Industry news

  • 22 Jul 2008 12:00 AM | Anonymous

    Tyre manufacturer Michelin has signed off on a three-year contract with ITO provider, Logica for the provision of systems development and IT consulting services.

    Logica will handle IT services for the company across its Finance and Purchase Reporting Group, supply chain management, marketing and sales (CRM) across Europe and North America.

    Michelin hopes the new deal will deliver enhanced operating efficiency and more responsive, flexible information systems whilst driving cost and quality efficiency. 

    Logica will implement the deal using a blended delivery model which allocates the optimal IT resources from its global service centres.

  • 22 Jul 2008 12:00 AM | Anonymous

    Kent County Council, one of the largest local authorities in the UK, has awarded Unisys an ITO contract worth approximately £32 million.

    Under the terms of the agreement, initially lasting until late 2012, Unisys will create and manage a public information network and security service for the Council.

    The contract, signed for an initial four years, forms part of the ongoing shared services initiative that has been spreading across the public sector since late 2006. It is hoped that the new system will enable cost-effective communications and collaboration among local government agencies, while providing new information services to residents.

    The network will initially connect approximately 1,100 public sector establishments, including schools, council offices and libraries. The extra bandwidth the network provides will also mean that many primary schools’ capacity for internet access will double and there will be improved capabilities to support home, flexible and remote working within the county. The network will also be available to all public service bodies within the Kent boundaries wishing to join the alliance.

    Paul Carter, leader of Kent County Council, said: “We expect that the benefits the network will bring in terms of collaboration, governmental linkage and common shared infrastructure will in turn result in enhanced public services for the people of Kent”.

  • 20 Jul 2008 12:00 AM | Anonymous

    Banco Espírito Santo (BES), one of the major financial groups in Portugal has awarded IBM a seven-year outsourcing deal for the management of the bank's IT infrastructure.

    As part of the agreement, IBM will manage the entire BES server infrastructure in Portugal including administration, management and operation of the midrange infrastructure.

    The agreement forms part of an ongoing BES' strategy to improve its IT efficiency, as well as management processes, elevating service quality and assuring products and processes innovation.

    The deal, signed in June 2008, expands the scope of a previous contract signed in 2006.

  • 20 Jul 2008 12:00 AM | Anonymous

    South Tyneside Council has signed a 10-year outsourcing deal with BT for the provision of back-office IT services.

    The contract, estimated to be worth around £300m, covers the human resources, procurement and financial services functions of the authority. It is thought that the deal could lead to provision of similar services to other councils across the UK in the future.

    As a result of the contact 450 South Tyneside Council employees will move to the new BT local government services division.

  • 20 Jul 2008 12:00 AM | Anonymous

    Indian IT systems house HCL Technologies is to acquire the fixed assets of UK life and pensions outsourcer Liberata Financial Services for US $2 million.

    LFS manages over three million policies on behalf of clients including AXA, Barclays, Resolution, Chesnara and Save and Prosper. The company will earn revenues of about $60 million this year and has an order book of $540 million to be executed over the next few years.

    As part of this transaction, HCL will acquire four delivery centres in the UK and 800 staff. The Indian company says it will invest $24 million in the business over the next three years.

    Ranjit Narasimhan, President and CEO of HCL BPO, said: "This strategic acquisition of LFS enhances HCL's ability to become an end-to-end provider of business process outsourcing services in the financial services space."

  • 18 Jul 2008 12:00 AM | Anonymous

    Barclays will move up to 1800 IT jobs offshore over the next two years to access skills and cost savings around the world.

    The bank is expected to send the work to ‘centres of excellence’ in India, Hungary and Singapore.

    700 of the jobs will be outsourced by September, with the remaining 1100 due to go by 2010. It is estimated that around 1000 existing Barclays IT jobs will stay in the UK at centres in London and Cheshire.

    Barclays says it needs "centrally-managed technologies in centres of excellence in key locations around the world" in order to become a fully global bank.

    "These changes are about putting in place the technology and systems to support Barclays in achieving its ambitions," says a statement.

  • 18 Jul 2008 12:00 AM | Anonymous

    Financial services provider, MGM Advantage has awarded a £1m managed services contract to ADA Technology Services, an ITO supplier.

    The agreement covers a comprehensive range of strategic technology solutions including disaster recovery, data communications and support services.

    ADA has worked with MGM Advantage for several years and this latest contract will consolidate and enhance the broad range of business solutions offered by ADA into a single master service agreement.

  • 18 Jul 2008 12:00 AM | Anonymous

    Convergys has announced a planned merger with Intervoice, a leader in the CRM, software-based interactive voice response, contact centre and mobile messaging technology and applications markets.

    The deal, worth an estimated $335 million in cash, represents a premium of 24 percent to Intervoice’s closing stock price on July 15, 2008. Convergys expects the acquisition to be complete by the start of 2009.

  • 18 Jul 2008 12:00 AM | Anonymous

    Companies are responding to the effects of a tough economy by expanding their use of existing outsourcing agreements and awarding new contracts, according to the latest market data from TPI, the sourcing advisory firm.

    TPI data reveals that 282 outsourcing contracts totaling over €39 billion have been signed so far this year – the strongest half year performance in 10 years. This represents an increase of 24 percent on the total value of contracts signed at this point last year. Demand for outsourcing is being driven by companies looking to cut expenditure and deliver variability in costs in the current economic climate. Corporate strategies that were growth-driven during more prosperous times are becoming profitability-driven in response to the economic challenges.

    EMEA leads the way

    Growth in the outsourcing market is taking place predominantly in Europe, Middle East and Africa region (EMEA). TPI data shows that the EMEA represents 61.5 percent of the outsourcing market to date in 2008 compared with 51 percent a year ago. So far this year. 126 contracts totaling €25.5 billion have been signed – up 58 percent on the value signed at this point last year.

    Duncan Aitchison, partner and president, TPI EMEA comments, “European companies are expressing their concerns regarding the softening business climate by taking steps to reduce operating costs, and restructure the nature of their business-support functions to have a more variable cost profile. They are doing this to gain the benefits of near-term cost savings, but also to position themselves to respond more effectively when the economy strengthens and growth is once again at the top of the agenda.

    “While I wouldn’t call today’s corporate attitude towards cost-reduction ‘desperate’, there is certainly a tone of urgency in play.”

    Reflecting the increasing adoption of outsourcing by large European corporations, 10 of the 13 mega deals (contracts valued at €800 million or greater) signed so far this year were in EMEA. The average value of a contract in EMEA is growing in contrast to declining contract values in the US and Asia Pacific. This growth in contract values in EMEA is being fueled by this rise in mega deals.

    What does the future hold?

    TPI’s data shows unprecedented market momentum in terms of new outsourcing contract awards – the best sequential nine months in the history of outsourcing. To date in 2008, 237 new scope outsourcing contracts have been signed globally totaling €32.6 billion – an increase in total contract value of over 25 percent from 214 contracts totaling €26 billion a year ago.

    Considering this strong start to the year, TPI estimates that global annualised revenue from outsourcing contracts will grow by around 10% to over €70 billion by the close of the year. This would surpass the €64 billion in 2007 and 2006.

    “This surge in new scope outsourcing contracts indicates healthy market demand and underlines the fundamental momentum in demand for outsourcing,” explains Duncan Aitchison. “We could well see a record sum for the total value of outsourcing contracts signed in 2008. While third quarters are traditionally the softest for outsourcing contracts, we see little to disrupt the current momentum.”

  • 17 Jul 2008 12:00 AM | Anonymous
    Tata Consultancy Services (TCS) has reported a massive drop in net income growth in the first quarter of its financial year: Q1 2008 net income was up just two percent, at $296 million, against Q1 2007's figure of 55 percent growth. However, revenues were up 21 percent year on year at $1.5 billion, and margins remained steady.

    The reason for the collapse in income growth was a sudden fall of the value of the rupee: the company had hedged that the currency's value would continue to rise against the dollar as the downturn hit. Instead, the value of the rupee has fallen sharply in recent weeks, leading to related losses of some $18 million.

    "We have been able to respond to the challenging macro environment and drive growth in the business under tough operating conditions and manage costs," said S Ramadorai, TCS chief executive and managing director of TCS.

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