CeBIT is an annual trade show exclusively for the digital industry. At this event companies from world over exhibit their products and services, showcase their innovative solutions and industry experts host conferences on prominent IT issues. This year CeBIT is organized in the city of Hannover, Germany from 6 March to 10 March 2012. Eric Schmidt, Executive Chairman of Google will be the keynote speaker at the opening ceremony of the event.

Over 20 years, CeBIT has emerged as a vital platform for businesses to meet clients, initiate deals, form synergistic partnership and a unique opportunity to network with top influencers of the digital industry. India is the global hub for offshore IT services. Around thirty companies from various states of the country are participating in CeBIT 2012 trade show. The interesting fact, however is that, about one third of these is from the western state Gujarat. Companies such as OpenXcell Technolabs, Cygnet Infotech, Elitecore Technologies and Radixweb are enterprise solution pioneers in their own rights and will showcase their services in the CeBIT IT trade show.

“It is exciting to know that most of the peer group companies such as Elsner Technologies, Hi-Tech Outsourcing Services, InheritX Solutions are going to exhibit in CeBIT 2012” says Mr. Jayneel Patel, Director of OpenXcell Technolabs, a software and consulting company in Gujarat. Last year the IT trade show attracted over 300,000 visitors from more than 110 countries among which were USA, Romania, Iran, UK, China, Egypt, Germany and Spain. Revealing his mind on such a positive participation of Gujarat based companies Mr. Jayneel Patel says, “This is a strong indication of Gujarat becoming the next big IT center after Bangalore.”

CeBIT is focused on encouraging innovation and developing rewarding solutions in the field of information and communication technology (ICT). This year the event will be organized under four theme-centric platforms such as Lab- for research, Life- for enhancing lifestyle, Gov- for public sector and finally Pro which is a dedicated platform for business operations solutions.

Participants can exhibit their products and services as a stand-alone presentation, in group pavilion or choose from special offer packages. The event attracted 500 top decision makers and CIOs from the world’s biggest companies the last year. Over a thousand journalists directly report about the event. Participation of Indian companies will get their efforts and good work noted by the top IT honchos and potential customers globally.

OpenXcell Technolabs will be presenting at CeBIT 2012 in hall 6, stand D44 all through 6 March to 10 March 2012. The India based company will showcase its premier CRM and ECM solutions along with cross platform mobile solutions at the event. It is an ISO 9001:2008 certified company.

Source:http://www.sbwire.com/press-releases/sbwire-126375.htm

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/beyond-brics/2012/02/09/cognizant-lessons-for-indian-it/#ixzz1lxmre93s

Indian second-largest software company, Infosys, found out last month that sometimes beating expectations on profits isn’t enough to please the markets.

On Wednesday, Cognizant – the US-headquartered competitor that’s making things tough for Indian behemoths like Infosys and Tata Consultancy Services – found out that sometimes projecting double-industry-standard growth just isn’t enough either, when its stock fell 1.75 per cent compared to a 0.41 per cent rise in the Nasdaq. What’s the problem? And what are the lessons for its Indian competitors?

The problem it seems is that Cognizant, after eight straight quarters of outperformance, merely met expectations. It saw a 16.4 per cent rise in net income to $240.1m for the quarter ending in December, on the back of a 26.9 per cent rise in revenues, to $1.66bn, just below the $1.67bn consensus. It forecast a minimum 23 per cent rise in revenues for 2012, to $7.53bn, according to results released on Wednesday.

Analysts told beyondbrics that the company will benefit from an improving economic environment in the US – where it earned nearly 80 per cent of its revenue in the quarter ending in December – but that its growth projection for the coming year, despite its 33 per cent increase in revenues for 2011, might be a tad ambitious, given the overall economic picture.

“Twenty-three per cent minimum guidance is a good number, but for the first quarter of next year, they are guiding at 2.2 per cent which means that the growth rate for the remaining 3 quarters would have to be at 6.8-6.9 per cent,” said Ashish Chopra, analyst at Motilal Oswal. “[That]is a strong number to assume in the current environment.”

But R Chandrasekaran, Cognizant’s chief executive for technology and operations, told beyondbrics that the company was confident that it could maintain much greater growth than the 11-14 per cent projected for the industry during the fiscal year ending in March 2013 by trade group Nasscom.

“We are also entering 2012 with a great deal of confidence stemming from a very loyal customer base,” he said. “The traction we are seeing from some of the new [products] like consulting [and] infrastructure outsourcing… is really helping us.”

Cognizant, which has around three-quarters of its workforce in India, took over from Infosys in the north American market last year. It competes with the “big four” Indian IT services and consulting firms of Wipro, Infosys, TCS and HCL, and overtook Wipro in terms of reveune mid-2011.

Indeed, analysts told beyondbrics that what separates Cognizant from its Indian competitors is the way it reinvests in itself in order to build up the company’s front-end and sales operations.

“They’re much more market facing, their ability to understand clients’ needs is much higher, their ability to connect with clients is much better and they are more business focused,” said Sudin Apte, analyst at Offshore Insights. “That has helped them to bring in better returns.”

When it comes to tough economic times, IT companies like Cognizant can benefit as other companies need to save money, by outsourcing operations that would cost more to do in-house.

“Even if [a customer’s budget] remains flat… in absolute dollars he’s spending same amount on technology but wants to do more with the same budget,” said Chopra. “The only way to do that is to take out costs on the existing work – if it’s being done onsite then you have to move it off-shore, and that directly plays into the hands of the offshore providers.”

“That drives the growth for these guys even during the tough times,” he added.

It’s not necessarily a new lesson – just one that needs to be done better than before as competition increases and the market demands ever-better results.

Source:http://blogs.ft.com/beyond-brics/2012/02/09/cognizant-lessons-for-indian-it/#axzz1lxmYyVXN

According to a new report from analyst firm IDC, amid the threat of “another recession” the cautious optimism will continue in New Zealand and that the IT services market in the country will still grow by 3.8% to reach NZ$3.08 billion this year.

While many of New Zealand’s CIOs are reviewing all their IT spending, IDC predicts that many will continue to spend on strategic areas of investment, particularly on mobile devices, virtualisation and security, lifting the opportunity for service providers (SPs) in 2012.

“2012 looks set to be another economically uncertain year, but nonetheless organisations and SPs alike will need to seek opportunities that not only make business sense but also capture the innovative element that will make organisations stand out in the competitive ecosystem,” Rasika Versleijen-Pradhan, senior IT services analyst, New Zealand IT services market, said.

“Ultimately it will require SPs to rethink their aspirations and capabilities in the market, forcing some organisations to move out of their comfort zones.

“As the demand for technologies such as cloud computing, analytics, mobility and the rate of convergence accelerates, IDC expects to see a more fragmented ecosystem develop, resulting in the restructuring of business models for some SPs,” Versleijen-Pradhan added.

Other key predictions by IDC for the New Zealand market this year include:

• Cloud Will Move from a Cost Management to Innovation Driver Role: The role of cloud to help manage costs will shift towards one that will encompass cloud as a means to driving innovation within an organisation.

• Business Analytics Will Ride a New Wave, Sending “Big Data” Further in Motion: Big Data analytics will become critical in verticals that are challenged by the huge amounts of data sets and the widespread use of collaborative and mobile technologies.

• The Government Will Reduce and Reallocate IT Budgets: The government has stated that its initial focus will be on common capability, networks and infrastructure and the sharing of business systems resulting in greater shifts in IT spending allocations in 2012.

• The Services Ecosystem Will See the Formation of More Service Aggregators: This will be driven by customers who lack resources and will look for service aggregators as the external managers to their organisation.

• Market Pressures Will Reshape and Restructure Existing Outsourcing Contracts: The outsourcing market remains competitive, and existing customers continue to challenge their incumbent SPs to match the services and benefits offered by competitors, sometimes insisting on renegotiating an existing contract.

• Service Providers Will be Forced to Create Disruptive Business Units: If traditional SPs are to really compete in the cloud space they will need to make some radical changes to their business model. Subsequently this will, lead to the creation of a disruptive business unit.

• The Channel will Make Bigger Strides in Delivering Higher-Value add Services: IDC predicts that in 2012, the services component of partner businesses will be led by managed and cloud-oriented services as opposed to legacy maintenance and support services.

• Datacentre Services Will Experience High Growth: IDC’s Asia-Pacific Continuum survey in 2011, revealed that 40% of organisations surveyed plan to utilise third party datacentres by the end of 2012.

• Business Continuity and Disaster Recovery Will Maintain its Priority Level: IDC believes that business continuity will remain a key component of the executive agenda, regardless of the next upheaval.

Source:http://www.itwire.com/it-industry-news/market/52705-nz-getting-on-with-it-but-caution-prevails-report

The Veterans Affairs Department is being accused of undermining its own goal of hiring more veterans by expanding its outsourcing practices that eliminate many federal jobs currently, or historically, held by veterans, according to the union representing 205,000 employees at the VA.

In November, President Barack Obama signed into law the “VOW to Hire Heroes Act,” which included language to set up an expedited process for hiring returning solders for federal jobs.

But the VA’s own outsourcing, which began to grow under the Bush Administration and are continuing to expand, are abolishing many federal jobs currently held by veterans, the American Federation of Government Employees (AFGE), an AFL-CIO union, said in a Feb. 8 news release.

For example, the Veterans Benefits Administration recently entered into a $54 million three-year contract with ACS Government Systems to perform claims processing work.

That work currently is being performed by “large numbers of veterans,” the union said. “To add insult to injury, the VBA employees are being asked to volunteer to train the contractors to do their work.”

“Contract claims processors working for profit will now handle the most personal information of our veterans.” AFGE National President John Gage said in the release.

In several other outsourcing contracts in recent years, the VA also has gotten rid of many government jobs historically held by veterans, AFGE said.

Other jobs recently outsourced by VA medical centers and cemeteries, which historically had been held by veterans, included cemetery caretakers, laundry and food service workers, housekeepers, groundskeepers and transportation assistants.

The VA also has failed to comply with a 2009 law that requires the agency to do a cost-benefit analysis before each outsourcing contract is awarded, to determine whether the contract is cost-effective for taxpayers, the union said.

“The agency continues to violate federal law by contracting out work that has been traditionally performed by veterans,” the union said. “The outsourced jobs include many entry level jobs that disabled veterans rely on to get back on their feet after returning from the battlefield.”

The union also claimed the VA conducts “excessive contracting” of physician and nursing services rather than hiring clinicians from within the military.

“Contract physicians and nurses lack the specialized skills and best practices of clinicians who dedicate their lives to serving the veteran population as VA employees,” said AFGE National VA Council President Alma Lee.

VA officials did not immediately respond to requests for comment on Feb. 9.

Complaints about VA outsourcing have arisen on a regular basis in recent years. In 2009, the president reversed course on a proposed third-party billing initiative for veterans medical care following negative media attention about it.

Source:http://fcw.com/articles/2012/02/09/va-accused-of-excessive-outsourcing-of-va-jobs-held-by-vets.aspx

In the world’s biggest outsourcing market US, Cognizant Technology Solutions is now only $50 million behind Tata Consultancy Services, according to the October-December quarter revenues earned by these companies.

TCS, which counts General Electric and Citibank among its top US customers, earned $1.37 billion during the quarter ending December from the country, compared to Cognizant’s $1.32 billion.

From a gap of around $150 million in quarterly revenues from North America in March 2010, Cognizant is now looking set to become the biggest India-based outsourcing firm in the region.

On its part, TCS has a much more diversified client base when compared with Cognizant. For instance, while Cognizant gets almost 80% of its revenues from the US, TCS’s North American business contributes 53% of the total revenues. TCS has UK and Continental Europe customers contributing a quarter of its total revenues.

Cognizant, which counts JP Morgan, Merck and 3M among its top US customers, grew its revenues from the country sequentially by 6.1% and 31.2% compared to the December quarter of 2010.

TCS reported a 2.2% sequential growth in its America revenues and 20.2% compared to the same period last year.

Analysts tracking the sector said Cognizant is expected to narrow its gap with larger peers by growing its share of spend from top healthcare customers-a segment where others are not as strong.

“Its well-entrenched position in the healthcare segment (27% of revenue, which grew at 37% in FY11), where we see limited competition from tier-1 IT peers, and continued growth, motivated by regulation-driven spending, help the company,” Nomura Research analysts said in a note on Wednesday.

“Indian IT companies have grown 10-15% slower than Cognizant through good and bad times, and we do not see that changing anytime soon,” CLSA analyst Nimish Joshi said. Cognizant surpassed Infosys’ US revenue during March 2011 quarter.

Source:http://economictimes.indiatimes.com/tech/ites/cognizant-technology-is-just-50-million-behind-tcs-in-the-us/articleshow/11829314.cms

British experts have a “very positive” outlook of the Philippines’ business process outsourcing (BPO) industry, the Department of Foreign Affairs said.

The DFA said British-Philippines Outsourcing Council (BPOC) Board Members Ian McGowan and Richard Patterson disclosed this to Philippine Ambassador Enrique Manalo early this month.

“(They said) that while most BPO clients served from the Philippines were American, there has been a ‘noticeable increase in interest’ from British, Australian and Asian firms wanting ‘extraordinarily high skill sets and competitive pricing,’” the DFA said.

McGowan and Patterson had paid a courtesy call on Manalo at the Philippine Embassy on Feb. 2.

During the call, the two said outsourcing was “not bad” for developed economies, such as the United Kingdom, emphasizing that companies outsource to the Philippines “to compete globally and be successful.”

Also, they said their extensive experience with various British companies with BPO services in the Philippines showed that “for every job created in the Philippines several more jobs are created in Britain.”

For his part, Manalo expressed support for BPOC’s efforts to promote the Philippines as an investment destination.

“The Embassy, as part of its economic diplomacy program, will continue to work with organizations such as BPOC to actively showcase the Philippines as a prime, value-for-money business location. The BPO industry is one of the country’s leading lights, especially here in Britain where the Philippines has been regularly adjudged Best Offshoring Destination thrice over the past few years. BPOC will be an important partner in developing a bigger market in this country,” he said.

BPOC is a non-profit, independent organization based in London. It was established in 2009 to promote the Philippines as a BPO destination to British businesses.

Its membership is open to all companies with a base in the United Kingdom who either operate outsourcing services in the Philippines, outsource work to the Philippines or provide advisory services to the outsourcing or buyer communities.

Estimates by the Business Process Outsourcing Association of the Philippines (BPAP) show the BPO industry grew by 22 percent to US$10.9 billion in 2011, employing 640,000 people.

Source:http://www.gmanetwork.com/news/story/247507/economy/business/british-experts-say-phl-bpo-industry-outlook-very-positive

On the back of the telecommunications boom in Africa, more IT service vendors are moving into the continent in search of new opportunities.

So says Brent Flint, services executive at Dimension Data MEA, who believes this trend is also driven by the maturation and growth of competition in the South African IT services market.

“This expansion is often on the back of clients’ businesses expansion into the rest of Africa,” he explains. “More businesses are moving into Africa and require IT service providers that will help drive IT efficiency as a key strategic business enabler and also an engine of innovation.”

Flint explains that organisations are looking for infrastructure, desktop, database and application support, as these play a key role in enabling business.

“Without a large IT department or justification for big expenditure on technology, businesses are looking for solutions that will get the job done cost-effectively and simply, while delivering a rapid return on investment.”

However, Flint says there is a shortage of specific skills in the African IT services market, and this is resulting in companies not always being able to efficiently provide the IT services needed to enable business.
Click here

He adds that there is, therefore, a demand for IT service providers with experience and knowledge to enable business strategy, improve competitiveness, and drive business outcomes.

“Businesses are moving from ‘out-tasking’ discrete managed and professional services to a complete IT outsourcing solution.”

Garth Hayward, regional manager, Africa, at Kaseya, also cites skills shortage as one of the challenges besetting managed service providers in Africa.

“Finding and keeping good staff in the managed services industry is a challenge,” says Hayward. “There’s also a perception by business that IT companies don’t need to pay their staff.”

Hayward adds that the managed service providers are also finding it tough to craft value propositions that have relevance within their target markets.

Source:http://www.itweb.co.za/index.php?option=com_content&view=article&id=51416:it-service-vendors-eye-african-expansion

No multinational information technology firms have so far committed to renting commercial space at Bhutan’s first IT park, operated by joint venture Thimphu TechPark (TTP).

Business processes outsourcing (BPO) company Genpact, which was supposed to have moved in this year, has also recently deferred its entry to 2013.

“We were in discussions with Genpact but they have recently informed MoIC (the information and communications ministry) that they have deferred their decision to come in this year,” said TTP’s Bhutan Innovation & Technology Centre (BITC) consultant, Anjali Gulati. “They might consider it for 2013,” she said.

Anjali Gulati added that discussions with other potential companies like WIPRO and WorldBridge, a BPO, are ongoing. She said that for 2012, only local companies would be taking up space at TTP, both commercial and in the BITC.

The park’s BITC is scheduled to be completed and operational by the end of March the centre’s chief operating officer, Tshering Cigay Dorji, said.

The BITC’s objective is to promote the private sector and Bhutanese entrepreneurs by providing an environment designed to allow businesses to be mentored, networked, and grow to the point they can move out and operate.

Currently, the BITC is still being fitted out but MoUs have already been signed with 10 local companies. A further three are due to be signed within this week, Anjali Gulati said. She said that the companies’ business proposals are being reviewed and a selection process is underway. Companies with business proposals that provide high potential such as in growth and job creation, among others, will be selected.

Once operating in the BITC, the ‘tenants’ will be able to access the centre’s various services and facilities. They will also be able to avail mentoring from international organisations and individual experts. BITC recently launched it overseas expert program. The program’s objective is to facilitate training and teaching of the Bhutanese business community by bringing in foreign expertise to share their knowledge and experience for a period between 3-6 months.

Anjali Gulati said that BITC has about three foreign individuals already interested in the program.

DHI’s BEGIN (business entrepreneurship growth and innovation) program, slated to begin in March, will also be run in tandem with BITC, said Anjali Gulati. The BEGIN program seeks to provide mainstream entrepreneurship by providing comprehensive training, sustained mentoring, and financing to individuals with strong entrepreneurial traits and sound business ideas. Anjali Gulati said that the BEGIN program will be available to BITC incubatees.

BITC incubatees will have to pay rent to TTP, but Anjali Gulati said that the rent would be subsidised and as a result cheaper than market rates.

Bhutan’s first IT park was inaugurated three months ago in November. TTP is a joint venture between Assetz Property Group of Singapore and DHI. The park was built at a cost of about Nu 250M.

Source:http://www.kuenselonline.com/2011/?p=26699

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Shares in IT outsourcing company Computer Sciences Corp soared as much as 25 per cent in the morning session as the company wrote down losses from a UK government contract.

The shares pared gains but still closed up 18.5 per cent to $31.39.

CSC booked a loss of $1.5bn, or almost $10 a share, on a contract to computerise the records of the UK’s National Health Service. Shares had fallen 50 per cent in the 12 months to the end of last week on concerns about the UK contract and an accounting probe by the Securities and Exchange Commission, and, although CSC had pre-warned about the writedown in late December, some analysts said the move provided a degree of closure for investors.

“The risk of further large writedowns is significantly smaller than it was yesterday,” said Tien-Tsin Huang at JPMorgan. “People feel like we may have seen a bottom for CSC.”

But other analysts were unimpressed, and suggested investors might be well advised to take profit, with CSC now trading at an earnings multiple equal to industry peers.

“To say CSC should trade in line with its peers when it can’t give guidance for 2012, is subject to an SEC accounting investigation and has the overhang of further potential losses on the UK NHS contract is presumptuous,” said Darrin Peller at Barclays Capital.

He said the share price move was largely a result of short sellers covering positions. More than 10 per cent of available CSC stock had been on loan to short sellers at the start of the day, with many investors anticipating a sell-off if the company declared a larger writedown on the NHS contract.

Elsewhere, US stocks climbed, but gains were moderate as eurozone worries once again weighed on Wall Street.

The S&P 500 climbed 0.2 per cent to 1,349.96. The Dow Jones Industrial Average edged up 5 points to 12,883.95, while the Nasdaq Composite index rallied 0.4 per cent to 2,915.86.

Energy stocks were the laggards with coal miners falling for a second successive day, as SocGen analysts said iron-ore shipments to China through Australia’s Port Hedland fell in January compared with December.

Peabody fell 1.6 per cent to $41.27 and Alpha Natural Resources fell 2.1 per cent to $21.85.

Option traders appeared sceptical about the latest rally in the face of renewed Greek default concerns, with data showing large bearish bets that would profit from a fall in the Dow Transport index.

The index is closely watched as a leading indicator for movements in broader indices.

But some analysts remained bullish. “Given other efforts to stabilise the eurozone, we tend to think a Greek default would only lead to a momentary pullback in US stocks, lasting one or two days, and indeed would present a good buying opportunity,” said Randy Frederick, managing director for active trading at Charles Schwab.
Luxury clothing chain Ralph Lauren rose 9.2 per cent to $17.73 after forecasting stronger than expected 2012 revenue.

Unlike jeweller Tiffany , Ralph Lauren did not see a slowdown in US or European sales in the fourth quarter, leaving investors free to focus on strong sales growth in emerging markets that Ralph Lauren reported in common with other luxury brands. The company also raised its forecast for 2012 margins.

“If we were to look for trouble, a cause for concern could be the recent gross margin deterioration, which reflects an increasing amount of technology resale that both boosts revenue growth and hurts gross margin,” said George Hill at Citigroup, although, along with most other analysts, he was upbeat on the results.

Bank stocks traded higher despite the Greek concerns. Citigroup was up 3.5 per cent to $34.23 and Bank of America topped $8 for the first time since September, closing up 3.6 per cent to $8.13 for the best performance in the Dow Jones Industrial Average.

Walt Disney shares climbed 0.7 per cent to $41.27 as earnings rose despite flat revenues.

The initial public offering of Caesars Entertainment made a surprise leap on its debut, jumping 71 per cent to $15.39 over its $9 debut price, the most of any US IPO since Zillow last July.

The offering of just 1.8m shares had been intended only to provide liquidity to a small clutch of investors in its 2008 leveraged buyout, ahead of potential larger exits by investors such Paulson & Co, Apollo Group and TPG Capital. But traders said that retail investors swooped on the offering at the discounted valuation, despite the risk of future dilution.

Source:http://www.ft.com/intl/cms/s/0/5231a8f8-5264-11e1-a155-00144feabdc0.html#axzz1llILQk4A

IT outsourcing firm Tech Mahindra on Wednesday reported a consolidated net profit of Rs 276 crore for the quarter ended December 31, 2011.

“Profit after tax for the quarter ended December 31, 2011 and 2010 are not comparable as the figures in respect of 2010 do not include share in profit of Satyam Computer Services Limited (SCSL) for the period,” Tech Mahindra said in a filing to the BSE.

The company had a net profit of Rs 257 crore during the October-December quarter 2010, the company said.

Income from operations rose to Rs 1,444.87 crore during the quarter under review, against Rs 1,211.14 crore in the same period last year.

The total headcount of the company at the end of December 31, 2011 stood at 42,746 out of which software professional headcount stood at 25,218, BPO at 16,419 and support staff at 1,109.

The debt stood at Rs 1,376 crore as of December 31, 2011 and cash and cash equivalent stood at Rs 321 crore on balance sheet during the same period.

“We have had a satisfactory quarter, with growth in both revenue and margins. This is a result of our investments in growth markets, and in emerging technologies. We continue to focus on delivering enhanced value to our customers in an uncertain economic environment,” Tech Mahindra Vice Chairman, MD and CEO Vineet Nayyar said.

At the end of December quarter, the company’s active clients stood at 130.

Shares of Tech Mahindra settled at Rs 650.75 on the BSE, up 1.28 per cent from the previous close.

Source:http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/tech-mahindra-posts-q3-profit-of-rs-276-cr-shares-up-1-28/articleshow/11807950.cms

Under the deal, IBM will assume responsibility for the development and support of PJSC Ukrsotsbank’s information systems and applications as well as the management of the bank’s IT infrastructure.

Big Blue takes over the management and maintenance of PJSC Ukrsotsbank’s application portfolio, data centre systems, IT network, ATMs, end-user and deskside support.

The move will help the bank make significant operational savings, improve customer service, increase performance efficiency and lower operational risk across a country-wide network of nearly 400 branches, says the vendor.

The deal follows PJSC Ukrsotsbank’s recent migration to a new core banking system and UniCredit hopes that this, coupled with performance improvements derived from the IBM collaboration, will offer a model it can export to other parts of the business.

Francesco Pusateri, head, global banking services, UniCredit, says: “Having already successfully migrated and centralised PJSC Ukrsotsbank’s core banking systems, this decision will help us to strengthen our leadership in the Ukrainian banking sector. Leveraging IBM’s technology assets and industry experience we are able to transform the way we work and run our operations.”

Joseph Benaroya, VP, IBM global technology services, adds: “This is the first instance of full outsourcing in the region and marks a new era in the IT delivery model and in the development of Ukraine’s financial services sector. Banks across growth markets are currently under enormous pressure to reduce costs and operational complexities while at the same time improve the customer experience.”

Source:http://www.finextra.com/news/fullstory.aspx?newsitemid=23404

Ciklum, a Danish innovative IT outsourcing company specializing in nearshore software development in Eastern Europe, expands its cooperation with the international and European Outsourcing organizations by establishing a combined knowledge partnership with the Outsourcing Verband (German-Austria-Swiss Outsourcing Association) and the Outsourcing Journal.

The key concepts of the knowledge partnership are sharing and acknowledgement. By partnering with the Outsourcing Verband Ciklum pursues the acknowledgement as a valuable member of the European Outsourcing Community by contributing and sharing IT Outsourcing (ITO) related information and best practices.

Another important goal Ciklum aims to reach via partnership with the Outsourcing Verband is to focus more on the European German speaking area (DACH) and help companies from this region to explore their Nearshoring opportunities and benefits in Central and Eastern Europe (specifically in Ukraine and Belarus).

“Since 2011 Switzerland has been witnessing an exploding interest in nearshore software development,” says Franco Dal Molin, Ciklum’s Country Manager for Switzerland. “Every month we add two new Own Development Team clients to Ciklum portfolio. We have accumulated lots of reference case studies and best practices that should definitely be shared with a broader audience via the Outsourcing Verband’s online portals.”

The Knowledge Partnership is expected to be mutually beneficial for both Ciklum and the Outsourcing Verband. “Ciklum has a proven model in delivering IT and business services to European customers and as part of the partnership Ciklum will share some of its knowledge and project experiences with our network,” says Stephan Fricke, CEO of the Outsourcing Verband.

Ciklum is looking forward to boosting expansion of its corporate communication within the German speaking markets via such powerful knowledge sharing and accumulation platforms as the Outsourcing Verband and the Outsourcing Journal.

Source:http://www.prurgent.com/2012-02-08/pressrelease224036.htm

The fate of over a billion dollars worth of information technology outsourcing contracts is in limbo after Thursday’s US Supreme Court verdict cancelling 122 licences of telecoms firms, The Outsource Blog reports.
The order comes at a time when both Indian and multinational IT firms like Wipro, Tech Mahindra and IBM, besides business process firms such as Firstsource, Intelenet and Aegis, have signed multimillion-dollar deals with telecoms firms including Uninor, Etisalat DB, Videocon and Idea.
For instance, Wipro had signed an estimated $500 million to $600 million outsourcing deal with Uninor in 2009. Similarly, Tech Mahindra had signed an outsourcing deal from Etisalat, with a revenue estimate of $400 million $500 million. MNC firm IBM, which has a $1 billion outsourcing deal with Bharti-Airtel, had also bagged a $200 million deal from Videocon-led Datacom Solutions.
Tech Mahindra, when contacted, said it was aware of the matter and was “closely monitoring” the development, Global Services says.
“At this point in time, we would not be able to offer any comment. Further, as a policy, we do not comment on any details pertaining to client-specific engagements,” it said. Tech Mahindra had won deals from Etisalat and Sistema Shyam. An estimated 500 employees manage the Etisalat deal at Tech Mahindra.
“The verdict will have a domino effect on both vendors and suppliers,” according to Kamlesh Bhatia, research director at Gartner. “The only way IT vendors can mitigate a large-scale impact is if the contract had factored in some market risk. Even then, there will be an impact.”
Bhatia says these deals were signed during 2009/10, when the telecoms vendor segment was much more mature. “Most of these contracts would be structured as partnerships with revenue related to the milestones achieved by the telecoms vendors. Many would even incorporate a situation where the company might wind up operations. Some might also have asked for an upfront capital investment from the telcos, which might buffer the vendors. But even then, there will be considerable impact,” he notes.

Source:http://www.itweb.co.za/index.php?option=com_content&view=article&id=51328:it-outsourcing-contracts-in-limbo

European firms engaged in business process outsourcing (BPO) are expected to expand their operations in the Philippines this year as the sector continues to be strong in the country, European Union Ambassador to the Philippines Guy Ledoux said.

“This (BPO sector) is a way for European companies to increase their competitiveness…so European companies in the BPO sector will also expand their operations in 2012,” he said.

The BPO sector, considered as a sunshine industry in the Philippines, is forecast to grow 20 percent in 2012. By 2011, the Philippines has overtaken India as the the top BPO destination in the world. More than 500,000 Filipinos are currently employed in BPO firms.

Ledoux said 10 percent of BPO companies currently operating in the Philippines are European companies.

Aside from BPO, Ledoux said that this year, European firms are also eyeing investments in renewable energy, noting that as of last year, 70 percent of new power generation capacity in Europe are renewable energy sources.

“The EU is very strong in renewable energy… European investors are waiting for a decision on feed in tariffs,” he said.

EU firms also eye expansion in electronics, a sector that continues to post high growth because of strong demand for mobile phones and tablet computers.

Ledoux said that as far as foreign investment and trade between the Philippines and EU are concerned, the flow of European investments into the Philippines will depend on the investment climate in the Philippines more than on the economic situation in Europe.

“At this stage it is difficult to predict the level of trade and investment between the EU and the Philippines in 2012. There is clearly a strong willingness by both the government of the Philippies and the European Union to further expand our economic links. Efforts are being made by both side to create a conducive climate that will attract European investor to the Philippines and expand two way trade,” he said.

Source:http://www.abs-cbnnews.com/business/02/08/12/european-bpos-expand-philippines

The State government on Tuesday inked a memorandum of understanding (MoU) with Cognizant, a NASDAQ-listed, USheadquartered provider of information technology, consulting, and business process outsourcing services to lease out 15 acres of land in Kochi Infopark Phase II.

Industries Minister P K Kunhalikutty, Infopark CEO Gigo Joseph, IT special secretary K S Srinivas, Joseph Korah, head of Cognizant’s Kochi operations and Anand Bhushan, senior associate general counsel of Cognizant were present.

Cognizant’s new campus in Infopark Phase II ,when fully completed, will have a built-up area of 1.6 million sq.ft.

and a capacity to accommodate around 12,000 professionals.

Planned for a campus development in various phases, Cognizant will chip in Rs 250 crore for the first phase and it will consist of a 5.5 lakh sq.

ft.software development block meant to house over 4,000 professionals.

Cognizant, presently, has over 1,500 professionals working from the first phase of Kochi Infopark.

Speaking on the occasion, Industries minister P K Kunhalikutty said that with the recent release of the ‘Emerging Kerala’ tagline, the government has been strongly advocating that Kerala is a land of great opportunities.

“With big IT names like TCS, Infosys, Wipro, Oracle, HCL, Cognizant and Capgemini setting up offices in the state, it is very obvious that Kerala is becoming a hot IT destination and an investmentfriendly state.

Today, we are on the brim of the next phase of IT growth in Kerala and the government assures all support to all companies who will play a key role in the development of the state as a leading IT hub of the country,” he promised.

“We are committed to grow our operations in Kochi and tapping into the world-class talent in the state of Kerala,” said R Chandrasekaran, president and managing director, Global Delivery, Cognizant.

Infopark has ambitious plans to become one of the major IT Park clusters in the country.

Ever since its inception in 2004, Infopark is well known among the IT/ ITES investors for its potential and is currently expanding to new locations in Cherthala and Koratty.

Infopark Phase II is planned in a PPP model by inviting investments from IT companies and other infrastructure developers.

Source:http://ibnlive.in.com/news/kerala-aims-to-be-the-countrys-biggest-it-hub/228237-60-122.html

India on Tuesday expressed hope that the current economic woes in the US would not lead to protectionism and said that concerns of the Indian IT industry over anti-outsourcing measures announced by President Barack Obama recently will be addressed quickly.

Foreign Secretary Ranjan Mathai on his first bilateral visit to the US said that the Indian IT industry in the US has contributed $15 billion in taxes alone in the last five years and underlined the need to eliminate discriminatory actions.

Mathai is believed to have raised the issue in his meeting with the officials of Commerce Department yesterday in the backdrop of Obama’s State of the Union address in which he outlined measures to bring jobs back to the country.

Obama had said his administration would offer incentives to those firms which will create jobs in the country.

Mathai in his address to the Centre for Strategic and International Studies said, “Indian IT industry contributed $15 billion in taxes over the last five years. This success story should not be set back by stringent visa regulations which act as a non-tariff barrier.”

“We do hope the current economic challenges in the US would not lead to protectionism and that concerns of Indian IT industry will be addressed quickly,” he said.

NASSCOM estimates that Indian industry employs over 100,000 in the US up from 20,000 six years ago, he said adding it supports 200,000 other jobs, including indirect ones, apart from enhancing the competitiveness of some the US industries.

Source:http://ibnlive.in.com/news/address-concerns-of-it-industry-india-to-us/228143-2.html

Real estate services provider CBRE Group Inc. reported a robust fourth quarter as property sales increased and the company expanded its asset management business.

The Los Angeles firm formerly known as CB Richard Ellis Group Inc. earns commissions from arranging transactions to buy or rent space in offices, warehouses and other commercial properties.

Property sales revenue rose 10% compared with the fourth quarter of 2010, powered by a growing number of deals in the United States and Asia, while sales in Europe remained flat, the company said Tuesday.

Income from leasing properties fell moderately as growth in European transactions was offset by a decline in leases the company helped sign in the U.S.

CBRE Group’s revenue was lifted by a 14% increase in its outsourcing business, wherein the company manages property for private and public clients. Outsourcing contracts were signed in the fourth quarter with Unilever, Newell Rubbermaid Inc. and Britain’s Foreign and Commonwealth Office.

The company announced that it now manages Microsoft Corp.’s 34-million-square-foot real estate portfolio, an expansion of its relationship with the Redmond, Wash., software giant.

“The Microsoft deal is huge,” said analyst Craig Silvers, president of Bricks & Mortar Capital. “It exemplifies how even companies the size of Microsoft see it as more efficient to have a professional team like CBRE come in and do most of the work for them.”

CBRE Group also profited in the fourth quarter from its growing real estate development business with the sales of two properties built by subsidiary Trammell Crow Co. in Texas.

“Our highly diversified portfolio was the key to our fourth-quarter results,” Chief Executive Brett White said. “The macro-environment during this period was marked by intensified concerns about sovereign debt issues, particularly in Europe, and tepid economic growth.”

Fourth-quarter profit was $79.8 million, or 25 cents a share, compared with $95.1 million, or 30 cents, in the last quarter of 2010. Excluding certain charges, profit would have been 46 cents a share, beating analysts’ expectations by 2 cents. Revenue was $1.8 billion, an increase of 7%.

CBRE shares fell 34 cents to $19.26 before earnings were announced.

Source:http://www.latimes.com/business/la-fi-cbre-earnings-20120208,0,6768561.story

martinwolf, the world’s leading middle market IT M&A advisory, today released its MW IT Index(R) for 2011. The Index is a proprietary analysis that serves as a benchmark and guide to better understand how key financial metrics affect the enterprise value of IT outsourcing and managed services companies. The Index continually tracks the enterprise value of 120 companies in IT Services and Business Process Outsourcing (BPO); IT Supply Chain Services; and Software including SaaS.

According to Marty Wolf, Founder and President, “The MW IT Index is the only index of its kind in our industry. We use it to counsel buyers and sellers of companies and companies use it to better understand how business decisions they make every day can either build or destroy enterprise value.”

Key findings by industry include:

– SaaS, which has experienced accelerated growth and premium valuation multiples over traditional software companies, will continue its fast growth for the next 12-24 months, especially in new segments and specialized industries;

– BPO will continue to see valuation growth driven by market demand for specialized solutions;

– IT Supply Chain Services are mature segments and companies will see continued consolidation; and

– The traditional enterprise Software market is really giving way to SaaS.

Source:http://www.newsfactor.com/news/SaaS-Will-Continue-Its-Fast-Growth/story.xhtml?story_id=01300086R02M

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Wipro, the Indian IT services and consulting group, says it plans to “aggressively” expand its US workforce, as it seeks to localise its operations and counter political opposition in the world’s largest economy to offshore outsourcing.

The outsourcing of work to companies such as Wipro, and the granting of work visas to foreign workers, including Indians, has long been of concern to US labour unions and is likely to become a political ‘hot potato’ in the upcoming presidential election.

The Indian information technology services industry, which accounts for the bulk of offshore outsourcing undertaken by US companies, has sought to reverse its negative image as an industry that takes away jobs from the country, particularly at a time of high unemployment.

Instead, the Indian IT sector is trying to present itself as a job creator. Wipro said it plans to expand its 8,700-strong US workforce through acquisitions and taking on new staff.
Like other Indian companies such as Tata Consultancy Services and Infosys, Wipro seeks to use the time ahead of the upcoming election – when state and federal governments are keen to woo voters – to negotiate tax breaks and land acquisitions for new facilities.

Azim Premji, the chairman and majority owner of the company, told the Financial Times that Wipro would establish two new software-development facilities in the US in the near future, staffed primarily by Americans.

At Wipro’s development centre in Atlanta, 90 per cent of its 800 employees are local hires and the company aims to duplicate this success elsewhere.
“In the US, we are aggressively localising,” Mr Premji said. “We are evaluating two more centres in the US, hoping to set up scenarios similar to Atlanta. We will make a call on this in the next three months, absolute maximum.”

Mr Premji, who has a personal fortune of $13bn and is the third wealthiest Indian according to Forbes magazine, plans to expand Wipro’s local hiring across the world over the next few years to ensure that at least half of those employed by Wipro overseas are from the host country. Currently, 38 per cent of Wipro’s workforce outside India are locals. Bangalore-based Wipro employs a total of 130,000 people globally.

“Hiring salaries of locals are not any more expensive than the hiring of talent from India,” Mr Premji said. “You do not have the back and forth of transfer expenses.”
TCS, India’s largest IT company by sales, announced the opening of a new unit in Silicon Valley last month, while Infosys, which is second in size after TCS, has hired about 2,000 Americans in the past two years and is now looking to hire about 500 locals in the first three months of this year alone. Similarly, HCL Technologies plans to create 10,000 US and European jobs.

Mr Premji added that Wipro – which has operations in 45 countries across the US, Europe, Middle East and Asia-Pacific – has an aggressive acquisition pipeline globally. Wipro is looking at buying companies with expertise in analytics, cloud, mobility and “big data” – the collection and processing of large amounts of customer data – particularly in industries such as healthcare, financial solutions, energy and utilities, which he sees as high-growth sectors.

He said Wipro still has scope to expand in northern Europe, particularly France and Germany. Sector analysts have said the ongoing debt crisis is providing attractive valuations for Indian IT companies looking for potential acquisition targets in the continent.

Source:http://www.ft.com/intl/cms/s/2/d6fe9894-51a0-11e1-a9d7-00144feabdc0.html#axzz1llILQk4A

Outsourcing continues to change in response to market changes, and a still uncertain economy. I expect the following trends to be apparent in outsourcing as we go through the year:

• Cloud concerns will increase – although I expect more companies to start implementing cloud-based solutions into their IT infrastructure, the struggle of complying with data protection laws, and a lack of contractual safeguards, will continue to slow the take-up by larger organisations.

• Mergers will increase – service providers, particularly the technology service providers, are likely to continue to find their established markets hard to predict, as customers take longer and longer to make decisions about their outsourcing strategy. I expect these pressures to lead to more consolidation in the market, and I would not be surprised to see 2 or 3 major deals announced over the next 12 months. In particular, I expect to see further consolidation among the second and third tier Indian vendors.

• Less established countries to increase their profile – Countries like Brazil and China, and possibly South Africa, Sri Lanka and Vietnam, are going to be seriously considered by companies looking to outsource beyond the traditional destinations such as India. The profile of these countries, and availability of skilled talent, has been steadily increasing and Brazil in particular is now looking to become a major player within Latin America. The introduction of data protection laws across Latin America over the last 12-18 months will also give comfort to organisations who might otherwise have been concerned about a lack of security and protection for the processing of sensitive data. Similarly, service providers are starting to shift their data centres to these regions to take advantage of these growing markets.

• Smaller deals will dominate. The trend for some time has been for customers to require shorter deals with easy routes of escape if required. Risk mitigation is the theme for most customers, and that requires a service provider to accept a shorter term, and “get out” clauses that enable the customer to exit the deal if market conditions change, or there is a change in strategy. This is, however, leading to a less strategic and more procurement-oriented mindset around outsourcing – which carries with it a risk that there will be less innovation and little in the way of transformation from service providers who have no incentive to be creative.

• Data Protection will become an increasing concern. The laws in Europe around data protection are set to change over the next couple of years, and fines for data breaches will be significantly higher. Data processors (ie: service providers) will also have regulatory responsibilities for the first time, forcing the industry to potentially adopt higher standards of security. Deals being signed will therefore need to anticipate some of these changes, and give more focus to this area, or face being renegotiated once the laws come into force.

• Legal Process Outsourcing to increase dramatically. One area of outsourcing likely to increase significantly over the next 12 months is LPO. Law firms are actively trying to minimise costs in all areas – and saving money through outsourcing is now becoming standard practice. Expect to see more service providers try to enter into this market, and for firms to continue to explore the outsourcing of legal services to offshore destinations such as India and South Africa.

Source:http://www.sourcingfocus.com/site/opinionsitem/4909/