Industry news

News reaches sourcingfocus.com that the Government has finally appointed a new CIO for the NHS, together with a new director of system delivery for the £12.7 billion National Programme for IT (NpfIT).

It has been six months since Richard Granger quit his role, after a controversial tenure that saw him lambasting suppliers and railing against what he called the “privacy fascists” who criticised the scheme's data security. Meanwhile, elements of the project slipped further and further behind schedule.

Christine Connelly, former CIO of Cadbury Schweppes and a head of IT at BP, will be CIO from September, while Martin Bellamy becomes director of programme and system delivery, and head of Connecting for Health. Bellamy's track record is in the public sector with the Department for Work and Pensions.

The newly split role makes sense organisationally, and also demonstrates yet again the Government's fondness for mixing private sector acumen with public sector tradition.

However, the challenges facing Connelly and Bellamy are extreme, and apparently escalating.

Since Granger's departure, much has changed: Fujitsu has walked away from its southern area deal after contract renegotiations stalled; some NHS Trusts have also walked or are going it alone, while others have expressed frustration at being coerced into working with preferred key suppliers.

Questions have been asked in the House, while Whitehall's Public Accounts Committee has heard tales of acrimony and dispute between client and supplier. Where elements of the scheme have gone live, some have done so successfully, while others have caused chaos and confusion.

Beyond that, morale is low; the Government's data handling culture and management have been exposed as inadequate and, at best, primitive, while economic growth is flattening out, perhaps heading towards a full-blown recession.

Clearly, the dynamic duo of Connelly and Bellamy will need to be crusaders for the cause as well as enforcers, good people managers, and sensitive negotiators.

If nothing else, this ambitious and, in many ways, ill-considered scheme has demonstrated that it, more than any other outsourcing deal, is about people, not about technology. We wish them luck!

Trinidad and Tobago award a multi-million dollar government contract to Fujitsu and Telecommunications Services of Trinidad and Tobago (TSTT). The ITO contract aims to improve the online communications facility of government services.

The network will be built on leading edge technology supplied and supported by a consortium led by TSTT and Fujitsu. Mervyn Eyre, CEO of Fujitsu in the Caribbean, commented "This is an IP-based network, similar to what supports the world wide web".

The creation of “GOVNETT” is in keeping with the Government’s commitment to having 50% of its services accessible online by 2009, with additional services being continuously added thereafter.

Ms. Arlene McComie, permanent secretary in the Ministry of Public Administration added, “This is a very significant initiative which in addition to giving the public easier access to government services, it will also enable more direct communication with agencies and in so doing make these institutions more accountable”.

Back office jobs may be under threat as Barclays is not renewing its BPO contract with Siemens, which ends this year.

Siemens has been running back office processes for Barclays since 2000, with around 500 employees based across Britain.

The bank has released a statement explaining "we do not plan on continuing to base the current activity at the Glasgow and Beeston sites in the future" and that Siemens staff have "been advised that once the activity is integrated back into Barclays, their roles will become redundant".

Barclays has hinted at a possible extension of the contract for a twelve-month period for a smoother transition process, and says it will work closely with Siemens to minimise any potential job losses.

Britvic has selected Atos Origin, the international IT services company, for a three year contract for the management of its back office systems.

Atos Origin has taken over management of the systems with immediate effect and will provide support from both the UK and its Indian delivery centres in Mumbai.

Mike Jones, CIO at Britvic said that “This new contract forms part of a broader initiative to improve and streamline our back-office functions, so that they can better help us meet our business strategies and objectives".

To a lunch meeting today with John Appleby and Colm Mulcahy, respectively chairman and CEO of Saaspoint, a company formed in 2005 to facilitate on-demand CRM implementations built on Salesforce.com.

When I first met Appleby and Mulcahy, barely one year ago at the Salesforce.com ‘Dreamforce’ event in San Francisco, the company seemed to have found its specialist niche partnering with the software as a service (SaaS) tyro as an expert go-between betwixt the vendor and its then mainly medium-sized client base.

In other words, Saaspoint was playing in that large, traditionally barren space where CIOs fear to tread, and large consultancies cannot afford to go.

Today, however, found Saaspoint a different, evolved, and more interesting proposition: the company has moved away from its sole focus on Salesforce.com and into the area of business transformation, wider SaaS consultancy, and partnership with Google.

As I discussed in a recent blog, the ‘Fortune Five Million’ of smaller enterprises that underpin the economy are almost impossible for large consultancies and services companies to sell into profitably without undermining their business models.

That leaves the playing field open for once-niche SaaS packagers, as it were, to move up the value chain and take increasing numbers of smaller enterprises with them.

Saaspoint and others have seen that opportunity and moved swiftly to grasp it, which shows how fast the SaaS market is maturing.

Indeed, Saaspoint is even debating the merits of outsourcing some aspects of its services as it nearly doubles its employee base – and in a year that has witnessed a severe downturn for most of us.

That said, there is some realpolitik at play here: Salesforce.com offerings and services are becoming increasingly commoditised, forcing its intermediary partners up the value chain – and elsewhere – to survive.

Also, they said, the past six months have seen contract signings forced to jump through a few extra hoops to keep client CFOs happy.

On the other hand, Appleby and Mulcahy claimed that most CIOs are now fully on board with SaaS (perhaps, but how many CIOs are there?), while less than one year ago the duo seemed gloomy at the prospect of CIOs’ negative interventions in SaaS implementations.

I took the opportunity to corner Appleby and Mulcahy about my current pet peeve: the baffling and inappropriate use of the term ‘cloud computing’ to describe the simple concept of on-demand software and services delivered over the Internet. How could this hope to win over the smaller, less expert business?

It won’t, they confirmed: terms like ‘cloud computing’ are invented solely to give large enterprises something to get excited about, and large consultancies something to demystify for a vast fee.

Shhh, don’t tell anyone….

After a recent stockholder meeting, EDS has agreed its proposed merger with HP. EDS will now become a wholly owned subsidiary of HP with 98% of the stockholders voting in favour of the deal.

Ron Rittenmeyer, EDS CEO, commented on the decision: “Not only does the combination of these two great companies create immediate value for our stockholders, it also enhances our ability to achieve our customers' needs with our unwavering commitment to quality and innovation”.

The transaction still requires regulatory clearance which EDS expects to come in Q3 2008.

Deutsche Post, owner of DHL, has decided not to proceed with a multibillion-dollar outsourcing deal after the cost savings it expected could not be achieved, according to Information Week.

The decision was reached after a six-month review found that the "benefits, particularly in the early years, do not outweigh the risks", according to an internal memo obtained by the publication.

The arrangements for the collapsed deal were for HP to hire 2,500 Deutsche Post employees, including those working for DHL. It also included taking over various ITO and managed service functions in Scottsdale, Ariz.; Prague, the Czech Republic; Malaysia; and other regions.

Barclays UK Retail, which employs 32,000 people in the UK, has signed a deal with recruitment process outsourcing firm Alexander Mann Solutions (AMS) to manage candidates from August 2008. Half of the AMS team will be based at Barclays’ office in Coventry and an e-recruitment system will also be implemented by Taleo, a talent management firm.

Andrew Rolfe, head of resourcing at Barclays UK Retail, comments;“We aim to provide an efficient mechanism by which to process over 100,000 applications per annum and greatly improve the ease by which talented individuals can secure a great job with us.”

American Nuclear Insurers (ANI), a liability underwriter for American nuclear facilities, has signed a managed services contract with AT&T.

Under the terms of the contract, AT&T will serve as ANI's primary data services provider delivering an e-mail gateway service web security to the company's headquarters.

AT&T will also provide ANI with network-based e-mail security and message management ensuring the integrity of e-mail messages before they enter ANI’s network.

Daniel Antion, VP of American Nuclear Insurers, commented: "Due to the nature of our business, it is critical that we have e-mail and network security measures in place, ensuring secure employee-customer communications and data backup. By implementing security services provided by AT&T, we are confident that our network will be protected from viruses or other service interruptions, resulting in better productivity and enhanced customer service".

UMass Memorial Health Care, a US-based hospital system, has awarded ACS with an ITO contract worth over $100 million,

The contract, spanning five years, will see ACS provide information systems services including the expansion of UMass Memorial's IT systems through deployment of new servers and data storage equipment. ACS will also provide networking, data systems, data center hosting, desktop, help desk, telecommunications, disaster recovery, and resource planning services.

George Brenckle, Senior VP and CIO at UMass Memorial, commented: "This new agreement will enable UMass Memorial to tackle upcoming challenges, including growing demands for storage, high availability computing, clinical information systems and the increasing service levels the technology requires".

The contract will extend an existing six-year business relationship between the companies.