Tag: outsourcing

Outsourcing continues to grow

Posted on April 8, 2021 by - News

Beancounters at ISG have noticed that global demand for technology and business services continues to rise, reaching an all-time high in the first quarter, with a growing pipeline of deals signalling continued expansion in 2021 as the economy begins to emerge from the pandemic.

Data from the ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show first-quarter ACV for the combined global market (both as-a-service and managed services) reached a record $17.1 billion, up 11 percent over last year and up four percent from the fourth quarter.

This was the third consecutive quarter of global growth following the pandemic-related drop in the second quarter of 2020.

Outsourcers moving to advanced tech

Posted on August 7, 2020 by - News

Outsourcers are increasingly relying on advanced technologies to meet client requirements in the customer experience (CX) outsourcing services industry according to a new Frost & Sullivan’s report.

The report with the catchy title  European Customer Experience Outsourcing Services Market, 2020, reveals that the European market is mature and but has quirks like demands for specific languages, cultural affinity, and nearshoring.

COVID-19 has adversely affected the industry in 2020 and Frost & Sullivan expects total market revenue to reach €16.23 billion, a 7.5 percent decline.

Outsourcers, display exceptional agility and flexibility when meeting the business continuity challenge. Assuming a reversal of fortune in the next three  to four months, Frost & Sullivan expects the market to recover to €20.03 billion by 2024. To stay relevant in the rapidly evolving market, outsourcers must develop new tools to address digitally native customers, cybersecurity challenges, and business continuity as a service.         

Outsourcing deals grew four percent

Posted on May 1, 2020 by - News

Information Services Group (ISG) said that the annual value of outsourcing deals in the Europe, Middle East and Africa (EMEA) region rose almost four percent in the first quarter of 2020.

The analyst outfit said it would have grown at a much higher rate had the impact of COVID-19 not hit the market in March.

The firm uses its EMEA ISG Index which measures commercial outsourcing contracts with annual contract value (ACV) of €5 million (£4 million) or more, shows combined market ACV (including both as-a-service and managed services) in EMEA increased by 3.8 percent year on year, to €4.5 billion (£3.9 billion).

Outsourcing contracts grew 10 percent

Posted on January 30, 2020 by - News

The value of outsourcing contracts in the EMEA region rose 10 percent in 2019 as businesses sought to counter economic uncertainty by reducing costs and investing in digital solutions.

The EMEA ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of €5 million or more, shows combined market ACV (including both as-a-service and managed services) in EMEA reached €17.1 billion in 2019.

Europe’s outsourcing falling

Posted on October 22, 2019 by - News

The annual value of Europe’s managed services contracts dropped by more than ₤774.87  million in the third quarter amid recession fears.

Information Services Group’s EMEA ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of ₤3.9 million or more, found the ACV of the region’s managed services contracts in the third quarter declined 31 per cent, or ₤792 million, quarter over quarter, to ₤1.8 billion. Compared with the 2018 third quarter, managed services ACV was down 17 percent.

UK outsourcing market was rubbish thanks to Brexit

Posted on January 21, 2019 by - News

Beancounters at ISG said that the UK outsourcing market was rubbish last year.

Initially, there were brief signs of a recovery in the UK’s outsourcing market, but it was not enough for declines to continue in 2018.

The traditional outsourcing market in the UK fell 27 percent to £2.2 billion last year, despite a five percent increase in contract numbers.

UK businesses pretty much satisfied with outsourcing

Posted on June 7, 2018 by - News

Workers are pictured beneath clocks displaying time zones in various parts of the world at an outsourcing centre in BangaloreAlthough two of the UK’s largest outsourcers, Capita and BT, have struggled over recent months, beancounters at Whitelane Research. have worked out that more than a fifth of UK businesses are looking to outsource less over the next two years, according to

The analyst claims its research found that 22 percent of UK businesses are looking to insource, citing innovation, intellectual property ownership and the quality of service as the main factors. 73 percent of respondents plan to outsource at the same rate or more over the same period.

Whitelane’s UK IT Outsourcing Study, which is carried out in conjunction with PA Consulting Group, assesses the satisfaction levels of end-user relationships with providers, with 747 connections evaluated.

TCS and Hexaware scored the highest, at 81 percent, while Getronics polled second at 79 percent.

In a statement following the publication of the report, Getronics CEO Nana Baffour said: “Our performance over the past four years shows that we have earned our reputation as a people-centric business, by focusing on adaptability, resilience and proactivity to deliver an exceptional user experience.

“This continued success is not just in the UK, but across Europe and is reflected in other Whitelane research success, for example, in Belgium.

“We are doing all the right things to maintain our reputation, and we work hard to keep doing those things to delight all our customers, year in, year out.”

Overall the UK’s satisfaction level with its outsourcers was scored at 88 percent by Whitelane.

Manish Khandelwal, IT sourcing expert at PA Consulting Group, said: “As businesses are increasingly technology-driven, the IT supply chain cannot remain back office-centric.

“While overall satisfaction levels with IT service providers remain high and outsourcers are generally seen as doing a good job of delivery, they must now prove to their customers that they are an essential part of the IT supply chain of the future as an innovation partner. If they are seen as bereft of new ideas they are destined to be relegated to the role of suppliers of utility computing”.

 

Wipro to buy Appirio

Posted on October 21, 2016 by - News

overview-2xIndian outsourcing giant Wipro is going to write a cheque for half a billion dollars to buy cloud services powerhouse Appirio.

The $500 million all-cash acquisition is expected to close by the end of the year.

Wipro said that bringing Indianapolis-based Appirio’s 1,250 global employees on board will create one of the world’s largest cloud transformation companies. This would make it the partner of choice for clients looking to modernise their processes and platforms on next-generation cloud applications.

Chris Barbin, Appirio’s CEO, said in a statement that if you combine Wipro’s global scale and deep digital focus with Appirio’s transformative worker and customer experience expertise, and best in class team, brand and partners, you create a formidable force in the industry.

“Our aim is to dominate the market and claim the top spots in industry Net Promoter Score, market share, and best places to work.”

Wipro’s existing Salesforce and Workday cloud applications practices will be consolidated under the Appirio brand and structure. Barbin will lead the expanded business,.

Appirio is a close chum of Google and created the Topcode marketplace that connects more than a million designers, developers and data scientists around the world with customers. It works with leading brands such as Coca-Cola, eBay, Facebook, Home Depot, Stryker, Johnson Controls, Cardinal Health and Sony PlayStation.

Appirio was founded in 2006 and incubated inside Salesforce’s San Francisco headquarters. The company today has offices in Indianapolis, San Francisco, Dublin, London, Tokyo and Jaipur, India.

The systems integrator has seen its revenue grow from $137 million in 2013 to $178 million in 2014 to $196 million in 2015, according to a filing with the Securities and Exchange Board of India.

 

Blackstone to buy HPE’s Indian outsourcing business

Posted on March 18, 2016 by - News

India_flagPrivate equity outfit Blackstone is close to a deal to buying Hewlett Packard Enterprise’s controlling stake in Indian IT outsourcing services provider MphasiS.

The deal is worth about $940 million. HPE owns roughly 60.5 percent stake in MphasiS, and now wants out from the Indian outfit to shore up its capital.

Bids for MphasiS were submitted earlier this month and Blackstone is the front-runner for taking majority ownership of the mid-sized Indian IT services exporter.

Financial details of the possible deal were not immediately known. Based on MphasiS’ stock price on Thursday, the HPE stake in the Bengaluru-headquartered company is valued at about $940 million. The company’s total market value is about $1.6 billion.

MphasiS is a rival for Tata Consultancy Services and Infosys but is not likely to command a very high valuation as a major part of its business depends on subcontracting by HPE.

MphasiS used to generate half of its cash by providing services to HPE’s clients. This is now only 24 percent of the firm’s total revenue.

The MphasiS deal, if closed, will be one of the biggest M&A transactions in India’s $150 billion outsourcing sector and indicates that the outsourcing market may still have life in it.

MphasiS was formed in 2000 and six years later Electronics Data Systems Corp acquired a majority holding in the company. In 2008, EDS was acquired by Hewlett Packard, which resulted in the transfer of the shareholding to the computer maker.

Councils found outsourcing a burden in 2015

Posted on December 29, 2015 by - News

ukflagLocal authorities in the UK  are starting to find that the outsourcing contracts they signed are saddling them with more costs than they predicted.

Outsourcing was being touted as a way to save money, but it is starting to look like the councils are having to scale down outsourcing operations or abandon them completely. The current belief is now that a move to outsource can be a false economy. Councils are beginning to realise they are quite adept at making savings themselves.

This year Cornwall Council was awarded the right to divorce its outsourcing contract with BT. The council signed a 10-year £160m contract with BT two years ago,. However Cornwall was far from happy and wanted out. So BT sued to keep it in.

The eventual contract with BT was a slimmed down version of the original deal proposed in 2012, which was overturned after councillors put forward a no-confidence vote to the leader of Cornwall Council over the plans.

It was not the only one which is unhappy with its outsourcing contract. Earlier this month, Somerset voted to terminate its 10-year SouthWest One deal with IBM a year early, due to a report finding it had become “increasingly unaffordable”.

Now it seems that other councils are getting less keen about being saddled with outsourcing contracts. Dorset County Council has rejected plans to outsource its IT services, as it was unlikely to be sufficiently flexible in the future.

Looking at the numbers the council decided that it would not get value for money.

This means that outsourcing sales teams hoping to interest councils in big contracts next year will find it a tough sell.

Satyam boss convicted for fraud

Posted on April 9, 2015 by - News

Ramalinga-Raju-Chairman-SatyamAn Indian court has convicted the former chief of outsourcing giant Satyam, Byrraju Ramalinga Raju, and his mates over a massive accounting fraud. 

Raju was the former chairman of outsourcing giant Satyam, and the case has tied up the Indian courts for nearly six years. All 10 accused,were found guilty by a special court in Hyderabad.

It was touted as the biggest accounting fraud in the country, and it first came to light in early 2009 after Raju confessed that he doctored key financial results and created a fictitious cash balance of more than US$1 billion.

Before that he overstated profits for several years, inflating the amount of debt owed to the company and understated its liabilities.

He was arrested two days later after he confessed to the fraud, along with his brother Rama Raju and others. They were charged with cheating, criminal conspiracy, forgery and breach of trust under relevant sections of the Indian penal code.

Satyam was once one of India’s biggest IT outsourcing companies. It was sold to Tech Mahindra in April 2009 in a government-overseen auction, which later absorbed the company in full.

Also involved in the case was Pricewaterhouse Coopers, which was in charge of auditing the firm when the scandal broke. So far there has been no indication what will happen to that outfit — after all they must seen the books and should have spotted what was happening.

The sentences will be announced on tomorrow. All 10 accused are presently out on bail.

ICO demands transparency for government outsourcing

Posted on March 19, 2015 by - News

parliamentThe Information Commissioner’s Office (ICO) said today that when the government outsources technology it’s often very opaque.

Head of Policy at the ICO Steve Wood said freedom of information laws haven’t always been able to follow the public pound.

“We’re calling on public authorities and contractors to consider transparency from an early stage, before a contract is even signed. And we’re asking whether the government might need to step in to make sure the public can access the information they should be entitled to from big government funded contractors,” he said.

Expenditure on outsourced public services represents half of the £187 billion the government spends on goods and services. Sometimes, the ICO said, it is hard for people to negotiate their way through outsourcing contractors’ deals.

The ICO conducted a survey and 75 percent of people said that private companies acting on behalf of public authorities should be subject to the Freedom of Information Act.

 

Infosys pays $200 million for US firm

Posted on February 16, 2015 by - News

India_flagIndian firm Infosys said today that it has spent $200 million to buy a company that specialises in automation technology.

The Bangalore based company bought Panaya, which is based in New Jersey.

Infosys has been seeking for some years to diversify its business after its initial success came in the outsourcing marketplace.

According to CEO Vishal Sikka, the company wants to leverage the importance of the cloud and AI. Sikka said that buying Panasya was an important step in diversifying its current lines of business.

Panaya sells CloudQuality, automation in the cloud and is intended as an automation method.

Sikka said: “This [acquisition] will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important strategic challenges faced by our clients.”

Infosys has over 165,000 employees worldwide and works in 50 countries.

Indian cloud services worth close to a billion

Posted on January 19, 2015 by - News

Clouds in Oxford: pic Mike MageeA report from Gartner said cloud services in the subcontinent will be worth $838 by the end of this year.
That figure will be up by almost a third – revenues last year totalled $632 million.
The revenues are being generated by cloud infrastructure as a service (Iaa), management and security, and infrastructure platform as a service (PaaS).
The market will be worth $1.9 billion by 2018, Gartner predicts.
Ed Anderson, a research VP at the market analysis firm, said Indian organisations looking to outsource their IT are turning to public cloud services.
“Cloud services are not only being used for low value or transient workloads, but also increasingly for production workloads, including some mission critical initiatives,” he said.
While business process as a service (BPaas) was worth $130 million in 2014, it will be with $351 million in 2018, while SaaS will grow from $246 million last year to $707 million in 2018.

 

Infosys beats Wall Street predictions

Posted on January 9, 2015 by - News

Workers are pictured beneath clocks displaying time zones in various parts of the world at an outsourcing centre in BangaloreIndian outsourcers Infosys have business results which were much better than the cocaine nose jobs of Wall Street predicted.

Infosys posted a 13 percent rise in quarterly net profit, as it won more outsourcing contracts from Western clients than many thought possible.

Infosys, which provides IT services to clients including Apple, Wal-mart, and Volkswagen, said profit in the quarter ended December 31 rose to $520.9 million. Analysts, on average, were expecting a profit of   $498.8 million.

It has been a tough year for Infosys.  It has lost ground to competition and staff have been leaving the building so fast they have had to keep the doors open all the time.

The company has been boosting growth by focusing on high-margin services including artificial intelligence and automation.

The company won 59 new clients in the December quarter, it said in a statement.