« November 2007 | Main | January 2008 »
December 19, 2007
Top Stories
MERCK EXTENDS DEAL WITH COGNIZANT...Cognizant announced a multi-year, multi-million dollar engagement with Merck & Co., a global research-driven pharmaceutical company. Cognizant will extend its existing relationship with Merck, dating back to 2005, to become a key technology partner and provide a full suite of services encompassing applications outsourcing, IT infrastructure management and business process outsourcing services.
PEROT SYSTEMS NAMES PRESIDENT OF GOVERNMENT SERVICES...Perot Systems Corporation announced that Eugene "Lee" Carrick has been appointed to serve as president of the company's government services unit. Carrick will succeed Jim Ballard, the current president who announced his intention to leave the company to pursue other opportunities. Carrick most recently served as Executive Vice President for National Security at Perot Systems. Carrick brings with him more than 26 years of experience working in the intelligence, defense and civilian markets. Prior to joining Perot Systems, Carrick directed a $480 million federal IT division at Northrop Grumman.
UNISYS MOVING HQ TO PHILADELPHIA...Unisys Corporation is relocating its corporate headquarters from Blue Bell, Pennsylvania to the city of Philadelphia. The company has signed a lease for 90,000 square feet of office space to establish its corporate headquarters at Two Liberty Place in center city Philadelphia. About 225 executive and corporate client-facing staff will relocate to the new location beginning in January 2009. The new headquarters location in Philadelphia will include a state-of-the-art client center for innovation, showcasing the company’s capabilities and solutions to clients and prospects.
Unisys said the move is designed to help the company enhance its image with clients and prospects, open opportunities for employees, and attract talent, while also allowing Unisys to reduce real estate expense.
Posted by jbowles at 08:37 PM
International News
Cajasol, the financial institution established by the merger of Caja San Fernando and El Monte, has signed a four-year, 42.3 million euro-contract with IBMthat will help the savings bank to reach the business goals of the merger and achieve its growth objectives. The aim of the agreement, which includes IBM software, hardware and services, is to enhance the service provided to Cajasol customers. The new consolidated information technology (IT) platform will allow Cajasol to expand its business in Andalusia, Madrid and the Spanish Mediterranean Coast. It will also enable the company to offer higher quality and real-time services to a growing number of customers with greater flexibility and at a lower cost.
Posted by jbowles at 08:36 PM
Large IT Outsourcing Mega-Deals an Infrequent Occurrence in 2008, According to Everest Research Institute
A fewer number of Information Technology Outsourcing (ITO) mega-deals will occur in 2008, according to the Everest Research Institute. A decline in the number and size of mega-deals, defined as contracts of $1 billion or more in total contract value, will instead result in a focus on existing mega-deal renewals and an increase in price competition by suppliers, according to a new study by the Institute.
“A decline in mega-deals is likely irreversible any time soon as few Fortune 100 companies remain that could sign new mega contracts,” said Ross Tisnovsky, Vice President of ITO Research at Everest Research Institute. “Next year, we expect buyers will gain pricing benefits due to the pressure suppliers will have to grow signings and contend with increased competition for contract renewals. In the large enterprise market segment, comprised of Fortune 1000 companies, we also foresee long-term price decline in the Infrastructure Outsourcing (IO) market due to an influx of new suppliers and increased competition where the most opportunities for ITO exist.”
The Institute study, How Structural Changes in the ITO Market are Likely to Affect the Industry, analyzed the market from the client point of view to study how buyer-driven structural changes will affect the ITO market. The analysis examined the three basic ITO market segments: mega-deals, large enterprises, and small and medium business (SMB).
In addition to conclusions about a mega-deal decline, key findings of the study include:
Relationship consolidation in large enterprises segment will present multiple improvement opportunities to buyers, enabling them to benefit from lower governance overhead and better prices.
Labor arbitrage will continue to be a significant driver of value in ADM (application development and maintenance) and will continue penetrating Infrastructure Outsourcing (IO), resulting in increased competitive intensity and price pressure
Increased market velocity (i.e., shorter durations and faster contract renewal cycles) will present buyers with more opportunities to renegotiate contracts and consider alternative suppliers.
Despite multiple initiatives by numerous suppliers to expand into the SMB market, this market segment is likely to remain underserved and continue to be serviced by smaller suppliers with limited capabilities.
To read more about the results of the Information Technology Outsourcing Market Update study, an extract of the report is available at www.outsourcing-center.com. To purchase the report or receive more information about other research services, please e-mail info@everestresearchinstitute.com or call +1-214-451-3110.
Posted by jbowles at 08:35 PM
Advertising Information
Outsourcing Alert reaches 50,000 key decision-makers a week. For advertising information and rates, contact Peter Bowes. Tel: (508)359-9356 or send an email.
Posted by jbowles at 08:35 PM
December 12, 2007
Top Stories
EDS WINS $715 MILLION DEAL FROM BRISTOL-MYERS SQUIBB...EDS announced a seven-year, $715 million information technology (IT) services contract that calls for EDS to manage Bristol-Myers Squibb's IT environment, which includes the company's critical operations data at Bristol-Myers Squibb data centers around the world. The contract initially covers IT services in the Americas and Asia Pacific regions, with the opportunity to include Europe, the Middle East and Africa. Additionally, EDS will provide computer capacity to Bristol-Myers Squibb from its data center in Auburn Hills, Michigan.
ACCENTURE COMPLETES DEFENSE ACQUISITION...Accenture has completed its acquisition of MAXIM Systems, Inc., an employee-owned defense consulting firm that provides advanced engineering and technical services in the areas of command and control, multi-level security and satellite communications. Terms of the sale were not disclosed. The acquisition expands Accenture’s Defense practice with the addition of San Diego-based MAXIM Systems’ capabilities in designing, developing, installing and supporting systems for C4ISR — which stands for Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance — for military and intelligence agencies.
RPO INDUSTRY CONTINUES TO GROW...The Recruitment Process Outsourcing (RPO) industry continues to gain the interest of new service sectors fueling the annual growth of this growing industry. During the second half of 2007, RPO leader The RightThing has inked deals with Wal-Mart, Vail Resorts and Harvard University which represent the retail, hospitality and higher education industries respectively. In addition, The RightThing continues to deepen its share of more mature markets including new contracts with Chubb Insurance (financial), Covidien (healthcare), MedImmune (pharmaceutical), MedPointe
first ever Best Outsourcing Thought Leadership Awards.
Posted by jbowles at 07:39 PM
New Business
The Idaho Department of Health and Welfare has awarded Unisys two seven-year, firm-fixed price contracts to provide systems and operational services as fiscal agent for the state’s Medicaid program. The contracts consist of a two-year system design, development and implementation phase, followed by five years of operations totaling $116.5 million. There is an additional three year option, exercisable by mutual agreement, worth $51 million. If the option is exercised the total contract value is $167.5 million.
Computer Sciences Corporation has won a contract to provide program management and information technology (IT) services for the U.S. Navy’s Naval Network Warfare Command (NETWARCOM) Cyber Asset Reduction Security and Task Force (CARS TF) program. CSC estimates the value of the contract, which has a one-year base period and three one-year options, to be $66 million if all options are exercised.
Posted by jbowles at 07:39 PM
International News
Siemens Metals Technologies is to take over complete responsibility for electrical and mechanical maintenance of all the machinery and equipment involved in the steel production process – from the sinter plant and blast furnace to the steel works and slab caster. The customer is ThyssenKrupp CSA Companhia Siderùrgica, which will entrust Siemens with complete responsibility for lifecycle servicing of its new integrated iron and steel works in Brazil. The contract will run for 15 years and the order is worth around 700 million euros.
Posted by jbowles at 07:38 PM
FAO Buyers Shifting Focus to an End-to-End Process-Driven Approach: O2C and P2P Adoption on the Rise
Companies outsourcing finance and accounting functions such as accounts receivable, accounts payable and general accounting in a piecemeal manner are increasingly seeking end-to-end process solutions to gain additional cost savings, business benefits and strategic impact, according to a new study by the Everest Research Institute.
The Institute’s study, Outsourcing Order-to-Cash (O2C) and Procure-to-Pay (P2P) – Opportunity to Create Business Impact, reveals that, although most buyers are relatively satisfied with their FAO contracts, business and strategic impact through outsourcing remains elusive as key pain-points continue to plague the financial supply chains for most buyers. As a result, more than two-thirds of buyer-organizations surveyed for the study have expressed some level of interest in the outsourcing of Order-to-Cash (O2C) and Procure-to-Pay (P2P) processes.
“With expansion of scope, the value proposition of outsourcing extends from being purely cost-based to cost-plus,” said Katrina Menzigian, Vice President of Research, Everest Research Institute. “There needs to be reprioritization of outsourcing value levers as scope expands to end-to-end outsourcing. While labor arbitrage and scale continue to be important value factors, value levers such as domain expertise, process optimization, and automation assume much greater importance.”
Suppliers are clearly responding to buyer demand as 85 percent of those surveyed in the study responded that they either provide or plan to offer outsourced O2C and P2P solutions. A third of the surveyed suppliers are also committed to developing vertically-focused O2C/P2P offerings and are targeting financial services, manufacturing and retail clients.
According to the study, although the potential of utilizing an end-to-end approach is being realized, challenges remain in this nascent market, including lack of market maturity that varies by sub-processes. The greater challenge, however, is found in resolving conflicting interdepartmental priorities and transitioning function mindsets to process-focused thinking.
“Finance and customer interaction organizations need to work together in order to tackle a true O2C process while the procurement arm of an organization needs the same type of relationship with finance to execute a true P2P,” said Saurabh Gupta, Research Director, Everest Research Institute and co-author of the report. “From a supplier perspective, we believe the evolving market will lead to platform-based FAO solutions that will cause buyers to move to more standardized solutions.”
The Institute study results were drawn from an analysis of more than 240 multi-process FAO contracts, surveys of finance and accounting outsourcing (FAO) buyers and suppliers, and focused interviews with leading FAO suppliers that included Accenture, Genpact, IBM, Infosys BPO, IQBackOffice, VWA and Wipro.
Other study findings include:
Suppliers scaled down O2C/P2P offerings to appeal to the upper-end of the mid-market, but the lower-end of the mid-market continues to be highly under-penetrated.
Buyer interest in outsourced O2C/P2P is apparent across all segments – both the mid-market and the large buyer segment.
Suppliers offering end-to-end processes can gain opportunities for additional revenue potential, testing platform-based FAO solutions and differentiation from competitors.
To read more about the results of the Outsourcing Order-to-Cash (O2C) and Procure-to-Pay (P2P) – Opportunity to Create Business Impact study, an extract of the report is available at www.outsourcing-center.com. To purchase the report or receive more information about other research services, please e-mail info@everestresearchinstitute.com or call +1-214-451-3110.
Posted by jbowles at 07:38 PM
Advertising Information
Outsourcing Alert reaches 50,000 key decision-makers a week. For advertising information and rates, contact Peter Bowes. Tel: (508)359-9356 or send an email.
Posted by jbowles at 07:38 PM
December 05, 2007
Top Stories
RITTENMEYER SUCCEEDS JORDAN AS BOARD CHAIRMAN AT EDS...EDS announced its board of directors has elected Ron Rittenmeyer chairman of the board. Rittenmeyer, 60, will also retain the titles of president and chief executive officer. He will succeed Mike Jordan, 71, who will become chairman emeritus and will step down from the board of directors. Both appointments are effective December 31, 2007. Jordan, who joined EDS in March 2003, will remain with EDS and serve as a strategic adviser to the company’s senior leadership team.
CAPGEMINI OPENS FIRST CENTER IN BUENOS AIRES..Capgemini has opened its first Advanced Development Centre in Buenos Aires to support European and North American clients operating in the South American market, initially focusing on Spanish clients. Planned development means that the centre should reach 1,500 professionals by 2009.
EDS SIGNS BIGGEST EVER POLISH OUTSOURCING DEAL... EDS has signed a US$52 million, five-year information technology (IT) outsourcing agreement with Telekomunikacja Polska, a major company in the TP Group (TP), and a leading telco operator in Poland. France Telecom, a leading global provider of telecommunication services, holds approximately 47.5 percent equity in TP. The deal is the largest technology infrastructure outsourcing contract ever signed in Poland. Under the contract, as of December 1, 2007, EDS assumes responsibility for TP’s and PTK Centertel’s (the mobile telecommunications company of the TP Group) desktop management infrastructure.
COMPUCOM NAMES CIO...CompuCom Systems, Inc. announced that Laurie Simon has been named Chief Information Officer, effective immediately. Simon will report to Jeff Frick, Chief Operating Officer, and will be responsible for leading day-to-day IT operations, setting IT strategy and executing key initiatives to ensure the company continues to achieve business goals with a reliable infrastructure.
FREEBORDERS LAUNCHES GLOBAL DELIVERY MODEL...Freeborders, Inc., the leading provider of Technology solutions developed in China, announced today that it has launched CHINDUS(sm), a unique global delivery model for providing software services from China. CHINDUS(sm) leverages best practices for delivering IT services, including software outsourcing and offshore development, from the U.S., India, and China.
Posted by jbowles at 08:35 PM
International News
Computer Sciences Corporation announced that its operations in Denmark have signed a five-year, $76 million (390 million Danish Kroner) information technology (IT) outsourcing agreement with Det Berlingske Officin, a major newspaper publisher in Denmark. Berlingske, which produces 14 daily newspapers and nearly 50 regional papers, is a part of the Mecom Group, a leading European regional publisher with operations in Denmark, Norway, Holland, Germany and Poland. Under the contract, CSC will provide help desk services, server management, project development and management, and applications development, maintenance and support. As a part of the outsourcing arrangement, approximately 70 employees will transition from Berlingske’s IT group to CSC.
Argentina's third largest private financial institution Banco Patagonia has signed an IT services agreement valued at $5.7-million with IBM. Under the agreement signed last month, IBM will manage consolidation, virtualization, technology updates, implementation of a backup datacenter, and all administration and support services for the bank's servers. The new contract also will provide external storage for the bank's main datacenter, backup datacenter and for all critical services provided by IBM. This agreement is an expansion of a 10-year, $15-million technology outsourcing agreement Banco Patagonia signed with IBM in 2005.
Care Management International, Inc. announced an alliance with WNS (Holdings) Limited, a leading provider of offshore business process outsourcing (BPO) services. Care Management International and WNS jointly will offer a comprehensive suite of smart sourcing medical management and care management solutions, such as transaction-based care services, health risk assessments, data analysis and member outreach programs.
Posted by jbowles at 08:35 PM
Impact of US economy on IT outsourcing spending in 2008 to be debated by Everest Research Institute and Bernstein analysts in Dec. 11 Webinar
Information technology services analysts from the Everest Research Institute and Sanford C. Bernstein & Co. will discuss – and debate – the impact of the U.S. economy on IT services spending in 2008 in a one-hour Webinar on December 11, 10 a.m. CST.
Ross Tisnovsky, Vice President of ITO Research at Everest Research Institute, and Senior Analyst Rod Bourgeois of Bernstein Research will offer differing opinions about the potential impacts of a lean economy and IT spending slowdown on IT services. Their topics will include:
- The case for both pessimistic and optimistic points of view regarding 2008 IT services spending
- IT services segments most likely to be affected by cyclical changes
- The lessons learned from prior slowdowns and factors that are different in the current era compared to the past
“There is a deep concern that the economic climate in the United States will impact what and how much buyers will spend on IT services or possibly eliminate next year,” said Tisnovsky. “The most insightful way to analyze the potential impact of a slowdown is take the buyer’s point of view and thereby consider what buyers are likely to do next year under certain economic conditions.”
“Our research suggests the IT services industry today is not as cyclical as it was in past eras. So, we think recent worry among investors about a slowdown in IT services is likely to prove overblown,” said Bourgeois.
The 45-minute Webinar, followed by 15 minutes of questions and answers with participants, will take place on December 11, 2007, at 10 a.m. CST; 11 a.m. EST. To register, please visit: www.everestgrp.com/Webinars.
Posted by jbowles at 08:34 PM
Advertising Information
Outsourcing Alert reaches 50,000 key decision-makers a week. For advertising information and rates, contact Peter Bowes. Tel: (508)359-9356 or send an email.
Posted by jbowles at 08:34 PM
