Posts Tagged ‘IBM’

IBM to Retrain Outsourcing Employees in Bid to Boost Competitiveness

September 19th, 2014

Technology giant IBM has reportedly asked some of its employees in its technology outsourcing business in the United States to undergo training and accept a 10% salary cut for the next six months.Outsourcing3

According to reports, IBM chose to offer them training instead of laying them off for being less competitive. But these employees, according to the New York Times, say the step is a cost-cutting tactic disguised as a training program.

It is not clear as to precisely how many employees have been told to undergo training. According to the NYT article, “a few hundred employees in the United States have been affected.”

The move, the paper says, could become a trend in retraining programs as both corporations and workers struggle to stay competitive in a fast-changing economy.

The technology service market has undergone drastic change over the past few years, with an increasing number of corporate companies adopting cutting-edge technologies such as mobility and cloud.

Some employees are obliviously struggling to keep pace with the change by acquiring the new skills that clients are looking for.

Employees receiving the offer are given little choice other than to look elsewhere in the company “for opportunities for which your skills may be a better match,” the paper said.

With hundreds of data centers and offices, IBM is one of the largest technology services provider in the world, helping companies manage their IT operations and resources. Its global business services division, which accounts for more than 50% of the company’s consolidated revenue, employs over 190,000 people across more than 160 countries.

Revenues from the Global Technology Services segment in 2012 totaled US$40.2 billion, a decrease of 2% compared with 2011.


IBM cuts pay for workers it says can’t keep up: Report

September 18th, 2014

IBM is slashing the salaries of some of its employees for not keeping their skill set sharpened, according to a report from ComputerWorld.outsourcing60

Selected employees in IBM’s Global Technology Services strategic outsourcing group received a memo on Friday stating “that some managers and employees have not kept pace with acquiring the skills and expertise needed to address changing client needs, technology and market requirements.”

The memo states that workers will need to dedicate one day per week to training so that they can “focus on learning and development.”

But during their training, employees will also receive a 10 percent pay cut.

“While you spend part of your workweek on learning and development activities, you will receive 90% of your current base salary,” the memo states.
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One unnamed IBM employee who was selected for the program said this is IBM’s attempt to get specific employees to quit instead of having to pay them their severance, according to the ComputerWorld report.

CNBC reached out to IBM for comment, but did not immediately receive a response.


IBM cuts pay by 10% for workers picked for training

September 16th, 2014

IBM has initiated a new training program that will cut the pay of participating employees by 10%.outsourcing50

A copy of the Sept. 12 memo, seen by Computerworld, was sent to IBM employees in its Global Technology Services strategic outsourcing group. The memo sent to affected employees begins by telling the worker that an assessment has revealed “that some managers and employees have not kept pace with acquiring the skills and expertise needed to address changing client needs, technology and market requirements.”

It then tells the recipient that “you have been identified as one of these employees,” and says that from mid-October through the end of March, “you will dedicate up to one day per week,” or up to 23 working days total, “to focus on learning and development.”

But IBM is coupling this training with a six month salary reduction. The key statement in the memo is this: “While you spend part of your workweek on learning and development activities, you will receive 90% of your current base salary.”

Salary will be restored to the full rate effective April 1, 2015.

Asked about program, IBM spokeswoman Trink Guarino said the firm “is implementing a skills development program for a small number of U.S. strategic outsourcing employees. Under this program, these employees will spend one day a week developing skills in key growth areas such as cloud, analytics, mobile and social.”

There was negative reaction from some IBM employees.

One IBM IT professional, who asked not to be identified, said he was “shocked” to be added to the list, particularly since his work has been consistently praised by managers.

By reducing pay “by a significant amount,” IBM is acting “in the hopes that the employees won’t be able to sustain that pay and decide to quit, exempting IBM from letting them go and have to pay severance,” the employee said.

One source familiar with the program said the percentage of employees impacted is small, in the single digits.

While employees may see the pay cut as unfair, the salary reduction is viewed by management as a form of employee “co-investment” in training, and as a better alternative to laying off and hiring employees with the latest skills. It’s not that these employees lack skills, but they don’t necessarily have the ones that are needed today, the source said.

The Alliance@IBM has received complaints from its members, and shared some of the that reaction.

Wrote one employee: “I have spent the whole of 2014 improving my skills and my manager has reviewed and approved my ‘skills Update.’ I have received recognition this year for sharing my expertise and offered to be a mentor when asked. So just where are my skills lacking?”

Lee Conrad, national coordinator at the Alliance, a Communications Workers of America local, said that “IBM employees have no problem with learning new skills but to combine that with a salary cut is outrageous and unacceptable. IBM continues to drive morale and employee loyalty down with each new slap in the face like this,” said Conrad. “IBM needs to be mindful of further demoralizing workers and adversely affecting customers,” he said.


Indian IT companies battle it out for Rs 11k-cr Australian pie

September 15th, 2014

Indian IT companies will be fiercely competing with MNCs for five big IT contracts in Australia valued at over A$2 billion (Rs 11,000 crore).infosys

Infosys, Wipro, TCS and HCL Technologies are participating alongside IBM, HP and Capgemini in request for information (RFI) and request for proposal (RFP) for incremental IT outsourcing work coming from Sydney Water, Rio Tinto, Jetstar, Aurizon and Transport for NSW, said an Australian IT consultancy firm that did not want to be named.

Incumbent IT vendors IBM, Infosys and Accenture have sought RFIs and RFPs to participate in mining major Rio Tinto’s A$750 million IT-BPO contract. The work is in HR, analytics, engineering and logistics. Rio Tinto had previously outsourced procurement to Infosys and finance & accounting (F&A) to IBM. Accenture was engaged with the mining major for ERP and application support, while CSC maintained its IT infrastructure. These previously outsourced 10-year contracts were worth A$3 billion.

Jetstar, a wholly-owned subsidiary of the Qantas Group, is considering outsourcing work related to ticketing, customer loyalty programme, analytics, HR and F&A. Wipro TCS and Genpact are participating in the RFIs/RFPs. “Jetstar is currently using Lincom for virtual desktop support. It has been subcontracted through Tech Mahindra. Jetstar’s customer support is partially outsourced to Teleperformance and Convergys,” the consultancy said.

Australian companies are reviewing monolithic contracts and are breaking them down into smaller ones to drive operational and cost efficiencies.

The Australian IT services market has gone through several cycles of IT outsourcing with strong demand particularly from public sector utilities. Last year, New South Wales (NSW) Transport had floated an expression of interest (EoI) for next generation infrastructure services (NGIS) that includes server and webhosting, data centre infrastructure and end user computing. Infosys, Wipro, HCL and TCS, as also HP and IBM, participated in the EoI.

“Analytics and BPO will lead the charge (in contracts). Public sector contracts have opened up in a big way. There will be at least 7-8 RFPs in both federal and state governments in the next six months,” said Mohit Sharma, director of Australia-based advisory firm Mindfields.

Siddharth Pai, president in outsourcing advisory firm ISG Asia Pacific, says Australia is one of the early adopters of offshoring, with Telstra using offshoring a decade back. Infosys counts the telecommunication and media company as one of its top ten customers.

Australia’s largest rail freight operator Aurizon is floating an incremental A$500 million contract for IT and BPO services. The freight operator is looking to outsource F&A, procurement and analytics, for which Capgemini, Wipro, Genpact and WNS have sought RFIs and RFPs.


Gartner Names IBM a Leader in the Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services

September 2nd, 2014

IBM today announced that Gartner, Inc. has once again recognized IBM as a leader, placing the highest for ability to execute, in the newly published “Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services” reports for North America(1) and Europe(2).outsourcing28

IBM’s cloud leadership, as well as its focused strategy on mobile, social and security – which are further fueled by extensive R&D and technology investments in analytics and automation – are key differentiators that enable the company to seamlessly integrate and orchestrate infrastructure services across hybrid environments spanning both cloud and traditional IT models.

Gartner evaluates the top providers of data center outsourcing (DCO) and infrastructure utility services (IUS), which are often enabled by remote infrastructure management (RIM) services and increasingly include cloud computing components. Gartner includes in its evaluation cloud infrastructure as a service (IaaS) and platform as a service (PaaS) offerings that are part of IUS and data center managed services.

“As clients look to grow their business with innovative technologies such as cloud, analytics and mobile computing, they are looking for a trusted partner to help them integrate the new IT solutions with their existing investments,” said Philip Guido, General Manager, IBM Global Technology Services, North America. “We believe this recognition from Gartner reaffirms IBM’s market leadership in assisting clients to evolve their IT infrastructure and meet their business demands.”

IBM delivers a full spectrum of infrastructure services that enable organizations to capitalize on the transformative power of cloud and hybrid IT environments. The company draws upon its vast technical resources and global delivery network – spanning 330 delivery services data centers; 40 cloud data centers, including new SoftLayer data centers in Toronto and London; 11 security operations centers; and 145 business resilience centers – to provide clients with fast, reliable, security-rich data center services.

According to Gartner, “growth in data center services has shifted from traditional to new models, such as cloud IaaS and PaaS, reflecting a shift in competitive delivery models. Gartner predicts it will deliver a global compound annual growth rate of 12.4% for the period 2012 through 2018.” The research firm also “predicts the key business indicators of data center service providers will improve significantly during the next five years and make them a more competitive outsourcing choice.”

(1) Gartner, Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, North America, William Maurer, David Edward Ackerman, Bryan Britz, July 31, 2014

(2) Gartner, Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, Europe, Claudio Da Rold, Gianluca Tramacere, Frank Ridder, DD Mishra, Gregor Petri, July 16, 2014

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.


Monitise signs partnership deal with IBM

August 28th, 2014

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British mobile money company Monitise has signed a partnership agreement with IBM in the latest sign that technology groups are pushing further into the lucrative financial services sector.

News of the agreement sent Monitise shares up about 14 per cent to a closing price of 48.4p. Monitise shares had fallen precipitously in the preceding months, to half the 80p highs they attained earlier in the year.

The tie-up will give lossmaking Monitise access to IBM’s client base of big corporate customers using cloud-based technologies, including global banks, said Monitise chief executive Alastair Lukies. A fifth of the company’s staff – about 200 workers in its professional services division – will move across to Big Blue.

“It doesn’t matter if I’m a small bank in Venezuela, a medium bank in Indonesia or a large bank in America,” said Mr Lukies, a former rugby player turned entrepreneur. “We will build the products and solutions, and IBM will go out and implement them.”

Monitise has been trying to turn the smartphone into a one-stop banking and shopping device, after it downgraded revenue estimates and began shifting its business model away from upfront licence fees and towards subscriptions.

The London-listed company – often considered one of the rising stars in UK tech – builds banking and payment apps, as well as software that lets different financial institutions talk to one another in order to facilitate mobile transactions. It likens itself to a next-generation Link, the organisation that co-ordinates ATMs in the UK. Monitise’s customers include Lloyds, RBS and Visa.

“The risk if you start dancing with these big bears is that they’ll go and do it themselves,” Mr Lukies said, referring to the partnership. “But we were never going to get to the scale of thousands of banks and hundreds of millions of customers alone. We’ve been here with Visa and MasterCard . . . and if IBM believe they could have done it themselves they would have built it.”

The transfer of 200 staff is “not about outsourcing the division because we don’t want it any more”, Mr Lukies added.

He said the deal would generate cost savings, but declined to put a commercial value on the contract.

Monitise is aiming to be profitable by 2016 and to achieve a user base of 200m people two years later, up from its current 30m. It recently recruited Visa executive Elizabeth Buse to share responsibilities as chief executive with Mr Lukies.

It will report full-year results on September 15, which it is guiding for about 30 per cent revenue growth. Revenues last year were £73m, with an operating loss of £46m.

Peter Roe, analyst at research group TechMarketView, said in a research note that the tie-up “will accelerate Monitise’s progress in the mounting land-grab across mobile banking and m-commerce.” He pointed out that it will be important for the partnership to ensure it has common objectives, as many have failed because of divergent aims.


IBM inks private cloud deal with Westpac New Zealand

August 22nd, 2014

Enterprise IT vendor IBM announced its private cloud deal with Westpac New Zealand.Outsourcing47

Westpac, one of the top outsourcing clients for IBM, aims to become New Zealand’s leading digital bank by utilizing IBM cloud.

The new five year agreement is part of an extensive services and technology contract which includes Westpac migrating some of its business critical IT systems into IBM’s Auckland data center, enabling enhanced customer service.

Utilizing IBM private cloud to develop and test tools within a dedicated environment, Westpac will deploy new online and mobile banking services and across multiple devices and platforms.

In addition, IBM is helping Westpac respond with enhanced online security features, such as the ability to manage identity and access through a single user ID.

“IBM’s private cloud platform will further enable increased development of Westpac’s digital capabilities as it responds to customer demands for a more personalized, convenient way of banking,” said Jason Millett, interim chief information officer of Westpac.

Gartner says poor return on equity will drive more than 60 percent of banks worldwide to process the majority of their transactions in the cloud by 2016.

Westpac will also optimize its IT infrastructure by renewing IBM mainframe services, midrange and storage platforms and migrating some services to IBM’s Level 3 data center providing even greater data resiliency.


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