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Archive for March, 2011

IT services space a good bet: Kotak AMC

March 23rd, 2011

IT services space is a good bet, says Alroy Lobo, Chief Strategist & Global Head- Equity Asset Management, Kotak AMC.

Lobo told CNBC-TV18, “We are still very constructive on the outsourcing theme both in terms of IT services and pharmaceuticals, we think that the nervousness that investors are showing on the IT services sector is normally seen during the March period because companies are coming closer to guidance and Q4 is normally relatively soft quarter. So I think that sector is showing very strong visibility in terms of revenue growth for FY12 and potential for significant earnings downgrade in that sector looks remote. So I think IT services is definitely one sector we would bet on.”

He further added, “Pharmaceuticals is another sector, which we believe will do reasonably well, there seems to be fair good degree of visibility also in the sector and valuation in the sector also seems to have corrected.”

“Another sector which I believe we are currently neutral on that sector is the banking sector, a lot of the concerns in terms of rate pressures have now been priced into the stocks, it appears that liquidity will ease going forward and some of the cost pressures they were facing in terms of deposit cost are now being gradually transmitted into lending rates and that would enable them to protect some of the net interest margins. So that is another sector purely because valuations have corrected, looks promising going forward.”

“At this point in time from a negative stand point, we would be still underweight infrastructure, we need to see far more powerful triggers and catalysts in terms of companies coming closer to execution, companies coming closer to cash flow generation, companies coming closer to declaration of dividends and unless you see those triggers in place, it looks very unlikely to see a very significant change in investor interest on the sector.”

“We are still underweight on real estate despite deep value in the sector that is another sector we would basically stay away from, I would be very selective in picking out stocks in that sector. At this point in time, also capital goods – we would be relatively underweight, we are very selective as to which companies we should be focused on. Consumption is a sector which we will be positive on, we see potential for companies with pricing power, ability to manage cost pressures and volume growth going forward as a companies to bet on.”

Source:http://www.moneycontrol.com/news/stocks-views/it-services-spacegood-bet-kotak-amc_531412.html

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Capgemini exec chair crowned IT ‘woman of the year’

March 23rd, 2011

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Christine Hodgson, executive chairman of Capgemini UK, has won the award for Woman of the Year 2011 at the inaugural CWT everywoman in Technology Awards.
The Connecting Women in Technology awards, held in London today, were launched to celebrate successful women operating in what continues to be a male-dominated industry.

“Given the tech industry’s expansion in the UK over past years and its potential for futher growth, everywoman felt there was a real need to create a forum to highlight the opportunities for women and the innovators already making their mark within the industry,” said Maxine Benson, co-founder and director of female business network, everywoman.

‘Woman of the Year’ Hodgson was appointed as position of chairman of Capgemini UK in January, and is the company’s first female board director. She also chairs Capgemini’s UK Sustainability Board.

Hodgson has worked at Capgemini for 13 years in a range of roles, including CEO of Technology Services North West Europe. In addition, with her background in accountancy, she was previously CFO for Capgemini UK and the Global Outsourcing Division.

The awards also celebrated the success of women in seven other categories, ranging from rising star (for women under 30 who are excelling in their careers) to business leader of the year.

Stephanie Nicolaou, an ICT systems analyst at Agusta Westland Helicopters who only graduated from university last year, won the rising star award. She was credited with helping the company save millions of pounds through her work on data clean-up and development projects.

Other notable finalists in this category included 27-year-old Emma Davids, an IT professional at Yorkshire Water Services.

Davids’ achievements include increasing the water company’s Service Level Agreement compliance from 88 percent to 93 percent. She is also one of the first people to set up a Computer Club for Girls (CC4G) in Bradford.

Cisco employees were also well-represented in the awards, with two finalists winning in their categories.

Bernadette Wightman, managing director, of Cisco UKI Partner Organisation, won business leader of the year, while Nikki Walker, senior director of inclusion, diversity and sustainability Europe at Cisco Systems, was crowned inspiration of the year. Walker played an important role in driving cultural change at the company, helping to increase the number of women on the UK and Ireland board from 18 percent to 40 percent.

Other winners included Billie Major, core assets portfolio director at Capgemini UK, who won team leader of the year. She leads the team responsible for the company’s largest global account, HM Revenue & Customs (HMRC).

Wendy Tan-White, founder and CMO of Moonfruit, a DIY website builder, was chosen as entrepreneur of the year, while Naomi Chayen, professor of biomedical sciences at Imperial College London, was innovator of the year.

Source:http://www.computerworlduk.com/news/careers/3266495/capgemini-exec-chair-crowned-it-woman-of-the-year/

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Japan and Korea Driving IT Outsourcing in China According to New Report IT Services Outsourcing in China 2010-2015

March 23rd, 2011

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Research and Markets has announced the addition of the “IT Services Outsourcing in China 2010-2015″ report to their offering.

China has seen increased IT outsourcing coming its way from regions such as Europe and the US. Japan and Korea have also begun outsourcing to China to utilize the availability of huge labor forces. Minimal costs have also been attracting these countries to this region. The market is expected to grow substantially.

Increased foreign investment and strong support from the Chinese government have been driving factors in this market. Language barriers and a lack of high skilled professionals however continue to prove to be challenges for this market.

TechNavio’s IT Services Outsourcing Market in China 2010-2015 report has been prepared based on an in-depth study of the market along with inputs from various experts. The report contains market and vendor landscape supported by drivers, restraints and trends. It also contains an analysis of key vendors in the market.

For the purpose of this report the market includes the Chinese Information Technology Outsourcing (ITO) market and key vendors. The Chinese Business Process Outsourcing (BPO) market and its vendors are not covered in this report.

Traditionally the US and Europe have been key contributors of IT outsourcing to China. Of late Japan and Korea have also followed suit. Availability of a large pool of labor coupled with significant cost advantages has been making the Chinese market attractive. Moreover the familiarity of regional languages has been an added advantage for countries like Korea and Japan. The growth of the Chinese market is viewed as a threat to other outsourcing leaders such India and the Philippines.

The growth of the Chinese market as an outsourcing hub can be directly attributed to foreign investment and strong support from the Chinese government. Transportation, telecommunications and network infrastructures have been developed quickly and consistently to be at par with developed countries.

TechNavio’s analyst says, Mergers and acquisitions will continue to be the key strategy used by organizations to gain a share in this market. The possibility of low cost acquisitions has been attracting several global companies into this market.

TechNavio has published a report on this subject titled IT Services Outsourcing Market in China 2010 – 2015. This report has been prepared based on the IT services outsourcing market in China. Inputs from industry experts, vendors and end-users were used in the analysis. The report includes a market size estimate and forecast, market landscape based on segments along with trends, challenges and drivers.

Source:http://dmnnewswire.digitalmedianet.com/articles/viewarticle.jsp?id=1412761

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Wipro technologies recognized as leading consulting and Outsourcing solutions provider by ‘consumer goods technology’ readers

March 23rd, 2011

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Wipro Technologies, the global Consulting, System Integration and Outsourcing business of Wipro Limited (NYSE:WIT), today announced that it has received Reader’s Choice Awards for the third consecutive year from Consumer Goods Technology (CGT) magazine. Wipro Technologies has won spots in the Top 5 for ‘Outsourcing/IT Integration’ and Top 8 in the ‘Consulting’ categories. Wipro has moved up by 4 places (positive movement) in the Outsourcing Category, from last year’s (2010) rankings.

“We are very pleased to be ranked again as one of the top performers in both these categories by the readers of Consumer Goods Technology magazine,” said Bhanumurthy B. M., Senior Vice President, Retail, CPG (Consumer Packaged Goods), Transportation & Government, Wipro Technologies. He added, “Helping our CPG partners best understand their consumer is of utmost importance. Our vision is to continually innovate and provide transformational capabilities in technology, infrastructure and business operations, to enable our CPG customers to improve their consumer experience, operational efficiency and profitability”.

For the 11th year in a row, CGT asked its subscribers to identify their most valued solution and service providers across multiple categories. Business and technology executives from more than 122 consumer goods companies were asked to identify the solution provider they currently use within each category and rate their customer experience. The rating is based on the readers’ experience implementing and using the software and the value the solution brought to their business.

Wipro Technologies enables the world’s leading Consumer Goods manufacturers to protect brand, enhance reach and nurture innovation. Wipro’s expertise spans areas of Packaged Application Services, Application and Infrastructure Management, Business Process and IT Consulting, Business Intelligence & Data Warehousing via deep domain expertise.

Wipro’s dedicated CPG (Consumer Packaged Goods), research identifies the emerging trends and industry drivers and enables CPG manufacturers to re-engineer the way they meet the end consumer’s needs through information technology solutions for better consumer insights, digital marketing and social media, trade promotion optimization, product innovation, consumer-driven supply networks, farm to fork traceability, food safety compliance, and Market Mix Analysis, to name a few.

Source:http://www.businesswireindia.com/PressRelease.asp?b2mid=26273

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Indian IT firms hike 5percent in pricing for outsourced contracts

March 22nd, 2011

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Ever since the wave of Lehman crisis hit the market, companies have not seen an increase in their pricing. Various projects were shelved and recession showed its impact on the world market. This crisis did not leave any space for the companies to be volatile with their pricing. But today the present scenario of Indian economy is different and hence it can take the risks of restructuring the industry and pricing. Rising inflation, wages and attrition are some of the reasons for driving up billing rates for outsourcing contracts.

Driven by higher salary costs and improved business environment Tata Consultancy Services (TCS), Infosys, Wipro and HCL are beginning to see an uptick of up to 5 percent in pricing. Companies like Citibank, JPMorgan, Telstra, Wal-Mart and American Express have come up to 1-3percent higher rates as compared to what it was three years ago in relation to the larger contracts outsourced by customers.

The Indian IT players have always followed the per employee, per hour billing model. The pricing was decided on the basis of number of hours contributed by each employee involved in the project. Last three years, pricing has been a complicated issue for the IT firms.

Today the outsourcing clients have also been taking India’s high inflation into account to give price increase. IT contracts will come with a clause that allows for fluctuations in pricing. A report released by CLSA, a brokerage firm said that with 4-6 percent revenues in any year from new business, it should add 40-50 basis points year-on-year to portfolio pricing. Hence next financial year would be able to get a 1.5-2 percent year-on-year pricing increase.

The last few years Indian IT players have been trying to move to a non-linear one where pricing is outcome based or fixed. This will help companies to provide more and more high – end services and dictate better prices.

Source:http://www.siliconindia.com/shownews/Indian_IT_firms_hike_5percent__in_pricing_for_outsourced_contracts-nid-80844.html

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BAA signs IT outsourcing deal with Capgemini

March 22nd, 2011

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Consulting, technology and outsourcing services provider Capgemini (Euronext:CAP) is to provide outsourced IT services to airport operator BAA, the company announced on Monday.

The five-year contract was awarded to a consortium led by Capgemini UK plc as prime contractor and systems integrator. It is said to be worth approximately GBP100m.

The other members of the consortium are SITA, Atkins, Computacenter and Amor Group.

Under the new contract Capgemini will take over responsibility for the delivery of BAA’s core IT services, including applications, infrastructure and projects, for around 10,000 users. The service will commence in May after a two-month transition period and will cover BAA’s six UK airports.

Some 200 BAA employees will be eligible to transfer to Capgemini.

As part of the agreement BAA will retain responsibility for IT strategy, stakeholder management and ensuring the quality of IT services in collaboration with Capgemini.

Source:http://www.tmcnet.com/usubmit/2011/03/22/5393395.htm

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AT&T, T-Mobile deal: Indian IT cos to benefit

March 22nd, 2011

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Indian outsourcing vendors like Infosys, Cognizant and Tech Mahindra are set to gain new projects worth hundreds of millions from AT&T’s acquisition of T-Mobile, as the two telcos seek to integrate their systems and lower their operational costs.

While Tata Consultancy Services, Infosys, Wipro and Tech Mahindra count AT&T among their top customer, multinational rival Cognizant counts both AT&T and T-Mobile among its key clients. Infosys too works with both the telcos, people familiar with recent outsourcing decisions taken by AT&T and T-Mobile said.

New outsourcing projects after AT&T receives necessary regulatory approvals could include integration of billing and customer systems apart from consolidation of other operational support systems.

“We are still watching this; as of now, it’s business as usual. But consolidation and M&A is a good news for IT business, there are always systems to be stitched together,” said a top official at one of the companies working with a US-based telecom customer.

Over past few years, Indian outsourcing vendors have seen business from telecom customers come down as telcos such as BT Plc trimmed their budgets and chose to work with more vendors at lower rates. BT, which once was Infosys’ top customer contributing some $300 million every year in revenues is now down to almost $100 million a year.

Outsourcing experts said Tech Mahindra, Infosys and Cognizant are set to benefit from this consolidation. “TechM does huge amount of business with AT&T. It is definitely going to be a plus. TechM was also planning to enter into T-Mobile. In fact, T-Mobile released an Infra RFP some days back.

Considering TechM expertise now in mobile telephony area across the globe, they are definitely going to take advantage of this move and leverage their existing AT&T relationship to do the same kind of business that they had done when AT&T acquired Bell South couple of years back,” said Suranjan Panda of QS Advisory, a Europe-based sourcing advisory firm.

“Infosys shall definitely try to move into AT&T quicker now but they have lost grounds in many areas inside AT&T. I don’t see them coming strong,” added Panda. Infosys and Cognizant are the only two vendors working withy both the telcos.

“Cognizant on the other hand is definitely going to be more aggressive and had already started getting inside AT&T doing smaller projects. Now because of their background of working with T-Mobile in the past and currently working with them in Europe, they might get some big chunks. Their chances are definitely positive,” said Panda. Overall, any consolidation brings good news for the business of outsourcing.

Over past few months, merger between top US banks helped TCS, Infosys and Cognizant sustain their double digit growth rates at a time when customers from other verticals shelved many projects.

“In general, merger integration work typically is good for outsourcing because a large amount of Systems integration work needs to be completed in a short period of time. Hence if this merger has any impact on the offshore firms, it is more likely to be positive,” said Peter Schumacher, CEO of European advisory firm Value Leadership.

Source:http://timesofindia.indiatimes.com/tech/enterprise-it/infrastructure/ATT-T-Mobile-deal-Indian-IT-cos-to-benefit/articleshow/7760429.cms

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