Posts Tagged ‘Outsourcing’

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.”


EMEA outsourcing market goes into overdrive

July 30th, 2014

The UK and EMEA’s love affair with outsourcing shows no sign of waning, with new figures suggesting the market is currently growing at a rate of nearly a third.Outsourcing37

According to market intelligence firm ISG, EMEA accounted for 51 per cent of the global IT and business process outsourcing market in the first half of 2014 after seeing the annual contract value of deals inked swell 32 per cent year on year to €5bn (£3bn).

Some 315 contracts were awarded in EMEA during the period, up 25 per cent year on year, ISG said, although its index looks only at commercial outsourcing deals with an annual contract value of €4m or more.

The UK, which is by far the most mature outsourcing market in EMEA, saw ACV jump six per cent to €1.4bn, despite a slight drop in contract counts from 92 to 83.

A glut of mega-deals ensured France leapfrogged Germany into second place with an ACV of €930m, despite the latter seeing ACV swell from €530m to €740m year on year.

“EMEA continues to maintain its leading position in the global outsourcing market,” confirmed ISG partner David Howie.

The total global outsourcing market rose 34 per cent to $12.4bn during the first half, with the Asia-Pac market doubling in size to $1.9bn. The Americas market grew by 21 per cent to $4.2bn.

IT outsourcing was the star of the show, growing 52 per cent to $9.5bn globally, while the value of BPO deals actually fell back four per cent – a picture that held for EMEA.

In a boost for the UK channel, local providers stand a better chance of bagging outsourcing contracts here than elsewhere in Europe, according to ISG, which picked out Kelway as one of the country’s “breakthrough” players. Some 54 per cent of outsourcing deals in the UK since 2011 have been awarded to EMEA providers, compared with only 25 per cent in DACH, 37 per cent the Nordics, 42 per cent in Benelux and 47 per cent in southern Europe.

“Overall, we’ve seen a good performance across EMEA this quarter – and not just because last year’s weak second quarter makes this year’s results shine,” Howie concluded.


Outsourcing a source of innovation: CII

July 30th, 2014

Unveiling the prowess of Indian outsourcing companies not only as a cheaper, better and faster destination but also a source of innovation, the Confederation of Indian Industry (CII), on Tuesday, began its two day event ‘Smart Outsource Expo &Summit 2014, Enhancing Business Excellence through partnerships’.Outsourcing36

Speaking during the inaugural session of the summit, CII Karnataka Chairman Sandeep K Maini said with the exponential growth of the global outsourcing industry, India has made a mark of its own globally.

“The dynamics of global business are changing, and outsourcing is no different. As markets worldwide are becoming knowledge-intensive, India has evolved to become the most preferred destination for knowledge services,” said Maini.  Banking on its skilled manpower, he said India developed knowledge process outsourcing as the biggest revenue generator and thus strengthened its position in the knowledge service industry.

Speaking on the MSME sector which comprise 75 per cent of Indian industry, Maini said small enterprises often look at outsourcing as being too expensive and beyond their means, however in reality it’s just the opposite. “India has a great many young companies that have an affinity towards building great global brands for which people are the key stakeholders and it is important to engage them better,” he said.

Besides the conventional  IT and ITES, domestic and global outsourcing market has expanded to include engineering and design, talent management, the digital edge of marketing, logistics and supply chain management, technology, operational and infrastructure management among others.

The summit is dedicated to help businesses think about how they can leverage partnerships and external expertise to enhance their own capabilities, improve profitability as well as products and services. As per Nasscom study, IT-BPM industry is set to aggregate $118 billion in the current financial year.

Speaking at the summit, Commissioner for Industrial Development & Director of Industries and Commerce, Government of Karnataka, M Maheshwar Rao, IAS said, the advantages in India for outsourcing can best be illustrated as four pillars like skill, efficiency, growing flexibility and service.

Rao said that in the near future the outsourcing trend will drift towards domestic companies looking inward and start outsourcing their high-end knowledge as well. “The future of outsourcing is not just restricted to IT and ITES.

It will include sectors like IPR, business research, analytics, legal research, clinical research, publishing, market research etc. Specialised outsourcing services will allow organisations to focus on their core businesses so that they can increase revenue and improve bottom line,” he said.

According to  Rao, the industry is slowly getting back to normalcy in Karnataka and the biggest gainers are textile industry and the food & beverages industry which registered growth (Index of Industrial Production, year-on year) of 4.65 per cent and 4.76 per cent respectively.

“The expected implementation of the State Industrial Policy (2014-19) and Infrastructure Policy will reflect positively on industrial development of the state and the state industry will see robust growth in the next 2 to 3 years,” he said.


Malaysia yet to fully tap outsourcing sector potentials

July 30th, 2014

Malaysia’s outsourcing industry achieved a higher overall revenue of RM1.59 billion last year as compared to RM1.25 billion in 2012 from overseas outsourcing opportunities and projects.

World Business Meeting with Growth Concept
This achievement is significant, said Outsourcing Malaysia (OM), an initiative of national ICT industry association PIKOM, as the outsourcing industry is one of the Entry Point Projects (EPP) under the Business Services NKEA of the Economic Transformation Programme (ETP) which focuses on areas of business such as business process outsourcing), IT process outsourcing and knowledge process outsourcing.
OM chairman David Wong said: “This 27% increase in just one year to RM1.59 billion in total revenue is pretty significant for Malaysia’s outsourcing industry, which is still relatively small compared to those of other regional countries.”

Wong attributes a driver to this positive earnings growth to the Malaysian government’s various initiatives via the ETP and industry-wide efforts.
However he noted: “There’s still a lot of room for improvement as out of this RM1.59 billion in overseas revenue, only 25% is generated by local outsourcing players while the rest is by their foreign shared services players based in Malaysia.”

Wong said there are still many local outsourcing players which only focus on business from the local market only, rather than their global counterparts (established and operating in Malaysia) who are more keen to attract and secure foreign outsourcing business.

“This is where OM is able to come in to assist small medium businesses (SME)-like local outsourcing companies in assisting them to move up the value chain to improve their global attractiveness and their overseas income from in-bound outsourcing projects.”

Among OM’s initatives are missions to help the SMEs connect with overseas firms looking to outsource their non-core business in fields such as analytics, healthcare and robotics.

In the AT Kearney’s 2011 Global Services Location Index, Malaysia was ranked third after India and China in terms of attractiveness for shared services and outsourcing; with Asian countries dominating the top 10 positions on the index.

“The domestic market in Malaysia is getting smaller by the day and unless we look outwards for business, the industry’s growth will remain stagnant or decrease as neighbouring countries have started picking up the pace,” said Wong.

He noted that the largest Malaysian outsourcing company employs only 5,000 staff at the most, as compared with some of the larger outsourcing companies in China and Indian that are made up of over 100,000 employees.

“Due to Malaysia’s population size, it is impossible for Malaysia to compete in terms of volume-driven type of outsourcing projects that naturally require very large scale call centre capacities.

“Malaysian players therefore need to start specialising their business service offerings and differentiate themselves from their Asian counterparts.

“They can look into sectors such as Islamic banking, healthcare, logistics, financial services where the world is constantly looking to outsource to players who can properly service these niche markets with higher sets of skills and expertise.”


Strong IT Outsourcing activity drives growth in UK, Germany and France

July 29th, 2014

Information Services Group (ISG) (NASDAQ:III), a leading technology insights, market intelligence and advisory services company, today reported that outsourcing activity in the Europe, Middle East & Africa (EMEA) region hit a record high in the first half based on the volume of contract awards, and achieved its strongest first-half performance by contract value since 2008.Outsourcing2

The Q2 2014 EMEA ISG Outsourcing Index, which measures commercial outsourcing contracts with an annual contract value (ACV) of €4 million or more, found that first half ACV across EMEA totaled €5 billion, an increase of 32 percent year-on-year. The number of contracts signed was up 25 percent for the same period.

With more than half of all global outsourcing value awarded in EMEA, the region continues to dominate the global outsourcing market.

Commenting on the latest findings, David Howie, partner, ISG, said, “EMEA continues to maintain its leading position in the global outsourcing market. The region’s increased contract volume and value in the first half was driven by a rise in demand from continental Europe, most notably France and Germany. Looking ahead, we’re seeing a great deal of transaction activity in the market that should come to fruition in the second half of 2014. Taking the year as a whole we would expect ACV in the region to comfortably exceed 2013 levels.”

The United Kingdom market maintained its steady performance, with ACV of €1.4 billion, an increase of 6 percent compared with the first half of last year. This occurred despite a slight drop in contract counts to 83, from 92 the previous year.

Germany saw year-on-year ACV growth in the first half of 2014, with around €740 million in contract awards compared to €530 million in 2013. This growth was driven by a return to strong contracting activity with almost twice as many contracts awarded: 59 compared with 30 in the first half of 2013.

France had it best-ever half year performance by both contract value and volume. The €930 million of ACV awarded was boosted by a number of mega-relationships signed in the first half and resulted in France becoming EMEA’s second-largest outsourcing market for the period, behind only the UK. Although the presence of large deals can temporarily boost market values, France also saw a corresponding increase in the number of contract signings. The 40 contracts awarded in the first half was the highest ever, and more than three times the number recorded in the first half of 2013. This has been driven in part by increased innovation as French businesses embrace new sourcing options such as Software as a Service (SAAS) and cloud-based solutions.

For the quarter, EMEA ACV remained flat compared with the strong first quarter of 2014 but finished 50 percent ahead year-on-year. The region benefitted from a steady IT Outsourcing (ITO) performance. Though modestly down sequentially, this was the strongest second quarter ever for ITO award value (€2 billion) and counts (111) in EMEA. Meanwhile, Business Process Outsourcing (BPO¬) continued its lackluster performance across the region, with values continuing to hover around the €500 million mark for the quarter.

“Overall, we’ve seen a good performance across EMEA this quarter – and not just because last year’s weak second quarter makes this year’s results shine. The market is moving in the right direction, and the first-half year-on-year comparison is testament to the market’s strength,” said Howie. “Solid performances in volume and value across most industry sectors give us confidence that this is not simply a blip.”

ISG presented the Q2 2014 EMEA ISG Outsourcing Index during a conference call for media and analysts.


Trinity Mirror cuts costs with IT outsourcing

July 29th, 2014

Trinity Mirror has revealed that outsourcing IT support and services functions have helped drive savings of £6 million in the first half of the year.Outsourcing1

The newspaper publisher confirmed in January that it was outsourcing its Glasgow-based IT service desk function to service desk provider Endava in Cluj, Romania from March.

While the outsourcing has contributed to savings, the company was not able to avert a fall in pre-tax profit of 2.2 percent to £48.2 million in the 26 weeks to 29 June 2014.

“Operating costs fell by £5.7 million reflecting the benefit of structural cost savings of £6 million and ongoing cost mitigation actions which have more than offset increased investment in digital of £3 million and inflationary price increases,” Trinity Mirror said in its results today.

“Structural cost savings in the first half have been delivered through the outsourcing of IT support and services functions, the restructure of editorial and advertising functions, the closure of the Reading print plant and a number of smaller offices and continued restructuring of all operating functions.”

Digital investment

As well as cutting costs, Trinity Mirror has been working on building its digital business. For example, it hired Yahoo’s MD for UK and Ireland, James Wildman, who joined in June as chief revenue officer of the National Advertising Sales Agency (NASA) division of Trinity Mirror.

The publisher said that its £3 million investment in digital had driven significant growth in average monthly unique users (91 percent to 61.3 million) and average monthly page views (132 percent to 440.2 million) across the web, mobile and apps, particularly for Meanwhile, its publishing digital revenue grew by almost 50 percent.

“We continue to refresh our websites to increase user engagement whilst ensuring we can drive revenues through a range of advertising formats,” Trinity Mirror said.

In addition, in its regional markets, having a centralised technology platform has enabled Trinity Mirror to launch new publications across multiple channels more easily.

“Our group wide technology platform gives us the capability to add new products on multiple platforms with a minimal increase in costs or resource,” Trinity Mirror said.

“One such example is the recent successful launch of the Sunday Echo in Liverpool, which has allowed us to increase our audience on a Sunday both in print and online through the provision of more comprehensive football content.”

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Trinity Mirror also said it is investing in increasing the quality and volume of video across its websites, as this channel brings in the highest revenue per thousand views.

In 2011, Trinity Mirror switched to Google Apps for email, collaboration and documents.

The following year, it rolled out its £1 million, internally-developed Advanced Recruitment Technology (ART) across its jobs sites portfolio, which includes Fish4jobs, GAAPweb, SecsintheCity, PlanetRecruit and TotallyLegal.

Trinity Mirror Digital Recruitment’s ART is an enterprise-grade Java platform, hosted in the Amazon cloud, with new job recruitment features in social media, mobile and search.


Xerox Soars to a New 52-Week High on Q2 Earnings Beat

July 29th, 2014

Information technology services provider Xerox Corporation (XRX) recently hit a new 52-week high of $13.29 on Jul 25, 2014, before closing the trading session a notch lower at $13.15. This translates to a healthy one-year return of 36.3%.Outsourcing38

Xerox’s share price has been on a steady uptrend since Feb 2014. Despite its strong price appreciation, this Zacks Rank #4 (Sell) stock still has enough fundamentals that may further drive its price upward. The stock is currently trading at a forward P/E of 11.9x and has a long-term earnings growth expectation of 7.3%.

Growth Drivers

Xerox reported adjusted earnings (from continuing operations) of $322 million or 27 cents per share in the second quarter of 2014 compared with $345 million or 27 cents per share in the year-earlier quarter. Adjusted earnings for the reported quarter marginally exceeded the Zacks Consensus Estimate by a penny.

Revenues from the Services segment, which include Document Outsourcing (DO), Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO), increased 2% year over year to $2,992 million in the reported quarter (57% of total revenues). While revenues from DO, ITO and BPO increased due to growth in commercial healthcare and commercial European BPO businesses, improvement in Europe and strength in healthcare offerings further bolstered the segment’s top-line growth.

Xerox expects the Services segment to fetch 66% of its total revenues by 2017, up from 55% in 2013. To achieve this objective, Xerox is focusing more on vertical markets like healthcare. Xerox recently secured an estimated $500 million worth contract to reinstate New York’s Medicaid management system, according to a Bloomberg report.

New York’s Medicaid program, worth $52 billion, is the biggest in the nation. Xerox’s selection as the vendor for the state may open doors to more lucrative opportunities for the document imaging giant, once the other states follow New York’s footsteps and revamp their Medicaid payment systems.

The company has already begun to reap huge benefits from the Medicaid Management Information System (MMIS) through its successful implementation and CMS (Centers for Medicare and Medicaid Services) Certification in all the 31-state Medicaid programs. Also, Xerox is looking forward to expand its offerings through inorganic measures to add more clients to its portfolio.

Other Stocks to Consider

Other stocks that look promising in the industry include Canon Inc. (CAJ), Lexmark International Inc (LXK) and Ricoh Company, Ltd (RICOY), each carrying a Zacks Rank #2 (Buy).


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