From:	Baroni Limited [baroni-limited@tiscali.it]
Sent:	20 April 2007 07:50
Subject:	Baroni Limited - Offshoring Newsletter' - 13/07

Importance:	High
Sensitivity:	Confidential

EquaTerra Market Assessment Confirms Organizations Recognize Critical Connection between Enterprise Software Applications and Business Process Outsourcing Success
Organizations that outsource business processes, such as HR or Finance & Accounting, fully realize the inextricable, critical role information technology (IT) and enterprise software applications play in their outsourcing success, according to the results of a just-released market assessment by EquaTerra.  The market assessment also found that business process outsourcing (BPO) buyers cite the IT capabilities of external service providers as vital to BPO success, and that buyers have a strong proclivity for leveraging the applications from enterprise software vendors that possess a clear BPO vision.
Respondents to EquaTerra’s 2007 edition of the Role of Enterprise Software Applications in BPO market assessment study were BPO decision makers in 154 North American and European organizations, each with more than 5,000 employees and greater than $1 billion in annual revenue.  All major industry groups were represented in the responses.  This is the second year this annual market assessment has been conducted by EquaTerra.
Said Stan Lepeak, EquaTerra’s Managing Director of Research and study author, 'Study respondents ranked IT at 4.2 on a scale of one to five as being key to BPO success.  This clearly demonstrates that BPO buyers fully recognize what EquaTerra has advocated since its inception' that IT and BPO cannot and do not operate as islands.  Further underscoring buyers’ understanding of this fact is the overwhelming number of study respondents who noted the IT solutions and capabilities offered by BPO service providers are also key to BPO success.'
Comparing North American and European Responses
While there was consensus among study respondents on the importance of IT and enterprise software applications to BPO success, there were some variations among responses from North America and Europe.  For example:
* The majority of European and North American respondents agreed that SAP and Oracle were the leading enterprise software vendors when it came to possessing a clear BPO value proposition.  This was also the case in the 2006 study findings
* When asked why they preferred the enterprise software vendor specified, 50% of those in North America and 62% of Europeans cited that the particular vendor’s software is part of their prescribed corporate IT strategy, and 41% of North Americans and 38% of those in Europe noted that the particular vendor’s software is already used.  This highlights buyers’ preference for leveraging existing enterprise software investments in their BPO efforts
* On whether the client or the service provider should hold the enterprise software license, 41% of Europeans and 36% of North Americans preferred the BPO service provider hold the license as part of its BPO offering.  67% of those in both regions stated this preference was driven by the desire for “one-stop-shopping” with the BPO service provider
* When questioned on how important outsourcing management and governance was to the success of an outsourcing initiative, North Americans gave it a ranking of 4.04 on a scale of one to five, and Europeans ranked it at 4.57
Lepeak concluded, 'Given the importance of IT, organizations engaged in or pursuing BPO must ensure they have the skills and take the time to adequately assess their IT options when it comes to BPO.  This involves understanding both the capabilities of their existing enterprise software environment in supporting BPO efforts and the technical capabilities of their strategic IT vendors.  Buyers must also assess and understand candidate BPO providers’ IT application system capabilities as well as their individual ability to support the buyer’s strategic IT vendor platform and systems.  Embedding IT requirements, needs, capabilities and key representatives from the IT group into BPO teams from the start will improve the likelihood of success.  And finally, organizations undertaking BPO must strive to leverage existing investments and technologies not only from a cost standpoint but also to maintain comfort levels and familiarity with IT applications and systems used in the past.'	

 	
 Top Stories	
 	
Citigroup to overhaul IT operations move 9500 jobs offshore
Citigroup has announced its plans to cut about 17,000 jobs and revamp its entire IT operations to achieve cost savings of over $10 billion by 2009.  About 8% of the group's employees will be affected by the company's plans of restructuring its operations.  In order to modernize the group's IT operations, various activities, such as consolidating its data centres, standardizing application development, and modernization of voice and data networks will be performed for its operations globally.  In addition, the company plans to offshore/outsource part of its back-office operations affecting about 9,500 employees to low-cost destinations.
First Tennessee outsources to WNS
First Tennessee plans to outsource some of its processing services including checks, statements, mail processing, and its back-office operations of Prescott-based operations centre to WNS.
Matalan cuts cost with offshoring
Value fashion retailer Matalan has signed a six-year contract with Capgemini to offshore core IT systems to India and Poland.  Under the contract, Capgemini will support all of Matalan's applications from Mumbai, including point-of-sale, stock control and replenishment, merchandising, finance, human resources and office applications.  Service desk and desktop support will come from a Capgemini service centre in Krakow.
Pearson Selects IBM for IT Infrastructure Services
Pearson, plc, and IBM today announced a 5-year, $128M Information Technology (IT) infrastructure services agreement to continue to help Pearson provide new services and reduce costs for its publishing, information and education businesses.
US GSA Awards Outsourcing Deal to EDS, AT&T
The U.S. General Services Administration (GSA) has awarded outsourcing deal to AT&T and EDS, a Texas-headquartered business and technology services company.  Under the deal, EDS will act as a subcontractor to AT&T Government Solutions, a business division of AT&T.
Stichting Pensioenfonds ING Awards Outsourcing Contract to BoNY
Stichting Pensioenfonds ING has selected the Bank of New York (BoNY) as its global custodian for its fixed income portfolio worth Є2.2 billion.  ING has its total assets worth Є10 billion.  The company has invested a major part of the remaining Є7.8M in mutual funds, which are also under the custody of BoNY.
ABN AMRO Mellon bags £1bn Bucks mandate
Buckinghamshire County Council Pension Fund has awarded a GBP 1 billion mandate to ABN AMRO Mellon under which the latter will provide custody, investment accounting, and performance measurement services.  ABN AMRO Mellon will act as the global custodian for the fund. Mercer Investment Consulting assisted Buckinghamshire Fund in the selection process.
Delphi to outsource 650 jobs to India
Delphi Corp. is pushing to significantly reduce the number of North American and European employees handling its bills and receipts by outsourcing those jobs to an Indian company.  The move is in line with the company's plans to restructure its operations and exit court protection. According to the papers filed by Delphi with the US Bankruptcy Court in Manhattan, the company has signed a deal with Genpact under which Genpact will provide finance-related functions, such as bills and receipts processing, travel and expense reporting, accounts receivable, and accounts payable.  Through the deal, Delphi is likely to save about $150M over the 88-months term of the deal.
Pharmaceutical firm DSM signs Atos
DSM, a worldwide pharmaceutical and industrial chemical firm, has signed a worldwide IT services contract with Atos Origin until the end of 2013.This side of the contract runs for three years, and also includes business consultancy services, enterprise content management, systems integration and infrastructure.
Emirates Airline to set up $55m Dubai call centre
Emirates Airline plans to set up a contact centre cum data centre at Dubai Outsource Zone to be operational by 2008.  The centre is expected to recruit about 500 professionals to support the increasing customer service requirements because of the expansion of the company's business across the world.  The new centre will complement airline's existing call centres in Dubai, Australia, the US, the UK, India, and Pakistan.  It will also handle customers' queries related to special offers, seat availability, commercial visas, routes, and flight schedules and connections.  It will also manage complimentary ticket delivery globally.
U.S. Healthcare Market Offers Significant Growth Potential for Healthcare IT Vendors: Study
According to a study conducted by Frost & Sullivan, although healthcare information technology (HIT) market in the US is currently in its early stages, the market is expected to offer considerable growth opportunities for HIT vendors in the near future.  The federal government has been significantly focusing on electronic health records, which is driving growth opportunities for the HIT industry.  The study also revealed that vendors must focus on educating third-party payers about various benefits of HIT solutions.  In addition, vendors should also educate insurance companies and other organizations about benefits derived from implementing HIT systems.  Among the other key findings, reasons, such as lack of technical expertise and professionals, need for workflow changes, and lack of awareness on HIT are major factors hampering the adoption of HIT by various physicians.  However, independent physicians are more reluctant to HIT adoption than salaried physicians.	
 	
 Service Provider News	
 	
Indian tech titans push European rivals to shakeout: Study
According to a study conducted by Value Leadership Group, revenues from the European operations of the top 5 Indian IT companies are expected to increase from EUR 2 billion in 2006 to EUR 5 billion in 2008. Among the key findings, India's top 2 IT companies - Tata Consultancy Services (TCS) and Infosys - collectively generated net profit of about $1.7 billion in 2006, while the entire European IT industry generated net profit less than this figure of $1.7 billion.  In addition, the combined market capitalization of the top 5 IT companies in Europe was $23 billion last month as compared to $100 billion among the top 5 Indian IT services firms including Infosys, TCS, Satyam, Wipro, and Cognizant.  However, the European IT market is expected to display various fluctuations by 2009 to compete with their Indian counterparts.  About 92% of the German firms are yet to realize the need for establishing offshore operations in India.
EDS Will Bring IT Outsourcing Service To Wuhan
EDS plans to open a new service centre in Wuhan, China.  The move is in line with the company's strategy of global expansion.  The new centre will recruit around 700 employees in 2007, and the company plans to increase the headcount to 3,000 by 2009.  The centre will complement EDS's existing centres in India, South America, and Eastern Europe to provide outsourcing services to its Chinese as well as other clients worldwide.  EDS aims to leverage China's growing software market by establishing the new centre.
Capgemini Opens Outsourcing Centre In Poland
Capgemini is spending about $3.1M to open the centre, which will initially house about 135 workers.  The centre, located in the Katowice Special Economic Zone, will ultimately expand to more than 400 workers, Capgemini said.  The company is no stranger to Poland: It has had a presence there since 1996, and employs more than 2,000 specialists
Personec to manage the payroll of the Helsinki Deaconess Institute
The Helsinki Deaconess Institute will transfer its payroll calculation to Personec's payroll calculation services from the beginning of May.
ACS Wins $51M IT Outsourcing Contract with DCP Midstream
The five-year, $51M deal with the US natural gas gatherer and processor will see ACS offer help desk and desktop support as well as network management, centralized computing, document management and messaging services.
Xansa sings Â£120M in new contracts
Co-operative Financial Services (CFS) is extending and expanding its outsourcing partnership with Xansa. In a contract which could be worth up to GBP 100M over five years, Xansa will work with CFS to create a unified Application Development and Support (ADS) service across the whole of the business.
Accenture signs with Sun Life
Accenture has signed a master services agreement with Sun Life Assurance Company of Canada, a member of the Sun Life Financial group of companies, becoming a preferred vendor for application development and maintenance services to Sun Life Financial.
IBM opens new autonomic computing technology centre in India
IBM has expanded its presence in India by opening a new Autonomic Computing Technology Centre in Bangalore, India, to cater to the needs of self-managed autonomic technology and systems among its Indian business partners and clients. The facility will primarily aim to focus on IBM's global Autonomic Computing initiative and will enable IBM to create and provide systems equipped with in-built intelligence to the Indian market and will help in simplifying IT complexity for clients.  Employees in the centre will work in association with various other software development centres of IBM, including IBM India Research Laboratory, across the globe to develop autonomic solutions.	

 :: To subscribe, unsubscribe write to Baroni-limited@tiscali.it ::
: Glad to have your comments Baroni-limited@tiscali.it ::
Copyright © 2005; Baroni Limited. All rights reserved 
 
Baroni Limited
68 Penwortham Road
Sanderstead, Surrey CR2 0QS 	Office: +44 (0)20 8660 6457
Fax: +44 (0)20 8645 9297
Email: jonathan-harrison@tiscali.it
Website: Baroni-Limited.com	

VAT Number:          814 6408                                 Company Registration Number                    4741496
              Registered Office: 10 – 14 Accommodation Road, Golders Green, London, NW11 8ED
**********************************************************************
This document and any attachments may contain information that is confidential and is intended only for use of the recipient(s) to whom it has been addressed.
No person, without written confirmation of their contents, should rely on the contents of this eMail. This eMail and the information it contains are supplied in good faith but the Company shall not be under any liability in damages or otherwise for any reliance the recipient may place upon them.

Furthermore, this document is sent for information and/or negotiating purposes only and shall not have the effect of creating a contract between the parties.

If you have received this eMail in error, please notify the sender(s) immediately by telephone. Please destroy and delete the message from your computer. Any form of reproduction, dissemination, copying, disclosure, modification, distribution and/or publication of this eMail is strictly prohibited save unless expressly authorised by  the sender(s).  Thank you for your co-operation.
**********************************************************************