New European Commission guidelines will call for greater scrutiny
of joint venture outsourcing deals
The
EC's latest updated guidelines, and interpretation of the 1990 Merger
Regulation, now include a section on how an increasing number of
joint-venture outsourcing deals can fall under the terms of the legislation.
This
means where an outsourcing supplier is buying all or part of the IT assets
being outsourced by a company - such as a joint venture arrangement - the
deal may need to go to the EC for approval.
The
threshold test for deals that will need EC approval is if the supplier has a
turnover of €5bn globally and €250m in Europe, and if the potential turnover
of the outsourced IT operation also exceeds €250m per year.
Deals
that have already come under EC scrutiny include IBM's Italia deal in 2001
and Lufthansa's IT joint-venture with EDS in 1995. Most deals will be
approved within five weeks but a small number that need greater scrutiny
could take up to four months to get the go-ahead from the EC.
Phil
McDonnell, head of competition at law firm Addleshaw Goddard, said companies
will have to factor this extra time and the possible delay into their
outsourcing plans from the start. He told silicon.com: 'You have got to build
in some time into your procurement to give the supplier time to go through
the hoops. You could also use it to identify suppliers who will give you
least aggravation - it might give the smaller suppliers potential
differentiation.'
Suppliers
will also need to factor these likely delays into their planning but
McDonnell also warned the EC may eventually start to restrict the number of
outsourcing deals any one supplier can hold with companies in a particular
sector because of competition regulations. He said: 'There will come a point
where a regulator will say a supplier has got too many deals in the same
sector. I don't think we are at that point yet but that is where it is
heading.'
Provided
by silicon.com -by Andy McCue
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Increasing Acceptance Drives
Hosted Contact Centre Solutions as Alternative to Premise-based Solutions
According to a study conducted by Frost & Sullivan, the North American
hosted contact centre market is expected to generate revenues worth $1.2
billion in 2012 as compared to $191.1 million in 2006. The growth in the
hosted contact centre market in North America is primarily driven by factors,
such as flexibility, low cost of entry, and scalability. The fast return on
investment, the ease of implementation, and the demand for more operational
flexibility have been the major driving forces behind the growth in the
market. The study revealed that organizations will benefit by leasing contact
centre technology rather than spending on it as hosted contact solutions
allow them to reduce a majority of their capital expenditure. The adoption of
hosted contact centre solutions is more common among mid- and small-sized
companies as compared to large organizations as they seek to access latest
technologies at an economical price. However, factors, such as the perceived
lack of control over operations and concerns regarding the security of
critical customer information, were cited as the major threats for the hosted
model.
Datamonitor
Survey Results on Infrastructure offshoring
One third of organizations would consider managing their IT infrastructure
from an offshore location in the near future. Majority of respondents agreed
to outsource their infrastructure services to Eastern European countries,
while about 38% respondent agreed to outsource their infrastructure services
to India. About 15% respondents preferred China, while about 9% preferred the
Latin American countries. Among the key findings, about 50% respondents
revealed to outsource their infrastructure services to a Western services
supplier having worldwide sourcing capabilities. About 35% plan to outsource
such functions to their captive operations, while only 12% plan to outsource
to offshore-based third-party service providers. In addition, about 47%
respondents revealed that they are expected to generate cost savings between
10% and 20% by offshoring such functions as against managing their IT
infrastructure onshore, while another 41% expected savings to be between 20%
and 40%. According to the survey, about 80% German respondents cited Eastern
Europe as their preferred offshoring location, while about 21% respondents
agreed to opt for multiple offshore locations to minimize risk. Moreover,
security was cited as the prime concern by respondents who were reluctant to
offshore their IT infrastructure in the near future.
BT
extends finance and accounting contract with Xansa
BT has extended its finance and accounting (F&A) outsourcing contract
worth GBP 128 million for 6 years with Xansa, under which the latter will
continue to manage BT's various F&A functions in the UK. It will provide
BT with F&A services, such as transaction processing, financial
reporting, and ledger and payroll services. The services will be provided
through Xansa's onshore and offshore operations in the UK and India, respectively.
Last November, Xansa beat stiff competition from IBM, EDS, and ACS, as well
as Indian players Genpact and Infosys, to capture an 85m-pound ($171m),
10-year deal to handle the BBC's accounting functions. It also has major
F&A deals with the National Health Service, Lloyds TSB, and myTravel.
Southampton
City Council signs 10-year outsourcing contract
Southampton City Council has signed a 10-year outsourcing deal to improve its
IT infrastructure and set up a state-of-the-art contact centre. The contract
with Capita will also support rollout of electronic document and records
management and customer relationship management systems across the council.
Capita will invest £25m during the first three years of the agreement to
update IT systems.
Hawaiian
Airlines Opts for TCS Services
To manage its operational efficiencies, Hawaiian Airlines - a subsidiary of
Hawaiian Holdings - has signed a multi-year contract with Tata Consultancy
Services (TCS). Hawaiian Airlines is one of the largest providers of
passenger air service between the U.S. mainland and Hawaii.
Boeing
Outsourcing 150 IT Jobs
Boeing Co. outsources information technology computer network operations unit
work to Computer Sciences Corp.
Network
Rail signs five-year IT services contract with CSC
Network Rail has signed a five-year IT services contract with CSC to help
support its ongoing UK rail infrastructure upgrades. The deal also comes with
a three-year extension option. Under the terms of the contract, CSC will
provide midrange services (includes server maintenance and management, data
centre hosting, security, disaster recovery planning and storage area network
management) and Oracle ERP support.
Telstra
sends 500 jobs offshore
TELSTRA is moving as many as 500 sales support jobs to centres in The Philippines.
Telstra, which is ramping up efforts to cut its costs as part of Sol
Trujillo's $11 billion overhaul of the company, is believed to have sent a
number of staff to The Philippines in recent weeks to train offshore workers.
Jobs, which may now go offshore, include billing disputes and liaison with
Telstra's third-party retailers. Telstra already uses India as a destination
for outsourcing a number of information technology functions through partners
such as IBM and Infosys.
Belk Renews
$98M Contract With IBM
Belk has awarded a 7-year, USD 98 million ITO contract extension to IBM,
under which the latter will continue to offer various IT services including
data centre services, storage and server support, back-up and recovery,
system software support, helpdesk services, end user services (such as email,
desk-side support, security monitoring, and cross-functional support).
Allianz
Taps IBM for IT Deal
Allianz of America (AZOA), parent company of Allianz Life Insurance Company
of North America, has signed a $330 million-, 7-1/2-year outsourcing
agreement with IBM to handle information technology (IT) operations of the
life insurer.
Bruno's
Supermarkets Outsources Accounting and Financial.
Bruno's Supermarkets LLC and FMS, Inc. jointly-announced today that an
agreement has been reached for FMS, Inc. to provide decision support services
through its business process outsourcing and applications. Bruno's received
these financial and accounting services from Bi-Lo of Greenville, South
Carolina in the past but in March 2007.
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EDS
Awarded $68 Million Contract Extension by Bureau of Alcohol, Tobacco,
Firearms and Explosives for Enterprise Standard Architecture III Program
Under the contract, EDS will continue to offer day-to-day seat management
services, such as hardware/software acquisition, desktop PC maintenance, and
support; application server management; messaging; peripherals; local area
network management; overall system security; helpdesk services; and disaster
recovery planning and preparation services. These services have been provided
to ATF under the ATF Enterprise Standard Architecture III contract.
ARINSO
Announces 10 Yr Agreement with AGILENT TECHNOLOGIES
Agilent Technologies has awarded a 10-year HR services contract to ARINSO. Under
the terms of the contract, ARINSO will provide a wide range of human resource
outsourcing services, such as payroll and time management administration
services, for Agilent's employees across the US using its SAP-based euHReka
platform.
Xchanging
wins large Allianz BPO deal
Xchanging has won a €400m ($542m) contract
with Allianz Global Investors to provide retail investment account management
services. Like several of Xchanging's large contracts, the deal will be
structured as a joint venture. Xchanging will pay €13m
($17.6m) in cash to acquire a 51% stake in Allianz's retail portfolio
management subsidiary Fondsdepot Bank, with an option to buy the remaining
49% for €13m ($17.6m) after four years.
Xchanging will take over the day-to-day running of Fondsdepot Bank from no
later than November 1 under an eight-year contract, with the goal of
improving the bank's productivity through process optimization and expanding
its business with third-party brokers and independent financial advisers.
Fujitsu
Services wins £500m Reuters outsourcing deal
Fujitsu Services has won a major contract with Reuters worldwide. Under the
10-year deal, which is valued at around £500m, Fujitsu will provide IT
services, such as desktop PC maintenance and email services, for 17,500
Reuters employees in more than 100 countries. In addition, more than 300
Reuters staff will transfer to Fujitsu.
IBM,
Omron In Seven-Year IT Services Contract In Europe
IBM is responsible for the transition of the Omron environment to the IBM
data centre in Brussels, building a new client platform, migrating all end
users to a new server-based computing environment, data centre management and
services, helpdesk, workplace services and technical application management.
Omron is an international company involved in a variety of fields including:
industrial automation, electronic components, automotive electronics, social
systems and healthcare
Wipro
opens offshore development centre for ZFSG in Chennai
Wipro Technologies has set up a 300-seater offshore development centre for
Zurich Financial Services at Chennai, India. The centre will be dedicated to
provide application development and maintenance services to Zurich Financial
across seven countries.
Satyam
Computer wins 3-year contract from Dutch Telco KPN for IT services
Satyam is to take responsibility for testing of KPN's fixed, mobile, and
internet divisions for the next three years. Telco KPN operates in the
Netherlands, Germany, and Belgium. Satyam will become a key partner in
creating systems and processes for testing and QA - largely through its
offshore development centre.
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