Finnair selects IBM for cloud transformation

October 13th, 2015 by Rahul Jain No comments »

Finland’s national airline, Finnair, has signed a five-and-a-half-year services deal with IBM to transform its technology infrastructure into a hybrid cloud platform.Outsourcing46

The agreement also includes development of new digital services, such as mobile on-flight services.

“The basic element [in the agreement] is our datacentre services, which we want to consolidate into one environment and under one provider,” said Kari Saarikoski, CIO at Finnair. “At the same time, we want to start to take these services into the cloud to gain flexibility, cost-efficiency and the other goodies the cloud promises. We’ll start with less critical services and then move on to the more critical ones.”

At the core of this transformation is the Finnair Cloud Platform, which will be run by IBM and will enable the integration of different operational and commercial services into single environment. This is a new step for Finnair which, while favouring the software-as-a-service model, has previously used the cloud sparingly.

The agreement also includes application management and development services, as well as a new services governance model. IBM will also take on responsibility for managing Finnair’s IT provider network.

“This will take some time, but is one of our goals,” Saarikoski said. “During the past years we have taken on many new applications and providers and it takes a lot of our time to manage them all…Besides looking for cost, consolidation and management benefits, we want to move the focus of our own people more towards digitalisation, development and innovation.”

Finnair’s employees will also trial IBM’s Watson Explorer capabilities and use its cognitive skills to locate information and respond to customer queries more efficiently.

While Saarikoski notes other vendors were considered, Finnair’s long term collaboration with IBM was a factor in its selection. The airline outsourced its basic IT services and application management to IBM in 2002.

A major driver for Finnair’s move towards the hybrid cloud is its need to boost digitalisation and customer experience in the highly competitive and cost-focused airline market.

Since launching its mobile app last year, the airline’s development focus has been on new consumer-facing mobile and in-flight services. These will now be progressed further with its upcoming cloud capabilities in collaboration with IBM and other partners.

Finnair will also join the growing number of airlines that offer in-flight connectivity and plans are in place to introduce Wi-Fi to its entire Airbus fleet by the end of 2016. The roll-out will start with its new Airbus A350 airliners, which will have built-in wireless networks.

“This opens up new opportunities for services development – it’s a new platform,” said Saarikoski. “Based on what we have talked about with our colleagues, everybody is focused on the same themes: customer experience and how to increase the sales of ancillary services to our customers.”

Finnair is Finland’s largest airline, carrying more than nine million passengers a year. The financial terms of its services deal with IBM were not disclosed.


How digital transformation is disrupting IT outsourcing

October 13th, 2015 by Rahul Jain No comments »

Spreading your data around, particularly to providers without effective data management, risks violations of laws such as those governing export control, responding to discovery requests in litigation, and compliance with privacy laws.Outsourcing46

You can lose substantial value to your digital age providers by allowing them to analyze your data and resell your business insights. Watch out for clauses allowing digital age providers to use your data in aggregated form to improve their services (such as selling insights from your data).

Spreading your data around, particularly to providers without effective data management, risks violations of laws such as those governing export control, responding to discovery requests in litigation, and compliance with privacy laws.

How should businesses prepare their sourcing strategy and policies when contracting for these newer technologies?

Peterson: Businesses should start with a digital age sourcing team with roles for IT, information governance, procurement, finance, legal and the business units. Letting any one group lead [this effort] is risky. IT alone will tend to buy the hottest products, which will be risky, overpriced and not meet the business need. Finance alone will tend to buy cheap products that cost a fortune to integrate and eventually fail to deliver. The business units alone will tend buy risky, overpriced products that don’t work well for the enterprise. Information governance and legal, left alone, will reject too many digital age services because of their focus on risk not possible benefit.

Then, the business should develop a digital age sourcing model that focuses on risk and benefit. Risks should be identified, assessed, mitigated operationally and contractually, and then weighed against benefits. The digital age products might not meet requirements, but the risk may be manageable and the benefits worth pursuing.
To move at a digital age pace, [businesses can] create contracting templates that work for digital age services. Those should be in plain English, easy to use, and recognize the standardized and automated nature of digital age services.

[Customers should never] agree to “cloud terms” even if they are “market” in consumer contracts or your company has accepted them in low-risk applications and no-leverage negotiations in the past.

To prepare for integrated digital age services, [it’s also important to] amend existing contracts with current outsourcing service providers to include cloud provisions and integration responsibilities.

What can companies do about existing digital services deals that weren’t set up with this level of rigor and risk management?

Peterson: Large companies tend to have hundreds of digital age contracts. A small fraction of those were negotiated; the vast bulk were entered into by individuals or business units with little review. Many are being used for sensitive data—perhaps in violation of laws, contracts, or company policies. Consolidating those to a limited number of providers of each service under negotiated master agreements can dramatically reduce risk and increase value.

What about the ongoing governance of these digital age deals?

Peterson: Most companies are not ready to govern digital age services contracts. The traditional model for governing services contracts relies on having designated people to talk with regularly. Often, that’s not part of the digital age model. The robots will not attend the change control meetings to explain that they will break if a change is made. You’ll need to negotiate new [governance] models.


Infosys Q2 profit rises 9.8%, firm lowers FY16 dollar revenue growth forecast

October 13th, 2015 by Rahul Jain No comments »

Infosys Ltd cut its full-year revenue growth forecast in dollar terms on Monday, citing the potential adverse effects of cross-currency movements, although it reported higher-than-expected revenue for the second straight quarter.Outsourcing45

India’s second largest software services firm lowered its revenue growth forecast for the year ending 31 March 2016 to a range of 6.4-8.4% in dollar terms, from an earlier forecast of 7.2-9.2%.

The revision jolted investors. Infosys shares fell 3.88% to Rs.1,122.50 on BSE on a day the benchmark Sensex shed 0.65% to 26,904.11 points.

Infosys retained its earlier revenue growth forecast of 10-12% in constant currency terms for the fiscal year, but warned that growth in the October-December quarter may not be better than the 0.8% increase in the year-ago period.

“Our endeavour, our wish is to be (better than the year-ago period) but our visibility is that it will not be,” Vishal Sikka, who took over in August 2014 as Infosys’s first non-founder chief executive, said in an interview.

In the three months ended 30 September, Infosys posted 6% growth in revenue on top of a 4.5% increase in the June quarter. It added 82 clients in the quarter to take the total number of active clients to 1,011.

Infosys’s revenue jumped 6% sequentially to $2.39 billion.

Worryingly for the country’s $146 billion outsourcing sector, slow demand growth that Sikka referred to was on account of clients across industries holding back on technology spending— a factor that’s not limited to Infosys.

If it pans out, this could mean that Infosys’s larger rival Tata Consultancy Services Ltd (TCS)—which posted a 3.5% sequential revenue growth in the first quarter—could find it challenging to match the 12-14% year-on-year growth that industry body Nasccom has forecast for the software services sector this fiscal year.

TCS is scheduled to report its second-quarter earnings on Tuesday.

“Traditionally, Infosys is the first to actually give any trend of any industry slowdown. Since the company has said it is seeing softness in demand, this actually puts TCS under pressure,” said a Mumbai-based analyst at a domestic brokerage firm. “It remains to be seen if the company will be able to grow even at 14%.” He declined to be named.

Infosys’s new chief financial officer Ranganath D. Mavinakere said that even if the company experiences “flat growth” in the third and fourth quarters, the company will still be able to end the year with growth at the “upper end” of its 10-12% forecast in constant currency terms.

Infosys appointed Mavinakere, formerly head of strategic operations and CEO’s office, as the new chief financial officer, after Rajiv Bansal decided to quit. Bansal will be an adviser to Sikka and his team until the end of December.

For the July-September period, Infosys’s net profit improved 10% sequentially to Rs.3,398 crore and revenue jumped 17.2% to Rs.15,635 crore in rupee terms.

A Bloomberg poll of 22 analysts estimated that the company would post a net profit of Rs.3,287 crore and revenue of Rs.15,211 crore.

Infosys’s growth was led by a 6.1% improvement in the US, which accounts for more than 60% of the company’s total revenue. Revenue growth in Europe, which brings in about one-fourth of revenue, improved 8.3% in the July-September period.

The banking, financial services and insurance sector, which accounts for 33% of the company’s revenue, grew 5.2% over the three-month period; business from retail and consumer clients saw a 7.9% improvement.

“It is an excellent set of numbers, as it’s more broad-based growth, across industries and geographies,” said the second Mumbai-based analyst working at a foreign brokerage firm. He didn’t want to be named.

Operating profit margin widened 1.52 percentage points sequentially to 25.54%, on account of improving utilization rates and an added 70 basis points gains made on cross-currency movements. One basis point is 0.01%.

Since taking the helm, Sikka has been pushing the company to embrace automation and other new technologies to stay competitive amid pricing pressure for traditional IT work.

Infosys is also making its engineers adopt the user-centric approach of problem-solving called design thinking, to open new revenue streams.

“I’m very optimistic and we are already seeing the benefits (of the changes put in place),” Sikka said, after the company reported its earnings.

But some experts said that it is still early to say if Infosys under Sikka has indeed made a turnaround and it could be a “long bumpy road” ahead for the current management.

“Ever since Vishal took over the reins at Infosys, we cautioned that the road to recovery will be a bumpy one. Its Q2 results appear to underline exactly that. Sound quarterly results were clouded by a softening in the outlook,” said Thomas Reuner, managing director of IT outsourcing research at HfS Research.

“The key issue is change management, both with a set a clients and also as the company internally shifts to embracing automation as it is disrupting Infosys’s workforce as Vishal pointed out. Crucially, we have to remember that the secular macros have not changed. Vishal and his management team continue to have their work cut out.”


Gloucester City Council extends Civica IT outsourcing deal

October 9th, 2015 by Rahul Jain No comments »

The council’s outsourcing deal with Civica will not end until October 2021, as it signs a three-year extension contractOutsourcing45

Gloucester City Council has extended its IT outsourcing contract with Civica for a further three years.

The council originally signed a seven-year deal with Civica in 2011, outsourcing its revenues and benefits services. In 2014, it extended the scope of the agreement that saw operations outsourced to Civica, with plans to reform the back office, transactional and corporate support services.

Gloucester hopes the extension to October 2021 will improve services and create jobs in the city.

David Norman, cabinet member for performance and resources at the council, said the partnership has been a success so far.

“It demonstrates how a public-private partnership can help local authorities achieve savings while continuing to deliver an excellent service to the residents of Gloucester. I am pleased we will be continuing this partnership arrangement,” said Norman.

The partnership has saved the council around £200,000 a year, as well as increased the collection of council tax and improved efficiency in processing benefits claims. The council hopes the three-year extension will deliver an additional £100,000 in savings.

In September 2015, Civica called for a shake-up of public sector IT to deliver the savings needed. In a report, the public sector IT services provider called for an increase in “data IQ” for public sector through better use of data and systems integration.

Civica increased its revenues by 13% to £170.5m in 2014, mainly due to local government sector and business process services.


Healthcare IT Market by Product by End User – Global Forecast to 2020

October 8th, 2015 by Rahul Jain No comments »

The healthcare industry is undergoing a major transformation due to the challenge of providing more cost-effective personalized care. The push towards predictable outcomes and higher quality of care is leading to convergence of information technologies. Healthcare IT systems are emerging as powerful tools to create and maintain electronic health records (EHRs) for maintaining the workflows in the entire healthcare organization.Outsourcing44

The global Healthcare IT market is expected to grow at a CAGR of 13.4% during the forecast period (2015 to 2020). Majority of the demand for healthcare IT solutions is driven by the growing need to reduce healthcare costs while adhering to the regulatory requirements set by government organizations for ensuring safety, security, and confidentiality of patient information. The growing adoption of health information exchanges (HIEs) and EHR systems and improved quality of care and clinical outcomes are some other factors driving growth of the global healthcare IT market. In addition to the demand for information technology solutions from healthcare providers, the growing need of healthcare insurance providers to efficiently manage an in-depth record of claims and reimbursements is also expected to contribute to the growth of the global healthcare IT market during the forecast years.

In 2014, North America commanded the largest share of the global Healthcare IT market, followed by Europe, Asia-Pacific, Latin America, and the Middle East and Africa. Developed geographies like North America and Europe are likely to grow at a lower CAGR as compared to the Asia-Pacific market, which is expected to grow at the highest CAGR of 15.4% during the forecast period. Growth in the Asia-Pacific region is largely driven by the increasing government initiatives for eHealth, rising medical tourism, and growing demand for quality healthcare in this region. In addition, factors such as increasing per capita incomes in emerging countries such as China and India are driving the growth of the Asia-Pacific healthcare IT market.

In this report, the healthcare IT market is segmented by product, end user, and geography. By product, the healthcare IT market is segmented into healthcare provider solutions, healthcare payer solutions, and HCIT outsourcing services. In 2014, the healthcare providers segment accounted for the largest share of the global healthcare IT market. This segment is poised to reach USD 157 billion by 2020, growing at a CAGR of 16.4% during the forecast period. The healthcare provider solutions segment is further segmented into clinical solutions and non-clinical solutions. In 2014, the non-clinical solutions segment accounted for the largest share of 53% of the global healthcare IT market. However, the clinical solutions segment is expected to grow at the highest CAGR of 19.8% during the forecast period, owing to the increasing demand for improved patient safety and patient care, stringent regulations regarding healthcare provider solutions, and the need for integrated healthcare systems.

The healthcare payer solutions segment covered in this report comprises pharmacy audit and analysis solutions, claims management solutions, computer-assisted coding solutions, customer relationship management solutions, fraud management solutions, care management solutions, provider network management solutions, member eligibility management solutions, medical document management solutions, payment management solutions, and other payer HCIT solutions. The HCIT outsourcing services segment is further categorized into provider IT outsourcing services, payer IT outsourcing services, operational IT outsourcing services, and IT infrastructure management services. Growth of the healthcare outsourcing services market is driven by the growing focus of healthcare providers and payers on minimizing operational costs of healthcare delivery and maximizing profit margins.

On the basis of end users, the healthcare IT market is segmented into healthcare providers and healthcare payers. The healthcare providers segment is further divided into hospitals; ambulatory care centers; diagnostic and imaging centers; home healthcare agencies, nursing homes, and assisted living centers; and pharmacies. The healthcare payers segment is further divided into public payers and private payers. Healthcare providers are the major end users of the healthcare IT solutions. This segment accounted for a share of ~73% of the healthcare IT market in 2014; owing to the increasing number of patients, hospitals, ambulatory care centers, and different healthcare delivery setups, worldwide. It also represents the fastest-growing end-user segment for healthcare IT products.

Some of the major players in the healthcare IT market profiled in this report include McKesson Corporation (U.S.), Allscripts Healthcare Solutions, Inc. (U.S.), athenahealth, Inc. (U.S.), Epic Systems Corporation (U.S.), GE Healthcare (U.K.), Siemens Healthcare (Germany), Cerner Corporation (U.S.), and Carestream Health (U.S.).

Reasons to Buy the Report
The report will enrich established firms as well as new entrants/smaller firms to gauge the pulse of the market, which in turn would help them garner a greater market share. Firms purchasing the report could use one or any combination of the below-mentioned five strategies (market penetration, product development/innovation, market development, market diversification, and competitive assessment) for reaping greater market shares.

This report provides insights on the following pointers:
– Market Penetration: Comprehensive information on product portfolios offered by top players in the healthcare IT market. The report analyzes the healthcare IT market by product and end user across all regions
– Product Development/Innovation: Detailed insights on upcoming trends, research and development activities, and new product launches in the healthcare IT market
– Market Development: Comprehensive information on the lucrative emerging markets by product, end user, and region
– Market Diversification: Exhaustive information about new products, growing regions, recent developments, and investments in the healthcare IT market
– Competitive Assessment: In-depth assessment of market shares, growth strategies, products, distribution networks, manufacturing capabilities, and SWOT analyses of the leading players in the healthcare IT market


Euro IT Group Enters European Nearshore IT Outsourcing Market with a 600-strong base of IT professionals

October 8th, 2015 by Rahul Jain No comments »

Euro IT Group today announced the launch of its operations within the UK and Western Europe. Euro IT Group is a premier technology consulting firm with a unique group structure and a holistic perspective across technologies and industry verticals.Outsourcing43

Euro IT Group has access to a diversified range of IT application technological skills and the know how of more than 600 IT professionals, in both established and cutting edge technologies. 1000+ projects endorse Euro IT Group, all being delivered by its Central and Eastern European member companies’ to international customers.

“While leading my previous company to a successful Exit, I understood the extraordinary benefits clients can extract from a mix of CEE-based technical knowledge and broad business acumen of Western industry experts. We have now decided to match the booming demand of IT services in Western Europe and the growing market of IT companies in Central and Eastern Europe (CEE).” stated Ian Tidder, Founder and CEO.

The Euro IT Group team has a proven track record in integrating various technologies and industry specific competences into single solutions. Euro IT Group can deploy mixed teams from different locations, without compromising on quality.

In the last year Euro IT Group has evaluated various IT companies from the CEE region. The Group now incorporates several CEE companies that share the group’s values.

Each Euro IT Group company has high quality and security standards, performance driven teams, year-on-year growth, experience with leading edge technologies and a focus on fast-growing sectors.

“Euro IT Group possesses proficient technological skills, resources and references in its CEE nearshore delivery centers to match the demand. Customers now require agile, accelerated product development and high quality IT services. Using the skill set within our group, we focus on latest technology trends such as cloud services, IoT, sophisticated mobile applications and big data . Furthermore, on the basis of the certifications and experience we achieved in leading solutions from Microsoft, SAP, IBM or Oracle we build international strategic partnerships, thus delivering value oriented services and state of the art solutions in international markets,” Ian Tidder added.

Euro IT Group is an international technology provider with delivery centers in selected Central and Eastern European locations. Euro IT Group focuses on accelerating software development through a blend of first-rate people and technologies, acknowledged processes and methodologies and forward-thinking employee development programs, all combined to deliver value for customers. Euro IT starts from a base of 600+ IT professionals who have successfully executed 1000+ software projects worldwide to customers of various sizes from a range of industry sectors such as such as banking, insurance, ecommerce, telecom, media, travel or healthcare.


IBM launches yet another Watson business unit

October 7th, 2015 by Rahul Jain No comments »

A new IBM Watson consulting unit aims to speed up the commercialization of cognitive computing—a.k.a. artificial intelligence.

IBM is establishing yet another business unit centered on Watson, its famous cognitive computing system.Watson computer at IBM in New York City

On Tuesday morning, the company announced a new consulting organization aimed at speeding up the commercialization of “cloud-delivered cognitive innovations.”

Translation: IBM is still working on ways to make money from its pricey Watson project and realize the substantial margins that the technology promises It’s a years-long effort, as CEO Ginni Rometty explained to Fortune in September 2014. “There is always a new shift coming in technology,” Fortune wrote two years before that, “and if she doesn’t help IBM become the first to discover and commercialize it, the company will lose its shirt.”

IBM  IBM -0.17%  said it will invest (yes) $1 billion in the new Cognitive Business Solutions group, which will be led by Stephen Pratt, who had been an executive with Infosys, the Indian outsourcing firm, before a brief stint at TPG, the investment firm. Rometty announced the news at the Gartner Symposium in Orlando.

The news comes weeks after the official opening of a new Watson Healthcare facility in Cambridge, Mass.

Watson and its self-learning capabilities first captured the public’s attention on Jeopardy! five years ago. Since then, there’s been hardly an industry that IBM has not attacked with the technology. Last year it set up the first Watson Business Group in Manhattan.


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