Archive for August, 2013

Qld govt outlines IT outsourcing plan

August 29th, 2013

The move is likely to benefit small to medium IT business, who will increase their chances at gaining lucrative government contracts.

But it renews concerns about more job cuts, with unions previously warning up to 2000 government IT jobs could be axed.

The ICT Action Plan for 2013-17, released on Thursday, says government IT services would be “contestable” as a default approach.

“Queensland government will increasingly become a purchaser of ICT services from private providers, and will safely but aggressively reduce its ownership and management of ICT assets and non-critical soft ware applications,” it reads.

But IT Minister Ian Walker has previously reaffirmed while public sector jobs would likely go, the net number of jobs would not.

It would mean current public servants could end up doing the same work, but instead be employed by a private company contracted to government.

At least one small to medium enterprise will automatically be shortlisted for contracts as well, as long as they are suitable.

Major contracts will also be broken down, allowing them to bid for specific sections.

The plan outlines almost 80 measures the government says will transform Information and Communication Technology delivery.

IT Minister Ian Walker says one of the key changes is the new online ICT Dashboard.

It will list the names of ICT initiatives, their investment objectives, time frames and costs.

Mr Walker says the site will offer more accountability and prevent a repeat of Queensland Health’s $1.2 billion payroll bungle.

“It drills down to the particulars, and clearly defines initiatives and their issues, and the actions needed to resolve those issues – giving clear timelines and identifying owners for each action,” he said in a statement.


Patni scions Arihant and Amit betting big on data analytic startups in India

August 29th, 2013

Patni brothers – Arihant and Amit – are setting up a platform that will incubate and invest in data analytic startupsin India. The venture, Hive Technologies, will be modelled on a similar US-based initiative, in which the Patnis hold a stake.

The Hive in Silicon Valley offers office space, seed financing of up to $1.5 million (about Rs 10 crore) as well as technology and business support for data analytic startups. It is co-founded by Sumant Mandal, a managing partner at venture capital firm Clearstone Venture and TM Ravi, former chief marketing officer of data analytics firm IronMountain.

The Patni facility in Bangalore, which is due to come up in the next two months, will invest $200,000 to $2 million (about Rs 1.3-13 crore) in data analytic startups that already have revenues and customers.

“Our ambition is to capture the new wave of technology,” said Arihant Patni, 37, a chemical engineer from the University of Pennsylvania. The brothers, whose father Gajendra Patni is the eldest of the three co-founders of Patni Computers, had earlier launched Nirvana Venture Advisors, a $75-million fund focused on internet ventures. Founded in 2011, the fund invested in a number of ventures, including education firm YourNextLeap.

“We earlier started a sector agnostic fund, but later realised, we could not differentiate ourselves,” said Patni. “Our aim is to create at least three big data startup successes out of India in the next few years.”

Industry experts said it makes sense to focus on big data startups. “A lot of companies were formed on top of the database revolution like SAP, PeopleSoft, Siebel Systems, Business Objects; there will be many companies formed on top of the Hadoop and big data revolution,” said Amr Awadallah, cofounder and chief technology officer at US-based firm Cloudera.

The Patnis plan to invest in four to five startups every year over the next two years, with an exit horizon of eight to 10 years. They are scouting for big data analytics startups focused on the US market and with expertise in such areas as telecom, fraud detection, social media and customer relationship management.

Arihant Patni, who earlier founded legal process outsourcing company Bodhi Global Services, is currently managing director of Patni Financial Advisors, a wealth management company that advises high net-worth families on a wide range of investment options.

“Ten years later, I should say I have created three valuable, credible organisations that I am proud of,” he said.


Wipro launches aviation IT products in partnership with Qatar Airways

August 29th, 2013

Wipro, a leading global information technology, consulting and outsourcing company today announced the launch of a range of information technology (IT) products for the aviation industry.

The aviation IT product portfolio comprises of two categories of solutions: enterprise and mobility solutions.

In September 2012, Wipro entered into a strategic partnership with (Q,N,C,F)* Qatar Airways to research and develop.

”These solutions have played a key role in enhancing customer service & operational efficiency of Qatar Airways. Now these already proven solutions can be brought to market and deployed in a variety of means such as licensing or Software as a Service,” said Akbar Al Baker, CEO of Qatar Airways.

”Qatar Airways is happy to work closely with Wipro to continually enhance our products and also bring out new product solutions that help airlines take service levels to new heights. Wipro’s technical expertise along with our airline domain knowledge and the insights from our award winning service has helped create some excellent IT offerings for the aviation sector,” said Al Baker.

Anand Sankaran, senior vice president and business head, global infrastructure services & Wipro Infotech said, “We are developing new IPs with Qatar Airways which will augment our available suite of solutions. This is a very unique partnership with Qatar Airways where we are marketing their existing software products and leveraging the core competencies of both organizations to create tangible value to other airlines. We believe that this portfolio of products will transform the Airline industry and help them do business better.”


A new IT plan but no hope yet for jobs

August 29th, 2013

Small technology suppliers will have a better chance at Queensland government contracts but hundreds of public servants continue to face an uncertain future as the state forges ahead with its ICT outsourcing push.

According to a government ICT Action Plan released Thursday, agencies will start to quantify the cost and quality of IT services currently being provided in-house and compare them with equivalent services from external suppliers. The move is expected to precede the outsourcing of ICT services across all agencies.

Minister for Information Technology Ian Walker said this “contestability framework” would help agencies determine which services might be better delivered by external suppliers.

Major systems slated for replacement are also expected to be prioritised by the year’s end. An $5.2 million ICT audit commissioned by the government last May revealed a plethora of outdated and moribund systems with a replacement bill estimated as high as $6 billion.

Mr Walker has previously announced the government’s intention to adopt a ‘buy-not-build’ strategy for ICT systems and offload its CITEC and shared services divisions within two years.

He said more high tech roles would be filled by the private sector as the government outsourced 1700 IT jobs within the next four years but the net number of jobs was unlikely to change.

“In relation to workforce requirements, the total number of people providing IT services to government is not going to go backwards,” Mr Walker said.

The skills of current ICT staff are set to come under the microscope, in the wake of the Royal Commission into the Queensland Health payroll system, which was critical of public servants’ ability to manage complex projects.

Several senior bureaucrats involved with the Health Payroll project were sacked earlier this month and others may face disciplinary action.

Mr Walker said the government would be “up-skilling staff where necessary” and would hire new people with appropriate skills as needed.

Meanwhile, the plan contains welcome news for small and medium enterprises, which have traditionally struggled to get access to lucrative public sector work, courtesy of onerous tendering conditions and risk averse agency mandarins.

Suitably qualified SMEs will be shortlisted for new projects automatically while major contracts will be broken down to allow them more opportunity for a piece of the action.

Tendering conditions for small suppliers are to be simplified while major consortiums would need government approval to change their subcontracting arrangements with SMEs, the plan states.

Dean Robertson, the technical director of Mexia, a Brisbane software consultancy employing 11 staff, said small suppliers had superior technical skills but were constrained by not being able to meet entire tender requirements.

“We think this risk-based approach to purchasing means the Queensland government has been getting an overall lower standard of IT skills in our particular area of specialisation, resulting in the higher project costs and lower levels of solution quality that they were trying to avoid,” Mr Robertson said.

“By opening the door to smaller SMEs with deep technical skills, the Queensland government will now get a far higher level of quality for a fraction of the price.”

The plan comes on the heels of an ICT strategy released in July which unveiled sweeping changes to the way the state buys and manages ICT and a raft of measures to prevent failures and cost blow-outs on major projects.

Measures include an IT dashboard which will act as an early warning system for projects which are falling behind time and budget and more scrutiny of ICT projects by directors general and Mr Walker’s department prior to approval.

Queensland spends around $1.6 billion running its ICT infrastructure, including $1 billion on products and services and $600 million on IT staff.

The state’s ICT spending has long received unwonted attention. Dubbed “the worst failure of public administration in this nation” by premier Campbell Newman, the Queendsland Health payroll system is expected to cost $1.2 billion to rectify.

The new plan identifies developing digital services for government and the public and creating a “transformed and capable workforce’ as key objectives for the state.


IT budgets rise as outsourcing spending falls

August 29th, 2013

The report by Computer economics showed that while outsourcing accounted for 11.9% of the average IT budget in 2012, this figure has dropped to 10.6% in 2013.

Meanwhile, the survey of 200 organisations in the US and Canada found that IT budgets have seen an average overall increase of 2.5% this year.

The report read: “In the early stages, IT organizations first turned to service providers out of reluctance to hire permanent staff. Now they are turning their attention to long-delayed infrastructure upgrades, system improvements, and unfilled positions.”

“Some organizations may be making strategic decisions to back-source as well, if they find they have the economies of scale to efficiently deliver IT services.”

The survey found that the most frequently outsourced function is application hosting, which has overtaken application development since last year.

Of those who outsource application hosting, 57% said they plan to increase the amount of work they outsource.


Business and IT consultancy Waterstons swells its ranks by a quarter

August 28th, 2013

Business and IT consultancy Waterstons has swelled its ranks by a quarter after a rise in referrals stepped up turnover by 25% in 12 months to £6m.Outsourcing

The Durham-based services firm began life in the basement of Sally and Mike Waterston’s home in 1994, rapidly expanding as it took on a host of clients within the North East and further afield.

The company opened an office in London to cater to the demands of customers outside the region in 2011, and expanded further by opening a second Durham office last year, a move which has seen sales of their business almost double in three years, from �3.7m for 2009-10 to £6m in 2012-13.

The rise in revenues, attributed by the company to an increase in referrals from existing clients, has led to the team expanding through the arrival of 20 new recruits at its head office in Durham, taking the workforce headcount to 83.

Managing director Mike Waterston said there is scope to take on more employees in the coming months to aid the firm’s plans to grow sales by a fifth in the year ahead.

Waterston said: “Referrals from existing customers are the best indicator there is that we are doing something right.

“We focus a great deal on looking after our employees and customers alike and this has always resulted in a lot of referrals, but over recent years there has been a sharp increase in the amount of work we are securing in this way.

“We expect to take on 10 more members of staff but to be honest it could be as much as double this; if we meet talented people we will always take them on.

“Our forecasted growth for the next financial year is 20% so we need to grow the workforce in line with this to ensure we can maintain the excellent level of customer service we have become known for.”

Waterstons has attributed a great deal of its growth to the trend in companies outsourcing the management of their IT services, enabling the firm to provides a range of managed services offerings.

The latest expansion sees Waterstons take on 14 software developers and five technical services consultants as well as an account director charged with managing its customers from the transport sector which include Port of Dover, PD Ports, Port of Tyne and Newcastle International Airport.

The company was officially recognised for its working practices by Investors in People, which awarded Waterstons with its highest accolade, the gold award, for a second time last month.

The new recruits include Richard Begg who has joined the now 26-strong software development team as lead specialist in integration and software architecture, having joined from services company Serco.

Begg said: “Waterstons make some big statements about the benefits of working for them and I’m pleased to say now that I’ve started that I would agree it is a great place to work. I was initially attracted to the company by their focus not only on customers but employees too, and the importance of employee empowerment as a way to achieve results. There is a real focus on looking after staff which is evident as soon as you arrive at the office.”


Infosys reshaping sales team, may go for job cuts

August 28th, 2013

Infosys, India’s second-largest IT company, is restructuring its sales and marketing team in India and abroad, including the US, its largest outsourcing market, and that may also involve job cuts.Outsourcing30
The Bangalore-headquartered IT major is looking at optimising costs and streamlining its workforce across geographies. “The company is going to get more aggressive with its sales and marketing team to fetch more deals by laying off underperforming employees and hiring new people for the customer-facing client services group (CSG) group,” an Infosys official told FE, adding that areas with overlaps will also see some job cuts.

Narayana Murthy sounds out Nandan Nilekani, Pai to recreate magic

These changes are part of the fresh measures initiated by chairman NR Narayana Murthy to revitalise the company and he is being helped by his son Rohan Murty, designated as executive assistant.

Narayana Murthy gets aggressive

According to another Infosys official, Basab Pradhan, who was head of global sales and marketing and Sudhir Chaturvedi, financial services head for the Americas, resigned recently from the organisation owing to differences after they were asked to explain the overstaffing of the sales and marketing task-force overseas.

“The company wants to bring synergies across geographies by streamlining the sales and marketing team, which will result in cost-optimisation, ” the official said, adding, “making it more agile and accountable.”

Sources told FE that Infosys is also looking at bringing about changes in the offshore-onshore mix of its employees. Currently, on an average, the onsite-offshore employee ratio is 35:65, which the IT major is trying to cut down to 10:90. “There was always a push to optimise the onsite-offshore ratio to 10:90, but now they are making it a must for all projects,” the official said.

For instance, if there are three shifts working on a project, typically two shifts are in India while one is overseas. Now, the company is trying to reduce overseas staff presence to a minimal essential strength and move most of the workforce back to India even for the third shift.

In response to an email query, Infosys spokesperson said, “We do not comment on queries pertaining to our internal organisation.”

The current multi-layered structure in Infosys is slowing the decision-making process, leading to losing out on contracts to increasing competition.

Though the external economic environment remains challenging with business momentum slowing down, Infosys’ performance over the last two years has never really matched that of its peers. Infosys always talked about the tough conditions, but it was clear that internal issues were plaguing the company, with no strong leadership to hold the firm together.

The entry of Rohan Murty, 30, who joined Infosys as his father’s executive assistant on June 1, is one of the moves to strengthen the leadership team. The company said that Rohan Murty’s appointment is yet to be approved by the ministry of corporate affairs. “His designation in the company will be confirmed once the process of his appointment has been completed,” Infosys said.

In response to a query by FE, Infosys said, “The company has filed an application under section 297 of the Companies Act, 1956, seeking approval of the government for Rohan’s appointment. The requirement of Section 297 is that any contract for sale, purchase or supply of any goods, materials or services, entered into by the company with either directors or relatives of directors, needs to be approved by the government.”


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