telephony.

Asif Khan, chief technology officer of Digicable, said: "The partnership with IBM will help us focus on our core business, reduce time-to-market for new services and adapt quickly to meet future market requirements at an optimum cost."

A New York based financial services outsourcing company is set to expand with the creation of 1,000 new call centre and loan servicing jobs.

Zenta Mortgage Services will expand its operation in Charlotte, North Carolina, over the next five years, with the aim of collecting up to $8.6 million in taxpayer incentives if it meets the job-creation targets and keeps them for nine years.

The company is set to start hiring next month for jobs which will pay a salary of up to $48,000 per year, it was reported by the Associated Press.

Zenta currently employs about 260 workers in Charlotte.

Europe has surpassed North America as the biggest practitioner of outsourcing, according to a survey by sourcing advisory firm TPI.

The survey shows that the UK is the second biggest user of outsourcing, behind the US, while Canada takes the third slot.

Based upon figures, European businesses became the world’s biggest outsourcing spenders, surpassing North America for the first time, and TPI expects it will round out the year as the leader, with a $1.2 billion lead leading into the final financial quarter.

Last year, North America spent $29.6 billion outsourcing business functions such as call centres, back-office processing and IT services, beating out Europe, which recorded an outlay of $28.7 billion.

An Essex-based Conservative council has paired up with IBM in a deal worth over £5bn in a bid to better manage and provide public services.

The eight year deal marks a new wave of privatization supported by David Cameron, it was reported in The Times.

The partnership will aim to transform the way public services are provided across the county and will attempt to achieve cost savings of around 20 per cent for the council.

The first task for IBM will be to review the £800m of services that have already been contracted out to investigate whether contracts need to be reviewed or if further savings can be made.

Simon Humberstone, of IBM said: “We can set up a hoist and send one worker instead of two. This is both cheaper and allows more one-to-one time between staff and patient.”

Japanese car manufacturer Nissan is on the hunt for a business process outsourcing partner to provide application development and maintenance services in a bid to cut operational costs.

The organization has invited outsourcing companies such as TCS, Wipro, IBM and Mahindra to bid for the deal which is reported to be worth around $250m.

A significant local presence or partnership with another Japanese IT firm is among the key parameters the bidders have to follow, according to a senior executive at one of the tech firms exploring this opportunity, it was reported in the Offshoring Times.

Japanese firms outsource IT contracts worth over $8bn to countries, such as China, India, Korea and Vietnam every year.

A Dundee domestic utilities advisory call centre has announced it will create an extra 40 jobs in the first three months of 2010.

Call Centre Dynamics is set to expand thanks to a £250,000 grant from the Scottish Government’s Regional Selective Assistance in an attempt to boost the company’s workforce by 116, it was reported in the Evening Telegraph.

The funds have also helped establish a second Dundee call centre for the firm.

Human resources manager Bette Smith said: “We need people skills and I think people in Dundee have these. It’s one of the accents that’s accepted across the country - we’re trusted and people like to speak to us.”

“We get a lot of applications for the jobs but we have restricted ourselves to this number to ensure they get proper training and there’s enough time spent with them to sharpen up whatever skills they need. We are delighted with the people we have so far, everyone mixes in so well.”

UK outsourcer, Capita Group Plc has signed a £75 million acquisition deal with ICT service group Synetrix Ltd.

Synetrix currently provides ICT application and communications solutions to both public and private sector organisations, including the London Grid for Learning.

The merger is believed to both “enhance and expand Capita's current IT capabilities, whilst gaining a number of key new customers through greater expertise in a range of areas that support Capita’s existing capabilities." Capita Chief Executive, Paul Pindar said.

Australian financial services giant Westpac is on the hunt for outsourcing suppliers to take on contracts worth up to $500m.

Indian technology companies Infosys, HCL and other firms are bidding against multinational rivals IBM and HP-EDS, it has been widely reported.

A consulting firm is now advising Westpac on how to flesh out its IT transformation programme, which is aimed at saving over $400m by 2011.

“HCL, Infosys and Wipro, apart from IBM, are already in discussions with Westpac for these contracts — offshoring being considered as a critical portion of these engagements,” said an anonymous senior executive at one of the top tech firms looking into this opportunity.

Ramesh Shah, chairman of WNS Holdings has revealed he is retiring from his current position and moving into a vice chairman role, it has been widely reported.

Shah’s decision is said to have been based on reducing his workload.

Eric Herr will now become chairman after spending numerous years on the board.

It is with great sadness that sourcingfocus.com writes the final round up of outsourcing news in 2009. It has been a fantastic year in the quest to discuss all things sourcing related. There has been turbulence at times, but the industry has soldiered on and we find ourselves now at the dawning of a New Year. The end of the year is a time for reflection, and with that in mind, let us look back over the year that was.

In the summer the blockbuster film Slumdog Millionaire won eight Oscars and put India in the media spotlight. But Hollywood films are not the only things that have been putting India on the map. In the (equally glamorous) world of outsourcing, India continued to soar above the rest with 89 per cent of respondents in an EquaTerra report outsourcing their ICT services there.

The summer also saw the launch of 2009’s Outsourcing Black Book which, surely to the ire of many, brings offshore risk back to the fore. Sourcingfocus.com asked the experts what they thought in the news analysis ‘For whom the bell tolls’.

As we neared the end of summer, India’s glitz and shine waned rather dramatically. Reuters released a report which revealed that three executives at Satyam had been arrested for alleged involvement in the company’s accounting fraud. India’s main investigative agency said in a statement that it had arrested the vice president, senior manager and assistant manager in the company’s finance department on Sunday. Only time exposed how deep the fraud went.

Another strain on the outsourcing industry came in the guise of Barack Obama’s controversial offshore tax avoidance crackdown. The US president, who campaigned relentlessly on the issue of closing offshore loopholes, said the steps he announced would raise $210bn (£140bn) over ten years and "make it easier" for companies to create jobs in Buffalo, New York, rather than in Bangalore, India. Just when we thought it couldn’t get any worse!

Looking back, the sourcing industry has had a lot to contend with over the past year. Despite this, the industry has been going from strength to strength. As I mentioned last week, it seems we have all taken a leaf out of Santa’s business model. Sourcingfocus.com hopes all readers enjoy their Christmas break and looks forward to when we meet again in the New Year.