Industry news

  • 23 May 2008 12:00 AM | Anonymous
    Apple's iPhone has reignited the debate over consumerisation - when new technologies are introduced into the consumer market and then brought into the enterprise market - with employees determined to integrate their personal devices with their enterprise applications. However, IT managers are reluctant to take on the responsibility of managing these devices.

    This is according to a new report by Datamonitor. The report Enterprise Mobility: Trend Analysis to 2012, predicts global enterprise expenditure on mobile devices will grow from $6 billion in 2008 to an estimated $17 billion by 2012, which highlights the need for IT managers to begin to implement mobile device policies as ever more enterprises look to expand their mobile workforces. "Enterprises are fighting a losing battle against employees when it comes to mobile devices and they should consider supporting a limited selection of devices rather than banning them outright", says Daniel Okubo, technology analyst with Datamonitor and the report's author. "Allowing a range of the most popular devices will improve employee satisfaction and encourage more of them to embrace mobile devices and improve their productivity when away from the office." Enterprises are understandably concerned about ensuring the security of their data. In a survey conducted by Datamonitor to establish issues that are currently preventing enterprises from investing in mobility solutions, the majority of the 467 respondents rated security as the greatest barrier to adoption of mobility solutions. Traditionally enterprises have allocated devices, such as the Blackberry, to employees to enable them to check their email and be responsive when they are away from the office. However, as other mobile devices like the iPhone are increasingly popular among end users, enterprises are finding that employees want to be able to integrate their personal device with their corporate email account and other applications. For many people their mobile device is a personal thing which they want to customise and keep on their person. They do not want one device for personal use and an IT issued device for work. So far very few IT departments have yielded to these requests and are refusing to be responsible for managing such a wide variety of mobile devices. However, the iPhone has set a new standard for device usability and the trend of consumerisation is going to continue. "There is an element of fear of the unknown," says Okubo. "Enterprises question how security will be managed and whether mobility technologies will fit into their current IT infrastructure. Technology vendors have a role to play by properly addressing enterprise pain points." The key issue is that regardless of device, IT managers need to ensure they have a clear policy on mobile devices and at least the basic security capabilities to lock devices remotely, wipe them back to their factory setting and block certain applications being loaded. Employees must be made aware that it is important to report lost or stolen devices immediately, and they should not use their mobile devices to transfer sensitive company data. Carriers such as Vodafone have started realising the problems that many enterprises face in managing devices and have started offering hosted device management solutions. This means that if an employee loses their phone they can call their operator and they will wipe or lock it. Similarly if their phone is broken they can contact their operator who can remotely diagnose and fix their device and install updates. IT managers should ensure they have these capabilities either through traditional security vendors such as Sybase or for smaller enterprises, perhaps a hosted solution from a carrier is more efficient. Okubo concludes: "As more enterprises look to expand their mobile workforces and equip their employees with mobile devices, the issue of device management is going to become increasingly important. The popularity of mobile devices in the consumer markets is forcing enterprises to consider how best to manage these devices in the workplace and they need to ensure they have clear policies in place to manage employee expectations."

  • 23 May 2008 12:00 AM | Anonymous

    CSC has announced its fourth quarter results. Revenues were $4.48 billion, up 11% (or 7% on a constant currency basis). Its fourth quarter EBIT margin was 9.2%, compared to 9.5% in the same quarter last year. CSC signed major contracts worth $2.5 billion in the quarter, which took its total for FY08 to $13.3 billion.

    Ovum analyst Phil Codling said: "This was a solid financial performance from CSC to round off a solid year. For FY08 as a whole, the revenue growth metrics were the same as for the quarter (i.e. 11% topline growth, 7% in constant currency). However, if we take out the c$500 million that CSC's acquisitions contributed to FY08 revenues, organic growth looks more like four percent. That is, nonetheless, an improvement on the flat performance we saw in FY07, a fact that reflects contract revenue timings and better execution from CSC, rather than any pick-up in the market more generally.

    "CSC's deal signing performance raises some question marks, however. The sum of $13.3 billion in total contract value for the year is down on the $16.9 billion bagged in FY07. Bear in mind that $11.2 billion of the FY08 signings came from the public sector, which means just $2.1 billion came from CSC's global commercial interests. CSC says some signings have slipped into FY09 and reports a reasonable start to the year, but the low level of major commercial signings is undoubtedly a weakness the company needs to address.

    "In attempting to do this, it faces a tough market environment with few new opportunities for the kinds of big wins that have traditionally underpinned CSC's outsourcing business. That said, a number of developments at CSC should give the company a chance of improving its position. Not least, its acquisition of Covansys last year means it now has a 15,000-strong workforce in India, a vital resource for competing effectively in the commercial sector in both North America and Europe. Secondly, under its 'Project Accelerate' strategy, the company has begun to align itself under targeted vertical markets which, in the private sector, should give it a better focus in financial services and manufacturing in particular. Finally, CSC is also focusing attention on what it terms 'mid-sized' deals (i.e. those typically $50-350 million in value) and appears to be gaining some traction here as the outsourcing market continues to fragment.

    "There is also a positive sign in the fourth quarter numbers that CSC can do better in the commercial sector. Global commercial revenues actually counterbalanced a flatter quarterly performance in the federal sector with an impressive 16% top-line growth (or 11% in constant currency) to $3.0 billion. CSC's improved and expanded consulting and projects capability accounts for much of this growth, not least in Europe (where the company's performance has remained significantly better than in FY07).

    "Overall, CSC is right to be aiming a little higher in the coming year (with a projection of 5-7% organic growth), particularly as CEO Mike Laphen appears to think he can capitalise on a likely wobble at major competitor EDS as it undergoes its integration with HP. (Whether such a wobble occurs is of course in the hands of EDS, HP, their partners and their customers, not CSC, but we acknowledge that it's a possibility.) The last two years have seen CSC put some key strategic pieces in place to improve its performance. Having restructured and refocused the business, it's now time to show that CSC really can accelerate. And in a competitive landscape that is about to be shaken up by the merger of HP and EDS, CSC needs to make it clear that it provides customers with a long-term alternative to its much larger competitors."

  • 22 May 2008 12:00 AM | Anonymous

    PizzaExpress, the popular Italian restaurant chain, has signed a contract with enterprise software provider Alphameric to implement its web-based ERP software, Caterwide.

    The system will be rolled out across 335 UK restaurant locations in August 2008. According to Alphameric, the project will see features such as web-based ordering and stock control integrated with application modules such as cash control and advanced business intelligence offered by Caterwide.

    The order module offers transaction processing features such as ordering, supplier confirmation, recommended substitution, delivery confirmation, short delivery, returns and wastage control. The feature enables clients to eliminate the need to re-key information at every outlet, supplier or the head office.

    John Sullivan, director of group IT for Gondola, PizzaExpress’ parent company, said: "Having conducted an extensive review of the marketplace we selected Alphameric based on the strength and depth of its products, level of services and ability to deliver a smooth deployment of its web based software, tilling and hardware to our PizzaExpress restaurants."

  • 21 May 2008 12:00 AM | Anonymous
    The increase of workstations in Polish call centres between 2005 and 2006 was at the level of 23.2%, and between 2006 and 2007 at 35.7%. This means that the call centre market is now increasing nearly 6.5 times faster than GDP in the country, according to research by callcentre consultancy MasterPlan.

    The increase is clear evidence that the call centre industry in Poland is developing fast, despite the moderate level of foreign investment. Favorable factors include: the dynamic development of e-business in Poland, sales development in direct systems (communication, insurance), the increased development of services targeted at so called 'time poor' people – as well as the continual decrease of the cost of telephone connections, says the report. • A PDF of the full report is available in our Whitepapers section.

  • 21 May 2008 12:00 AM | Anonymous

    BT Ireland has launched a new remote IT management service, BT Innovate, which caters for IT management in the SME space. Managing director of BT business, Liam O’Brien, says the launch is the result of five years of tactical acquisitions in the space and is aimed at offering smaller businesses cost-effective resilience.

  • 21 May 2008 12:00 AM | Anonymous
    A study by IT Recruitment specialist CV Screen has found that permanent IT Salaries in the UK have risen by 4.1% over the last 12 months.

    The research, which monitored over 11,000 advertised positions in the UK during Q1 2008, concluded that the average advertised salary for an IT professional in the UK is now £34,217.

    CV Screen’s Matthew Iveson commented “The continued high demand for IT professionals has continued to put upward pressure on IT salaries.” “There are certain technical skills where there is still a considerable war for talent with candidates with strong skills in areas such as .Net, C# and PHP inundated with opportunities” continued Iveson. With regards to the outlook for salaries in 2008, Iveson commented “The IT Jobs market is holding up well in spite of the wider economic problems. It is likely that as a result of the rising costs of living in the UK that more candidates will seek to move for financial reasons, thus putting further upward pressure on IT salaries.”

  • 21 May 2008 12:00 AM | Anonymous
    Hewlett-Packard has confirmed strong second-quarter results in the wake of its industry-shaking acquisition of EDS last week. The technology and services giant reported net revenues of $28.3 billion for the quarter, an increase of 11% year on year.

    HP Services revenues increased 12% year on year to $4.6 billion, with strong growth in Outsourcing (14%). 70% of the company's revenues now come from outside the US, with business growing particularly fast in Brazil, Russia, India and China.

    During the conference call, CEO Mark Hurd batted aside industry concerns about the complexity of turning the massive deal into a well-integrated and managed cultural fit and said that the EDS deal would extend HP's reach into enterprise accounts, encourage new business and bolster outsourcing margins.

    Analyst firm Ovum said: "We still have some serious questions regarding the forthcoming EDS integration, but we suspect that in the short term HP's consistent financial performance of the last year, coupled with Hurd's continued focus on cost savings, effective execution and streamlined operations, will lead many to give HP some leeway as it leads EDS down the path toward 'the HP way'.”

  • 21 May 2008 12:00 AM | Anonymous

    Public sector bodies are facing a number of critical barriers in seeking to reap the benefits of shared service initiatives, according to a report published by law firm Browne Jacobson.

    These include a lack of available resources, workforce opposition and risk-averse organisational cultures.

    The Shared Services Survey 08 is the result of research carried out among 178 senior public sector managers in the health, local authority, social care, education and fire service sectors.

    The research found that the primary barrier to implementing shared services, as identified by public sector managers, is a lack of adequate resources. Two thirds of public sector managers (65%) were concerned about a lack of financial resources, while 59% identified insufficient manpower. Resource challenges were particularly evident within the social care and education sectors, where 85% and 71% of managers expressed concern over financial and human resources respectively.

    Dominic Swift, head of the Shared Services team at Browne Jacobson, said: “Having the necessary financial and human resources in place is a vital component if the full potential of shared services is to be realised.”

    When asked to define shared services, the vast majority of respondents talked about ‘sharing, collaboration and the pooling of resources’. Surprisingly only one in four public sector managers (26%) referred to cost savings and end benefits.

    Swift says: “Government is guiding the public sector to drive significant cost efficiencies while improving public services. Yet only a small minority of managers list these among the aims of the shared services agenda.

    “This raises an interesting question: is it widely assumed that shared services will mean greater efficiency and translate into significant cost savings or have public sector managers not fully engaged with the government’s ambitions to drive efficiencies through shared services projects?”

    When quizzed on who they believe is the driving force behind shared services, public sector managers principally identified senior management and central government. Over three quarters (77%) pointed to senior management, and over half (52%) Whitehall civil servants.

    Frontline workers were cited by only 13% of managers – and customers by just a tenth (10%).

    Swift says: “The momentum behind shared services is being generated internally – and from the top. It is critical that front line staff are equally engaged in the process right from the beginning. Managers need to consult with staff and customers in a consistent and coordinated way, consider the feedback received and decide together how to address any major concerns.”

    The report also identifies a series of cultural issues, including internal opposition, risk-averseness and a lack of trust between partner organisations.

    According to public sector managers less than a quarter (23%) of the workforce are active supporters of shared projects, while over a third (36%) actually oppose them. Opposition levels reach some 40% among fire services.

    Over one third of public sector managers cite a lack of trust as a key challenge to implementing shared services. Concerns over partner organisations giving priority to their own issues, and a lack of authority over partner workforces, are the two principle barriers to establishing trust identified by the study.

    Swift continues: “Clear consultation and communication with employees, unions and local representatives is essential if public bodies are to overcome cultural hurdles and internal opposition, and develop trusting partnerships.”

    Close to half (41%) of managers identified the risk-averse nature of their organisations as a significant challenge to delivering shared services.

    Ongoing liabilities and high exit costs are paramount among the risks keeping public sector managers awake at night. Close to three quarters (71%) cited these as key.

    Other major risks identified are partners withdrawing from shared arrangements (cited by 66% of public sector managers); non-compliance with statutory procurement processes (61%); and inadequate consultation with staff (55%).

    “Public sector managers are clearly concerned about a range of risks and barriers inherent in sharing operations with an external organisation," says Swift.

    “Managers will undoubtedly need to undertake a thorough profile to identify and assess any potential risks – including financial, personnel, regulatory, compliance, data privacy and intellectual property.

    “They should also ensure that all the partners are clear about their responsibilities and obligations and put in place the necessary legal and governance structures before implementation.”

    • A PDF of the full report is available in our Whitepapers section.

  • 21 May 2008 12:00 AM | Anonymous
    The rise of legal process outsourcing (LPO) may have a significant impact on the numbers of junior lawyers in the UK, says one LPO specialist, and 2008 will be the tipping point.

    Although LPO is in its infancy with a total industry population of perhaps 7,500 people, many legal functions. such as document drafting, analytics, and research are now being unbundled, commoditised and outsourced to India, along with locations such as South Africa and the Philippines. This will undoubtedly have an impact on the lives of people studying law in the UK, says Mark Ross, director of LPO specialist LawScribe.

    Ross believes (unsurprisingly) that deregulation within legal services presents a great opportunity for the Indian market – from where the English lawyer's Los Angeles-based company draws its pool of talent.

    One of the reasons for the law being one of the last industries to use offshore services is that large legal practices traditionally make money by “leveraging out their junior associates”, he says. However, now that the Indian legal sector is being liberalised and opened up to foreign law firms, all that is set to change.

    In India, 70.000 lawyers qualify annually – that's double the number within the UK – and the economics of labour arbitrage within a traditionally expensive sector (especially in a downturn) will become attractive for many types of company. Fixed costs are are boon for any organisation grappling with its balance sheet, and LPO certainly promises more predictable pricing – on the surface at least.

    However, the very nature of offshoring legal operations surely carries with it a whole range of additional elements, such as time, language, culture and distance (none of which have an obvious field in a spreadsheet), and that's not even to mention currency fluctuations.

    Nevertheless, the UK may be the key. The US legal system is “hooked on the hourly rate”, says Ross, whereas the UK is more flexible, with fixed quotes becoming commonplace. That means that UK firms are more likely to look for ways of improving their margin.

    BPO organisations are already declaring their intention to join the large accounting firms in dipping their toes into the LPO market, and India is set to be the major player. Infosys and Wipro are commencing LPO operations, and evidence is emerging of consolidation among pureplay LPO practices.

    Now it is possible for law firms to be publicly listed and their stocks traded, shareholder value and a private equity mentality come into play, and that inevitably means downward pressure on costs.

    2008 will be “a tipping point year”, says Ross as higher value work begins to move offshore. Soon, he claims, it will be attractive for law firms to acknowledge offshore work in their client portfolios, and this, in turn, will become part of a client's reasonable expectation.

    Of course, the barriers are significant: the law is a nuanced, subtle and culturally charged sector, and local knowledge is at a premium – especially in the US, where state and federal laws are complex and sometimes contradictory.

    Those 70.000 lawyers qualifying in India each year may have a good grounding in common law, but applying those skills in terms of local knowledge is a major challenge. Protectionism is rife, particularly in the US, and there are inevitably issues surrounding data confidentiality and regulation.

    However, Ross counters that the huge scale of litigation in the US – you could fit the value of the rest of the world's legal market several times into that of the US – means that firms are looking further afield than the proverbial 'lawyer in the basement'.

    Industry self regulation will emerge, says Ross, and companies are beginning to offer in-house training and qualifications for Indian lawyers training in the UK.

    The closer cultural fit with India means that the LPO market may find its most fertile ground in this country – assuming of course, that deregulation doesn't see the rise of 'Tesco Law' before offshore providers get a look in.

  • 21 May 2008 12:00 AM | Anonymous
    We may still be some way from the heady days of 2000 which saw merger and acquisition levels in the telecoms sector peak globally at not far short of €500 billion, but the market is again seeing renewed levels of activity. According to figures from Thomson Financial the market emerged from a trough in 2004 of €36 billion to levels of more than €150 billion in 2005 and 2006.

    Analysys Research’s Teresa Cottam comments: “M&A levels in the global sector were reported by Reuters at around €53 billion, but this figure hides a high level of transactions. We’re seeing significant consolidation of smaller players – particularly in high-growth markets – as well as telcos buying into new markets. An example of the first trend would be China VoIP buying Hangzhou Zhongfang; on the other hand you have KPN acquiring Getronics, which is part of a trend for telcos to strengthen their IT services portfolio for business customers. On the supply side consolidation continues to be significant and ongoing, with larger players absorbing technology-based start-ups to reinvigorate their product sets, or merging with rivals to create real scale and breadth of operation.”

    And while combining businesses to increase geographical coverage or to extend into new domains might make commercial sense, consolidating the businesses effectively can be a significant challenge.

    “A traditional IT objective in telecom M&A,” notes M&A expert Peter Sokoloff, “has been to migrate acquired companies onto the same standardised platforms. In practice this is usually a devilish task, requiring years and many millions in costs to accomplish. Further, the integration is rarely fully completed and IT execs can expect to contend with disparate systems, and installing the band-aids necessary to get them to cooperate, for decades to come.

    "Management focus is usually driven by a desire to standardize front end systems like billing and customer care. But these, in turn, must tie into a multitude of other applications such as workflow, inventory, service activation, provisioning, and so on, each of which also taps into deeper network-level elements.

    "The objectives set by larger carriers when contemplating integration are usually to drive greater cost efficiencies. While this plays well on Wall Street, this is where the trouble always begins. When the objectives of the integration are not driven by better customer service and improved network performance, the risk increases of serious execution errors and certainly causes countless headaches for the IT crew.”

    Sokoloff cites the example of Sprint/Nextel where at the time of the $70 billion deal, Sprint predicted $12 billion of savings from reduced capex and opex.

    Says Sokoloff: “The savings were expected to be achieved as a result of expenditures of $1.2–1.8 billion over 2006 and 2007. This past December Sprint announced a $29.5 billion loss, mostly relating to goodwill write-down of the purchase price paid for Nextel. How much of this loss might be attributed to fall out from integration and conversion issues has not been made public, but several reports have cited integration issues as contributing factors. At the end of the day, IT integration after an M&A rarely creates the cost efficiencies which look so great on paper.”

    Peter is spot on in his assessment, but my question is whether this situation is acceptable. Wouldn’t it be of great interest to acquirers, business managers and shareholders if they were able to guarantee the efficiencies predicted at the point of acquisition? Shouldn’t they do more than accept these impressive-looking numbers on face value?

    For all those that are still digesting their acquisitions or who now have a new target in their sights, my recommendation is to spend time and effort scrutinising how complex IT consolidation is going to be delivered before leaping into the unknown spend.

    Also it is critical to assemble a team that spans both the business and the technologists, because your business managers are best placed to identify and prioritise where the greatest needs and benefits lie. This, in turn, frees up your IT staff to concentrate on the important job of delivering the migration.

    Next, expect that a business-driven migration will begin to show business benefits early and incrementally. You should not have to wait for a long – often unspecified – period of time wondering and hoping if and when you will see any benefits.

    Time-to-benefits should be short and ROI should be quantifiable.

    Finally, the migration method and tool you use should be flexible enough to adapt during the migration to accommodate the changing needs of the business. For example, at the beginning of the migration you might decide you would like to move your biggest customers over first, followed by all of those that select a particular new service (which can only be supported on the target application), followed by all of those that live in a particular locality, followed by a bulk load of the remainder. Many of today’s migration tools would not be able to deliver a migration in this fashion, because they don’t allow you to identify and prioritise different business data sets, but instead see a mass of undifferentiated customer records.

    If you really want to realize the commercial and operational efficiency that you know is there then the choice is yours. Don’t accept old technology or tools not built to cope with business-critical consolidation. Don’t commission custom-built solutions and then wonder why your project is so expensive or takes so long.

    There is an alternative to solutions that are high risk and slow to deliver. Instead demand that you are using proven, state-of-the-art migration technology that can easily support a flexible, fast and business-driven migration.

    Business value does not have to haemorrhage out of the organisation. Technology is now available that will stop your IT infrastructure from bleeding the value out of your acquisition and instead delivers the business value you desire.

Powered by Wild Apricot Membership Software