From:	Baroni Limited [baroni-limited@tiscali.it]
Sent:	03 June 2007 21:05
Subject:	Baroni Limited - Offshoring Newsletter' - 17/07

Importance:	High
Sensitivity:	Confidential

Reports & Surveys...
According to a recent survey conducted by PricewaterhouseCoopers, about 87% of clients agreed that they were able to achieve projected benefits by outsourcing, while 91% agreed that they will continue to outsource their functions in the future.  About 25% of outsourcing buyers surveyed believe that multisourcing (many suppliers/providers) is a better option as compared to limited sourcing (few suppliers/providers); however only 10% of outsourcing vendors believe the same about multisourcing.  In addition, although information technology outsourcing will continue to dominate, organizations are expected to increasingly outsource their strategic functions including production or delivery of core products or services as well as innovation and R&D over the next five years.  Also, about 66% of clients revealed that the social and environmental issues are likely to affect their offshoring plans, while about 52% of outsourcing providers believe that these issues will not affect the client's decision regarding offshoring.  The survey identified UK- and US-based clients as mature outsourcing customers.  About 44% of the clients are expected to expand finance and accounting outsourcing deals.  The study also cited that as outsourcing is maturing, better communication and association between vendors and clients would lead to effective outsourcing arrangements.
A recent survey conducted by PricewaterhouseCoopers cited that about 31% of the investment firms surveyed are likely to expand their existing outsourcing deals with third-party BPO services providers in the future.  Only 7% of them revealed to retract their back-office operations in-house, while about 62% agreed to continue with their existing third-party providers.  Among the key findings, about 31% of finance executives revealed that they outsource their administrative, and back- and middle-office functions as their organizations do not possess the adequate resources to manage such functions, while about 40% revealed that outsourcing would allow them to focus on their core business functions.  About 29% revealed that outsourcing would help them in reducing their operational costs.
A study conducted by Frost and Sullivan cited that information technology outsourcing (ITO) and business process outsourcing (BPO) spending by banking, financial services, and insurance firms in Australia is likely to increase at a CAGR of 9.5%, from AU$1.83 billion in 2006 to AU$2.63 billion by 2010. In addition, BPO is expected to grow at a faster rate than ITO.  The move will be driven by plans to achieve significant cost savings in back-office functions and manage increased competition.  In addition, offshoring part of IT services and business processes has been undertaken by about 26% of Australian firms in 2006, while another 12% plan to offshore such functions over the next year.
According to the Dataquest-IDC MegaSpenders 2007 survey, IT expenditure by large Indian companies is likely to increase by about 26% over FY 2007 (ended March 31, 2007)to reach INR 89.74 billion in FY 2008 (ended March 31, 2008).  In addition, a majority of the top 50 IT spenders included Public Sector Undertakings (PSUs) in FY 2007.  The BFSI sector comprising 35 companies spent about INR 26.46 billion on IT in FY 2007.  The sector's spending on IT is expected to reach INR 33.68 billion in FY 2008.  The IT spending by telecom companies (including Airtel, Bharti, BSNL, Hutch, MTNL, Reliance Communications, and VSNL) is expected to increase from INR 23.14 billion in FY 2007 to INR 30.31 billion in FY 2008. The average IT spending by an Indian firm is expected to increase from INR 340 million in FY 2007 to INR 430 million in FY 2008, reflecting an increase of 26%.  The retail sector's IT spending is expected to grow by maximum 41%, followed by the utility sector (35%), the telecom sector (31%), and the BFSI sector (27%) in FY 2008.	

 	
 Top Stories	
 	
World Bank selects EDS for offshore and on-site IT services
World Bank Group today announced a new, three-year with two option years, indefinite delivery indefinite quantity (IDIQ) information technology agreement.  EDS is one of three companies selected by the World Bank Group to compete for task orders under the $150 million services contract.
Lloyds TSB extends outsourcing deal with Ceridian for payroll services by five years
Lloyds TSB has signed a multi-million pound outsourced payroll deal with human resources services provider Ceridian.  The agreement covers Lloyds TSB’s 98,000 staff and pensioners in the UK, and extends the existing seven-year relationship with Ceridian for a further five years.
First National Bank of Arizona to Outsource Mortgage Closing Process
The First National Bank of Arizona has assigned Accenture to create the mortgage industry’s first completely automated mortgage post-closing process.
Deutsche BP AG extends application management contract with Atos Origin
Deutsche BP AG, a subsidiary of the international BP petroleum group, has concluded a continuation contract for application management with Atos Origin.  Germany's biggest petroleum group is thus placing the development, support and maintenance of its software applications in the hands of the international IT services company for at least another two years.  In future, Atos Origin will employ staff in India to carry out some of these services.
Prudential Financial Renews Outsourcing Agreement
Insurer Prudential Financial Inc. has extended its claims-processing agreement with Antares Management Solutions. The 10-year agreement, an extension of a previous five-year pact, calls for Antares to handle claims processing, administrative duties, customer service, and compliance management, among other things, for Prudential’s health insurance business.
Allianz signs outsourcing deal with Fujitsu
Insurance and financial services group Allianz has signed a five-year £274M strategic outsourcing partnership with Fujitsu Services for the provision of desktop, network and telecommunication services.
TV18 ties up with Infosys for media outsourcing
Broadcaster Television Eighteen India Ltd said on Monday that its parent TV18 group has tied up with Infosys BPO to launch Source 18 to offer media and entertainment outsourcing services.
MIVA Announces Outsourcing and Optimization Plan
A key component of the plan is an IT infrastructure and business process outsourcing initiative to migrate certain service, development and support functions - including IT infrastructure services, application development and maintenance, transactional accounting services and MIVA Media support services to Perot Systems.  Additionally, the plan is expected to integrate MIVA Media's various ad management and auction platforms across the U.S. and Europe onto a single new global application.
Air Arabia outsources call centre
General sales agent for Air Arabia, National Flight Service, has selected Frontliners to provide contact centre teleservices on behalf of the airline. NFS said it expected to make substantial cost savings from the agreement, as well as see an increase in customer satisfaction levels.
Hana Bank Chooses Accenture to Manage Initial Phase of Next-Generation Banking System Transformation
Hana Bank, Korea’s fourth-largest bank and a subsidiary of Hana Financial Group Inc has chosen Accenture to provide project management office services for the initial phase of its next-generation banking system transformation program. Financial terms were not disclosed.  The contract calls for three months of initial project planning, followed by 24 months of business transformation office services to complete the planning process, confirm findings and begin managing implementation of the plan.  The project is part of the bank’s strategy to transform capabilities through a modernization of information technology systems designed to increase efficiency, reduce operating costs and enhance revenue opportunities.	
 	
 Service Provider News	
 	
Capgemini sets up financial services unit in Pune
Capgemini has opened its financial services strategic business unit (FS SBU) in Pune, India that will contribute significantly to the company's expansion plans in India.  The company aims to increase its Indian headcount to about 40,000 professionals over the next few years. In addition, this unit would increase the company's worldwide financial services headcount to 14,000 professionals and will strengthen the company's position in the financial services sector.  The company is also considering increasing its investments for training and development of its employees, thereby supporting its expansion plans for the new unit.  It has enhanced its training and development facility in the FS SBU campus.
AP Moeller-Maersk and IBM in 5-Year Agreement
A.P. Moller-Maersk, one of the world's leading shipping companies, and IBM today announced a five-year agreement for IBM to manage A.P. Moller-Maersk's IT infrastructure and services.  The partnership creates a flexible and resilient IT platform that will achieve significant cost savings for A.P. Moller-Maersk throughout the life of the contract by leveraging IBM's global economies of scale.
TietoEnator in charge of IT infrastructure services at ISS Services
ISS Palvelut, the leading real estate and business premises enterprise in Finland, have agreed to transfer ISS' IT infrastructure services to TietoEnator.  The new agreement involves customer and local support, server capacity, monitoring and management, backups and SAP and Citrix maintenance.
Mellon strikes ABN AMRO deal
Mellon Financial Corporation has been awarded the full administration service mandate for ABN AMRO Bank’s new suite of UCITS III approved funds, which will be marketed under the name Brushfield.  Under the terms of the deal, global custody and depositary services will be provided through Mellon’s joint venture, ABN AMRO Mellon Global Securities Services, while fund accounting and transfer agency will be provided by Mellon’s asset servicing division.
EDS wins $1 billion contract to manage computer systems for Europe's KarstadtQuelle
Electronic Data Systems Corp has won an eight-year, estimated $1 billion (€730 million) contract to manage computer systems and applications for European retail and tourism group KarstadtQuelle AG.  EDS will take responsibility for KarstadtQuelle's information-technology subsidiary, which will be used to create an EDS retail-service centre in Germany.  The subsidiary has about 700 employees.
BT Germany to supply all network and IT services for the “Frankfurter Rundschau” newspaper
Under the terms of the contract, BT will provide all the company’s network and IT services.  Fifteen DuV sites, including the publishing and editorial headquarters in Frankfurt and the printing plant in Neu-Isenburg, will be connected to BT’s MPLS data network.
Fiserv Selected by Huntington National Bank to Provide Complete Healthcare Banking Services
Fiserv, Inc announced that it has been selected by Huntington National Bank to offer health savings account (HSA) services to the individual and business customers the bank serves.
Polaris Software launches Canada development facility
Polaris Software has unveiled its plans of expansion in Canada by opening an application development centre and a global performance engineering and certification Lab in Mississauga, Ontario.  The development centre will help the company to cater to the software development needs of its North American clients.  The company's engineering and certification Lab in Canada will enable it to provide testing solutions including performance engineering consultancy services, product performance benchmarking, remote application performance testing and tuning, customer application hosting and performance testing, etc., for its banking and financial services clients across the world.
Oracle forms alliance with EBZ Online to support small co-op banks
Enterprise software company Oracle India on Thursday announced an alliance with EBZ Online to offer back office solutions to co-operative banks in India. Under the initiative — which will target community banks, credit unions, urban and rural co-operative and agricultural banks, amongst others — Oracle would also set up a centre of excellence to sharpen focus on the co-operative banking space.
HDFC to sell its 50% stake in Intelenet
According to media reports, HDFC is planning to sell its 50% stake in Intelenet Global.  Barclays holds the remaining 50% stake in Intelenet Global.  A few private equity companies including Blackstone Group are eying for the 50% stake in Intelenet Global.  Initially, the stake in Intelenet Global was held equally by Tata Consultancy Services (TCS), an Indian IT services provider, and HDFC.  In 2004, TCS started its BPO operations and sold its 50% stake in Intelenet to HDFC for US$35 million.  Later on, Barclays acquired a 50% stake in Intelenet from HDFC.	

 :: 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 

Office: +44 (0)20 8660 6457
Fax: +44 (0)20 8645 9297
Email: baroni-limited@tiscali.it
  Website: Baroni-Limited.com

Baroni Limited
68 Penwortham Road
Sanderstead, Surrey CR2 0QS

 

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.
**********************************************************************