Industry news

Compassion fatigue was a term popular in the late 80s and 90s, in the wake of Live Aid and all its offspring – the wave of socially responsible, human-rights-centred creativity that followed it. This was swiftly followed by 'compassionate muso' fatigue, as the likes of Sting and his (recently zero rated) rainforest campaigns soon became tarnished by the impression that they were looking at a smoke-tinted world from the clean air of a limo headed fast uptown. We became suspicious of water-walking multi-millionaires such as Bono et al who appeared, at least, to be remaking the world in their own ego-sphere.

An exception has been Peter Gabriel, largely because his understanding of the transformational human potential of technology has been allied with a quiet determination to prove it, rather than be adored for it. He was inspired by his father, who had a vision for on-demand content delivered via the analog telephone in the early 1970s.

'Telephone' means 'far voice' and sometimes distant voices can be the most inspiring, if only we can find a way to hear them. Gabriel has inspired enough people to recently (and quietly) receive a Nobel prize.

Gabriel's projects have been as varied as online music delivery services OD2 and We7 on a commercial basis, and Witness, the Hub, and the Elders on a humanitarian one. The Hub is essentially a human rights YouTube, and Witness is the surrounding organisation. The Elders, meanwhile, is an international group of respected figures, including Jimmy Carter, Nelson Mandela, Desmond Tutu and others, who act as 'the elders of the global village' to address our more intractable local crises. While the latter is a flawed and romantic idea, the Elders have influence because they are people who, once again, it is hard to put down the telephone on.

Today, compassionate CEOs are the order of the day, so it was no surprise to find Gabriel sharing the Dreamforce Europe stage in London with its host, Salesforce.com CEO Marc Benioff.

Benioff's Salesforce.com Foundation is behind the '1/1/1' corporate social responsibility message – donating one percent of time, one percent of product, and one percent of equity to good causes. (They've recently added another '1' for '1 with the earth' [sic], but that may be over-cheesing the world cuisine; but then again, calling it 'OneWorld' would have inspired a writ from NetSuite).

Witness and The Hub have benefited from the Foundation's work in terms of donated equity and product, and the London Dreamforce event gave them one percent of Gabriel's time to talk about it.

In conversation with Gabriel, Benioff said: “All the wood is coming [together] behind the same arrow” in terms of technology's potential to change the world meeting people's desire for humanitarian change. Gabriel said of the mobile phone: “For the first time we have to potential to put anyone in the world in touch with anyone else, and what are we going to do with that?"

Asked how real such change could be, he added: “How can you solve a problem like all the starfish washed up the beach? Well, if you can throw one back it makes a lot of difference to that one, and then to that one, and then to that one...”

So why am I telling you all this? Because it occurs to me that the outsourcing industry in particular should be the one to take up Benioff's challenge to donate one percent (or more, much more) of employee time, corporate or personal equity, and product (or service) to causes that benefit local communities.

It's hardly a difficult message, after all.

Far more companies than governments seem interested in environmental transformation, for example, and our industry, with its global reach and deep links with emerging economies could really make a difference by pouring funds and time back into communities and humanitarian projects that need both.

I will be speaking to Benioff in the near future and will ask him to share his views with sourcingfocus.com about the specific ways in which this forum can help – not him, but to set up that kind of initiative within other companies and organisations and to make it work as an agent for change.

Wouldn't you and your company like to be involved with something like that?

• In an ironic demonstration of the risks of using hosted services, the servers hosting Peter Gabriel and the affiliated WOMAD and Real World websites were stolen from Gabriel's ISP on Monday morning.

The Hub

Witness

The Elders

Salesforce Foundation

The Bank of England has opted to ignore commercial pressure and leave interest rates unchanged at five percent in an effort to keep a lid on inflationary pressures. The European Central Bank has also left rates unchanged at 4%.

India’s outsourcing industry will provide an additional eight million jobs over the next decade as smaller cities grow in prominence, according to industry association, Nasscom.

The report, which looked at India’s top 50 cities for IT and business process outsourcing (ITO and BPO), predicts that less well-known outsourcing destinations in India will create approximately two million of these jobs.

Currently 90 per cent of the industry's workforce are based in India's top seven ITO and BPO cities but the report says this will drop to 75 per cent over the next decade as employers turn to smaller alternatives.

The seven key centres, such as Bangalore, Chennai and Hyderabad, are becoming overloaded with new graduates and employees, meaning that the industry needs to encourage smaller cities such as Amedabad, Coimbatore and Visakhapatnam to come to the fore, according to the report. But it says the government needs to begin building infrastructure and education facilities in the smaller cities to underpin this future growth.

Speaking about the rationale of the report, Mr.Som Mittal, President, NASSCOM said, “The development of only a few select set of cities has put severe pressure on the infrastructure, costs and also increased migration of resources. We see immense potential in the next set of locations if the right steps are taken now. The growth projections of the industry indicate that even the seven existing centres will see significant growth, however would need proactive planning and meticulous execution to support this growth.

The Sri Lanka Export Development Board (EDB) will launch an Export Coaching Programme for IT outsourcing companies in order to help them locate and retain customers in the EU.

The programme, to go live mid 2008, will seek to identify and benchmark strong service providers in Sri Lanka to introduce them to the European market, providing matchmaking and promotion opportunities whilst aiding European end-users in their offshore outsourcing buying decisions.

While the Sri Lankan ITO industry has shown steady growth in the last few years, according to Central Bank statistics, IT services exports total just US$182 million. The programme will encourage small to medium sized Sri Lankan IT enterprises to promote themselves to the European market and increase the prominence of the country as an ITO player.

Capgemini UK plc has won a five-year contract to provide IT services to C.Hoare & Co, the UK’s leading independent bank. The contact, starting in June 2008, will see Capgemini provide 24/7 datacentre services from a UK delivery centre.

The bank says that its contract with Capgemini will improve the cost-effectiveness of its IT support, provide access to the expertise of a global leader in technology and outsourcing and enable valuable space occupied by computer facilities at its Fleet Street headquarters to be made available for other business activities.

Alexander Hoare, chief rxecutive of C.Hoare & Co, said: "Our strength as a bank lies in our provision of first-class personal service to our clients backed by high levels of efficiency and excellent data, and we are confident that working with Capgemini will maintain and enhance the IT service which provides vital underpinning for our work."

• See News Analysis for more on Capgemini, including its latest results, announced this week.

Thomson Reuters has signed off on a contract that will see BT manage its wide area network (WAN) infrastucture for the next eight years.

BT will work to transform Thomson’s existing technology into a high-speed, IP based global infrastructure that will encompass 323 locations across 100 countries including six applications hosting data centres.

The new contract follows a 10-year deal BT signed in 2005 to transform and manage Thomson Reuters global financial services information network.

Peter Moss, MD of content, technology and operations, Thomson Reuters, said: “Thomson Reuters is absolutely committed to gathering and providing high quality information to meet the needs of our demanding markets. To do this effectively we needed to support our people with a world class, efficient and well managed internal network. Having worked with BT for a number of years now we are confident they can execute against our requirements wherever in the world they may be.”

CODA Group, the finance systems specialist, and software as a service (SaaS) tyro, salesforce.com today announced the availability of CODA 2go, the first on-demand financial system built entirely on salesforce.com’s Force.com 'platform-as a service'.

The first release delivers Opportunity to Cash functionality, enabling users to go from the 'opportunities' in Salesforce to create an invoice at the click of a button and post the transaction to their sales ledger. It is fully integrated with salesforce.com’s CRM application and aims to help companies manage business processes. The system was launched today at Dreamforce Europe, salesforce.com’s European User and Developer Conference at the Barbican Centre in London.

• Salesforce.com passed 7,000 customers and nearly 140,000 subscribers in EMEA in the first quarter of the current financial year.

Finjan Inc has announced its discovery of a server controlled by hackers (Crimeserver) containing more than 1.4 Gigabyte of business and personal data stolen from infected PCs. The data consisted of 5,388 unique log files. Both email communications and web-related data were among them.

The compromised data came from all around the world and contained information from individuals, businesses, as well as renowned organizations, including healthcare providers, said the company.

The rise of India and Asia is underlined this week by the publication of the 2008 Global Outsourcing 100 rankings, by the International Association of Outsourcing Professionals (IAOP).

The chart features 20 Indian firms, five of them being in the top ten: Infosys (ranked 3), TCS (6), Wipro (7), Genpact (9) and Tech Mahindra (10). Accenture is on the top slot and IBM comes in second.

Other Indian companies placed in the 2008 list are HCL Technology (11) Mastek (16), WNS Global Services (19), Hexaware (22), ExlService (26), 24/7 Customer (28), Cambridge (36), ITC Infotech (40), KPIT Cummins (42), Patni (46), Zensar (53), MindTree (54), Mphasis (56), Aditya Birla Minacs (62), FirstSource Solutions (73) and VCustomer (84). Good management figures strongly in Indian companies' selections.

In last year's list, there were five Indian firms in the top 10: Wipro, Infosys, Genpact, Tech Mahindra and Cambridge.

China's hiSoft Technology International broke into the top 20 this year (at 20), after steadily climbing the rankings in previous years.

The full chart rundown is as follows, complete with the reason for each selection and ranking: 1/ Accenture Customer testimonials 2/ IBM Size and growth 3/ Infosys Technologies Executive leadership 4/ Sodexo Global presence 5/ Capgemini Achievement recognition 6/ Tata Consultancy Services Employee management 7/ Wipro Technologies Employee management 8/ Hewlett-Packard Outsourcing experience 9/ Genpact Executive leadership 10/ Tech Mahindra Outsourcing experience 11/ HCL Technologies Outsourcing experience 12/ EDS Outsourcing experience 13/ ACS Balanced performance 14/ CGI Group Customer testimonials 15/ HOV Services Outsourcing experience 16/ Mastek Customer testimonials 17/ SPi Customer testimonials 18/ Colliers International Global presence 19/ WNS Global Services Achievement recognition 20/ hiSoft Technology International Employee management 21/ SITEL Balanced performance 22/ Hexaware Technologies Competency certification 23/ CSC Outsourcing experience 24/ Unisys Competency certification 25/ ARAMARK Size and growth 26/ ExlService Holdings Achievement recognition 27/ Cognizant Technology Solutions Competency certification 28/ 24/7 CUSTOMER Employee management 29/ CB Richard Ellis Global presence 30/ EMCOR Group No. of locations/centres 31/ ISS Facility Services Balanced performance 32/ Syntel Employee management 33/ Headstrong Balanced performance 34/ Sutherland Global Services Employee management 35/ Neusoft Group Achievement recognition 36/ Cambridge Solutions Size and growth 37/ EPAM Systems Outsourcing experience 38/ Inspur Balanced performance 39/ Ocwen Financial Customer testimonials 40/ ITC Infotech Competency certification 41/ Océ Business Services Customer testimonials 42/ KPIT Cummins Infosystems Competency certification 43/ Amdocs Balanced performance 44/ Vertex Balanced performance 45/ Donlen Employee management 46/ Patni Computer Systems Balanced performance 47/ Diebold Global presence 48/ NCS Competency certification 49/ Pitney Bowes Balanced performance 50/ ADP Balanced performance 51/ Outsource Partners International Achievement recognition 52/ Advanced Technology Services Achievement recognition 53/ Zensar Technologies Balanced performance 54/ MindTree Consulting Achievement recognition 55/ Johnson Controls Global presence 56/ MphasiS Competency certification 57/ Convergys Achievement recognition 58/ Cushman & Wakefield Global presence 59/ Luxoft Achievement recognition 60/ Ceridian Achievement recognition 61/ Xerox Employee management 62/ Aditya Birla Minacs Size and growth 63/ ICG Commerce Executive leadership 64/ Stream Balanced performance 65/ Comprehensive Health Services Employee management 66/ Eclipsys Executive leadership 67/ IBA Group Employee management 68/ LogicaCMG plc Outsourcing experience 69/ ExcellerateHRO Achievement recognition 70/ SNC-Lavalin Profac No. of locations/centres 71/ Cartus Employee management 72/ KPN/Getronics Outsourcing experience 73/ Firstsource Solutions Balanced performance 74/ IPT Balanced performance 75 (equal)/ Hewitt Associates Achievement recognition NCR Balanced performance 76/ Summit HR Worldwide Achievement recognition 77/ Bleum Competency certification 78/ Cross-Tab Marketing Services Customer testimonials 79/ Cybage Software pvt Outsourcing experience 80/ Beyondsoft Customer testimonials 81/ LawScribe Balanced performance 82/ MERA Networks Executive leadership 83/ Intetics Employee management 84/ vCustomer Competency certification 85/ Smart Sourcing Customer Testimonials 86/ Datrose Employee management 87/ Ci&T Software Competency certification 88/ Achievo Executive leadership 89/ IST Management Services No. of locations/centres 90/ Auriga Balanced performance 91/ QuEST Achievement recognition 92/ CompuPacific International Customer testimonials 93/ DataArt Achievement recognition 94/ Emerio GlobeSoft Pte Global presence 95/ Symphony House Berhad Achievement recognition 96/ Objectiva Software Solutions Balanced performance 97/ Freeborders Achievement recognition 98/ Hundsun Global No. of locations/centres 99/ Mindcrest Balanced performance 100/ Innodata Isogen Achievement recognition

IT and BPO services company Cognizant Technology Solutions Corporation has joined a host of outsourcing companies enjoying positive results. The company has announced record Q1 revenues, for the quarter ending March 31, 2008.

Revenues for the first quarter increased to $643.1 million, up 7.2% from $600.0 million in the fourth quarter of 2007, and up 40% from $460.3 million in the first quarter of 2007. GAAP net income was $101.9 million, or $0.34 per diluted share, compared to $75.4 million, or $0.25 per diluted share, in the first quarter of 2007. GAAP operating margin for the quarter was 17.4%.

"We are pleased with this quarter, during which we have surpassed our growth targets. The quarter's results, achieved despite the increased economic uncertainty and challenges in the financial services industry, testify to the resilience of our business model which is diversified across business segments, service offerings and geographic regions,” said Francisco D’Souza, Cognizant president and CEO. “Our healthcare, retail/manufacturing/logistics and other segments all demonstrated sequential growth of approximately 10% or greater, and Europe continued to grow well in excess of company average, growing 12% sequentially during the quarter.”

“We have adopted a more cautious view for the remainder of the year to reflect the heightened economic challenges over the past two months," he continued. "However, we believe that the current environment also presents us with opportunities to help clients in industries such as financial services, healthcare and media adapt to the structural changes that are transforming their industries. "In addition, our clients are also seeking cost rationalization solutions in order to compensate for the pressures on their businesses. The investments we’ve made in broadening our service offerings, building deep domain expertise and advanced consulting and analytics capabilities position us well to capitalize on these needs.”

Based on current visibility, the Company is now providing the following guidance: Second quarter 2008 revenue anticipated to be at least $680 million; Q2 2008 diluted EPS expected to be $0.34 to $0.35 on a GAAP basis, and $0.38 to $0.39 on a non-GAAP basis, which excludes $0.04 of estimated stock-based compensation and stock-based Indian fringe benefit tax expense. Fiscal 2008 revenue is anticipated to be approximately $2.95 billion, up approximately 38% compared to 2007.

"We continue to invest across our industries, service-areas and geographies in order to address client needs, enhance our market position, continue to grow and deliver value for shareholders," said CFO Gordon Coburn.

“While keeping these goals in mind, we plan to increase resource utilisation throughout 2008 in order to optimize efficiency and quality and help us remain flexible within the current environment. As we look ahead, we remain confident that despite near-term challenges in the economy, our strategy and execution excellence will ensure that Cognizant’s growth continues to outpace the industry.”

"Our performance is a result of the diversification of our business across multiple industries and geographies," continued D'Souza. "We continue to see demand for our services across a range of industries, geographic markets and solution offerings. We experienced strong performance in the health care sector, which grew 45% year-over-year and 10% sequentially.

"Manufacturing, retail and logistics which grew 40% year-over-year and over 12% sequentially and our other segment which includes communication, information, media and entertainment and technology business areas which grew 11% sequentially and 41% year-over-year.

"And despite turmoil in the financial markets during the quarter, our financial services sector showed growth of three percent sequentially and 37% year-over-year.

"Geographically, Europe continued the strong trend we've seen for several quarters growing 87% year-over-year and 12% sequentially and comprised 19% of our revenues, compared to 14% of our revenues in the first quarter of 2007. It is worth noting there are significant growth in Europe, five full percentage points of total company revenues over a one year period is the result of our focused efforts to increase our presence in this geography."