Industry news

Tata Consultancy Services (TCS), the leading ITO and BPO provider, has won a £100 million contract to provide global IT applications services to NXP Semiconductors B.V, a top 10 semiconductor company and offshoot of Philips.

The five year contract will see TCS provide consulting services as well as application management, development and support services across NXP’s supply chain operations. The company will also support NXP’s global technology infrastructure covering ERP, CRM applications in addition to the company’s portal-based applications.

Through the deal TCS aims to consolidate and solidify NXP’s complex application portfolio whilst delivering considerable operational cost savings. Its R&D department will also be drafted in to drive application innovation which NXP hopes will deliver competitive advantage across all stages of the product cycle.

Louis Luijten, Senior Vice President and Chief Information Officer, NXP said: “The engagement with TCS reflects NXP’s commitment to optimizing our processes and driving business value from all aspects of our operations.”

Delivery of the services will be implemented using TCS’s global delivery model from centres in India, Asia and the US. The contract will be coordinated by a local ‘High Tech Centre of Excellence’ based in Eindhoven.

Recent headlines regarding the DVLA and the Child Benefit agency have highlighted how data loss as a result of negligence can springboard an organisation into the headlines for all the wrong reasons. With data controls set to get stricter, those companies looking at outsourcing data banks need to be aware of both the legal requirements, and the associated risks. Michael Porter, Director of commercial and contract management consultancy Blake Newport explains…

Legally within the UK there is still very little control regarding how data is held or outsourced, and common law has no recognition of data privacy. This has ultimately led to the creation of the Data Protection Act. But whilst the Act sets out eight principles by which those organisations holding personal data should abide, it is generally seen as guidance only with penalties for its breach historically difficult to quantify in court.

Those organisations that see this lack of legislation as a free reign on data management however should think again. If recent recommendations by the House of Commons Justice Committee go through and negligent data loss becomes a criminal offence, the issues surronding corporate responsibility for the protection of data will only become more pressing. Couple this with the fact that many UK businesses currently outsource to countries where data privacy law is applicable and we have a significant issue on our hands.

Lets take a look at Germany for example. Here data can only be held for a single specific use, for which full permission is needed from the originator. Once the data has been used for the reason it was obtained, it must not be passed on, either externally or to other internal departments. UK companies outsourcing abroad need to be comply with these laws or face possible prosecution.

Regardless of the legislation, stringent controls on the outsourcing of data make good business sense as aside from the obvious public relations issues there are also many operational risks associated with outsourcing data management, with the misplacement of critical information potentially resulting in significant delays and costs being incurred.

So what can be done?

The integrity and security of those companies that you may outsource to should be of key concern and if sensitive data is to be processed or transferred offshore, a compliance mechanism to deal with data protection will be required.

Whether outsourcing internationally or nationally, effective contract management presents the legal mechanism by which organisations can ensure full control over the data that is being outsourced. By utilising clauses within a contract to stipulate how information can be used and stored, your business can ultimately gain more control and ensure that damages can be sought if the contract is breached.

And whilst the rules surrounding the outsourcing of data are foggy at best, there are still some simple questions that organisations can pose namely:

 Is the data being sent to the company going to be held in a safe, secure and appropriate manner?

 Will the data only be used in the manner for which it is being held?

 Does the outsourced company have appropriate security processes in place such as high levels of encryption or email policy to ensure that employees cannot transfer data out of the organisation?

Clear commercial and contract management will ensure that the outsourced company can answer positively to the above questions. But if in doubt ask an expert and follow the guidance laid out in the Data Protection Act. After all ‘best practice’ working only creates better business efficiencies, minimising risks and maximising profits. What more motivation do you need?

There is a secret to successfully distributed Agile development, and it has nothing to do with AJAX, Java, .NET or perfect hours. In cases where English is a second (or third) language and employees have different cultural morals and religious affiliations, successful communication is the key issue. Challenges, such as working over multiple time zones, or simply working with a new colleague for the first time, can also present communication problems. The keys to successful communication are cultural awareness and team building.

Cultural Differences and how to Anticipate Friction

Distributed Agile projects with multinational team locations are becoming the norm. The primarily reason for this is cost reduction, but skill set is another driver. Each geographic region has its own cultural subtleties that must be taken into consideration. For example, in the Indian and Chinese cultures, it is considered impolite to say no or to disagree with someone in too strong a manner, while in the Russian and Baltic cultures, voicing strong opinions are expected. As you can imagine, both reactions can cause friction if a team is not used to these cultural nuances.

The manner in which team members feel comfortable communicating is another common source of friction, often English is the second or third language for a team member. Perhaps their writing skills are more advanced than their verbal, or vise versa. Typically, Baltic and Indian cultures feel more adept with writing than they do with speaking English. Conversely, the French and Latin American cultures are often more comfortable with the spoken English word.

Another issue to be aware of when working with diverse teams is that each culture has its own work ethic, holiday schedule and accepted office behaviours. These seemingly harmless differences can lead to a lot of friction. For example, the French believe strongly in a 35-hour working week, while Americans often work more than 50 hours each week. Holidays are another planning issue that needs attention. Each country has its own set of national holidays, and different religions observe different Holy days. Finally, in regards to all planning, it is always important to be aware of daylight savings issues for the different locations.

Fortunately, these are all fairly consistent, easy to decipher differences. But, there are other issues that do not stand-out like these. Differing cultures have varying senses of urgency, such as the British and French. Their cultural norm varies greatly from that in China, India, Russia and the Baltic nations. What is considered appropriate conversation and behavior can also vary widely between geographies.

Team Building from the Start to Avoid Animosity

Much of the animosity and friction that can grow between members in any team, whether globally dispersed or crammed into one small office, can be avoided through strong, repetitive team building activities.

It is strongly recommended to arrange face-to-face meetings at the start of any release plan that involves, multi-site distributed teams. It is also best, if possible, to have periodic follow-up meetings after the launch. It is true that planning can be done over the phone using collaboration tools such as WebEx or NetMeeting. However, even though the output may look the same, there is a distinct lack of chemistry and familiarity within teams that never meet face-to-face and rely solely on collaboration technologies. Developers are people, and they won’t bond with programs – personal rapport goes a long way. Face-to-face meetings are ideal for hammering out how to communicate within the team.

The travel costs involved in setting up these face-to-face meetings can easily run into thousands, and management will almost always refuse at first. Simply remind them of what the cost could be if the development team delivers the wrong functionality or the accrued cost of developer run-rate if they have to start over, which often happens when a team doesn’t meet regularly. In this case, the financial impact could be much greater than the cost of a few flights! If you have a team of developers doing the "wrong" thing for a period of time and then getting into a blame situation with a product owner and vice versa, the cost can often be the entire sprint or even the project.

Plan to have team-wide meetings every week via audio or video conference where every sub-team reports on what they’ve done, issues they’re facing and something non-work related to share. The more conversation the team members can have that does not involve work, the closer they will grow to each other. Team member familiarity goes a long way to relieving tension, and letting each others know you have a sense of humour will help during the inevitable stressful moments. Be considerate of the team’s time zone issues too. Rotate meetings to share the burden of off-hours meetings so that the same geographic region isn’t always inconvenienced with a late or early meeting.

Distributed Agile success is dependent on developing good communication skills between team members. Keeping an open mind, watching out for cultural differences and working to build kinship beyond the project at hand can be the difference between failure or success. This is not a hard process, but it does take effort from everyone. And, the likelihood is if your company has decided to try distributed Agile through outsourcing or its own distributed locations, you’ll end up working with these coworkers on further project. Working to improve inter-cultural communication is an important investment that will continue to benefit your company throughout many future endeavors.

About the Author

Clive Jenkins currently serves as Delivery and Assurance Manager for Exigen Services. A certified Prince2 Practitioner and Product Owner, he has been working with distributed Agile teams for more than four years, with more than 20 years of development experience in total. Clive lives in Wiltshire, England and works in London.

The green datacentre is a myth for many companies, who either lack the skill or the will to implement green policies, despite their public support of green policies. Those are the findings of an investigation into the green datacentre, at a time when increased power consumption globally is linked to the demand for IT services.

A survey by datacentre specialist Aperture Research Institute (ARI) of more than 100 datacentre professionals has shown that organisations are unable or unwilling to meet the expectations set by their adoption of green initiatives for the datacentre. Organisations lack the tools to measure energy efficiency, lack processes to charge the business for energy use, and that many do not decommission ‘ghost’ servers that are no longer needed.

This follows an earlier ARI report published in March 2008, which discovered that 70% of organisations say they are adopting green initiatives – although 19% of those had omitted the datacentre from that programme.

In the latest ARI study, 74% of those surveyed refused to activate power saving features on devices if it would require a drop in performance. While 37% are concerned that the power/performance ratio doesn’t add up, 15% worry that they have no way to track whether the power saving setting is on or off. Nearly half (48%) of those surveyed blame the business for not using power-saving features, saying that users wouldn’t tolerate a drop in performance in the interests of saving power.

When it comes to procurement, energy efficiency and ease of disposal are the lowest priorities, rated as less significant than brand and price. 37% of datacentres have no plans to measure energy efficiency, and 76% do not charge the business for the power used by the IT it commissions. One reason for that is a lack of infrastructure for measuring power consumption.

Steve Yellen, principal of the Aperture Research Institute, said: “Although many organisations have made a commitment to cutting their environmental impact, when it comes to the datacentre, most lack the tools and processes they need if they are to deliver on that promise. The number one cause of increasing power consumption is an increase in demand for IT services, so business managers must be made accountable for the energy their applications consume. Only 24% of organisations we surveyed said the IT department charges the business for energy use. They simply don’t have the technology to be able to implement the management processes they need.”

The survey also found that decommissioning processes are not strictly followed, and “ghost servers” haunt the datacentres of 19% of organisations. Ghost servers are those servers which the business no longer needs, but which have not been switched off, and which are as a result needlessly consuming electricity, space and other limited resources.

The report comes in the wake of the recent European Outsourcing Association conference in London, where delegates said that datacentres were – in theory, at least – top of their green agenda in terms of IT services, but also voiced the opinion that innovation and education are often expected to come from their outsourcing services providers.

Less than half of HR and finance professionals in charge of payroll have any efficiency measures in place, according to research published today by ADP Employer Services.

In a week of challenging surveys, this is the latest depressing evidence that companies look for quick-fix ways of saving money (cancelled contracts, redundancies) but often ignore the entrenched areas where money is being slowly drained out of the enterprise by inefficient systems.

ADP surveyed over 750 HR and finance professionals, and found finance professionals faired worse than their HR counterparts, with only 39% measuring payroll efficiency, compared with 49% in HR. Less than one third of all respondents consider payroll expenditure (aside from staff costs) when looking to reduce costs in the business.

The research also highlighted disagreement as to where responsibility for payroll rests in the organisation: in large businesses it is more likely to fall under finance than HR (49% versus 40%), rising to 69% versus 31% in smaller companies.

Despite this reluctance to grapple with payroll inefficiencies, 63% of all organisations retain the function in house – rising to more than three-quarters of finance companies. Data control and security were cited as the main causes of the decision not to outsource.

This, of course, is the key point: nearly forty percent of IT directors have experienced data theft or leakage and see internal security as the biggest threat to the enterprise. Specialist BPO companies, whose business bedrock must be security and process expertise to survive are perhaps better placed to take the problem off CIOs hands.

While payroll might be an often overlooked area of inefficiency, it joins energy consumption as a cause of money being wasted internally because no one has the skill or the will to tackle a deeply embedded and costly problem that haemorrhages money out of the enterprise. A separate report this week finds that 37% of datacentres have no plans to measure energy efficiency, and 76% of IT professionals do not charge the business for the power used by the IT it commissions (or refuses to decommission, in the case of 'ghost servers' that are never switched off).

In a large enterprise, power consumption is directly related to IT services demand, and many of those systems remain switched on even when dormant or no longer used.

The recent European Outsourcing Association conference in central London found cancelled contracts and slashed budgets were the response to the downturn in roughly a third of delegates' companies. How many of these could save that money by tackling inefficiency on an enterprise scale, rather than hacking away at strategic investment?

More than one third (37%) of IT directors say their company has experienced data leakage or data theft in the last 12 months, and more than 80% of IT directors see internal security threats as being more significant than malicious hacks.

These are the findings of a report by Secure Computing Corporation, which uncovers rising concern about insider threats – presumably in the wake of high-profile public- and private-sector data losses in the last year. Despite the once traditional view of security threats being the domain of 'black hat' hackers, IT directors offered their widespread acknowledgement of being unprepared for Web-based attacks. Less than one in five respondents (17 per cent) feel that external threats are more dangerous.

With 37% of respondents reporting data theft or leakage in the past 12 months, internal security is at the top of IT Directors’ shopping lists when respondents were asked to rank potential future investments that included perimeter security, staff mobility and network performance.

The report found that email remains the enterprise Achilles heel, cited by 34 percent of respondents as a significant security threat. Interestingly, Voice over IP (VoIP) comes second, cited by one quarter of the directors surveyed.

The biggest budgets will be spent on strengthening internal security, with 35 percent of IT Directors identifying it as their priority planned investment. Surprisingly, considering the global downturn in the economy, 'IT asset management for cost savings' is the lowest priority.

The government's National Programme for IT initiative to computerise all patient records nationally suffered another blow as the £896 million NHS contract with Fujitsu was terminated earlier today.

Connecting for Health's talks with Fujitsu to revise contract terms in favour of greater flexibility failed. Fujitsu had held out for more money or a return to the original terms.

Fujitsu clinched the 10-year deal for installing the programme in the south of England in 2004, but renegotiation talks began in July 2007. Severance of the deal could cost the Japanese electronics company some £300 million.

The overall NHS project has been dogged by controversy, delays, overspending and security fears, along with criticism that it is fundamentally misconceived. The programme was one of the foundation stones of former prime minister Tony Blair's quest for modernity in government. In practice, this and other public-sector programmes have demonstrated that government and large-scale technology project management are rarely natural bedfellows.

A spokeswoman for NHS Connecting for Health said: "Regrettably and despite best efforts by all parties, it has not been possible to reach an agreement on the core Fujitsu contract that is acceptable to all parties. The NHS will therefore end the contract early by issuing a termination notice.”

Fujitsu is the second IT firm to leave the project. In 2006 Accenture – which was responsible for the north and north east England components of the project – walked away from parts of the programme.

Indian telco Reliance Globalcom is to pay $76.9 million for the UK's virtual network operator Vanco, which sourcingfocus.com reported recently has been in financial difficulties and had lost its founding CEO.

Reliance says that the deal is part of a strategy of increasing its share of the international telecoms market. Vanco will provide Reliance with a European enterprise arm, with an established base in the UK, France, Germany and the US.

• However, sourcingfocus.com believes that Vanco's real asset remains its detailed technical map of the world's telecoms infrastructure, which would offer a logical foundation for consultancy services, especially to the world's emerging economies.

Last week's European Outsourcing Association (EOA) conference in London provided a real insight into how the industry is thinking about itself as economic woes bed in after ten years of life on credit.

Delegates from the UK, Europe, China and the US, and from a range of companies, including media, broadcasting, finance and legal services mixed with outsourcing suppliers in interactive sessions that explored the future of the industry in Europe.

Asked if their company had suffered any negative effects from the credit crunch, over one-third (36%) said yes. A similar figure reported contract negotiations being suspended, while 39% said that budgets were being restricted and eight percent reported terminated contracts. BPO contracts were being affected the most, said 78% of delegates.

By contrast, 24% said the downturn promised greater opportunities to outsource. Sixty-four percent believed the credit crunch was a significant opportunity for the industry, most notably in terms of offshoring, while 59% predicted that global outsourcing will rise over the next five years.

First and foremost this was a European event, of course, and the view from the floor was that outsourcing is becoming an accepted strategy in formerly 'culturally opposed' countries. such as France and Germany, while many saw the possibility of brand-name services arising out of Eastern Europe.

Fifty-nine percent of delegates believed that recent EU entrants Romania and Bulgaria have become more attractive to work with since joining the community.

Asked for their thoughts on the Lisbon Strategy for making the EU the knowledge centre of the world – due to be renewed in just over a year – 32% of delegates (the largest voting bloc) said “We manage to earn a living despite the EU, not thanks to the commissioners”.

In a bear market, the Russian bear – as it so often is – was a divisive issue. Thirty-nine percent of delegates believed Russia is an important part of the European outsourcing picture, while 52% did not even consider it relevant.

Still looking East, just 17% of delegates thought that Indian providers are leaps and bonds ahead of other regions. That said, three-quarters of delegates said that Indian players will inevitably acquire European or American providers.

Talking of acquisitions, the elephant in the room was HP. Unfortunately, just 23% of the conference thought the EDS deal was good news for either HP or EDS customers.

• Apologies for my recent absence from this blog due to a dose of flu. Fully recovered, next week I shall be speaking at the Gartner outsourcing conference in London. I look forward to meeting and talking with you there.

Centro, the executive arm of the body responsible for public transport in the West Midlands, has partnered with Logica to develop the largest smartcard travel scheme outside of London.

The initial phase of the deal saw Logica develop and deliver 430,000 National Concessionary Passes for the over 60s and blind and disabled people in the West Midlands region. The system, which has now gone live, allows one in six people living in the West Midlands to use the bus anywhere in England for free.

Built upon smartcard technology, the passes can integrate with technology on many UK busses and will soon allow people to swipe on and off over 2,600 buses from over 50 depots in the region, as well as trains and trams.

Geoff Inskip, Chief Executive of Centro said: “We were delighted to appoint Logica, who provide us with the detailed knowledge and experience in transport technology and smart retailing we need to provide passengers with a smart transport system in the West Midlands.”

The cards were issued across the country as part of a Government scheme - the new English National Concessionary Transport Scheme (ENCTS). After the initial success, Centro and Logica will continue to work together to develop the remaining part of the programme which will go live during 2009.