Tag: outsourcing

Lufthansa sells IT infrastructure to Big Blue

Posted on October 23, 2014 by - News

lufthansa-history-1German airline Lufthansa is about to sell its IT infrastructure unit to IBM as part of an outsourcing agreement for the services.

Europe’s largest airline by revenue is undergoing restructuring and cost-cutting efforts to better position itself to compete with low-cost carriers and Arabic rivals

It earlier this year said it was seeking a buyer for the unit, which provides data centres, networks and telephony. Apparently, it is worried that it requires a high level of investment and economies of scale, which the airline could not afford.

Under the deal, Lufthansa will outsource all of its IT infrastructure services to IBM for seven years. The US firm will take over the airline’s IT infrastructure division, currently part of Lufthansa Systems.

The deal will result in a one-off pre-tax charge of 240 million euro for Lufthansa. It will allow Lufthansa to reduce its annual IT costs by around 70 million euro a year. It is not clear how much this will all cost in the end as this is still being ironed out.

Outsourcing is a fail

Posted on October 22, 2014 by - News

depressionWhile the services market grew in 2013, revenues failed to shine.

That’s according to a report from market research company IDC, which said the whole service market grew from 12.3 percent in 2012 to 13.4 percent last year.

But, as IBM and SAP results showed earlier this week, the gloss appears to have faded on the services industry.

Vendors, said IDC, attributed the small increase in income to cutting jobs, making people work harder for less money, and finind new places where labour is cheaper.

IT outsourcing appears to be on he wane, said IDC. It was the least profitable service line last year and in 2012.

But support and training services are still profitable, while the second and third most profitable lines were “business consulting” and IT project based services, said IDC.

Chad Huston, a senior analyst at IDC, said the lacklustre revenue growth hasn’t stopped what he described as “an upward trajectory”.

But, he added, that’s because vendors are cutting their costs.

Outsourcing giant reports record results

Posted on July 11, 2014 by - News

India_flagIt appears that the downturn in the outsourcing market is over with Infosys, India’s second-largest software services exporter, beating estimates.

The company reported a 21.6 percent rise in quarterly net profit and retained sales growth outlook for this year on surging demand for outsourcing services.

The news is a little surprising as Infosys seems to been reeling under a staff exodus and loss of market share to rivals.

Vishal Sikka, a former senior executive at German software Company SAP took over as CEO last month seen nearly a fifth of his staff leave after 18.7 per cent left in the last quarter.

Infosys added 61 customers in the quarter, maintained its revenue growth forecast for the year to March 2015 at 7-9 percent, as expected.

Consolidated net profit for the quarter ended June 30 rose to $480.20 million. Revenue in the quarter rose 13.3 percent to $212 million.

Datacentres continue to be outsourced

Posted on November 8, 2013 by - Events, News

gigabyte-haswell-motherboardA market research company believes that by 2016 as many as 28 percent of UK datacentres will be outsourced.

DCD Intelligence said that companies now believe that outsourcing mission critical IT to a colocation provider is a viable alternative to having their own datacentre.

The company said that as the trend to outsource datacentre grows, it is adding a current to upcoming conference DatacenterDynamics Converged, in London.

The conference takes place at London Excel on the 20th and 21st of November.

Comms-care fills engineering supervisor role

Posted on October 7, 2013 by - Moving People, News

lhancockLyndsy Hancock has joined Comms-care as engineering supervisor.

Comms-care provides outsourced IT services for the channel and Hancock will work with the engineering management team giving support and guidance to field based engineers.

Part of her job will also be designing improvement programmes for engineers about technical procedures, standards and company policies.

Hancock has been with Comms-care since 2006 and before that worked for Canon at its service desk.

Technical Director Darren Briscoe said: “Comms-care is growing rapidly and we need high calibre, dedicated people to help us deliver the best possible service to our growing partner base. Lyndsy has proven to be an exceptionally customer-focused member of the Comms-care team and has always delivered beyond the requirements of her role to ensure we provide excellent 24/7 customer service.

“Lyndsy has also been tasked to implement new processes, procedures and working practices that will ultimately result in Comms-care improving the service we provide to our partners.”

Hancock’s previous role at Comms-care was as service desk team leader.

Public sector outsourcing drops

Posted on September 13, 2013 by - News

kcalmAccording to research outfit Information Services Group (ISG), the public sector outsourcing market in the UK has taken a massive hit in the first half of the year. The ISG Outsourcing Index for EMEA found just €2 billion of outsourcing activity in the UK for the first half of the year. Last year the market was worth €4.6 billion.

However, Britain still leads the way when it comes to public sector outsourcing in Europe. The whole EMEA market for the first six months of was just €2.3 billion compared to €3.1 billion last year. In other words, the UK accounted for five sixths of all public sector outsourcing in EMEA this year.

The ISG figures track all outsourcing contracts with an annual value of €4 million or more. They include IT contracts, business process outsourcing, back office processes, but IT dominates with more than two thirds of all contracts. Public sector outsourcing now accounts for 41 percent of all outsourcing activity in EMEA, with Britain in a clear lead.

The top 15 companies winning these lucrative contracts are Accenture, AECOM, Arqiva, Arvato, BT, Capgemini, Capita, CSC, Grupo Ferrovial, HP, Interserve, QinetiQ, Serco, Thales and Tieto.

Infosys hikes salaries

Posted on June 14, 2013 by - News

2008-9-23-17-36-38-5077fa01951842f2b98ae92a756dec49-5077fa01951842f2b98ae92a756dec49-2While many companies are tightening their belts and looking for austerity measures until the economy picks up, outsourcing outfit Infosys is going in the opposite direction.

According to Indian newspaper, the Economic Times, the first concrete step made public after the return of founder Narayana Murthy to an executive role is to jack up all employee’s salaries.

The company will increase pay by an average of eight percent for staff in India and three percent for overseas staff.

The announcement was made to the stock exchanges after markets closed in Mumbai.

Murthy returned as executive chairman on June 1, 11 years after he was last CEO of Infosys. The move is intended to boost flagging morale at the company and to enhance Murthy’s stock of goodwill. It is also sending a message that the Infosys co-founder is back and means business.

The company has had two years of disappointing results and starting to lose market share to rivals such as Tata Consultancy Services and Cognizant Technology Solutions.

The pay increase will be effective July 1 for most staff, while the company’s global sales force will see increases effective May 1, the company said.

Say Tata to broke Indian outsourcers

Posted on February 12, 2013 by - News, Opinions

Workers are pictured beneath clocks displaying time zones in various parts of the world at an outsourcing centre in BangaloreReports from India suggest that the country’s  IT outsourcing business is turning a corner after being in a slump for a while.

This means that the UK companies can expect to find tougher competition from Indian based software companies, outsources and contract service outfits in the near future.

Analysts predict an improvement in India’s outsourcing industry, which has been gutted for many quarters by shrinking IT budgets and a slowdown in decision making by customers in the traditional markets like US and Europe.

Research firm Offshore Insights predicts that the offshore market for outsourced services is will grow by 12 percent to 15 percent this year, as more customers are expected to increase IT spending.

India’s $100 billion IT services sector seems to be recovering thanks to the acceleration in IT spending by existing customers although there have been a few new sign ups.

This week, Nielsen Holding increased the size of its contract with India’s top software services exporter, Tata Consultancy Services Ltd, to $2.5 billion from $1 billion.

India’s $100 billion IT services sector has been in the doldrums for a while but it seems to be recovering thanks to the acceleration in IT spending by existing customers.

TCS has major clients including General Electric, British Airways and Sony and competes with rival Indian software providers Infosys and Wipro as well as multinational firms such as IBM and Accenture Plc for outsourcing deals.

The National Association of Software and Services Companies (Nasscom) also forecasts that India’s exports of software and services will be between $84 billion to $87 billion in the Indian fiscal year from April 2013 to March 2014.

One of the problems that some business watchers believe that the Indian outsourcers will have to tackle is the fact that they are dependent on a revenue model that is largely dependent on the number of people working on a project.

This worked well when IT labour was cheap. While labour is still comparatively cheap in India, it is getting more expensive meaning that outsourcers have to woo new business with promises based on owning some natty technology and replicable processes.

They will have to shift more of their operations closer to their key markets in the US and Europe.