To manage IT services including mid-range computers, servers and desktops, and applications development and support

CSC has been awarded a new five-year IT outsourcing agreement by SELEX Galileo, a Finmeccanica company. The approximate value of the agreement is $200m.

Under the five-year agreement, CSC will manage IT services for SELEX Galileo, including mid-range computers, servers and desktops, local and wide area networks, internet and intranet services, service desk, applications development and support, and IT procurement services.

SELEX Galileo UK and Italy ICT businesses vice president Tony Ham said that the new agreement builds on their existing business relationship with CSC.

“The benefits that CSC can bring are evident for our business as IT grows in importance not only as we look to manage our costs, but as a key enabler in maximising operational performance and facilitating the rapid development of our services and products to market,” Ham said.

Source:http://www.cbronline.com/news/selex-galileo-awards-200m-it-outsourcing-agreement-to-csc-150211

Outsourcing from new telecom operators was expected to yield around $1 billion worth of business to vendors and replicate the phenomenal success of IBM’s engagement with Bharti, but investigations into irregularities in spectrum licences have put these multi-million dollar contracts in limbo and a question mark over their future revenue potential.

Etisalat DB India , earlier known as Swan Telecom , has outsourcing contracts with Tech Mahindra that were estimated to grow to $400-500 million, while Wipro has an outsourcing contract with Uninor estimated to grow to $500 million. Other than Wipro and Tech Mahindra, back-office providers such as Aegis, Genpact and Intelenet Global Services have customer service contracts with these telecom operators.

These were to be showcase projects in terms of size and complexity, helping the providers bag more contracts but uncertainty around their operations has made future business and the multi-million dollar targets also less certain, said technology experts and analysts. The contracts are structured as partnerships with revenues for the IT outsourcing vendor dependent on subscriber growth and revenues of the telecom operator.

“The contracts were based on a projected growth in revenue and subscribers, and given what we seeing today some of that may come under review if the operator fails to meet the agreed milestones,” said Kamlesh Bhatia, principal analyst, Gartner India. “Bharti was one of the most complex engagements for IBM, even with its background in executing complex projects globally. With the Bharti project they gained experience, they have learnt and they have taken these learnings to companies outside India, in US and UK,” he added.

The success of the telecom outsourcing story saw IT service providers vie for outsourcing contracts from new telecom operators with aggressive bids. “In one instance, there was a 50% difference between the first and second bid. With these kinds of aggressive bids, I would estimate most service providers would still be cash negative. Even IBM did not make money on the Bharti deal in the first year,” said one technology analyst, requesting anonymity. Both Tech Mahindra and Wipro have commenced work on the outsourcing projects they won in 2009.

“At this point, it is only an investigation. The licences have not been withdrawn. But with all with negative news coming in, the bigger question is will they be able to attract new subscribers? Even today, these contracts are not meeting the revenue growth anticipated by the service providers except for Uninor, most of the new operators have 1% or less than 1% market share,” said Alok Shende, principal analyst, Ascentius Consulting.

Shahid Balwa, the vice-chairman of Etisalat DB, is under investigation for his alleged involvement in the 2G spectrum scam. Uninor is also under investigation for unfairly obtaining its licence, a charge the company has denied. Aircel is also reported to be under scrutiny. Aircel, the fifth largest GSM mobile operator, has an outsourcing contract with Wipro. Earlier this month, investigating authorities were also said to probing Datacom, part-owned by Videocon, which has outsourced its IT to IBM.

A spokesperson for Tech Mahindra said, “We are confident about Etisalat DB’s growth plans and their commitment to the mobile telephony market in India.”

Tech Mahindra has been contracted to provide IT and business process outsourcing services to Etisalat DB. A Wipro official said the company had already completed setting up the IT hardware and software infrastructures for Uninor in November 2010 and the project was now in the operational phase. “Contractually, there is a lot of protection. We have already been paid for the set-up phase,” he said.

Wipro was to have over 1,000 people on Uninor projects and is said to be ramping down but the official said this was part of the normal project cycle, where more people were needed in the implementation phase and fewer in the operational phase.

“They are in the danger zone. But we have no choice, we cannot stop investments,” confessed one of the outsourcing vendors about a telecom operator, requesting anonymity. “If the projects do not scale up as anticipated, the employees will have to be accommodated on other projects. And in an environment of high employee turnover, many of them may opt to leave for other companies,” said another outsourcing vendor.

“There is a waiting period, nobody is really sure what exact impact the scam will have…This is a very dynamic industry – you need to be evaluating the risks that can happen but yes, I don’t think anybody expected the scam,” said Fred Giron, VP Services (India & MEA), Springboard Research.

Source:http://economictimes.indiatimes.com/news/news-by-industry/telecom/uncertainty-clouds-it-outsourcing-from-telcos/articleshow/7505391.cms

It is widely accepted that London and the UK are not measuring up to other countries as a digital economy, according to one expert, which may encourage more firms to consider IT outsourcing.

Denis McCauley, director of global technology research at the Economist Intelligence Unit (EIU), said: “There are many policymakers, business leaders and industry experts who are justifiably proud of the UK’s achievements in some areas of digital development.”

However, he went on to say that there is “broad recognition” that Britain currently “lags behind” other nations in key areas of digital development – an issue which could potentially be addressed through greater use of IT outsourcing.

Meanwhile, the specialist SEO agency Awesome Resources has said this month that UK businesses are willing to spend “huge amounts” to cleanse search results and the search suggest keywords that appear when their name is entered.

Those outsourcing IT in London were told that the industry surrounding search-related reputation management was “massive now”

Source:http://www.ihotdesk.com/article/800403118/Britain-lagging-behind-Europe-in-IT-outsourcing

Having presented its first 1st edition white paper on ‘Maximizing Product Development ROI through Offshore Product Engineering’ Cybage is now courting responses to some of the points raised within.

Additionally, Cybage would encourage readers to consider some follow-up questions.

Combining all its inherent and much advocated benefits, can we safely conclude that outsourcing is all about improving the operational efficiencies? If yes, then is it possible to see a grand picture and have a situation whereby outsourcing not only impacts the product engineering and development but also the overall structure of the organization?

In other words, can the process of outsourcing software development function to a software services provider make an entire organization more efficient across a range of business processes – such as HRD, Finance, Recruitment, Marketing, Sales or Administration – thereby amplifying the benefits manifold? And, can outsourcing achieve this without affecting a business’s overall organizational mission, its inherent business philosophy and its strategic and tactical objectives, while keeping the overall cost equation balanced?

Source:http://www.prnewswire.com/news-releases/cybage-knowledge-series-on-global-it-outsourcing-116153944.html

Global professional recruitment and IT outsourcing group Harvey Nash has recorded “strong” trading in H2, according to a trading update for the full year ended 31 January 2011.

The update reveals that the firm’s board expects results for the full year to be ahead of expectations, with total revenue of around £425m, gross profit of £68m and profit before tax of around £6m, up 46% on the previous comparable year.

The group add that its net cash position at the year end was better than expected at around £8m and has no long-term debt, while bank facilities are available to fund working capital as required.

The statement continues: “During the recession the group remained profitable, generating strong cash flows, resulting in increased dividend payments and a further strengthening of the balance sheet. The strong financial results for the year just ended reflect a return to growth across the business and the leverage achieved from increased market share gains particularly in the UK and Europe.”

The group will announce on the 28 April 2011, preliminary results for the year ended 31 January 2011.

Source:http://www.recruiter.co.uk/harvey-nash-records-%E2%80%98strong%E2%80%99-h2-trading/1008562.article