Posts Tagged ‘IT’

IT stocks gain after positive US economic data

August 28th, 2014

Firmness continued on the bourses in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently up 115.76 points or 0.5% at 26,573.79. The market breadth indicating the overall health of the market was positive. The market sentiment was booutsourcing26osted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. ONGC gained on hopes of announcement of reforms by the government on subsidies and gas prices ahead of its share sale. IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. HCL Technologies hit record high.

Key indices have remained in green after a strong opening triggered by higher Asian stocks and a first closing for S&P 500 in the US above 2,000 overnight.

Asian stocks rose after US data on durable goods and consumer confidence boosted optimism in the strength of the world’s largest economy. Meanwhile, there are expectations for quantitative easing and other steps by the European Central Bank. Crude oil prices rose ahead of the weekly US oil inventory data from the US government.

At 11:16 IST, the S&P BSE Sensex was up 115.76 points or 0.5% at 26,573.79. The index jumped 156.31 points at the day’s high of 26,599.12 in early trade, its highest level since 25 August 2014. The index rose 101.63 points at the day’s low of 26,544.44 in mid-morning trade.

The CNX Nifty was up 29.85 points or 0.38% to 7,934.60. The index hit a high of 7,946.85 in intraday trade, its highest level since 25 August 2014. The index hit a low of 7,929.50 in intraday trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,404 shares gained and 946 shares fell. A total of 78 shares were unchanged.

The BSE Mid-Cap index was up 43.05 points or 0.46% at 9,301.87, underperforming the Sensex. The BSE Small-Cap index was up 83.45 points or 0.82% at 10,256.83, outperforming the Sensex.

ONGC gained 1.99% on hopes of announcement of reforms by the government on subsidies and gas prices ahead of its share sale. The government plans to sell a stake in ONGC later this year. State run upstream companies share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PDS kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.

Oil India gained 2.08%.

GAIL (India) fell 1.27% as the stock turned ex-dividend today, 27 August 2014, for final dividend of Rs 5.90 per share for the year ended 31 March 2014.

IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. Wipro (up 0.65%), and TCS (up 0.43%) edged higher. Tech Mahindra fell 0.01%.

HCL Technologies rose 3.21% to Rs 1,648.60 after hitting record high of Rs 1,649 in intraday trade.

Infosys rose 0.09%. At an investor conference yesterday, 26 August 2014, Infosys’ chief operating officer UB Pravin Rao reportedly reiterated the company’s 7% to 9% US dollar revenue growth guidance for the current financial year. Rao also reportedly said that Infosys would look to maintain operating profit margins at 24-25% for the current year.

Hindustan Media Ventures advanced 3.32% to Rs 165 after 0.47% equity changed hands in a bulk deal on BSE today, 27 August 2014. A bulk deal of 3.50 lakh shares was executed on the Hindustan Media Ventures counter at Rs 163 per share in opening trade on BSE today, 27 August 2014.

The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 364.72 crore on Tuesday, 26 August 2014, as per provisional data from the stock exchanges.

The market may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire tomorrow, 28 August 2014.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.49, compared with its close of 60.44 on Tuesday, 26 August 2014.

Source:http://www.business-standard.com/article/news-cm/it-stocks-gain-after-positive-us-economic-data-114082700252_1.html
Crude oil prices rose ahead of the weekly US oil inventory data from the US government. Brent for October settlement was up 22 cents at $102.72 a barrel. The contract fell 15 cents to settle at $102.50 a barrel yesterday, 26 August 2014, after reaching $103.40 during the session. The US is the world’s biggest oil consumer.

At a meeting yesterday, 26 August 2014, the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organization (EPFO) decided against investing in equities and Exchange Traded Funds (ETFs). The finance ministry had suggested EPFO to invest in equities to enhance returns for subscribers.

Asian stocks rose today, 27 August 2014, after data signaled a stronger US economy and Russia’s president hailed as “positive” talks over Ukraine. Key benchmark indices in Indonesia, Hong Kong, Japan, China, Taiwan, Singapore and South Korea were up 0.06% to 0.78%.

Trading in US index futures indicated that the Dow could gain 11 points at the opening bell on Wednesday, 27 August 2014. US stocks edged higher on Tuesday, 26 August 2014, to lift the S&P 500 index just a hair above the 2,000 mark, its first close above that milestone, after data that pointed to a brighter future for the US economy.

Bookings for goods meant to last at least three years climbed by a record 22.6% in July after a 2.7% gain in June that was bigger than previously reported, data from the Commerce Department in Washington showed. The Conference Board’s US consumer confidence index rose to 92.4 in August, the highest since October 2007, the New York-based private research group said.

Russian President Vladimir Putin yesterday, 26 August 2014, said talks with his Ukrainian counterpart over separatist fighting that’s killed more than 2,000 people were “positive.”

Meanwhile, there are expectations for quantitative easing and other steps by the European Central Bank. Ever since ECB President Mario Draghi’s comments at US Federal Reserve’s annual symposium in the United States on 22 August 2014, there have been expectations of quantitative easing and other steps by the ECB. Draghi said expectations of future inflation in Europe exhibited significant declines at all horizons this month.

Sensex, Nifty hit record closing high

August 28th, 2014

Key benchmark indices edged higher amid expectations that further monetary stimulus in the euro zone could trigger more foreigoutsourcing25n fund flows to emerging markets. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, attained record closing high. High volatility was witnessed in late trade as key indices recovered from lower level soon after trimming intraday gains. The Sensex gained 117.34 points or 0.44% to settle at 26,560.15. The market breadth indicating the overall health of the market was positive. The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session.

Shares of defence equipment makers rose after the government notified increase in foreign direct investment limit to 49% from 26% in the defence sector. Most bank stocks advanced. FMCG stocks gained. Shares of companies with significant sales to Europe gained as expectations grew for further monetary stimulus measures from the European Central Bank. Shares of PSU OMCs and state-run upstream oil and gas stocks companied edged higher on hopes of announcement of reforms by the government on subsidies. IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. HCL Technologies hit record high. Auto stocks were mixed. Maruti Suzuki India fell as the stock turned ex-dividend. Shares of two-wheeler makers gained.

Key indices remained in green throughout the trading session after a firm opening triggered by higher Asian stocks and a first closing for S&P 500 index in the US above 2,000 on Tuesday, 26 August 2014.

European shares edged lower after worse-than-projected German confidence data. Asian stocks rose after US data on durable goods and consumer confidence boosted optimism in the strength of the world’s largest economy. Crude oil prices rose ahead of the weekly US oil inventory data from the US government.

The Sensex garnered 117.34 points or 1.44% to settle at 26,560.15, a record closing high. The index jumped 156.31 points at the day’s high of 26,599.12 in early trade. The index rose 49.69 points at the day’s low of 26,492.50 in late trade.

The CNX Nifty advanced 31.30 points or 0.4% to settle at 7,936.05, a record closing high. The index hit a high of 7,946.85 in intraday trade. The index hit a low of 7,916.55 in intraday trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,606 shares gained and 1,379 shares fell. A total of 122 shares were unchanged.

The BSE Mid-Cap index advanced 67.77 points or 0.73% to settle at 9,326.59. The BSE Small-Cap index gained 80.49 points or 0.79% to settle at 10,253.87. Both these indices outperformed the Sensex.

Among the Sensex pack, 21 stocks advanced while remaining shares declined.

IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. Wipro (up 1.19%), MphasiS (up 4.1%), MindTree (up 4.72%), and TCS (up 0.47%) gained. But, Tech Mahindra fell 0.83%.

HCL Technologies rose 3.02% to Rs 1,645.45 after hitting record high of Rs 1,651.50 in intraday trade.

Infosys rose 0.34%. At an investor conference yesterday, 26 August 2014, Infosys’ chief operating officer UB Pravin Rao reportedly reiterated the company’s 7% to 9% dollar revenue growth guidance for the current financial year. Rao also reportedly said that Infosys would look to maintain operating profit margins at 24-25% for the current year.

Shares of defence equipment makers rose after the government notified increase in foreign direct investment limit to 49% from 26% in the defence sector. Astra Microwave Products (up 8.55%), Bharat Forge (up 1.17%), Tata Power Company (up 0.91%), Dynamatic Technologies (up 3.31%), Walchandnagar Industries (up 9.91%) and Pipavav Defence & Offshore Engineering Company (up 0.99%) edged higher. Shares of L&T lost 0.1%.

Bharat Electronics rose by the maximum permissible level of the day of 20%. BEML rose by the maximum permissible level of the day of 5%.

The Department of Industrial Policy and Promotion (DIPP) yesterday, 26 August 2014, notified increase in foreign direct investment (FDI) limit to 49% from 26% in the defence sector. The FDI limit of 49% is a composite ceiling. It includes all kinds of foreign investments such as FDI, Foreign Institutional Investors (FIIs), Foreign Portfolio Investors (FPIs), Non-Resident Indians (NRIs), Foreign Venture Capital Investors (FVCI) and Qualified Foreign Investors (QFIs). Portfolio investment by FPIs, FIIs, NRIs, QFIs and investments by FVCIs has been capped at 24% of the total equity of the investee or joint venture company.

The applicant company seeking permission of the government for FDI up to 49% in defence sector should be an Indian company owned and controlled by resident Indian citizens. The management of the applicant company should be in Indian hands.

Foreign direct investment proposals in the defence sector above 49% will have to seek the approval of the Cabinet Committee on Security on case to case basis, wherever it is likely to result in access to modern and state of the art technology in the country, according to the press note of DIPP.

Auto stocks were mixed. Mahindra & Mahindra (M&M) fell 0.26%, with the stock reversing gains after hitting record high of Rs 1,413.90. M&M proposes to appeal against the Competition Commission of India’s recent order before the appropriate forum. The Competition Commission of India (CCI) on 25 August 2014 levied a total penalty of Rs 2544.64 crore on 14 car makers at the rate of 2% of the average turnover after it found them to be in contravention of the provisions of the Competition Act, 2002. The amount of penalty imposed on M&M is Rs 292.25 crore.

Tata Motors gained 1.7%. The company after market hours on Tuesday, 26 August 2014, said that it would be filing an appeal against the CCI order before the appropriate authorities. The penalty levied on Tata Motors is Rs 1346.46 crore.

Maruti Suzuki India fell 0.21% as the stock turned ex-dividend today, 27 August 2014, for final dividend of Rs 12 per share for the year ended 31 March 2014. The CCI’s penalty on Maruti is Rs 471.14 crore.

The CCI said it found that the conduct of the car companies was in violation of the provisions of section 3(4) of the Competition Act, 2002 with respect to its agreements with local Original Equipment Suppliers (OESs) and agreements with authorized dealers whereby it imposed absolute restrictive covenants and completely foreclosed the aftermarket for supply of spare parts and other diagnostic tools.

Ashok Leyland gained 2.08% at Rs 36.75.

Shares of two wheeler makers gained. Hero MotoCorp (up 1.61%), TVS Motor Company (up 1.19%) and Bajaj Auto (up 1.49%) advanced.

DLF tumbled 4.44% on reports the Supreme Court today, 27 August 2014, penalised the company Rs 630 crore for exploiting its dominant position to the disadvantage of its customers in three projects in Gurgaon. The court said that DLF will deposit Rs.50 crore of the Rs 630 crore within three weeks and the balance of Rs 580 crore within three months from today. The court directed the registry to put this amount in a fixed deposit in a nationalised bank.

MCX jumped 5.08% after the company during market hours said that the commodities market regulator Forward Market Commission (FMC) has approved Kotak Mahindra Bank’s (KMBL) proposed acquisition of upto 15% of equity share capital of MCX. In July 2014, Financial Technologies (India) (FTIL) entered into a share purchase agreement (SPA) to sell 15% stake in MCX to Kotak Mahindra Bank for a total consideration of Rs 459 crore.

Shares of KMBL were down 1.59% at Rs 1,039.90 on reports that a foreign brokerage has downgraded the stock to “neutral” from “outperform. The brokerage has cited the stock’s massive outperformance and stiff valuation for the downgrade.

FMCG stocks advanced. Dabur India (up 2.31%), Godrej Consumer Products (up 2.63%), Nestle India (up 0.58%), Colgate-Palmolive (India) (up 1.76%), and Hindustan Unilever (up 1.02%) gained. Shares of Marico shed 0.3%.

Most bank stocks gained. Federal Bank (up 3.4%), IndusInd Bank (up 2.59%), ICICI Bank (up 2.05), Punjab National Bank (up 1.56%), Yes Bank (up 1.08%), State Bank of India (up 0.4%), Axis Bank (up 0.23%), Bank of India (up 0.09%) gained. Bank of Baroda (down 0.35%), HDFC Bank (down 0.7%), and Canara Bank (down 1.12%) declined.

Deepak Nitrite rose 2.73% at Rs 77.05 after the company during market hours said that the commercial paper of Rs 20 crore issued on 28 May 2014 has been repaid on 26 August 2014.

Cox & Kings jumped 4.2% at Rs 304.85 after the company during market hours in a clarification with regard to news item titled Cox & Kings to operate Deccan Odyssey” said that the Maharashtra Tourism Development Corporation (MTDC) appointed the company as its outsourced partner to operate the luxury train, Deccan Odyssey from October 2014. This partnership will cover full management of on-board and off-board services, sales, marketing and operational activities. The agreement is for a period of 5 years with scope for extension for another 5 years, Cox & Kings said.

Venus Remedies surged 14.77% after the company said it has entered into a collaborative agreement with Israel-based generic drug maker Teva Pharmaceutical Industries for selling an anti-cancer drug in the Canadian market. The announcement was made after market hours on Tuesday, 26 August 2014.

GVK Power & Infrastructure was locked at 5% upper circuit at Rs 13.02 on BSE after the company led consortium leased a land parcel in Mumbai for commercial development to Oasis Realty for Rs 580 crore.

Shares of PSU OMCs and state-run upstream oil and gas companies advanced on hopes of announcement of reforms by the government on subsidies. BPCL (up 2.59%), HPCL (up 1.6%), Indian Oil Corporation (up 0.77%) and Oil India (up 2.73%) edged higher.

ONGC gained 2.31% at Rs 427.75 on hopes of announcement of reforms by the government on subsidies and gas prices ahead of its share sale. The government plans to sell a stake in ONGC later this year.

Public sector oil marketing companies (PSU OMCs) suffer under-recoveries on domestic sale of diesel, LPG and kerosene at a controlled price. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.

State run upstream companies share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PDS kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.

GAIL (India) rose 0.35% at Rs 435.25. The stock was volatile. The stock hit a high of Rs 437.45 and a low of Rs 426.30. The stock turned ex-dividend today, 27 August 2014, for final dividend of Rs 5.90 per share for the year ended 31 March 2014.

Mangalore Refinery and Petrochemicals (MRPL) rose 0.16% at Rs 60.85 after the company said that Petro Fluidized Catalytie Cracking unit has been successfully commissioned today, 27 August 2014 in Phase-III project of the company and products are being routed to respective destinations. This will increase LPG, light distillates and production of Propylene which is a feed for Polypropylene unit, MRPL said.

Shares of companies with significant sales to Europe gained as expectations grew for further monetary stimulus measures from the European Central Bank. Havells India surged 8.27% at Rs 295.30. Motherson Sumi Systems rose 4.37% at Rs 372.40. Dr. Reddy’s Laboratories rose 1.26% at Rs 2,927.

The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 364.72 crore on Tuesday, 26 August 2014, as per provisional data from the stock exchanges.

The market may remain volatile tomorrow, 28 August 2014, as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire tomorrow, 28 August 2014.

The Sensex edged higher for the fifth day in a row today, 27 August 2014. The barometer index has risen 245.86 points or 0.93% in five trading sessions from a recent low of 26,314.29 on 20 August 2014. The Sensex has gained 665.18 points or 2.56% in this month so far (till 27 August 2014). The Sensex has gained 5,389.47 points or 25.45% in calendar year 2014 so far (till 27 August 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 9,111.44 points or 52.21%.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.46, compared with its close of 60.44 on Tuesday, 26 August 2014.

Crude oil prices rose ahead of the weekly US oil inventory data from the US government. Brent for October settlement was up 19 cents at $102.69 a barrel. The contract fell 15 cents to settle at $102.50 a barrel yesterday, 26 August 2014, after reaching $103.40 during the session. The US is the world’s biggest oil consumer.

Geopolitical developments were in focus. Talks between the Russian and Ukrainian presidents yesterday, 26 August 2014, were inconclusive, and the conflict in eastern Ukraine continued with Kiev releasing videos of captured Russian soldiers.

At a meeting yesterday, 26 August 2014, the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organization (EPFO) decided against investing in equities and Exchange Traded Funds (ETFs). The finance ministry had suggested EPFO to invest in equities to enhance returns for subscribers.

The government yesterday, 26 August 2014, notified increase in foreign direct investment limit to 49% from 26% in the defence sector. The hike in FDI ceiling could encourage domestic manufacture of defence goods which are imported.

European shares edged lower after worse-than-projected German confidence data. Key indices in Germany and France were off 0.1% to 0.12%. In UK, the FTSE 100 index was up 0.1%.

A consumer confidence index in Germany will fall to 8.6 in September from a revised 8.9 in August, GfK AG forecast in a report today, 27 August 2014.

There are expectations of quantitative easing and other steps by the European Central Bank (ECB) to bolster growth and counter downward pressures on prices in the euro zone. At US Federal Reserve’s annual symposium in the United States on 22 August 2014, ECB President Mario Draghi said that expectations of future inflation in Europe exhibited significant declines at all horizons this month.

Asian stocks rose today, 27 August 2014, after data signaled a stronger US economy and Russia’s president hailed as “positive” talks over Ukraine. Key benchmark indices in Indonesia, Japan, China, Taiwan, Singapore and South Korea were up 0.11% to 0.98%. Hong Kong’s Hang Seng fell 0.62%.

Trading in US index futures indicated that the Dow could gain 14 points at the opening bell on Wednesday, 27 August 2014. US stocks edged higher on Tuesday, 26 August 2014, to lift the S&P 500 index just a hair above the 2,000 mark, its first close above that milestone, after data that pointed to a brighter future for the US economy.

Bookings for goods meant to last at least three years climbed by a record 22.6% in July after a 2.7% gain in June that was bigger than previously reported, data from the Commerce Department in Washington showed. The Conference Board’s US consumer confidence index rose to 92.4 in August, the highest since October 2007, the New York-based private research group said.

Source:http://www.business-standard.com/article/news-cm/sensex-nifty-hit-record-closing-high-114082700807_1.html

ASIC backs licenses for IT suppliers serving financial markets

August 27th, 2014

Promotes minimum IT and DR standards.outsourcing22

Australia’s corporate and financial services regulator has thrown its support behind a proposal to require large technology suppliers to hold a license to supply core systems to the financial services industry.

The Australian Securities and Investment Commission (ASIC) today gave its stamp of approval to a recommendation in the July interim Murray Report, as part of its second submission to the Government’s financial system inquiry.

The interim report offered several recommendations as to how the industry should be regulated into the future – including consideration of mobile wallets and Bitcoin – and discussed how to approach risks to the health of the country’s financial markets, such as the failure of IT systems on which trading relies.

It suggested third-party software providers who supply “widely used and significant business systems to stockbrokers” be required to hold an Australian Financial Services License to manage risks of failure, to allow for minimum standards to be set, and for monitoring of the systems to occur.

The panel admitted there would be practical implementation challenges, and asked the financial services industry for feedback on appropriate risk-based criteria to ensure only suppliers of the most crucial systems be subject to regulation.

In its responding submission, released today, ASIC signalled its support for regulatory oversight of technology service providers “of sufficient scale”, suggesting such oversight could include imposing AFS licenses as well as giving oversight responsibility to market participants who outsource their material business functions to IT providers.

“Technology underpins all key operations in Australia’s financial markets. Market participants and market operators rely heavily on key technology service providers to perform core business operations in the financial markets.

“This reliance means that outages or system malfunctions at a technology service provider that provides a large proportion of the industry with services (e.g. technology service providers of sufficient scale) have the capacity to affect the fair and orderly functioning of Australia’s financial markets.”

- ASIC second submission to the FSI

The regulator said the existing limited regulatory visibility and oversight of large IT providers placed the onus on financial services firms to ensure their chosen technology was appropriate for their operations.

Current legislation also assumed market participants would consider the risks (including systems failures) of the technology to their operations, but there was no provision governing whether technology failures would disrupt the broader Australian financial markets, ASIC said.

“For example, a major system failure or malfunction by a technology service provider of sufficient scale could have widespread ramifications for the ability of multiple market participants to settle trades for that period.

“It is also unclear to what extent market participants and market operators can adequately mitigate and manage their operational risks when they rely on vendors to perform significant business operations (both through outsourcing and offshoring).”

Regulating the oversight of large IT providers in the financial services sector would therefore help mitigate the risk of disruption posed to the wider local financial markets, the regulator argued.

Requiring IT service providers to hold AFS licenses would mean they would need to prove adequate risk management, and could potentially include conditions governing mandatory business continuity and minimum IT infrastructure requirements.

ASIC suggested the regulatory model include guidelines to help it ascertain what constitutes an IT service provider of “sufficient scale” which had the potential to affect the operation of the financial services markets.

Such factors could include the IT provider’s market share, how many market participants use them, the critical nature of the service provided, their ability to be substituted by another provider’s service, and their interconnectedness in the market, ASIC said.

Source:http://www.itnews.com.au/News/391434,asic-backs-licenses-for-it-suppliers-serving-financial-markets.aspx?utm_source=feed&utm_medium=rss&utm_campaign=iTnews+

Enterprise IT Swings Back to Insourcing

August 27th, 2014

Everything is cyclical. That is especially true in the information technology profession. For instance, companies are constantly shifting between centralizing and decentralizing technology, so it can be more responsive to the business.outsourcing21

The same can be said about outsourcing. Only a few years ago, the general thinking was that technology was a commodity, and that companies could outsource most, if not all, IT functions. But is that still true today?

According to David Wright, a former technology senior vice president at Capital One and the current CIO of McGraw-Hill Education, the shift to insource is stronger than ever. “Today, technology is seen as being so central to the business,” he told us. “There is now a move to centralize technology and insource it. Just a few years ago, IT was defined as a commodity, and there was a massive move to outsourcing.”

Although there are many things that companies need to do themselves, they still don’t need to run all technology, Wright said. “Most small and medium-sized companies don’t need to run their own data center,” including McGraw-Hill Education. “But there are certain things that we do need to control,” such as creating digital learning products, which are the future for traditional textbook publishers.

In his role as CIO at McGraw-Hill, his financial services experience will be helpful. “The banking industry is so technology dependent, and it has been that way forever.” Technology has only recently begun to play a central role in the education space, whose legacy is one of print textbook publishing. “Technology is now the foundation of McGraw-Hill and digital learning tools.”

Timetable slip delivers further blow to UK government IT projects

August 27th, 2014

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article.outsourcing20

Sweeping plans for Whitehall departments to share back-office services are running behind schedule in the latest blow to the UK government’s reputation for delivering IT projects.

Under a blueprint unveiled last year, services such as human resources, procurement and payroll are to be provided to several Whitehall departments by a private sector-run “shared services centre”. The Cabinet Office said the strategy could save up to £400m a year in administration costs and was a key element in its plans to reform the civil service.

However, the timetable has slipped and the transfer is unlikely to be completed before the end of next year.
The project has been championed by Stephen Kelly, Whitehall chief operating officer, who last month announced he was stepping down to become chief executive of Sage, a software company.

The Financial Times understands that some departmental permanent secretaries had expressed worries about the speed with which the changes were to be implemented.
Under an agreement struck with the Cabinet Office, Arvato, a business processing company based in Surrey and part of Germany’s Bertelsmann, is providing back-office services to the Department for Transport and its executive agencies, before moving on to provide services for a number of other government departments and bodies.
The economies of scale would enable Arvato “to drive down costs and improve service levels by sharing expertise across customers, adopting common processes and systems, and investing in new tools”, the Cabinet Office said last year.

It is thought that under the original plans, departments such as culture, media and sport and communities and local government, were to have started switching to the new shared services centre in the autumn. The plan also involved migrating users from one form of software to another.

Arvato said that, together with government, it had made “a strategic decision to adjust the timing of the migrations to a new platform. This is to ensure the right balance between speed of implementation and continuing to provide a low risk, high-quality and reliable service to our clients. We expect the first migration to take place at the end of 2014, with others following throughout 2015.”

Last week it emerged that the government had been ordered to pay Raytheon, a US defence contractor, £224m for unlawfully terminating a £750m contract for an electronic border control system, turning a fresh spotlight on the difficulties governments can have in implementing IT programmes.

The Cabinet Office confirmed it had agreed changes to the original timetable but emphasised that it remained fully committed to the Arvato contract, and the company continued to deliver a good, stable service.

The shared services centre remained on track to deliver long-term savings and effective services for customers, it said.

Peter Smith, a former senior civil servant, now managing editor of Spend Matters, a procurement website, said Whitehall must have been well aware of the potential for serious embarrassment if the scheme had been implemented too rapidly. “Operational problems can hit the headlines quite quickly, for instance if staff and suppliers are not being paid.”

He said the decision to use Arvato had been motivated by a desire in the Cabinet Office to “move away from some of the usual suspects in outsourcing such as BT, IBM, Accenture and Capgemini, and they were keen, understandably, to bring in some fresh faces”.

“The problem with that is fresh faces maybe don’t understand the specific issues or complexities of UK government work and although Arvato is not a small company, it is not experienced in large-scale UK central government work”, he argued.

Meanwhile, the move of other Whitehall departments into a second shared services centre, formed last year through a joint venture between the government and Steria, the French business services company, has been completed to the planned timetable.

Source:http://www.ft.com/cms/s/0/408d27dc-1d94-11e4-8f0c-00144feabdc0.html#axzz3BYxTW8GB

It will take a while to get growth back, says Infy

August 27th, 2014

Infosys Ltd, the country’s second largest software exporter, has said it is on track to meet its growth estimate of 7-9 per cent this fiscal despite macroeconomic volatility and lower demand from top clients, but added that it will take a while for the company to report higher growth.outsourcing19

Infosys’ growth estimate is much lower than the industry guidance, which, according to Nasscom, is in the range of 13-15 per cent for FY-2015.

Addressing Motilal Oswal analysts in Mumbai, UB Pravin Rao, chief operating officer, said: “We have definitely underperformed over the last few years and it will take a while for us to get growth back.”

The company’s margins are expected to be in the range of 24-25 per cent, lower than market leader Tata Consultancy Services’ 28.8 per cent. “Our focus is on growth and the company cannot sustain margins without growth,” Rao said.

Acquisition plan

Signalling the company’s intent to grow business through acquisitions, he added Infosys will look at buying firms in the life sciences and IT infrastructure management segments in markets such as Latin America and Japan.

On Tuesday, the company’s scrip closed marginally down at ₹3,620.60 on BSE.

‘Market is stable’

Infosys, along with other IT companies, believes demand for outsourcing continues to be strong and the situation looks better at this point compared to the year-ago period. “Our pipeline is good and the market is stable,” said Rao. Also, the company is seeing traction in financial services, communications and energy sectors.

Rao added that high attrition is an area of concern and it will take several quarters to bring it down to 14 per cent, from 20 per cent now. Rao attributed this to the distraction around CEO succession, coupled with a spate of top management exits. “With the new leadership in place, that distraction will go away.” Infosys, in June, appointed Vishal Sikka as the first non-founding CEO of the company.

Rao also maintained that the company would use its $100-million venture fund to invest in start-ups, something that Sikka has outlined as a part of his strategy since taking over the company.

Source:http://www.thehindubusinessline.com/features/smartbuy/tech-news/it-will-take-a-while-to-get-growth-back-says-infy/article6354175.ece

Microland bets on hybrid cloud to land large deals

August 27th, 2014

Bangalore-based Microland has embarked on a new strategy to get large outsourcing deals and has launched a new brand identity for itself.outsourcing18

This new strategy involves building on its capability of managing networks and other IT infrastructure of Fortune clients through a mix of private and public cloud, commonly known as hybrid cloud.

Hybrid cloud is a service that a combination of traditional IT, private, public and community cloud computing services, from different service providers such as Microsoft, Amazon and others. Companies like Microland take these offerings and integrate it with their existing business. Called version 4.0, Microland founder and MD Pradeep Kar told BusinessLine that it sees a multi-billion opportunity in this area, as companies are starting to consider vendors which have expertise in particular technologies.

In line with this, the company has come up with a new identity in its 25th year of operations. When asked about the impact of this new strategy on its business, Kar said the company will continue to grow three times faster than Nasscom’s projections for the 2015 fiscal. Nasscom estimates that the industry will grow 13-15 per cent. However, since it is a private company, Microland did not share revenue plans for the year.

Market for these services is growing, albeit not at a fast clip. The public cloud services market is expected to grow 17.8 per cent in 2014 to $153 billion, according to analysts. Forrester estimates peg the private cloud market at $15.9 billion, from $7.8 billion in 2011.

It has around 2,700 employees with 75 global clients and six global delivery centres – three in India and one each in the US, the UK and West Asia.

Source:http://www.thehindubusinessline.com/features/smartbuy/tech-news/microland-bets-on-hybrid-cloud-to-land-large-deals/article6354172.ece

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