Archive for April, 2014

The IT domino effect: First big data, then mobility, cloud…

April 29th, 2014

Anyone who manages IT systems knows a technology change can have a domino effect across an entire organization. One change leads to another and another, and pretty soon the whole business process has transformed because of the way information flows through the organization.dominos

Today, there are several IT changes on the horizon which, within the next two years, could hit government IT organizations very much like a line of falling dominoes. Each change could have a substantial impact of its own, and it could affect the next domino in line. Government IT managers and business process planners will need to keep these cascading changes in mind as they make  their long-range IT plans.

The first domino in line is the rapid growth of the Internet of Things (IoT). This refers to a wide range of items, including sensors attached to roads, bridges and traffic lights; energy consumption monitors embedded into building heating and cooling systems; and even so called “personal area networks” that channel data from smartphones, health monitors and heads-up displays like Google Glass. Smart City efforts alone will create new petabyte-size data collections as they store everything from captured video images from license plate scanners to GIS mapping for police reports.

The second domino to hit government hard will be changes related to mobile devices and mobile networks. Discussions about mobile are no longer limited to tablets, smartphones and Wi-Fi systems. Mobility also means closing that last mile to the vast array of IoT devices that are popping up across the  country. Thousands of networked parking meters or traffic lights  don’t each get their own cellphone connection; they connect via neighborhood wireless systems.

Consequently, companies like IBM, Hewlett-Packard and General Electric have entered into citywide pilots related to the infrastructures needed to support this wide range of new city-management devices. Sometimes commercial projects can piggyback on government infrastructure. Electronics companies Philips and Ericsson are working with Verizon Wireless on a project to merge energy-efficient street lighting with mobile phone infrastructure. The solution will soon be offered to city governments.

With that kind of wireless infrastructure in place, new solutions can be attached to the networks. For example, in Barcelona, Spain, sensors in public trash cans alert workers to when they should be emptied. The city also monitors how water is being used, with an application that workers can view from an iPad. Meanwhile, cities like Lafayette, La., are investing in their own citywide broadband solutions to help boost economic development.

The third domino to hit government is already at the tipping point. It’s the cloud-based solutions that are rapidly coming to the forefront for many departments. Even though the majority of public-sector IT departments still maintain their own data centers, when they launch new solutions, they are likely to use cloud-based infrastructure. This practice is especially true for applications that generate large quantities of new data or that require data feeds from outside the enterprise. As a result, agencies need to be ready to make the enterprise architecture changes necessary to interact with third-party IT resources. These improvements can range from boosting network bandwidth to establishing an enterprise services bus to allow both new and legacy applications to interact with the new data sets.

So these first three examples show how one domino falls into the other. 1) The growing IoT will boost the need for 2) new broadband mobile solutions, and new mobile solutions will feed data into 3) rapidly expanding cloud solutions. But the cascade of IT changes doesn’t stop there. We’ve already mentioned that these trends are having an impact on the enterprise IT architecture within many organizations. And one of the biggest changes is how IT is consumed. Government organizations are increasingly outsourcing their infrastructure and instead focusing their IT departments on the specialty applications they need to build and maintain themselves.

Next domino: With the growth of mobile and cloud-based applications, look for more agencies to outsource application management and device management. This trend will lead to standard devices and apps across the enterprise (and actually lead away from support for the bring-your-own-device movement).

And within their internal networks, government organizations are seeking solutions that will provide them with quickly reconfigurable networks. Cisco’s  “application aware networks” provide better (and often highly automated) network optimization and control, with a focus on network capacity management and planning that is trigged by an awareness of application usage and performance across the network.

The real long-term issue here is that most government agencies want to make this type of change, but they lack the IT investment capital to make it happen. But the wise groups will analyze their return on investments to understand their current baseline costs and what their potential savings might be if they take a new approach to the influx of new data and new devices.

This is not an easy path to walk. But being ready for these falling dominos could be the difference between being prepared for change and having the force of that change come crashing down.


Eighteen companies vie for massive IT contract

April 29th, 2014

Eighteen companies are vying to win all or part of Minneapolis’ largest contract, an IT outsourcing deal that has paid Pennsylvania-based Unisys more than $149 million since 2003.outsourcing15
The city opted to seek competitive bids on the contract in 2012 and IT officials have expressed interest in breaking up its many components. The city renewed the contract without seeking bids in 2007 and then extended it in 2010 — it now ends in December 2015.
Some have questioned the city’s close ties with the company over the years. A Star Tribune analysis in 2012 revealed a revolving door of sorts between the company’s top ranks and Minneapolis government.
The contract is hugely important for the city, since almost all data at City Hall flows through Unisys property — from laptop computers to their Eagan-based servers.
Only two of the companies who submitted proposals are headquartered in Minnesota. US Internet, which runs the city’s municipal wireless network, is based in Minnetonka. ipHouse is based in Minneapolis.
The city would not disclose which companies are seeking the full contract and which are seeking pieces of it. Council Member Andrew Johnson, chair of the city’s IT policy subcommittee, said smaller contracts are beneficial in a rapidly evolving field like technology.
“Our goal is with this is to make sure that not only is the contract length shorter, so that we’re better able to adjust as the industry adjusts, but that we’re also breaking these into smaller components so that we’re able to get more solutions from different niches of the market,” said Johnson, who plans to review the proposals later this week.
The city is in “phase two” of its multi-stage process of selecting a new vendor or vendors (see page 13 of this presentation). The new contract is slated to be approved in February 2015.
Here are the companies that responded to the city’s request for proposals:
One Neck — Scottsdale, Ariz.
Unisys — Blue Bell, Pa.
SDI — Piscataway, N.J.
Advanced Governmetn Solutions, Inc. — Bowie, MD
Atos — Bezos, France
US Internet — Minnetonka, MN
CenturyLink — Monroe, La.
Data Bank — Dallas, Texas
Oracle — Redwood City, Ca.
ipHouse — Minneapolis, MN
CMC Americas —  Baton Rouge, La.
EnPointe Technologies — Gardena, Ca.
Comcast — Philadelphia, Pa.
tw telecom — Littleton, Co.
Stefanini — Southfield, MI
Toshiba — Minato, Tokyo
Ricoh — Chūō, Tokyo
Corporate Technology — Burlington, MA


Elephant Group’s Jamaica Workforce Grows Fivefold

April 29th, 2014

Outsourcing firm The Elephant Group has revealed that its headcount in Jamaica has increased fivefold in the past year. The Florida-based BPO provider, which only entered Jamaica in February 2013, operates a huge call center in the Montego Bay Free Zone.elephant-crop

Elephant Group’s employee count increased from 80 to 400, the Jamaica Gleaner reported, quoting company officials. The headcount ballooned as the BPO provider won dozens of outsourcing contracts in the early months of this year. This sudden growth makes Elephant Group one of the biggest BPO firms operating in the Caribbean region.

“We have acquired several accounts and seen considerable revenue growth. Our intent is to try different campaigns and continue to grow steadily,” said Simone Schloss, corporate ambassador for Elephant Group Jamaica.

Earlier this month, Elephant Group moved into a  20,000 square-feet office facility in Jamaica’s Montego Bay Free Zone. The outsourcer provides call center services to US corporate giants, particularly those in the telecom sector such as AT&T, Comcast and Time Warner Cable.

It has half a dozen call centers in Latin American countries including Panama, Honduras, El Salvador and the Dominican Republic. But nowhere is the company expanding as rapidly as in Jamaica.

There are many outsourcing firms in the Free Zone, including global giants such as Xerox and Teleperformance. In the last fiscal year, the Free Zone reported more than 20% growth in employment.

In Jamaica, Elephant Group has engaged an HR firm called HEART Trust to help train potential employees in call center operations.


Ukraine Tech Firms Seek Work Amid Turmoil

April 29th, 2014

Lezgro, a 50-person IT outsourcing firm, urges Western companies to move IT work from Russia to Ukraine to take advantage of country’s tech talent.outsourcing14

The news out of the Ukraine, with Russian troops on its eastern border and armed militiamen holding government buildings in the eastern provinces, sounds dire. But to one IT consulting shop, it’s a time to stay calm and carry on.

Ihor Pidruchny, head of Lezgro, a programming and IT consulting firm in the western Ukraine, responded via email to questions about his business and those of associates who make up the Ukrainian IT Development Center, a group he founded to promote outsourcing to Ukrainian firms.

While acknowledging the situation, Pidruchny said neither he nor his employees live in daily fear of invasion or a full scale war breaking out. Although this exchange took place several days before the latest developments in the Ukraine, Pidruchny, when asked if there was anything companies in North America or Europe can do, urged those watching to “shift your outsourcing projects from Russia to the Ukraine. Not only will you help us, you will gain a real advantage out of it.

“We all definitely support the changes and the new transitional government” under Acting Prime Minister Arseniy Yatsenyuk, versus ousted President Yanukovych, he said. “There is nothing to hide here — I believe political position is above any business purpose. Supporting the changes means supporting the basic freedoms and human rights.”

At the same time, he believes the upheaval and threat of potential violence has the potential of damaging business relations between Ukrainian tech companies and the rest of the world. “Surprisingly it doesn’t, at least for me and for my friends in the industry. However, I am aware that big multi-million dollar contracts have been suspended by potential clients at big outsourcing companies.”

As founder and head of the Ukrainian IT Development Center, he has sought the opposite. The center has built a “plan of technological innovation” that the country as a whole might follow. Friends “with knowledge based on experience from other countries” have helped him form the center and draft the plan.

“Once we all understood that we had gained a better, more open government… multiple initiatives in IT and technology arose to promote the industry,” he wrote. Mainly, the group is seeking to reduce the barriers to starting a new business in the Ukraine and ease taxation until a new business can get on its feet. “Many of initiatives are in the ideation stage — some have duplicate ideas and would gain velocity if they would unite efforts,” he said.

Pidruchny sees his own role as twofold: help business associates implement their ideas for strengthening the country’s technology economy and use his “good connections” with the Ukrainian Parliament’s IT Committee to connect the public and private sector with new laws.

An orientation to the West seems to come naturally to him. His firm has looked to the U.S., Canada, and Australia to find most of its work, not to Russia or other former members of the Communist block; also, surprisingly, not much to Western Europe. “We tried working with Europe,” he said, “but over time, we understood that we have better chemistry with folks in the initial markets and decided to focus on them.

“Our success with North American markets is due to the unique culture that our company nurtures. It resonates with our clients,” he said.

Pidruchny is unapologetically behind the new government and a change in the Ukraine’s world view that shifts its outlook westward.

“Apparently we will have to get used living under threat, but we are not the only country like that in the world. If it doesn’t kill us, it makes us stronger — we need to innovate and make Ukraine one of the world’s top technological countries,” he wrote.

The Ukraine until recently has been host to manufacturing of weapons used by the Russian military and was still exporting weapons to Russia until recently. “Innovation in the sphere of the arms industry may also become a priority,” he wrote.

“I know we all see threatening pictures, but at the end of the day, it happens on a very limited territory. Technological talent in Ukraine is well recognized worldwide. Pay attention to working with Ukrainian development shops, shift your outsourcing projects from Russia to Ukraine,” he wrote.

“We want the IT outsourcing industry to become a major sector in our economy within 5 to10 years,” he added.

His firm, Lezgro, is located in the western part of the country in Lviv and Ivano-Frankivsk, two towns not far from the border with Poland. It is focused on cloud and mobile projects for both B2B and consumer applications. His firm has specialized in PHP and Ruby development for the backend; JavaScript MVC for the front end. JavaScript Model View Controller is a standard way of organizing end user interactions with the parts of a program on a server. Lezgro can also use Objective C and technologies native to iOS for Apple devices. His firm has 50 employees, half of them developers and the rest in quality assurance, project managers, designers, and top management.

“I had a chance to take a poll of the audience during my recent speech at the Lviv International Outsourcing Forum. Only two people out of 100 stated that their business went down. Approximately 98 in the audience raised a hand when I asked if their businesses either maintained the same level or grew,” Pidruchny reported, with an even split between the two categories. The forum was made up of primarily small firms, like his own.

Nevertheless, Pidruchny thinks this time of testing that may result in stronger ties between the technology sector of the Ukraine and the West as a whole. “Ukraine is a very morally strong country. We have shown our high sense of dignity,” he wrote, and it would be happy to demonstrate its growing technical prowess as well.


Indian IT firms come under greater scrutiny as US implements new risk-mitigation rules

April 29th, 2014

Indian information technology firms are facing greater scrutiny from financial sector clients in the United States, following the new risk-mitigation rules they have been asked to adhere to by regulatory agencies. Over the last six months, the Office of the Comptroller of the Currency and the US Federal Reserve have issued new directions on how financial firms should consider risk — both in terms of the companies they outsource to and the operations that are being outsourced.outsourcing8

The Fed, which updated its rules after a decade, also put the focus on the responsibility of company boards. A direct result is that boards of directors are increasingly scrutinising new deals and the renewal of existing contracts, and asking questions about controls at outsourcing firms, where the work will be done, and in which centres. “These are questions that should be asked but it also increases the time taken in negotiations,” a senior IT industry executive told ET, on condition of anonymity as he is not allowed to discuss contract negotiations. Scrutiny has also increased, as the type of work being done increases in scope and complexity.

IT companies have been talking about a shift from basic application maintenance to a more progressive outsourcing and joint working strategy. There are approximately 500 contracts worth about $28.5 billion (Rs1.7 lakh crore) due for renewal this year, according to PricewaterhouseCoopers. North American banks may spend $59.4 billion on technology services in 2014, Celent, a US research firm focussed on the financial companies said in a recent report.

“The board is expected to scrutinise specially the large outsourcing deals/renewals to prevent any fraudulent scenarios, ensuring the spends are in line with business objectives and hiring the right partner for outsourcing. The directors’ involvement will impact the closure of sales cycle,” Sivarama Krishnan, executive director for risk advisory services at PwC, said. He added the contracts would also have to be more detailed to specify geographic locations for a better delivery governance and compliance with regulations.

The increased need for regulatory compliance may also lead to firms pushing their vendors for more details, particular reworking the due diligence aspect of an outsourcing deal.

Stuart Levi, partner for intellectual property, technology and outsourcing at US corporate law firm Skadden, Arps, Slate, Meagher & Flom, wrote in a note that in the view of Office of the Comptroller of the Currency banks often rely on their prior experience with the vendor as a proxy for due diligence. “Although the RFP process can be time-consuming, it provides a critical opportunity for banks to assess and compare various service providers.”

More audits for security and process integrity are underway. Some large US financial service firms are asking for additional process audits, known as a Service Organization Control 2 audit, as a prerequisite for participation in their outsourcing contracts, Chris Halterman, executive director of advisory services at consultancy Ernst & Young told ET. The audit specifically looks at security, processing integrity, confidentiality and privacy.

“We have done about a dozen SOC 2 reports in India but the trend is increasing. We’re even seeing companies using it as a selling point-that they’ve done the audit. Compliance is becoming important. We’ve seen outsourcers take members of their internal compliance team to try and win deals,” Halterman said.

A SOC 2 audit, which could cover the entire organisation or just a business line, could take months or even a year, the cost of which is borne by the IT company. But Indian IT players see increased scrutiny as necessary for doing business.


Cebu rated 8th best outsourcing destination, NCR 2nd

April 28th, 2014

A LEADING US-based services globalization and investment advisory firm, Tholons Inc., has included Cebu in the world’s top outsourcing destinations, a lawmaker said on Sunday.outsourcing13

House Assistant Majority Leader and Nacionalista Party Rep. Gerald Anthony Gullas Jr. of Cebu said the 2014 Tholons Top 100 Outsourcing Destinations ranks Cebu as the world’s eighth-best, after Bangalore, Metro Manila, Mumbai, Delhi, Chennai, Hyderabad and Pune.

The lawmaker said Cebu is conti-nuously beating other high-profile locations in Europe as one of the top outsourcing destinations.

“Cebu’s reputation as a prime world-class outsourcing hub will get an even bigger boost once the Mactan Newtown is fully developed,” Gullas said.

Gullas was referring to the 28.8-hectare special information-technology (IT) park and economic zone being built by publicly listed Megaworld Corp. as a “live-work-play” community in Cebu’s Lapu-Lapu City.

“Cebu has all the building blocks needed to rapidly grow as an outsourcing hub. Besides the policy environment and fiscal incentives, we have the required college-educated human resources and infrastructure, including advanced connectivity,” Gullas said.

“It is also easier to live, work and play in Cebu, where there is less congestion and stress. The costs of living and doing business in Cebu are, likewise, lower compared to Metro Manila and other global outsourcing sites,” he said.

Cebu and Metro Manila were the only Philippines spots in the top 10 of the 2014 Tholons Top 100 Outsourcing Destinations, where the NCR ranked No. 2.

The top 10 was dominated by six metropolitan districts in India. Poland’s Krakow ranked No. 9, while Ireland’s Dublin was No. 10.

The Tholons rankings are based on a rigorous location-screening framework and regarded by industry stakeholders as the best grading of global outsourcing hubs.

Gullas said once fully developed, business-process outsourcing (BPO) firms based in the P20-billion Mactan Newtown are expected to directly engage some 45,000 knowledge workers.

Mactan Newtown’s first office tower has already been fully leased by Diamond Bar, California-based Enfrasoft Inc. and Fort Lauderdale, Florida-based The Results Companies, he said.

Without counting Mactan Newtown, Cebu now has 25 fully functional IT parks, plus 12 more being developed, providing plenty of high-tech office spaces to BPO firms, Gullas added.

Accenture Inc., Convergys Philippines Services Corp., TeleTech Customer Care Management Philippines Inc., JPMorgan Chase Bank N.A.-Philippine Global Service Center, Stream International Global Services Philippines Inc., IBM Corp., Sykes Asia Inc., Aegis PeopleSupport Inc., NCR Cebu Development Center Inc., and Wipro BPO Philippines Ltd. Inc. are among the multinational firms with extensive BPO activities in Cebu.

Gullas said BPO firms in Central Visayas—mostly in Cebu and partly in Negros Oriental—already employ over 100,000 full-time workers and yield more than $500 million in annual revenues.

The country’s BPO and IT-enabled services industry encompasses contact center services; back offices; medical, legal and other data transcription; animation; software development; engineering design; and digital content.

The IT and Business Processing Association of the Philippines said the industry is expected to add 372,000 new jobs from 2014 to 2016.


IT staff head for the exits as work stress prevails

April 25th, 2014

The third annual IT Admin Stress Survey announced today by GFI Software has revealed that 68% of IT staff are actively considering leaving their 8outsourcing7current role due to job-related stress, despite apparent economic and staffing improvements in many businesses across the country.

For the third year running, high levels of work stress is contributing to high levels of job dissatisfaction with in excess of two thirds of IT professionals looking for a new job due to the pressures imposed on them in their current role.

Despite improvements in the economy reducing budget pressures, the level of job dissatisfaction among UK IT professionals has reduced only slightly over 2013, when 73% of those surveyed reported they were actively looking to leave their current job due to stress.

The blind, independent study was conducted by Opinion Matters among 200 UK administrators in companies of 10 or more people. The survey gauged respondents’ stress levels at work and revealed their opinions on their main stressors, as well as how their stress level compares to that of friends and family and how it affects their personal and professional lives.

Key findings from the survey include:

·       67% of all UK IT staff surveyed consider their job stressful – just 1% lower than 2013

·       Over a third (36%) have missed social functions due to overrunning issues at work

·       A further 36% also report missing time with their families due to work demands on their personal time

·       28% of IT staff regularly lose sleep over work pressures

·       19% have suffered stress-related illness, up on 2013, while a further 15% complain of feeling in poor physical condition due to work demands

·       One sixth (16.5%) of respondents have had a relationship fail or be severely damaged due to their job

·       One quarter (24%) feel they are the most stressed person in their social or family group

Management Headache

Management was clearly singled out as the biggest contributing factor to workplace stress, with half the sample of IT professionals surveyed citing management as the biggest source of stress for them. A further 24% cited a lack of budget and staff to get the job done, a small improvement on 2013 and reflecting the improvement in the UK’s job market.

Extra Hours and Illegally-Long Work Weeks

Once again, IT staff frequently find themselves working additional hours over and above the 48-hour working week set down in the EU Working Time Directive, often without additional pay. On average, the IT workers surveyed would work six hours a week over and above their stated working hours, with 20% of the survey sample working between eight and 12 hours a week unpaid overtime.

Smaller is Better

While the overall number of IT staff looking to change roles is already high, in organisations with between 250-500 staff it is particularly high, with 76% of those surveyed looking for a job change, while the smallest companies with between 10 and 49 staff are more content, with 58% looking for a new role.

‘IT is renowned for being one of the most stressful white-collar jobs to undertake, now more so than ever given the critical role IT plays in everything from ecommerce to facilities management,’ said Sergio Galindo, general manager of the Infrastructure Business Unit at GFI Software.

‘There is a lot that organisations can do to reduce the burden – and with it the stress levels – carried by IT staff. Providing realistic IT budgets and staffing levels helps a lot, but there are productivity changes that can also significantly de-stress the IT department, such as investing in technology to automate personnel-intensive activities like deploying software updates and managing sprawling Wi-Fi networks and the myriad of mobile devices that users are bringing to work.’

Regional Findings

·       IT staff in the Midlands are the most stressed group, with 76% of those surveyed saying their work was overtly stressful. Staff in Scotland are the least stressed, with only half of respondents in Scotland declaring themselves stressed at work

·       Nottingham is the city with the most stressed IT staff – with 83% of IT professionals there stressed at work. In line with the regional findings, Edinburgh is the least stressed, with only 30% of IT staff surveyed stressed at work

·       In London, 69% of staff surveyed said management were the biggest cause of stress at work, the highest of all the regions

·       IT departments in Scotland are the most concerned about the lack of budget for IT activities (37.5%)

·       Two thirds of IT personnel in Nottingham (66.7%) are the most stressed of all the people in their social circle

·       40% of IT staff surveyed in the Midlands have experienced stress-related health issues

Things are worse in the US

This years figures are in stark contrast to the US, where the same survey revealed noticeably higher levels of stress, and higher levels of job dissatisfaction among US IT professionals.

Over three quarters (78.5%) of US IT staff are looking for a new role, broadly in line with the same number that report their current role to be stressful.

Management is a significantly smaller influence on US IT stress levels, with just over a third (36%) of those surveyed singling out management as the root cause of their work-related stress, far lower than the UK.


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