Industry news

The French National Geographic Institute (IGN) has selected Atos Worldline, an Atos Origin Company, to design, develop and host the first national website, 'Edugéo', dedicated to geography teaching.

This major project forms part of the French Government’s Reform programs and has been developed on behalf of the French Ministry of Education. IGN has joined forces with Atos Worldline to offer pupils and teachers from French primary and secondary schools easy access to local geographical resources dating back as far as 1947.

Resources to be included in the portal are aerial photos, digital maps, current and older topographic data. The site will also included functionalities to enable 3D map viewing; the possibility to annotate a map or an aerial photo as well as sketching facilities and access to sharing work done in the classroom.

“Edugéo is a major project for the National Ministry of Education. It offers teachers new tools for teaching geography. Atos Worldline was able to support us in the development of these services by providing an educational environment that pupils can easily access,” commented Gilles Braun from the National Ministry of Education.

OMV AG, the leading oil and gas group in central Europe, has selected Fujitsu Siemens Computers as its main technology partner after signing a contract for IT infrastructure and services across 30 countries. Under the terms of the agreement Fujitsu Siemens will manage OMV’s systems across 30 European countries

Johann Kandelsdorfer, Chief Information Officer at OMV, explains why the company selected Fujitsu Siemens Computers as its technology partner: “The most-important factors in making this decision were flexibility, efficiency and the company’s ability to empathize with the customer. We wanted a provider that could guarantee efficient, reliable and cost-effective business process operations in over 30 countries. Fujitsu Siemens Computers, with whom we had already enjoyed a long-standing partnership, was unmatched in being able to completely fulfill these conditions.”

The US Department of Agriculture's (USDA) Food Safety and Inspection Service has awarded Unisys a contract to migrate the agency’s data centre to the USDA’s new consolidated Enterprise Data Centres (EDCs). The fixed-price contract, valued at approximately US$5.5 million over a two-year period, is part of a USDA initiative to streamline IT management, reduce costs and address IT security vulnerabilities by consolidating the department’s data centres into four EDC locations.

Unisys (NYSE: UIS) will plan, execute and manage the migration of critical FSIS applications, servers and storage network hardware from multiple locations to the USDA EDC and set up a disaster recovery environment at another USDA EDC site. FSIS is responsible for ensuring that the nation’s commercial supply of meat, poultry and processed egg products is safe and correctly labeled and packaged. FSIS is leveraging Unisys support and data centre migration expertise to help achieve an efficient transition of its IT systems.

“Uninterrupted availability of FSIS’ mission-critical applications is essential to the USDA’s ability to fulfill its mission to ensure the safety and security of our food supply,” said Eugene Zapfel, lead partner responsible for USDA, Unisys Federal Systems. “Unisys expertise in data centre migrations, demonstrated in similar projects with the Centres for Disease Control and Prevention and other public and private sector organisations, will assist the FSIS in its vital mission of protecting our nation’s food supply.”

As the US economy and political system dusts itself down in the wake of Barack Obama's historic win in the US – bolstered by the speed and organisation of his first week as President Elect – the economy on this side of the Atlantic shows signs of strong outsourcing demand, particularly in government.

British support services group Babcock has reported a 40 percent increase in first-half profit, with gross profits standing at nearly £51 million. It forecasts more growth, in the belief that businesses will turn to outsourcing to cut costs.

CEO Peter Rogers told the Reuters news agency that government bodies in particular will turn to people like his company for strategic support and spend reduction.

The company has fingers in the shipbuilding, defence, rail and nuclear sectors, and is the biggest third-party supplier to the Royal Navy.

But as we've explored in this blog before, is government services outsourcing really a sector that companies should feel confident about, given the high-profile trashing of many suppliers' names by association with troubled Whitehall projects?

There are some worrying signs, looking ahead: Home Secretary Jacqui Smith recently made the unlikely claim that most people are excited about, and supportive of, the ID card scheme, despite the ever-escalating cost to the same people who are allegedly so keen on it.

At the same time, talk of the possibility of supermarkets being among companies in the frame for managing key outsourced elements of the service is alarming – creating the intriguing possibility of a future where people's shopping habits are monitored at the till: obese? No chance of buying that cake, sir! Liver disease? Stand away from that four-pack, ma'am!

I jest, of course... or do I? One tabloid headline today shouted: 'Pay the Obese to Take a Walk'!, referring to some new DoH scheme to encourage the larger parents among us to walk their children to school.... for cash.

Whatever the reality versus the fiction, the ID card scheme remains highly controversial, and it has little to do with security (at least, no one has explained how it will make us more secure). It is almost certainly a bridge to a data-gathering/service matching economy of the future, linking in with citizen relationship management schemes at local level, and who knows what else nationally.

Suppliers may not wish to be associated with such a scheme, given the security risks and political sensitivities. Just ask PA Consulting how its reputation is in the wake of its association with a mismanaged government outsourcing deal.

But there are other, less Big Brother-style signs to be encouraged by: none other than Peter Mandelson has the found the perfect way to restore his reputation: by being the supporter in chief of local Post Offices to provide outsourced services direct to the public. Watch this space for more.

As long as the government returns to seeing the Post Office as being an essential public service rather than a poorly functioning profit-making machine in a deregulated market, it will be a national asset.

Elsewhere, two stories from the Philippines show the strength of the BPO market there: first, there is now a reported skills shortage there, and second, Philippines BPO companies may themselves outsource their staffing and HR needs.

Hello World

Bupa, a leading provider of private healthcare in the UK, has appointed Patni Computer Systems to provide BPO services for its core business applications. Under the terms of the agreement, Patni will dedicate 40 technical specialists both in the UK and India to Bupa service for the next three years.

The new contract with Patni forms part of a worldwide initiative by Bupa to drive change within its IT function. Through the deal Bupa hopes to improve levels of service to the business, to support quality software developments and to promote global re-use of applications and processes. Bupa estimates that it will make savings of around £1 million over three years through the deal.

David Guest, Chief Applications Officer at Bupa, commented: “The Group’s ambition is driving change in IT. We are a large company and our staff and customers expect professional levels of service, while growth in business volumes will continue to put increasing pressure on services and drive additional requirements. Our software is becoming ever more critical to the business, and they expect it to be delivered on time and work first time. Our range of services, geographies and IT assets is also increasing, so simplification and re-use are both important. Offshoring is an obvious part of the jigsaw.”

Cognizant, the BPO provider, has signed a five-year agreement with AstraZeneca to provide application maintenance services to the company’s global enterprise in research, clinical development, and sales and marketing. The agreement will further expand Cognizant’s long-standing relationship with the pharmaceutical major.

Under the expanded agreement, Cognizant will work with AstraZeneca’s Global Shared Services organization and implement end–to-end application maintenance services. Cognizant will provide these services by leveraging its global delivery network, talent pool and best practices. This is expected to ensure a predictable service model, reduce the overall cost of IT ownership, and deliver year-over-year efficiency improvements.

“Our strategic partnerships will enable us to streamline operations efficiency, raise standards and deliver world-class services. The selection of Cognizant will allow us to leverage their global operations to meet the needs of our business and increase our focus on our core business -- to make the most meaningful difference to patient health through great medicines,” commented Richard Williams, Global CIO at AstraZeneca.

Océ, an international leader in digital document management, has outsourced the IT support for its European sales companies to Atos Origin in a new seven year agreement. Under the contract terms 65 Océ staff will transfer to Atos Origin but another 20 jobs will be lost at the company.

Atos Origin will be responsible for the management of over 6,000 workplaces and all local applications in Océ’s sales companies across Europe. Other services that Atos Origin will provide include network, server and LAN management, and the management of Océ’s telephone network in Europe.

Effective 1 November 2008, Atos Origin will contribute significantly to Océ’s transition to a central European IT organisation, which will make it easier and less expensive to provide support to its operating companies and result in greater flexibility at lower cost.

“Outsourcing the IT support for our European sales companies helps us improve our operational processes. The move is part of our previously announced cost savings program, in which 950 job positions are being eliminated. In so doing we will realize € 130 million in savings in 2008 and 2009,” said Jan Dix, member of the Océ Board of Executive Directors, responsible for IT.

Financial services institutions must focus on IT innovation for radical change or hibernate to minimise cost and prepare for later action to survive the economic downturn, according to analyst house, Gartner. Organisations that choose the middle ground risk wasting their IT budget on incremental modernisation for little gain.

“Far from being fast followers, companies in-between the two options will be ditherers or laggards who waste their IT budget on incremental modernisation, which will have little or no consequence for their business,” said Alistair Newton, research vice president at Gartner.

Mr Newton provided an outlook on how financial services organisations can innovate during Gartner Symposium/ITxpo 2008, which is taking place in Cannes through November 3-7.

Organisations that hibernate are making a conscious decision to prepare for survival by avoiding IT change until absolutely necessary. They take a short- to medium-term approach, keeping their systems running for the absolute minimum cost while building up a war-chest of savings for later use on , smart, innovative activities as and when market conditions improve.

Gartner defines companies that innovate as at the leading edge of technology and embrace the big bang approach. They develop accurate cost-benefit models that link IT changes to business metrics so that they can quantify benefits and justify the radical transformations they encourage.

Mr Newton added: “Financial Services companies need to continually assess the external market, especially in today’s current turbulent market. Many new competitors – including non-banks looking to enter the financial services market - see the confusion and uncertainty generated by the current problems as the ideal opportunity to attack the banks and steal their customers. Banks need to be aware of this threat and adopt the appropriate response, taking into account their own capabilities and desires to defend their customers from acquisitive aggressors.”

Mr Newton outlined four examples of how companies can embed innovation in their corporate culture and agenda:

o Re-design branches to sell and advise – Banks must re-learn how to engage customers after pushing many away from branches through telephone and internet banking. With the help of branch automation and solid multi-channel integration banks can engage customers for transactions that add value to the relationship and make the purchase of new products and services streamlined.

Extreme but not complex innovation – Use technology to deliver a new level of personalisation for the customer. For example, one Spanish bank allows its customers to calculate exactly how much the bank profits from their custom and enables them to donate a portion of those profits to a designated charity. In India, another bank provides easy access to a ‘Do Not Call’ register on the front page of its internet banking home page.

Treat customers as innovators via social networks – Customers can answer most of what organisations want to know about them, whether it’s where they shop, how they feel and what and when they want to purchase. Some new financial services entrants such as the social networking start-ups, are trying to leverage customers more effectively using this technology and customers’ increasing acceptance and use of it. The next innovation step will be to bridge the gap between pure social networks and financial social networks (FSNs). FSNs are leveraging social networks to initiate a new form of financial transaction, allowing members to not only share information but to actually start lending and borrowing to each other, cutting out the middle man – in this case the bank.

Innovation in payments – Financial services companies are gradually recognising the role they need to take to transform their approach to payments if they are to maintain a payments franchise, as well as the role that payments can play in their customer propositions. Some of the innovations around payments are focused at the payment applications themselves and result in the deployment of multi-application cards and the use of loyalty applications. However, many innovations in payments will be invisible to customers, focusing instead on the more effective use of payment data and the re-architecting of bank payment infrastructures to support the deployment of organisation-wide payment hubs

CSC has revealed plans to open a new IT services delivery centre in Tianjin, China, to better serve existing multinational and local customers and increase CSC’s presence in the region. The announcement was made during a ceremonial event involving CSC Chairman, President and Chief Executive Officer Michael W. Laphen, local CSC executives and senior Chinese officials at the Tianjin Guest House.

The new centre, which will be located in the Tianjin Airport Industrial Park, will open in early spring 2009. It will initially house approximately 200 employees. The company anticipates that number will grow to 500 within three years. CSC will begin delivering services from a temporary location in the same area starting Nov. 1, 2008.

The company also plans to construct a data centre facility in or near Tianjin to address global demand for technology hosting and managed services within the region. The efficient and cost-effective modular design will allow CSC to meet customer needs for several years and grow in 200-square-meter increments as required. Construction of the data centre is scheduled for completion in mid-2010.

“We are pleased to announce the establishment of our new China Delivery Center,” commented Laphen. “Strengthening our global delivery framework and expanding our presence in Asia are key elements of our multi-year growth strategy. China is an important location for us, and we’re committed to developing and expanding our capabilities here. We look forward to our grand opening early next year and to establishing Tianjin as a fully operational center in our World Sourcing Services global network.”