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Archive for December, 2010

BP’s $400m deal with HP suggests EU outsourcing thaw

December 21st, 2010

The latest in a series of high profile outsourcing deals by European companies suggests barren period for IT services providers may be over
BP has signed a $400 million IT services contract with Hewlett-Packard, the latest in a brace of high profile outsourcing contracts by European companies.

Under the five-year deal, HP will manage all of BP’s data centres in America and Europe. It currently supports the oil company’s data centre facilities in UK and some other European companies.

The deal allows London-headquartered BP to standardise its data centre operations thereby reducing cost, the company said. “By establishing a standardised global operating model, BP will realise immediate cost reductions, improved consistency of service and be well positioned to utilise emerging technologies,” said BP’s CIO Dana S Deasy in a statement.

This echoes remarks by European utilities provider E.ON, which signed a $1.4 billion IT infrastructure outsourcing deal with HP last week. “E.ON demands consistent, innovative and agile IT services to operate in a competitive global industry,” said that company’s CIO at the time.

The two deals indicate that HP’s luck might be changing in the IT services market. In its most recent financial quarter, the company’s IT services division grew revenues by just 0.4% year-on-year to $9 billion.
And put next to the UK Ministry of Defence’s £800 million IT outsourcing deal with Boeing, also signed last week, this deal may suggest that the European outsourcing market – which has been stagnant for some time – may be opening up.

But just as HP’s fortunes in Europe seem to be improving, its business practices in the continent are attracting unwanted attention. Last week it emerged that an investigation into allegations that HP offered kickbacks to win contracts has been extended from Russia to include Germany, Austria, the Netherlands and some other European countries.

On a similar note, the US Securities and Exchange Commission yesterday revealed that it is investigating the departure of former HP CEO Mark Hurd. Among the allegations under investigation is the claim that Hurd gave Jodie Fisher, the former adult film star whose relationship with Hurd brought about his demise, insider information about the acquisition of IT services giant EDS before the deal took place.

Source:-http://www.information-age.com/channels/it-services/news/1307798/bps-and36400m-deal-with-hp-suggests-eu-outsourcing-thaw.thtml

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Towers Watson to buy benefits outsourcing firm

December 21st, 2010

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NEW YORK—Consulting firm Towers Watson & Co. announced Monday that it has signed a definitive agreement to acquire Aliquant, a health and welfare benefits outsourcing firm.

Services provided by Milford, Conn.-based Aliquant include employee call centers, flexible spending account and COBRA administration. The company, which was founded in 1985, generated $32 million in revenues in fiscal 2010, has more than 200 employees and more than about 75 clients, with workforces ranging from 1,000 to 100,000 employees, according to a Towers Watson statement.

Terms of the deal were not disclosed. New York-based Towers Watson said it expects the transaction to close before the end of the year.

Source:-http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20101220/NEWS/101229992

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Wipro Technologies wins industry award

December 21st, 2010

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In the VLSI design area, Wipro works on leading edge technologies to deliver end-to-end chip design services for semiconductor companies.

Wipro Technologies, the Global Consulting, System Integration and Outsourcing Business of Wipro Limited has announced that it has been awarded the ‘2010 Outstanding Corporate Award’ for contribution to the Embedded systems and Very-Large-Scale Integration (VLSI) industry segment. The ‘2010 Leadership Awards for the Embedded/VLSI Industry’ are administered by Mentor Graphics, and SiliconIndia. Wipro is a recognized leader in the Product Engineering Services area and has been recognized for its commitment towards delivering high-value engineering solutions that help customers to accelerate time to revenue by building the right products that suit the end users.

Wipro is the world’s largest third party R&D services provider, according to a 2009 report by an independent research firm, Zinnov Management Consulting.
In the VLSI design area, Wipro works on leading edge technologies to deliver end-to-end chip design services for semiconductor companies. The Product Engineering group at Wipro also serves system companies in multiple industry verticals. Wipro has developed a collaborative eco-system of partners over the last two decades to offer turnkey solutions to customers.

Wipro’s product compliance and certification lab – ‘Tarang’ has world class facilities that help test products in aerospace, automotive, computing, consumer electronics, industrial automation, medical electronics and telecommunication industries. It is a one-stop-shop offering consultancy and pre-compliance testing in the areas of EMI/ EMC, Mechanical, Thermal, Acoustic, Safety and Reliability. Wipro also offers product certification enabling services across geographies. This is a NABL (ISO/ IEC 17025) accredited facility.

“Wipro Technologies has been the biggest driver and motivator to most of the R&D services companies in India and across the globe. With this award it will be one more stepping stone for Wipro in the endeavor to become the largest R&D services company in the world. We salute Wipro on this significant achievement and outstanding contribution to India VLSI and Embedded Industry,” said Dr Walden C. Rhines, Mentor Graphics CEO and Chairman of the board.

Ayan Mukerji, Senior Vice President and Global Head, Product Engineering Services, Wipro Technologies, said, “We are elated by this recognition of our achievements in the Product Engineering space. This award is a strong testimony of our capability and position in the VLSI/embedded design industry and our efforts to accelerate the product life cycle, reduce product and compliance failures; and build smaller, faster and power-efficient chips. We will continue to partner with our customers to deliver industry leading solutions in embedded design as well as address their product marketing and next generation product development needs, and enable them to optimally leverage technology and become more competitive.”

The SiliconIndia Mentor Graphics Leadership Awards for the Embedded/VLSI industry are the first annual industry awards instituted for the VLSI/Embedded sector.

The winners of these awards were chosen jury panel consisting of eminent industry leaders such as Guru Ganeshan, Managing Director, ARM-India Operations; Vivek Sharma, Vice-President Asia Pacific & India

Operation Director, India Research Centers, STMicroelectronics; Srini Rajam, Chairman and CEO, Ittiam Systems; Dr. Satyanarayan Gupta, CEO, Concept2Silicon Systems; Pravin Desale, Vice President, Milpitas CA (Storage Components Division), LSI; Santhanakrishnan Raman, Managing Director, LSI India R&D and Rajiv Kapur, Managing Director, Broadcom India.

Source:http://www.indiainfoline.com/Markets/News/Wipro-Technologies-wins-industry-award/5026850598

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HP grabs five-year BP deal

December 21st, 2010

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HP has penned a $400m (£260m) five-year data centre outsourcing contract with BP.

The oil giant kicked off the year by dramatically rationalising hardware and software suppliers with Computacenter and Compuware the major beneficiaries, and is ending 2011 by tendering another mega-deal.

Under the terms of the latest contract signing, HP’s existing hosting services tie up with BP in the UK expands to include the remaining data centres in Europe and the Americas.

“By establishing a standardised global operating model, BP will realise immediate cost reductions, improved consistency of service and be well positioned to utilise emerging technologies,” said BP CIO Dana Deasy.

The data centre management services include monitoring, back-up, and recovery, site management and maintenance services, database and middleware management.

HP will also give BP the platform to roll out enterprise private and public cloud computing services, HP said.

Mike Nefkens, HP senior VP and GM for EMEA, said it could help BP build an “Instant-On Enterprise” so that technology was embedded in “everything it does”.

Only last week, HP signed another mega IT outsourcing deal – data cetre and workplace services – worth £900m with Germany-based energy provider E.ON.

John O’Brien, research director at TechMarketView, pointed out that through the contract, E.ON became the first major energy provider to outsource its entire IT infrastructure.

“Energy companies are under increasing pressure to cut costs and transform their IT estates as they grapple to take on the challenges of smart metering roll outs,” he said.

Source:http://www.microscope.co.uk/news/vendor-news/hp-grabs-five-year-bp-deal/

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Süd Beteiligungen sells German IT services provider to Capgemini

December 21st, 2010

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Süd Beteiligungen, the mid-market private equity arm of German bank Landesbank Baden-Württemberg, has sold IT services provider CS Consulting to French IT services company Capgemini.

Capgemini has agreed to purchase all shares in the company from Süd Beteiligungen fund LRPC, to be paid in cash.

Founded in 1984, CS Consulting specialises in IT consulting for the bank and insurance sectors in Germany, with 400 consultants and software developers. In 2009, the company posted revenues of €47.7m.

Capgemini is one of the world’s largest IT services companies, specialising in management consulting, outsourcing and professional services, with operations in over 35 countries. The acquisition of CS Consulting will allow the company to strengthen its presence in the German banking sector.

Source:http://www.altassets.com/private-equity-news/article/nz19838.html

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GM continues IT Outsourcing

December 21st, 2010

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Back in the summer, General Motors renewed two outsourcing contracts with Capgemini to manage and support the automaker’s sales and marketing as well as dealer systems. The combined value of the contracts—two five-year agreements—is $250 million (you can read more about that here). Well, GM is at it again. It has just renewed three contracts with Capgemini, valued at $100 million over the next five years.

Now, as many of you know, after infamously accepting a $49.5 billion U.S. government bailout to finance its bankruptcy, GM appears well on its way to a rebound, if not a redemption. In November – in a landmark IPO (the biggest in U.S. history, it was reported) raised $20.1 billion by selling 478 million common shares at $33 each, raising $15.77 billion, as well as $4.35 billion in preferred shares. Days later, banks bought GM shares and expanded GM’s IP to $23.1 billion, making it the largest in global history.

In a Bloomberg article earlier this month (you can read it here), GM’s CEO Dan Akerson said the automaker will not make the same mistakes that led to its “near-death experience,” as he puts it in the article. There are pay restraints (no increases in base salaries, for example) and Akerson said he’d like to implement incentives and variable pay for management. As reported in the article, Akerson also points to a culture resistant to change, arrogance, and an underestimation of competitors (particularly foreign car companies). The article doesn’t give many specifics.

But if the new deals say anything, they indicate that the existing outsourcing contracts GM has with Capgemini (and also with HP; in the blog I wrote here I also talked about the $2 billion contract with HP ) are going well enough to be renewed.

This time, the automaker is renewing three application integration management contracts with Capgemini. The deals extend Capgemini’s ongoing work in supporting GM’s Next-Generation Systems Factory Operating Model. Under terms of the renewed contracts, Capgemini will continue providing GM standardized processes for application management and for developing common, integrated-based solutions that can scale with GM’s business needs, according to a press release on the deals. More specifically, Capgemini will work with GM’s IT group to provide services in strategic planning, data management, systems engineering and architecture, software engineering, program management and verification and validation.

I tried to find more information about this so-called Next-Generation Systems Factory Operation Model, but didn’t have much luck. Of course, GM has been spending quite a long time and money updating the IT architecture and systems that power its factories. A few years ago, Mary Hayes Weier (a friend and a former colleague) did this great article on a big initiative GM had done overhauling the IT infrastructure that, at the time, was supporting 160 global plants. That overhaul included standardizing software and processes at every plant, updating networks, and creating four command centers–in the United States, Latin America, and Europe. As Weier reported, that overhaul included two global rollouts of standardized software apps: a product routing and tracking system designed to help GM produce vehicles as planned, and an in-plant order management system linking suppliers into the assembly line.

Anyway, I’m interested in hearing what you all have to say about GM’s use of outsourcing, and whether the auto giant is on the right track – the track to redemption, so to speak. What say you, readers?

Source:http://advice.cio.com/beth_bacheldor/14871/http_advice_cio_com_beth_bacheldor_11353_gm_nc_have_sights_on_outsourcing

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India still top destination for offshore outsourcing

December 21st, 2010

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India is still the world’s favourite destination for offshore outsourcing, but attractive cost structures in the Philippines, Vietnam and Indonesia and the rapid growth of the business in China are posing tough competition, reports PTI quoting a new study by Gartner Inc.

In the study, the IT research and advisory firm identified the top 30 countries around the world for globally sourced activities in 2010-11, rating them on the basis of 10 criteria.

Many organisations that choose to move IT services to lower-cost countries are daunted by the task of determining which country, or countries, would best suit their requirement. Gartner conducted an analysis of these countries to assess their capabilities and potential as offshore services locations, it said.

India retained its position as the most successful country among global offshore locations, as per the Gartner study. It scored well across all 10 criteria. While its cost-competitiveness is being challenged due to the rising rupee, this is compensated by its strength in other areas, as per Gartner’s study.

“Clients continue to seek a portfolio of offshore countries and with India again experiencing increasing labour costs and attrition, this is creating opportunities for other offshore locations to target the services needs of more-mature Asian clients,” said Gartner Research vice-president Ian Marriott.

China improved its scores for “political and economic environment” from “good” to “very good”, and “culture compatibility” from “fair” to “good”.

Contributing to the increased rating for China is its rising global political and economic leverage, especially in the wake of the recent global economic crisis.

China experienced a steady positive growth rate, spurred by a $583.9 billion stimulus package, in 2009. The Shanghai 2010 World Expo has helped increase cultural awareness within China, which has helped the growth of the business in the country, according to the study.

Gartner’s scores for the Philippines remain largely unchanged, although its rating for “global and legal maturity” fell from “good” to “fair”.

Gartner continues to see foreign companies being attracted to the Philippine’s young, experienced labour pool specialising in contact centres and finance and accounting (F&A) business process outsourcing (BPO), complemented by its good language and cultural compatibility with western economies.

Source:http://www.moneylife.in/article/8/12533.html

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