Archive for July, 2014

Cordium partners with IP Sentinel

July 31st, 2014

Cordium, a provider of compliance consulting, accounting, tax and software to the financial services industry, has partnered with IP Sentinel, a provider of IT solutions, cybersecurity, monitoring and audit services to regulated entities. 


Cordium and IP Sentinel have entered into this partnership due to the increased demand from clients for advice on safeguarding their infrastructure and the identification of cost-effective solutions for technology issues.

Much of the infrastructure underlying a firm’s ability to comply with financial regulation, such as the maintenance of records and the proper execution of trades, is now technology dependent.

The SEC has put considerable focus on cybersecurity. Further to this, the FCA has recently signalled that a firm’s underlying technology setup is crucial to its ability to meet regulatory obligations, and that IT will accordingly come under greater scrutiny from now on.

IP Sentinel offers a range of services to regulated entities. It provides regulatory IT consultancy, advising on how to outsource IT and manage outsourced IT while remaining compliant with FCA and SEC regulations. For firms who do not have a chief technology officer, IP Sentinel supplies compliant architectures directly via a virtual CTO service and manages these relationships for the firms on a continuing basis. IP Sentinel can also assist growing firms via start-up packages that assist clients with all the peripheral, yet critical, essentials needed to begin a business, such as a logo, a website, email hosting, telephony, connectivity and hardware.

James Hogbin, director of IP Sentinel, says: “In today’s world the ability of a firm to comply with regulatory obligations is completely intertwined with its IT systems and procedures. Yet, the industry has evolved in such a way that the two are typically thought of and dealt with quite separately. For example, IT outsourcing is often treated with far less care than the outsourcing of book keeping. Recently this has become something that firms can ill-afford as the FCA is explicitly turning its attention to the management of IT. Cordium’s deep regulatory expertise combined with IP Sentinel’s wealth of insight into fund management IT operations makes for the perfect team to help our clients meet this challenge.”

Stephen Burke, managing director EMEA at Cordium, says: “As we have said previously, firms are operating in an increasingly joined-up world where the lines between compliance, tax, and accounting are all starting to blur. Our business has always been about adapting to this new reality and offering our clients the most comprehensive service possible by connecting all of these disciplines.”


Freelancer marks strong cash flow to June

July 31st, 2014

Freelancer has marked a strong performance for the first six months of this year with net operating positive cash flow of $1.35 million on revenue of $11.85 million.Outsourcing42

The world’s largest outsourcing market place reported net operating cash flow of $246,000 on revenue of $18.54 million in the full 12 months of 2013. It has also made a number strategic acquisitions.

It remains well cashed up with $19.7 million in cash as of 30 June 2014.

Cash outflows of $3.9 million for the quarter included cash consideration for various intangible assets relating to the acquisition of Warrior Forum as well as capital expenditures and the provision of security deposits relating to the expansion and fit-out of the Company’s operations.

Recent Update

The company had earlier this month launched Warrior Payments, an all-in-one payments, analytics, affiliate marketing and distribution platform that supports its internet marketing forum Warrior Forum.

Besides acting as an alternative to other payment platforms such as Paypal, it leverages on the over 780,000 internet marketers on the Forum.

Warrior Payments integrates payment processing, online product delivery, detailed analytics, affiliate marketing and distribution into the one service for a 2% fee on sales through the platform.

It handles customer management, connecting with preferred mailing list services like MailChimp and AWeber and also allows sellers to provide special limited time offers including time-sale and dime-sale offers to create a sense of urgency around product launches.

The platform also simplifies selling online with affiliate commissions automatically managed by Warrior Payments.

The company had in April acquired Warrior Forum, a leading network of over 780,000 internet marketers, for US$3.2 million.

It is ranked in the world’s top 300 websites, top 200 in the United States and Canada, top 150 in the United Kingdom and top 100 in Australia according to Alexa.

It is also home of the War Room, an elite discussion group of the world’s top experts in the field, and the Warrior Special Offers marketplace has launched over 65,000 products & services to date.

The forum’s business model is to charge fees for access, self-serve advertising and listing fees for marketplace items posted in the forum.

These add to the company’s existing freelancing, outsourcing and crowdsourcing marketplace with over 11,830,121 employers and freelancers.

Fees are charged on the type of project and membership.

Other value added services include project upgrades, crowdsourcing contests and upgrades, bid upgrades, transaction fees, certification fees and advertising.


With net operating positive cash flow of $1.35 million in the first 6 months of 2014 exceeding the $246,000 it recorded in the entirety of 2013, Freelancer is well positioned to record strong results this year.

Freelancer is well cashed up with $19.7 million in cash as of 30 June 2014.

The acquisition of Warrior Forum, a leading network for internet marketers, and the recent introduction of Warrior Payments will also be cash flow accretive rendering the group the world’s largest outsourcing marketplace.

It had also earlier this year acquired, the leading feelancing marketplace in Poland with over 85,000 users – a strong bolt-on acquisition, as well as leading virtual content marketplace, which had over 100,000 users and almost 1 million items of digital content.

Freelancer operational and product development outlook for the 2014 financial year includes:

–    Continued focus on platform scalability;
–    Product & user experience to drive engagement;
–    Increased focus on acquisition channels;
–    Expanding its global presence;
–    Launch mobile offerings; and
–    Continually assess opportunities.

The Warrior acquisition is a significant pick-up for Freelancer and should provide momentum for the the group into 2014/15.

2014 tech trends report reveals opportunities and challenges

July 31st, 2014

Xchanging plc. released its 2014 Insurance Technology and Spending Trends Report, a survey encompassing responses from 75 insurance industry practitioners. The 15-question survey was designed to explore insurance industry technology and spending tends, but the findings reveal a number of opportunities and challenges for insurance professionals.Outsourcing41

According to the Bureau of Labor Statistics, nearly half of the industry’s workforce is age 45 or older, pointing to a shrinking talent and labor pool. However, only 11% of respondents ranked attracting qualified talent as a top challenge for their agencies. Approximately a third of survey respondents stated that talent acquisition is lower on their list of priorities.

Fewer than half of respondents have the “strategic sourcing of talent” ranked as their second highest priority in order to increase efficiency, cost savings and competitiveness.

The survey also revealed that 40% of respondents claim their level of BPO engagement would increase, and more than half said they would increase IT outsourcing and a nearly a third would outsource back-office services this year, including policy and claims administrative duties.

When it comes technology investment, the survey results show that technological advancement is a clear priority for the industry as a whole. Approximately 67% of respondents reported that they expect their company’s IT budget to increase this year, and 44% cite that that they will significantly increase their budget (by 6-10% or more).

Technological investment was the top priority for 60% of respondents, while 86% ranked technology as either their first or second priority.

Mobility and claims investment were cited as the first or second priority for 39% and 16% of respondents, respectively.

In terms of technological investment, it is no surprise that Big Data/analytics and mobile apps are high on the priority list, but e-placing platforms will also receive attention, results reveal.

Respondents most value predictive modeling/analytics and Big Data as their focus areas, and 36% of respondents have selected Big Data/analytics to have the highest likelihood of an increased investment this year.

Contrastingly, only 8% ranked cyber security technology as the most valued, which is interesting given the attention being paid to electronic insurance fraud.

While e-placing platforms are in the early developmental stages, interest for these platforms is growing, with 45% of respondents citing it as a first, second or third priority.

When it comes to industry competition, the survey reveals new pressures and new customer engagement models. Insurance providers are seeking to engage their customers in new ways.

While half of survey responses cited U.S.-based insurance companies as their biggest competition, a significant segment of respondents—30%–believe non-conventional sources are the biggest threats moving forward.

The biggest opportunities in 2014, according to respondents, are engaging customers in new ways as a first or second priority, which speaks to tremendous interest in Big Data and mobile applications.

Insurers are also actively seeking to work across boarders. Global utilities, which allow companies to work across boarders and the interest for technology continues to grow. Approximately 30% of respondents’ companies plan to deploy a global utility or are already in a pilot program, and 27% of respondents are evaluating how global utilities can bring value to their organizations.

“The core messages that we are taking away from this survey is that the U.S. insurance market is ready to tackle its challenges and find a new gear in terms of growth and improvement,” said Jenna Richardson, director, North American Insurance Services, Xchanging.

“We expect to see a marked investment in advanced technologies, business processing outsourcing and IT outsourcing as companies look to differentiate their businesses, combat growing competition, and increase their market share in 2014.”


Infosys Turnaround: Incoming CEO Vishal Sikka Favors Tweaks Over Drastic Changes At IT Giant

July 31st, 2014

Infosys is struggling but incoming CEO Vishal Sikka said his prescription consists more of innovative tweaks than any drastic changes at the software company after he takes over at the end of the week.Outsourcing40

Sikka was speaking at the Bangalore-based IT services giant’s general meeting that formalized his appointment as the company’s chief executive and managing director. He will take over on Friday from incumbent SD Shibulal, the last of the company’s founders to hold the top position.

“I see no reason to make any grand changes to the direction we’ve been going in, but I do see a great opportunity to augment that with new kinds of innovation,” said Sikka, who has been offered over $5 million in annual compensation in addition to stock options to lead Infosys.

When Sikka, who quit as chief technology officer at SAP AG before accepting Infosys’s offer, starts in his new role, it will be the culmination of a tumultuous 15 months since Infosys’s iconic founder NR Narayana Murthy returned from retirement to try and pull the company from the morass it seemed to be stuck in.

When Sikka takes over it will be a break in history as he’ll be the first non-founder chief executive, and from outside the company to boot, to lead Infosys at a time when it’s future hangs in balance.

In the two years leading up to Murthy’s return, Infosys implemented much of a strategy it called Infosys 3.0. This was expected to help the company break away from adding hoards of college recruits, like the rest of India’s outsourcing industry, and bring in disproportionately higher revenue growth from a combination of proprietary software products and platforms and consulting.

But that effort coincided with financial crises in the U.S. and Europe that left the company’s biggest customers in no mood for fancy projects, the strategy didn’t really take off and Infosys lost ground to rivals such as Tata Consultancy Services, paying the price for neglecting its bread-and-butter IT outsourcing business. Sales growth fell close to 80 percent in the two years before Murthy returned, margins were down nearly 45 percent, and Infosys continues to lag its peers in the Indian IT sector.

Murthy vowed in June 2013 that he would reverse the trend and put the company back on track to winning large outsourcing contracts. He offered ruthless cost cutting, productivity improvement in software delivery and renewed focus on sales effectiveness.

Since Murthy’s return, leading up to Sikka’s selection in June this year, some 13 top executives quit, including those who were considered CEO candidates. However, bolstered by a gradually improving US economy, Infosys is showing signs of accelerating its growth, largely meeting street expectations over the last one year. The U.S. accounts for 60 percent of Infosys’s revenues.

“The initiatives taken by Mr. Murthy (and others) over the last one year has started to show results, and we are confident that the team we have in place and recent momentum is in our favor,” Sikka told shareholders from Bangalore. He will continue to be based in California where his family is, and travel as needed, he has said.

Sikka, 47, has a doctorate in computer science from Stanford University and is often called the father of HANA, SAP AG’s in-memory analytics and applications platform. Since his very first interactions with the media and others, he has always argued Infosys is uniquely placed to deliver path-breaking software to its clients.

Shareholders got a broad-brush glimpse of that philosophy on Wednesday: “The world around us is becoming fundamentally reshaped by software … it is happening in every industry that we already operate in, and so I see great opportunity in bringing innovative new kinds of software to our clients.”


HCL Tech Q4 dollar revenue disappoints investors, shares fall

July 31st, 2014

HCL Technologies Ltd (HCLT.NS), India’s fourth-largest IT services exporter, reported on Thursday quarterly growth in its dollar-denominated revenue that missed analyst estimates, sending the company’s shares down by as much as 2.5 percent.To match Insight INDIA-OUTSOURCING/

For most IT services companies, analysts and investors track the dollar sales numbers as clients oversees get billed in that currency. For the quarter ended June, HCL posted a 3.4 percent rise from March to $1.4 billion, below industry leader Tata Consultancy Services’ (TCS) (TCS.NS) 5.5 percent increase.

“We were expecting it to grow about 4 percent. In the past HCL has been able to keep at about the same dollar revenue growth as TCS,” said Ankita Somani, analyst at brokerage MSFL Research.

HCL is part of a $108 billion Indian outsourcing sector that generate the lion’s part of their sales by providing services like IT network installation and development of software applications to Western clients.

Revenue from the Americas, HCL’s largest market, saw a rise of 12 percent in the quarter, while sales in Europe, where the company’s clients include a British government agency and a Swiss pharmaceutical company, rose 25 percent.

Consolidated net profit in its fiscal fourth-quarter ended June 30 rose 54 percent to 18.34 billion rupees ($305.4 million) from 11.93 billion rupees a year earlier, the company said.

Analysts, on average, had expected the company to report a net profit of 16.15 billion rupees.

HCL shares were trading 2.5 percent lower at 1,556.95 rupees at 10:51 a.m., while the Nifty was down 0.1 percent.

Research firm Gartner says global IT spending is expected to total $3.7 trillion in 2014, up 2.1 percent from a year earlier.


Wipro wins ten year outsourcing engagement with ATCO

July 31st, 2014

Wipro Ltd., a leading global Information Technology, Consulting and Business Process Services company announces that it will provide total outsourcing solutions to ATCO Ltd. in Canada and Australia.Outsourcing39

Wipro’s strategic alliance with the Alberta-based ATCO, one of Canada’s premier corporations is expected to earn Wipro revenues of over CAD 120 million (USD 112 million) annually, for the next ten years up to December 2024. Under the agreement, Wipro will provide a complete suite of IT services to ATCO.

According to Brian Bale, Senior Vice-President & Chief Financial Officer, ATCO, the alliance will ensure ATCO can focus on growing their core businesses of structures and logistics, utilities, and energy with the Wipro partnership providing strategic, innovative IT solutions required to support their global operations.

Anand Padmanabhan, Chief Executive – Energy, Natural Resources and Utilities, Wipro commented that they will focus on enabling ATCO to enhance their competitiveness through the deployment of strategic solutions and efficient delivery of IT services. He is confident Wipro’s domain expertise combined with the enhanced talent pool will help them support ATCO’s growth.

Wipro’s IT services delivery model will be further strengthened in North America and Australia through the acquisition of ATCO I-Tek, a subsidiary of ATCO with a presence in both these geographies. Now a part of Wipro, ATCO I-Tek has been providing IT services to ATCO for the past 15 years.


Now, leading IT firms like TCS and Wipro pay upfront to win big contracts

July 30th, 2014

The battle for winning information technology contracts is getting fiercer as leading software exporters are either paying money upfront or buying assets to swing the deal in their favour, a trend some industry executives and experts believe will gain traction in a year that has $55 billion (Rs 3.3 lakh crore) of contracts up for renewal. Outsourcing38

At least four large deals bagged by the country’s largest IT firms, including TCSBSE 0.18 % and WiproBSE -0.85 % this year, have seen the homegrown firms edge past competition from global outsourcing firms after innovative structuring of contracts.

“Any deal you do, there will be a certain level of structuring that goes in,” said TK Kurien, chief executive officer, Wipro, after the country’s third-largest software exporter paid about $200 million to buy the IT subsidiary of Canadian utility Atco as part of its single-largest outsourcing deal worth $1.2-billion.

In April, TCS signed an agreement with Mitsubishi under which the country’s largest software company merged its Japanese subsidiary with IT Frontier Corp (ITF), a unit of Mitsubishi. The deal was structured in such a way that gives TCS 51% holding in the new entity.

“It’s very much a trend,” said Sid Pai, who heads the Indian arm of outsourcing advisory TPI. “As deal economics move inexorably toward usagebased models to include the adoption of cloud technology, service providers will have to absorb an ever increasing portfolio of client hardware and software and human resource assets,” said Pai.

The strategy of paying cash upfront is not an entirely new trend. Back in 2007, when ABN Amro signed an over $1 billion contract with InfosysBSE 0.05 % and TCS, the deal involved transfer of people and assets, and some upfront payment. Then, in 2012, IBM beat both Infosys and Wipro to win a billion-dollar contract from Mexico’s biggest cement firm Cemex.

As leading IT firms now bid against global outsourcing firms, homegrown IT majors have started structuring deals to stay competitive. In May, the country’s fourth-largest software services firm, HCL TechnologiesBSE -0.95 %, bagged a $500 milion contract from PepsiCo for infrastructure management services, thereby pipping IBM. Experts said the Gurgaon-based company’s decision to sweeten the deal by putting in money upfront helped the company seal the seven-year deal. The money paid upfront to a client is a part of the sum which the IT outsourcer expects to spend over the total deal.

“It is not a standard kind of payment term,” said Suresh Senapaty, chief financial officer at Wipro, adding that buying the captive IT centre brings its own benefits. “Depending upon how the customer is looking at, it varies. I won’t say across the board but there are quite a few deals where you are able to protect your downside and able to structure the deal to take it forward by putting something upfront,” Senapaty told ET. However, some experts doubt if the structuring done by companies can be dubbed as a secular trend and said that taking “over assets and people is the DNA of outsourcing.”

“Given the maturity of the outsourcing market, most providers apply a portfolio management approach to sourcing large deals based on their penetration of specific verticals,” said Tom Reuner, an analyst at Ovum, a Londonbased IT research firm.


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