Posts Tagged ‘IT’

Study Predicts Further Growth of IT Outsourcing in the United Kingdom

July 3rd, 2015

A new study of IT outsourcing customers and contracts in the UK projects that demand for IT outsourcing services in the UK will grow, and shows that some service providers meet customer expectations more consistently than others. The study—conducted by Whitelane Research in collaboration with PA Consulting Group and published on June 11—surveyed top sourcing executives from 260 of the UK’s biggest consumers of IT services that hold more than 800 contracts with a collective value of more than £15 billion.Outsourcing26

Among other questions, respondents were asked to describe their company’s future IT outsourcing plans and to rate their satisfaction with their service providers.

Key findings from the study include:

69% of survey respondents reported that their companies will maintain or increase the IT services they receive from service providers, and 40% of respondents said that they intend to outsource more.

15% of respondents said that they will outsource less. According to the study’s authors, anecdotal evidence suggests that companies are selectively in-sourcing certain services, particularly customer interaction functions.

More than half of respondents are using (or intend to use) public cloud vendors such as Amazon, Rackspace, and SAP.

86% of respondents report satisfaction with their IT outsourcing service providers.

When asked for the key drivers of their needs for IT outsourcing, 68% of respondents cited a need for their companies to focus on core businesses. However, respondents also expressed the need for better resources or a business transformation more frequently than in past Whitelane Research studies on the UK (Whitelane annually conducts studies on the market for IT outsourcing in 14 European countries). More UK companies are looking to service providers to help drive change in their company’s business model, not just its IT services. Vassilis Serafeimidis, Head of IT Sourcing at PA Consulting Group, describes the heightened demand for business transformation through outsourced IT services as a move by customers toward “digital everything,” such as offering their customers seamless service across multiple channels, including mobile.

The study includes a point-system ranking of IT service providers based on customer satisfaction. According to the authors, some respondents expressed frustration with service provider shortcomings in innovation, proactivity, and ability to drive change—critical competencies in a business transformation. While choosing a service provider should always be a careful decision, companies that intend to rely heavily on outside providers (especially those that seek business transformations through IT outsourcing) should do their due diligence and consider the strengths and weaknesses of various providers. Serafeimidis suggests that price may not be the most important factor, depending upon the particular IT function(s) to be outsourced.

Of the various sectors of the IT outsourcing market studied, telecommunications companies were among the most maligned. However, the authors argue that customers may have “unrealistic expectations” of low prices, customized services, and service levels from providers of commoditized, large-scale IT services.

Source:http://www.natlawreview.com/article/study-predicts-further-growth-it-outsourcing-united-kingdom

HP re-energises NHS Trust with complete IT systems overhaul

June 30th, 2015

Computing has reported that the ITO partnership between Cambridge University Hospitals (CUH) and HP has been a resounding success, acknowledged by both sides of the outsourcing relationship.Outsourcing24

HP has digitalised CUH’s services in a way that allows frontline staff to quickly and securely access data and patient records.

“All of our IT is now managed by HP – and the system is already delivering real benefits,” commented Dr Afzal Chaudhry, CUH’s chief medical information officer.

However, some of the NHS workers have struggled with the transition, particularly those that are less “tech-savvy” than their younger colleagues. Chaudhry continued: “If you take some of the senior consultants who’d never left notepad and books.

“They’d trained as a student, used them as junior doctors all the way through and some of these people, they’d been there for years. Then overnight we took everything that they knew, then threw it away.”

Nevertheless, the majority of staff have transitioned well and are working more efficiently as a result of HP’s input.

The new platform installed by HP is being widely adopted and utilised, with 3,200 people using the system onsite, and further staff using it offsite, on a daily basis. Even during its quietest periods in the early hours of the morning, CUH tends to find 300-400 individuals logged in at any given time.

Source:http://www.sourcingfocus.com/site/newsitem/8799/

Catalina Marketing IT jobs being outsourced

June 29th, 2015

In thousands of stores across the country, you’ll find Catalina Marketing’s coupons, apps and rewards programs.Outsourcing22

Inside the company’s St. Petersburg headquarters, the company’s IT infrastructure employees help keep all that technology running.

That’s about to change.

About 50 Catalina IT workers will be replaced by employees from Mindtree, one of the largest outsourcing firms used by companies in the U.S. , according to sources familiar with the matter. Employees affected by the layoffs told FOX 13 they’re being asked to train their foreign replacements.

Catalina Marketing wouldn’t answer any questions. The company sent a statement from a California-based PR firm saying the decision to transition some operations to Mindtree was part of their “ongoing focus on enhancing Catalina’s unique business competencies, building new capabilities, and focusing on core business strategies.”

Some of the company’s employees told FOX 13 they’re simply being replaced by less expensive workers.

“Employees are expected to personally train their Indian replacements, reverse roles and watch their replacement work,” said one IT worker who spoke on the condition of anonymity, fearing retaliation by the company. “Once management is satisfied with the transition, the American worker is laid off.”

Former Disney employee Keith Barrett says the IT outsourcing sounds similar to what happened to him and about 250 other workers in Orlando six months ago.

“I was only seven years away from retirement when I was laid off,” said Barrett, who is still looking for a full-time IT job.

News of the Disney layoffs earlier this month sparked more public debate about the H1-B Visa program, which was designed to allow companies to hire highly specialized foreign workers to fill in crucial gaps in the American workforce.

Some say IT jobs don’t fall into that category.

“Those skills are actually incredibly common in this country,” Barrett said. “If you ever open up a job for applicants, you will get hundreds of people applying for it that are adequately or overly skilled for that.”

Catalina wouldn’t say how many of the outsourced jobs would rely on H1-B Visas for foreign workers. Mindtree did not respond to requests for comment.

A New York Times report on Disney’s layoffs earlier this month prompted Sen. Bill Nelson (D-FL) to ask the Department of Homeland Security to investigate how the Visa program is being used.

“I plan on delving further into this issue in the Senate and request that the U.S. Department of Homeland Security also investigate potential misuses of the H1-B visa program,” Nelson wrote in a June 4 letter to DHS Secretary Jeh Johnson. “I want to know if there are abuses going on in the system.”

A week later, the Labor Department launched a similar H1-B Visa program investigation into Southern California Edison and two Indian technology firms over allegations the companies may have used the Visa program to replace American employees with less expensive workers.

Barrett says employees face being replaced with foreign workers have more to contend with than an impending loss of income.

“You’ve still got to do your job while you’re there…and job hunt and then add training those that are actually coming in to take over your responsibilities: that’s a lot of stress,” he said.

Source:http://www.myfoxtampabay.com/story/29402790/catalina-marketing-it-jobs-being-outsourced

Supporting enhancement of IT governance and acceleration of globalization while further reducing IT operational costs centered around U.S. and Japan

June 29th, 2015

Accenture today announced that it has signed a contract to provide information technology (IT) system maintenance and operations, as well as monitoring and operations of servers and networks for Eisai Co., Ltd. in the U.S. and Japan.Outsourcing21

“We will use our experience accumulated in the pharmaceutical industry, our IT operational processes that are standardized globally, and our deep expertise in continuous business improvements to support Eisai’s successful business.”

Under this contract, Accenture will deliver services including operations, maintenance and monitoring of Eisai’s applications and infrastructures (excluding a portion of research and development) in the U.S., and a part of Eisai’s enterprise resource planning systems including accounting, production management and related systems, as well as its IT infrastructure, such as servers and networks in Japan. This contract runs for seven years in the U.S. from April 2015 until March 2022, and for nine years in Japan from April 2015 until March 2024.

The global pharmaceutical industry is undergoing significant standardization in areas of new drug development, medical practices, and regulations for new drug review and approval. This contract will enable Eisai to strengthen its global competitiveness by further reducing global IT costs and enhance its global IT solution delivery framework. This, in turn, will enable Eisai to build a global IT governance structure that is more efficient and effective.

“During Eisai’s recent growth, Accenture has been supporting Eisai in many initiatives, and it is our pleasure to have this opportunity to play an important role in this key project that is designed to ensure even greater growth for Eisai in the future,” said Atsushi Egawa, senior managing director, Products, at Accenture in Japan. “We will use our experience accumulated in the pharmaceutical industry, our IT operational processes that are standardized globally, and our deep expertise in continuous business improvements to support Eisai’s successful business.”

These contracted services will be delivered from the Accenture Delivery Center for Technology in Manila, Philippines, and a part of application services for the U.S. will be delivered from the Accenture Delivery Center for Technology in Pune, India. These are both part of Accenture’s Global Delivery Network, which is comprised of more than 50 locations around the world.

Source:http://www.businesswire.com/news/home/20150623005322/en/Eisai-Signs-Global-Outsourcing-Contract-Accenture#.VZDSgRuqqko

Eisai Signs Global IT Outsourcing Contract With Accenture

June 24th, 2015

Accenture ACN, -0.34% today announced that it has signed a contract to provide information technology (IT) system maintenance and operations, as well as monitoring and operations of servers and networks for Eisai Co., Ltd. in the U.S. and Japan.Outsourcing21

Under this contract, Accenture will deliver services including operations, maintenance and monitoring of Eisai’s applications and infrastructures (excluding a portion of research and development) in the U.S., and a part of Eisai’s enterprise resource planning systems including accounting, production management and related systems, as well as its IT infrastructure, such as servers and networks in Japan. This contract runs for seven years in the U.S. from April 2015 until March 2022, and for nine years in Japan from April 2015 until March 2024.

The global pharmaceutical industry is undergoing significant standardization in areas of new drug development, medical practices, and regulations for new drug review and approval. This contract will enable Eisai to strengthen its global competitiveness by further reducing global IT costs and enhance its global IT solution delivery framework. This, in turn, will enable Eisai to build a global IT governance structure that is more efficient and effective.

“During Eisai’s recent growth, Accenture has been supporting Eisai in many initiatives, and it is our pleasure to have this opportunity to play an important role in this key project that is designed to ensure even greater growth for Eisai in the future,” said Atsushi Egawa, senior managing director, Products, at Accenture in Japan. “We will use our experience accumulated in the pharmaceutical industry, our IT operational processes that are standardized globally, and our deep expertise in continuous business improvements to support Eisai’s successful business.”

These contracted services will be delivered from the Accenture Delivery Center for Technology in Manila, Philippines, and a part of application services for the U.S. will be delivered from the Accenture Delivery Center for Technology in Pune, India. These are both part of Accenture’s Global Delivery Network, which is comprised of more than 50 locations around the world.

Source:http://www.marketwatch.com/story/eisai-signs-global-it-outsourcing-contract-with-accenture-2015-06-24

Sikka steers Infosys on bumpy road in first year

June 22nd, 2015

As the first non-founder chief executive of India’s iconic IT behemoth, Vishal Sikka steered Infosys Ltd well on a bumpy road to turn around its fortunes in his first year at the helm.Outsourcing19

Though the 48-year-old former SAP AG executive took charge of the $8.7-billion global software major on August 1, 2014, he instilled hope in the 1.76-lakh techies that their troubled company was in safe hands and had a bright future.

“It has been a year of great transition for us though the full-year performance was average,” Sikka candidly admitted in his maiden letter to the company’s investors ahead of its 34th annual general meeting (AGM) here on Monday.

Admitting that the company faced internal issues leading to lagging growth, Sikka said high attrition rates and exit of many key executives during the fiscal 2014-15 had put tremendous pressure on its business and performance.

A whopping 37,604 techies left Infosys in 2014-15 as against 36,268 in 2013-14, resulting in net addition of 15,782 in FY 2015 as against 3,717 in FY 2014.
“There were hard-fought battles in a difficult climate in which clients’ expectations were changing, new emerging technologies were coming to market and where the landscape of (IT) services firms became more competitive,” Sikka told the 4.5-lakh investors.

A 1:1 bonus issue in October 2014 swelled the number of shareholders by 24 percent to 448,000 in December from 362,000 in September, while the company’s board recommended another 1:1 bonus on April 24.

Signalling a departure from the era of its illustrious co-founders who built the company with their hard-earned savings over the last three decades, Sikka said the management and the employees were learning to work in a new environment and in new ways through a difficult phase.

“As I look over the last year (fiscal 2015), which has been a difficult one, I see many promising signs for the future as with learning comes the promising of renewing ourselves and pursuing new horizons,” Sikka said in the letter.

In a bid to check the rising attrition level, which shot up to a whopping 23.4 percent in first quarter (April-June) before Sikka took over the reigns, the company wooed its techies with a higher compensation and additional hikes in third quarter (September-December) and promotions to 25,000 to retain as many of them.

“By investing more in our employees and giving them opportunities to move up the value chain, we brought down annualised attrition to 13.4 percent in the fourth quarter (January-April) from 23.4 percent in first quarter (April-June) and the number of employees leaving the company reduced by more than half from May 2014 to March 2015,” Sikka said.

Assuring investors of higher growth, operating margins and profitability, the chief executive said the company’s revenue would grow 10-12 percent in constant currency for this fiscal (2015-16) as against 7.1 percent in last fiscal.

“I believe we have a promising year ahead of us in the near term. Looking beyond this year (FY 2016), our mission is to prepare the company to achieve an aspirational goal of $20 billion in revenue by calendar year 2020, with 30 percent operation margin, with specific targets of increasing revenue per employee to $80,000 per year,” Sikka said.

Growing at 5.6 percent in dollar terms, the outsourcing firm’s consolidated revenue increased to $8.71 billion in the fiscal under review (2014-15) from $8.25 billion in previous fiscal (2013-14) and operating margins to 25.9 percent in FY 2015 from 24 percent in FY 2014.

“Our strategy to achieve large-scale growth is the right one, as evident from several measures we took to improve competitiveness in winning large deals in areas such as application maintenance, software testing, infrastructure management and business process outsourcing,” Sikka pointed out.

A doctorate in computer science from Stanford University, the Silicon Valley-based Sikka infused fresh blood at executive levels by inducting at least a dozen of his former colleagues at SAP and investing substantially in the automation platform to run the software more on artificial intelligence than human ability.

“Going beyond automation, we are bringing artificial intelligence to more cognitive tasks that were not solvable by software systems, specifically, complex business problems such as airplane engine balancing through artificial neural networks,” Sikka added.

Source:http://www.thestatesman.com/news/business/sikka-steers-infosys-on-bumpy-road-in-first-year/70739.html

Why Indian IT firms want to shift outsourcing projects from offshore to onshore model

June 15th, 2015

With the advent of automation at the heart of India’s $146-billion information technology industry, the sector’s biggest customers are starting to rethink their strategy around outsourcing and debating whether to shift some outsourcing projects onshore – a development that has the potential to make the offshoring versus onshoring debate irrelevant. Outsourcing15

With automation having the potential of reducing costs by as much as 80% in commoditised service lines such as computer infrastructure management, customers of Indian IT are starting to initiate conversations around whether they can move more projects to onsite locations, without significantly disrupting the traditional offshoring labour arbitrage model of Indian IT in the near term.

“When you have the potential to automate certain projects, what difference does it make whether that project is onshore or offshore? It makes that debate irrelevant,” said a chief information officer of a European bank that outsources projects to one of India’s top three software firms. He requested anonymity as these discussions are private and confidential. The development, if it kicks off consistently, will signal a considerable shift for Indian IT firms such as TCSBSE -0.17 % and Infosys, which have for years thrived on the offshoring model where they built large campuses to house thousands of engineers to help bring down the cost of software development and maintenance.

“After more than a decade of achieving value through the offshore labour arbitrage model, one would think that mature organisations that have built GICs or captives, or organisations with extensive use of third-party outsourcing providers, would be at peace with the model. We expected them to move to a model of arbitrage plus automation,” said Peter Bendor-Samuel, CEO of outsourcing advisory Everest Group, in a blog post last week. “But the level of peace and comfort with offshore arbitrage is much less than we expected, and companies are expressing their desire to use robotics automation to repatriate their work,” he added.

The emergence of robotics automation, as has been widely reported, has the potential to disrupt the traditional “pyramid model” of Indian IT. Recognising the need to gain an edge in the battle for automation, the sector’s top companies such as TCS, US-based Cognizant and InfosysBSE 0.70 % are investing heavily on building tools and platforms that can afford large-scale cost benefits to demanding customers who are tightening technology-spending budgets with each passing year.

For instance, Infosys’ new automation platform has the potential to generate productivity improvements of about 40-50%, Infosys’ head of platforms Abdul Razack said in an interview last week. Similarly others like IPSoft’s cognitive computing system Amelia has the potential to perform routine, commoditised tasks at a fraction of the cost and time it takes a human engineer.

The fact that the cost of automating software services has come down rapidly over the years is also playing its part in this debate. “Previously, about 10-15 years ago, the cost of automation was much much higher – now that those costs have come down, you can afford to keep more projects onshore,” said Sid Pai, Asia-Pacific head at outsourcing advisory firm ISG.

To be sure, this does not mean that customers will move work away from third-party vendors such as TCS and Infosys. What is likely to happen is what is commonly referred to as “rebadging” — the process where third-party vendors take over the assets of a customer and replace personnel with their own staff, experts say.

Source:http://economictimes.indiatimes.com/tech/ites/why-indian-it-firms-want-to-shift-outsourcing-projects-from-offshore-to-onshore-model/articleshow/47593595.cms

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