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News -> Why Ofcom has to act now on the pricing scandal of non-geographic numbers

Mon, 30 Jan 2012 12:41:36 +0000

Brian Hudson of Performance Telecom has had enough of the mobile networks' greed and Ofcom's paralysis. In this article he outlines his own solution to the rip-off which Ofcom does nothing about and which the mobile networks protect since it's their cash cow. Blatant overcharging by mobile networks to call non-geographic numbers has been allowed to carry on for over a decade. Many millions of pounds have been spent by mobile networks fighting attempts from Ofcom to address this issue, leaving the market in a state of paralysis and the consumer confused, out of pocket and generally unable to decipher how much they will pay to call any given 08 or 09 number from any variety of communications providers and a plethora of call tariff's. One of the key arguments mobile networks use to keep prices high is that they carry a significant debt risk in transiting 08 calls, a fact which was recently repeated to me and my industry colleagues by Dr Steven Miller of Ofcom.. So I asked him a few questions: 1. How can a call to an 0800 number present a debt risk as it is free to connect that call to the host network? 2. Where an 0800 number is charged for there is a risk that you may not be able to collect the 100% profit charge that has been levied, but hasn't the debt risk been created by charging a fee for something that is free? 3. For higher charge band numbers, for example 0844 numbers which would cost 5p per minute from a BT line to call, is it justifiable to make a surcharge of up to 45p per minute to protect a debt risk of 5p? Would any business or consumer take out an insurance policy that cost 10 x the price of the item insured? 4. How can it be justified for a pre pay mobile customer to pay an even higher fee to call an 08 number - there is clearly no debt risk since they have paid in advance for the service. Needless to say I did not receive any coherent answers to my questions. In the industry we know the cost to terminate a call from one network to another. A mobile network will incur a cost to deliver a call made from a mobile to a landline number and add a margin. It is therefore reasonable to conclude that a fair mobile access levy could be cost plus 100%, allowing the mobile network to benefit from revenue generated by 08 and 09 call traffic. This access levy could be added as a surcharge to the bill of the organisation publishing the number - hey presto, we have a workable framework. How can the mobile networks not agree to that? Numbering Framework - What a Mess Currently our numbering framework consists of: 01 and 02 prefix numbers - Landline numbers 080 numbers - Free to call some of the time, extortionate to call from a mobile 0845 numbers - these used to be the cost of a BT local call, but today its anyone's guess what they cost to call and from where 0844 numbers - these can cost anything from 0.5p per minute to 5p per minute to call if you're ringing from a landline, or any amount above that from a mobile, but the only way to know what the price is going to be is to download the entire numbering code scheme from Ofcoms' website and trawl through all the pricing variations published there.And it still doesn't make sense! 0870 & 03XX - Now mandated to be charged at the same rate as calls to 01 & 02 numbers, yet there is no policing of this and many offenders hide variable charges Currently on the table from Ofcom, after several years and no doubt several million pounds worth of academic research is a proposal which offers us the following: a) Split up the charging mechanism so that calls to NGN's have an access charge (retained by the network from which a call is made) and connection charge which would be paid to the host network supplying the 08 number by the network from which the call has been placed, both of these charges being levied to the caller on their bill. b) The mandating that free to call numbers are free to call regardless of the network on which the caller places the call. c) Ending revenue share on 0845 numbers (although this has all but disappeared anyway), in the same way that 0870 was dismantled in 2009, forcing many businesses to change their contact numbering yet again. In all the above, Ofcom has failed to address the critical factor - price transparency. If Ofcom goes ahead with implementing this proposal, the caller will still not know what the cost of the call will be before making a call and there will still be no control over the level of 'access charge' a mobile network may make to connect that call. Not only does this laughably weak proposal fail to address the fundamental issues, but were it to be implemented it would create an enormous billing headache for all communication providers. OFCOM - A force for making changes without any real understanding of or appreciation for the knock on effects I believe we have the right to expect better, or at least for there to be a real appreciation of and some genuine communication with those in the industry. The numbering scheme has the potential to greatly impact on how businesses interact with their customers to deliver positive experiences. I would like to make public the proposal that I put forward to Ofcom a couple of years ago and which remains ignored to this day. The Solution Clearly when making changes to a numbering scheme you need to do so with a long term view as change is both expensive and time consuming. Therefore this solution has the long game in mind. I believe the key things that the numbering scheme needs to achieve are: 1. Price Transparency 2. Easy to understand 3. Offer publishers a wide range of tariffs to apply to the call 4. That all free to call numbers are always free to call 5. That the caller is actually charged the per minute rate intended for the numbering band 6. That any network surcharges are met by the publisher of the number and not by the caller 7. That sufficient quantity of number ranges are made available to meet long term demand 1. Price Transparency This is very easily addressed as per the following table with the highlighted part of the number range denoting the cost of the call to the caller. Number Range Cost of Call to Caller Volume of Numbers Available to Allocate 080 Free 100 million 081 1p per minute 100 million 082 2p per minute 100 million 083 3p per minute 100 million 084 4p per minute 100 million 085 5p per minute 100 million 086 6p per minute 100 million 087 7p per minute 100 million 088 8p per minute 100 million 089 9p per minute 100 million 09010 10p per minute 1 million 09015 15p per minute 1 million 09020 20p per minute 1 million 09025 25p per minute 1 million 09030 30p per minute 1 million 09035 35p per minute 1 million 09040 40p per minute 1 million 09045 45p per minute 1 million 09050 50p per minute 1 million 09055 55p per minute 1 million 09060 60p per minute 1 million 09065 65p per minute 1 million 09070 70p per minute 1 million 09075 75p per minute 1 million 09080 80p per minute 1 million 09085 85p per minute 1 million 09090 90p per minute 1 million 09095 95p per minute 1 million 09100 100p per minute 1 million 09105 105p per minute 1 million 09110 110p per minute 1 million 09115 115p per minute 1 million 09120 120p per minute 1 million 09125 125p per minute 1 million 09130 130p per minute 1 million 09135 135p per minute 1 million 09140 140p per minute 1 million 09145 145p per minute 1 million 09150 150p per minute 1 million 2. Easy to understand The above table is also so clear and easy to understand that I cannot see any reason why the publisher of a number would need to state the price of a call or announce it at the start of a call. 3. Wider Range of Tariff's The above structure increases the number of tariffs available to the publisher, meaning they are able to follow a numbering strategy that is appropriate for the service they are providing. 4. That all free to call numbers are always free to call For this to work there must be a reverse charging mechanism, whereby the network on which a call is placed is paid a levy for connecting the call and these fees are paid at interconnect level as part of the interconnect charging mechanism. This does not 'guarantee' a free call, as the mobile networks could continue to charge for free calls, however it does take away the argument they have for imposing additional charges and one would hope that continuing to charge in the face of such a change would either be addressed by a 'fairplay' change of heart, or much easier for Ofcom to pass into law so that surcharging would be illegal. 5. That the caller is actually charged the per minute rate intended for the numbering band This is covered by the same reverse charging mechanism as an originating network access levy paid out via the interconnect revenue mechanism. 6. That any network surcharges are met by the publisher of the number and not by the caller The publisher has a wide range of price bands to chose from so is able to decide freely which numbering band suits their business drivers, in the full knowledge that the caller will absolutely know, prior to making the call, what the call is costing them. They will either choose to subsidize that call, break even or earn revenue, depending on their individual business drivers in order to meet and manage the expectations and demands of their respective customers and compete in their market place. 7. That sufficient quantity of number ranges are made available to meet long term demand Currently the most commonly used numbers are almost exhausted, 0844 charging bands now also include 0843 and 0871 includes 0872, all at the various charge bands! Confusing!! The above table would release 100's of millions of new number ranges into the number allocation pool, enough to meet demand for several decades at least. Conclusion Whilst the economy is suffering so badly it cannot be justified to spend years on academic studies, tests and fighting legal challenges from mobile networks before action is taken. The NGN industry has a significant part to play in assisting UK businesses whilst they strive to service their customers and succeed in their market places. I believe that service providers across the nation wish to treat their customers fairly and strive to deliver the best service they possibly can, yet they are not only being hamstrung in their efforts but they are also carrying the can for a blatant rip off culture that is being defended extensively by the mobile networks. The industry is in limbo while Ofcom procrastinates, and ignores a solution that is staring them in the face. Ofcom has the power to make changes now without needing to effect changes in the law. The industry has the potential to fundamentally impact the performance of the businesses who buy NGN services to the benefit of the consumer and to provide a lift to the UK economy and we need Ofcom to empower us in this respect. The only winners in this current paralysis are the mobile networks - to the tune of £400 million each year and growing. How long will Ofcom stand by and let this crazy situation continue? ...

News -> Local government urged to move to more impactful website approach

Mon, 30 Jan 2012 10:39:32 +0000

Councils are being encouraged to produce simpler, more focused websites to up their ratings in an annual ranking of all local government websites. Assessment criteria for the next Socitm Better connected survey, due to be published on 1 March, have changed since the last survey, with a new focus on simplified website design and content. The association for ICT professionals in local public services warns the shift in survey assessment criteria could result in some significant changes in the rankings. Council websites that embrace the concept of 'top tasks' and promote the importance of quick and simple customer journeys for website users from search engine or home page through to resolution are more likely to be at the top of the rankings, Socitm says. Martin Greenwood, Programme Director for Socitm Insight and editor of the report, said: "The new top tasks approach means much stronger emphasis in the assessment on achieving a successful customer journey. "Some sites that might have been rated three or four star under the old system which put more emphasis on 'all-round' competence may do less well now, and conversely, some sites not quite so well rated in 2011 may do better this year, especially those focused on top tasks and simple, clear, uncluttered navigation," he predicted. Another report published by Socitm earlier this month found that public sector IT managers are exerting even more influence as local public services turn to technology to bring service delivery costs down and cope with dramatically reduced budgets....

News -> G-Cloud App Store set for mid-Feb launch?

Mon, 30 Jan 2012 10:38:15 +0000

The Government Cloud App Store may launch a couple of weeks ahead of schedule, in mid-February, not the March deadline originally laid down in last October's Strategic Implementation Plan. That at least is the impression the man in charge of the 'Catalogue Network' - to give the Store its official Whitehall name - gave delegates to this week's Cloud Expo Europe in London Olympia. "We are looking at a mid-Feb launch now," Mark O'Neill, Proposition Director for Innovation and Strategy in the Government Digital Service told attendees at his Thursday keynote. The promise is especially interesting as O'Neill pointed out that ICT vendor applications for the G-Cloud framework has now hit 1,600 - the "largest we've ever received for a framework," he said. "This was a much bigger response than we ever expected." "Many of those applying are SMEs, which is particularly welcome," he added....

News -> Police in ambitious shared services tie-up

Mon, 30 Jan 2012 10:37:03 +0000

A major shared services deal offering police forces a range of services including CCTVC and command and control could be worth up to £3.5bn. West Midlands Police is leading a partnership with Surrey for the seven year contract major shared services deal - but according to a notice in the Official Journal of the European Union, the contract will be open to other Police authorities in England and Wales. The chosen supplier will be expected to provide computer equipment, and networks and miscellaneous software development services. The deal is worth between £300m and £3.5bn, with the upper estimate of the deal dependent on the number of Forces that may join the contract. "The purpose of entering into a strategic partnership with forces is to deliver transformation across policing services. It is anticipated that the strategic partner will also directly manage some services with the Forces," says the notice. The document adds that the driver behind the deal is a desire to develop a sustainable business model that maintains and improves the delivery of policing services to the public, while making cost savings. "However, for reasons of policing specialism, operational risk and public confidence, some activities will necessarily continue to be delivered by police forces," it says. West Mids and Surrey hope to make cost savings through the collaboration, deliver services more efficiently, and move to a more innovative and "cutting edge" approach to policing. They apparently believe efficiencies are better achieved by taking a wider view of policing, rather than reducing the budgets of functional units....

News -> Sitel in the Leader Quadrant for Customer Management Contact Centre BPO

Tue, 24 Jan 2012 16:12:38 +0000

Sitel, a leading global customer care outsourcing provider, today announced it has been positioned by Gartner, Inc. in the Leaders quadrant of Gartner's 2011 Customer Management Contact Centre BPO report. The report evaluates vendors through a series of stringent criteria related to the ability to execute as well as completeness of vision. "Sitel's positioning in Gartner's Leaders quadrant confirms our mission to be a trusted partner to our global clients," said Bert Quintana, President and CEO of Sitel. "As Sitel continues to enhance our multi-channel customer service strategy, the Company remains focussed on investing in the right people, process and technology. Over the next year, Sitel will remain focussed on delivering innovative solutions driven by social media engagement , self-service and customer satisfaction improvements." The Magic Quadrant for Customer Management Contact Center BPO states: Over the past 12 months, four key emerging trends surfaced that are fundamentally related to the CM contact center BPO business: -Emergence of New Markets -Socioeconomic and demographic evolution of large CM contact center BPO buying hubs or markets, such as North America and Western Europe, and the emergence of new markets - developing countries and non-English-speaking markets -Mobility Evolution -Increasing numbers of mobile devices, such as the iPhone, iPad, smartphones and so forth, and richer content and interaction on such devices, are driving demand for CM contact center BPO, not only in the matured markets, but more so in emerging markets. -Growth of Non-voice Channels -The growth of non-voice and automated services, such as self-service, analytics and multichannel services, which are driven by technological changes, innovation, and a focus on service efficiency and effectiveness. -Continued Service Provider Consolidation -The service provider landscape will continue to consolidate during the next three years as excess capacity is absorbed and service providers drive revenue growth and market share through mergers and acquisitions (M&As)....

News -> NelsonHall Industry Insight: January 23, 2012

Tue, 24 Jan 2012 16:05:39 +0000

The following extracts are commentary and insight from NelsonHall Industry Insight, NelsonHall analysts weekly views on key industry developments that impact your sourcing. Register to receive your copy weekly This newsletter forms part of NelsonHall's Key Vendor Assessments service. For further details, contact Paul Connolly Significant News and Developments •· IBM Global Services Announces Q4 2011 Revenues up 2.7% to $15.3Bn Jan 20, 2012 | Financial Results by Jamie Snowdon IBM Global Services has announced Q4 2011 revenues, for the period ending December 31, 2011 , of $15.3bn up 2.7% year-over-year (up 2% in constant currency). Q4 2011 revenues (and revenue growth) by division were: Global Technology Services $10.5Bn (+2.8% ) (+3% in CC) Global Business Services $4.9Bn (+2.5% ) (+2% in CC). Overall the breakdown of IBM Global Services' Q4 2011 revenues (with reported and constant currency revenue growth) by activity was: GTS Outsourcing 40% ~$6,132m ( +3%, +3% CC) Integrated Technology services 16% ~$2,453m ( +5%, +4% CC) Maintenance 12% ~$1,839m ( -1%, -1% CC) GBS Outsourcing (AMS) 7% ~$1,073m ( +5%, +4% CC) GBS Consulting & SI 25% ~$3,832m ( +2%, +1% CC). Overall outsourcing revenue (i.e. across GTS and GBS) was up 4% (3% CC), while "transactional" revenue was up 3% (2% CC). IBM Global Services Q4 2011 pre-tax margin by division was: GTS 18% , up 2.3% pts yoy GBS 16.6% , up 1.8% pts yoy . Q4 2011 IBM Global Services new signings were down 8% (-8% in CC) to $20.4bn, of which: Outsourcing $11.6bn (-16%, -15% CC) Transactional $8.8bn (+5%, +4% CC). IBM Global Services' total backlog was $141bn (down 2% YoY, flat in CC). The outsourcing backlog was $93bn (down 4% yoy, down 3% in CC). IBM Group overall Q4 2011 revenues were $29486m, up 1.6% (+1% CC) IBM Group overall Q4 2011 revenues (with reported and CC revenue growth) by geography were: Americas $12.5Bn, up 3% (+3% CC) EMEA $9.6Bn, up 1% (+1% CC)- UK +8% (+9% CC)- Spain +8% (+9% CC)- Germany +3% (+4% CC) Asia Pacific $6.7Bn, up 2% (-1% CC)- Japan -3% (-9% CC). IBM Group's overall Q4 2011 revenues in "growth markets" were up 16% (+11% in CC) and contributed 22% of revenues, with the BRIC countries reporting revenue growth of 19% (+16% in CC). IBM's services revenue in "growth markets" grew +11% (+13% CC). IBM Group overall Q4 2011 revenues (with reported and CC revenue growth) by industry sector were: Financial services $8.9Bn, flat (-1% CC) Public sector $4.4Bn, flat (0% CC) Industrial $2.9Bn, up 3% (+2% CC) Distribution $2.9Bn, up 6% (+6% CC) Communications $2.8Bn, up 5% (+6% CC) General Business $6.1Bn, up 7% (+7% CC) IBM Global Services full-year 2011 revenues were up 6.6% (+2% in CC) to $60,163m. 2011 services revenues (and revenue growth) were: Global Technology Services $40,879 (+7.0%) (+3% in CC) Global Business Services $19,284 (+5.8%) (+1% in CC) IBM Global Services full-year 2011 pre-tax margin by division was: GTS 14.9% , up 1.0% pts yoy GBS 15.0% , up 1.6% pts yoy Analyst comments: IBM Global Services strong margin gains in Q4 2011 are testament to the success of its ongoing cost control and operational efficiency measures. The Q4 pre-tax margin for its services business was 17.5%, the highest for at least 16 quarters. Thanks to this impressive performance IBM GS margin has pulled away from its on-shore rivals like HP and even Accenture, and it gets ever closer to the margins delivered by the offshore providers. The current backlog implies that revenue growth in 2012 is likely to be similar to 2011. The 15% CC decline in new outsourcing signings in Q4 implies a challenging time for new signings but in fact this was against a hard compare in Q4 2010, when outsourcing signings were up 23% in CC. Revenue growth in the quarter was boosted by performance from IBMs "growth market" countries, with CC growth of 13% for Services in these countries. GTS Outsourcing remains resilient, delivering CC growth consistent with Q3, but ITS slowed its CC growth by one point. GBS saw stronger CC growth in Q4 than in Q3. This improvement was due mainly to improvement in GBS Consulting & SI which returned to growth after flat Q2/3. Challenging conditions in the public sector and in Japan contributed to the slow growth. Excluding Japan and the Public Service business, GBS revenue would have been up 9% in CC. It is encouraging that signings for transactional work is up 4% CC for the quarter; this should return GBS C&SI to higher levels of growth in H1 2012. The strategic push for growth from IBM Global Services continues with expansion into faster growing economies and developing solutions for fast growing technology areas. Cloud, business analytics and Smarter Planet offerings remain the global priorities in technology. •· Wipro Announces Fiscal Q3 2012 Revenue Up 12% to $1,505m Jan 20, 2012 | Financial Results by Rachael Stormonth Wipro Technologies has announced results under IFRS for fiscal Q3 2012, the period ended December 31, 2011. Revenue was $1505.5m, up 12.0% YoY (up 13.7% in CC), and up 2.2% sequentially (up 4.5% sequentially in CC). Operating margin was 20.8%, down from a margin of 22.2% in fiscal Q3 2011. Fiscal Q3 2012 revenue share (with estimated $ revenue and YoY growth) by practice was: ADM 24% ($361m, +7.1%) Technology Infrastructure Services 21.7% ($327m, +13.6%) Analytics and Information Management 6.6% ($99m, +25.3%) o Business Application Services 30.8% ($464m, +15.8%) BPO 8.5% ($128m, +2.4%) Product Engineering & Mobility 8.4% ($126m, +10.7%). Fiscal Q3 2012 revenue share (with estimated $ revenue and YoY growth) by vertical was: Global Media & Telecom 15.4% ($232m, +1.5%) Financial Solutions 27.3% ($411m, +12%) Manufacturing and Hi-Tech 19% ($286m, +6.4%) Healthcare, Life Sciences & Services 10% ($151m, +7.7%) Retail & Transportation 14.9% ($224m, +8.4%) Energy & Utilities 13.4% ($202m, +51.6%). Fiscal Q3 2012 revenue share by region (with estimated $ revenue and YoY growth) was: Americas 52.5% ($790m, +8.5%, +8.5% in CC) Europe 28.2% ($425m, +11.6%, +12.2% in CC) Japan 1.3% ($20m, -2.9%, -2.1% in CC) India/Middle East 9.1% ($137m, +14.6%, +31.4% in CC) APAC and Other Emerging Markets 8.9% ($134m, +40.4%, +41% in CC). Client distribution by size of annual revenues (trailing 12 months) was: $1m+: 462 (end Q3 FY 2011: 433) $5m+: 197 (end Q3 FY 2011: 176) $10m+: 121 (end Q3 FY 2011: 113) $20m+: 73 (end Q3 FY 2011: 64) $50m+: 25 (end Q3 FY 2011: 21) $75m+: 14 (end Q3 FY 2011: 10) $100m+: 6 (end Q3 FY 2011: 1). Client contribution to total revenues was: Top 1: 3.9% (FY 2011: 3%) Top 5: 11.8% (FY 2011: 10.9%) Top 10: 19.9% (FY 2011: 19.5%). Excluding Infocrossing, India/Middle East and BPO: Revenue contribution from FPP was 45.5% (compared with 46.3% in the prior year's equivalent quarter) The offshore/onsite revenue mix was 45.6%/54.4% (compared with 48.2%/51.8% in the prior year's equivalent quarter). Headcount at the end of the quarter was 136,734, a net addition during the quarter of 5,004. Wipro has provided guidance for fiscal Q4 2012 of revenue in the range of $1,520m to $1,550m. Analyst comments: It is no surprise that Wipro saw an ongoing softening in revenue growth in the December quarter, a trend we expect to see reported by nearly all service providers. While Wipro continues to trail the other Indian headquartered Tier 1s, the rate of YoY revenue decline it has experienced in the last two quarters has been slightly less than it has been for either TCS (from 34.4% growth in fiscal Q1 2012 to 20.6% in fiscal Q3) or Infosys (from 23.0% growth in fiscal Q1 2012 to 13.9% in fiscal Q3) (Cognizant reports next week). This indicates some early progress in the new strategy being implemented under new CEO TK Kurien. Among the positives are: The 4.5% constant currency revenue growth was slightly above prior guidance The increase in contribution from very high value accounts, in particular the number of clients contributing revenues of at least $100m per annum has shot up from in the last year from just one to six, (though this is still far fewer than Infosys' 13 $100m+ clients, or the 14 of TCS). Wipro is seeing strong revenue growth in its top client, which generated an estimated $59m last quarter (compared with $40m in fiscal Q3 2011). Within the service lines, R&D has had its strongest quarter for YoY growth (in US$) for a year. However, all other service lines saw a softening in revenue growth Ongoing strong growth in emerging economies, which contribute 18% to global revenues A significant improvement in attrition rates in IT services: voluntary TTM attrition of 19.0% is down from 21.6% in the prior year quarter A marked improvement in DSO, from 76 in the previous quarter to 71. Nevertheless, Wipro continues to trail TCS, Infosys, and Cognizant. Apart from E&U, where growth is fuelled by the June 2011 acquisition of the SAIC oil & gas practice, and the 12% growth seen in financial services, all its verticals are now down to single digit growth. Looking ahead, Wipro has reorganized its management and go-to-market along vertical SBUs: this ought to have led to greater clarity, improved accountability and more integrated offerings. There has also been a significant increase in sales & marketing: from 5.2% of global revenue in fiscal Q3 2011 to 5.7% this last quarter. We would expect to see these initiatives bearing fruit by fiscal H2 2013. (NelsonHall will be publishing shortly a detailed comparison of the quarterly performance of the Indian Tier 1s, also an updated Key Vendor Assessment on Wipro). • Capgemini Awarded Energy and Carbon Data Management BPO Contract by Tesco Jan 17, 2012 | Contracts by Dominique Raviart industry: General retail Capgemini has been awarded an energy and carbon data management BPO contract by Tesco. Services to be provided by Capgemini include: Collecting, processing, and reporting of energy usage and carbon emission data from Tesco operations worldwide Technology systems administration Support in matters of sustainability data from Capgemini's Sustainability CoE. The BPO service, which uses CA Technologies' ecoGovernance software product, is named BPO Sustainability Service and is part of Capgemini's Supply Chain Management BPO portfolio. The client, Tesco, intends to become a zero carbon emission firm by 2050. The contract with Capgemini will help measuring its current energy usage and carbon emissions. Tesco is the third largest retailer in the world. It is headquartered in the U.K. Analyst comments: This is a small contract in terms of revenue, but interesting in that this new managed service from Capgemini is likely to be highly attractive to many organizations. Few BPO service providers are currently offering an energy and carbon data management service - another vendor in Europe is Logica - but we expect it will feature more commonly within vendors' broader BPO portfolio over the next few years. • HCL Technologies Announces Fiscal Q2 2012 Revenues Up 18% to $1,022m Jan 17, 2012 | Financial Results by Mark Dale HCL Technologies has announced fiscal Q2 2012 revenues, for the period ending December 31, 2011, of $1021.9m up 18.3% y-o-y, and up 18.7% in constant currency. Sequential growth was 2.0%, 3.7% in constant currency. Fiscal Q2 2012 EBIT was $161.8m, an EBIT margin of 15.8%, up from a margin of 13.1% in the prior year quarter. Fiscal Q2 2012 revenue share by region (with estimated revenue and YoY growth) was: Americas 58.8% ($601m, +21.8%) Europe 26.8% ($274m, +19.2%) Rest of World 14.4% ($147m, +4.5%). Fiscal Q2 2012 revenue (and YoY revenue growth) by business unit was: IT services $975.4m (+19.7%)- Core software services $736.4m (+19.2%)- Infrastructure services $239.1m (+21.4%) BPO services $46.4m (-6.3%). Fiscal Q2 2012 EBIT margin by business unit (with comparable margin for the prior year period) was: IT services 17.0% (14.6%)- Core software services 17.3% (14.6%)- Infrastructure services 16.0% (14.5%) BPO -7.5% (-11.0%). Fiscal Q2 2012 revenue share by service type (with estimated revenue and YoY growth) was: Enterprise Application Services 20.3% ($207m, +12.9%) Engineering and R&D Services 18.9% ($193m, +21.2%) Custom Application Services 32.8% ($336m, +22.1%) Infrastructure Services 23.4% ($240, +21.7%) BPO 4.5% ($46m, -6.6%). Fiscal Q2 2012 revenue share by vertical (with estimated revenue and YoY growth) was: Financial services 25.3% ($259m, +21.6%) High-tech/manufacturing 29.5% ($301m, +28.7%) Telecoms 8.0% ($82m, -12.2%) Retail & CPG 8.8% ($90m, +13.9%) Media, pub'g & entertainment 6.4% ($65m, +10.7%) Healthcare 8.6% ($88m, +21.1%) E&U, public sector 6.4% ($66m, +5.2%) Others 6.9% ($71m, +39.7%). Client contribution to revenue in the LTMs was: No. clients >$1m: 362 No. clients >$5m: 144 No. clients >$10m: 84 No. clients >$20m: 42 No. clients >$40m: 12 No. clients >$50m: 9 No. clients >$100m: 3. HCL's top 5 clients account for 15.8% of overall revenue, the top 10 for 24.2% and the top 20 for 33.9%. Fiscal Q2 2012 revenue share by contract type (with revenue share in the prior year period) was: Time and material (T&M) 53.9% (58.5%) Fixed price 46.1% (41.5%). The proportion of revenue coming from offshore efforts has slightly decreased sequentially to 42.1%, compared with 42.3% in fiscal Q1. However, revenue coming from offshore efforts slightly increased compared with the prior year period (41.9%). Total headcount at end December 2011 was 83,076, a net increase during the quarter of 2,556. Headcount by BU (with net increase during the quarter) was: IT services 72,055 (+1,734)- Technical 65,266 (+1,631)- Support 6,789 (+103) BPO services 11,021 (+822)- Technical 10,106 (+728)- Support 915 (+94). Attrition (TTM) in IT services was 15.7%, down from 17.2% in the prior year quarter Offshore attrition (quarterly) in the BPO unit was 6.1%, down from 10.8% in the prior year quarter. Analyst comments: HCL Technology continued to experience softening revenue growth in the December quarter, a trend reported by all the Indian majors. On a positive note, its YoY revenue growth for the quarter outperformed both Wipro and Infosys at 18.3%. The yoy improvement in EBIT margin was due to the 11% depreciation of the rupee during the quarter. HCL continues to trail all the Indian majors in terms of operating margin. Over recent quarters its margins have fluctuated between a high of 17.8% and a low of 11.8%: margin stabilization has to be a priority for the company going forward. The BPO unit continues to be a problem, with no signs of becoming profitable, though HCL previously guided that BPO revenues will decline until the December quarter. The period that HCL previously publicly stated that it would need to restructure the acquired insurance BPO business from Liberata is coming to an end and HCL needs to demonstrate that it has been turning this around. The Americas had a slightly stronger quarter, stemming from some key contract wins including a health care organization, a software product organization, a multi-million deal with an industrial manufacturer and a global bank. Europe, despite it being a strong performance in term of revenue growth, was actually HCL's softest quarter since Q1 FY 2011. Speaking bullishly, CEO Vineet Nayar anticipates the combination of the tougher market in 2012 and the many global contracts coming up for renewal will work in its favor: the company expects to be able to take advantage of this and pick up new clients during their renewal stage. • IBM Joins Innovations in Environmental Sustainability Council Jan 17, 2012 | New Partnerships by John Willmott IBM has partnered with the World Environment Center (WEC), joining the Innovations in Environmental Sustainability Council to explore sustainability in materials, energy, water, infrastructure and logistics. Charter members of the council will include Boeing, CH2M HILL, The Coca-Cola Company, The Dow Chemical Company, F. Hoffmann-La Roche AG, General Motors, IBM, Johnson & Johnson Family of Consumer Companies, The Walt Disney Company and WEC. Analyst comments: Sustainability continues to be a major theme for IBM and this initiative enables IBM to complement its "smarter city" and "smart planet" initiatives around energy, water, and transportation in the public sector with similar themes in the corporate world. • TCS Announces Fiscal Q3 2012 Revenues Up 20.6% to $2,586m Jan 17, 2012 | Financial Results by Rachael Stormonth TCS has announced fiscal Q3 2012 results, for the period ending September 30, 2011. Revenues were $2585.6m up 20.6% year-over-year and up 2.4% sequentially. Volume growth on a sequential basis was 3.2%. Operating income was $756.3m, a margin of 29.24%, up from a margin of 28.27% in the prior year quarter. Q3 fiscal 2012 revenue share (with NelsonHall estimated revenue and YoY growth in $ terms) by region was: North America 53.3% ($1,378m, + 20%) Latin America 3.1% ($80m, + 21%) U.K. 15% ($388m, + 13%) Continental Europe 10.5% ($272m, + 36%) India 8.4% ($217m, + 10%) APAC 7.6% ($197m, + 33%) Middle East/Africa 2.1% ($54m, + 27%). Fiscal Q3 2012 revenue share (with NelsonHall estimated revenue and YoY growth in $ terms) by vertical was: Banking, Financial services and Insurance 43.3% ($1,118m, + 17%) Telecoms 10% ($259m, + 1%) Retail & distribution 12.3% ($318m, + 36%) Manufacturing 7.8% ($202m, + 31%) High-Tech 5.9% ($153m, + 42%) Life sciences & healthcare 5.3% ($137m, + 23%) Transportation 3.8% ($98m, + 35%) Energy & Utilities 4.1% ($106m, + 12%) Media & Entertainment 2.2% ($57m, + 15%) Others 5.3% ($137m, + 25%). Fiscal Q3 2012 non-India revenue share (with our estimated revenue and YoY growth) by service type was: Application development/maintenance 44% ($1,138m, + 18%) Business intelligence 4.4% ($114m, flat) Enterprise solutions 11.4% ($295m, + 43%) Assurance services 7.6% ($197m, + 29%) Engineering and industrial services 4.6% ($119m, + 16%) Infrastructure services 10.6% ($274m, + 22%) Global consulting 2.8% ($72m, + 47%) Asset leveraged solutions 3.8% ($98m, + 15%) BPO 10.8% ($279m, + 14%). Revenue mix by contract type (with comparative share for fiscal Q2 2012) was: 53.6% (53.2%) T&M 46.4% (46.8%) FP. Revenue mix by delivery location (with comparative share for fiscal Q2 2012) was: Onsite 45% (45.2%) GDC/RDC 4.5% (3.9%) Offshore 50.5% (50.9%). The company secured ten large deals during the quarter, broad-based across geographies and sectors. Analyst comments: TCS continues to extend its lead over Infosys and Wipro in both revenue growth and operating margin: among the Indian headquartered majors, only Cognizant (which operates to a lower target margin range) is likely to match or exceed its revenue performance. TCS also continues to enjoy particularly low attrition rates. With the exception of telecoms, TCS continues to see double digit YoY revenue growth in all verticals: The major growth engines continue to be BFSI and retail & distribution, which we estimate contributed respectively 37% and 19% of the YoY growth in US$ Management expects to see some improvement in its telecoms business by FY 2013. Similarly, with the exception of BI, TCS continues to see double digit YoY revenue growth in all service lines: The major growth engines are ADM and Enterprise Solutions, which we estimate contributed respectively 39% and 20% of the YoY growth in US$ Like Infosys, TCS saw a softer quarter in its software business; testing has also slowed down from the very strong growth seen in the previous seven quarters. TCS continues to see very strong growth in APAC (outside India) and Middle East/Africa. While North America continues to be the major growth engine, and Continental Europe had a strong quarter, it should be noted that TCS' APAC business contributed a healthy 11% of the YoY revenue growth in US$. While management commentary was, as usual, slightly more upbeat than the characteristic cautious tone of Infosys, there was a note of caution about CY 2012. CEO N. Chandrasekaran discussed the results from conversations with the company's top 120 clients: of the 96 who have finalized their budgets for 2012, two-thirds expect them to be flat to up and one-third expect theirs to be down. He also commented that TCS is seeing delays in decision-making in about half of its largest discretionary projects, although as yet no cancellations. This echoes what was said by Infosys management last week. ...

News -> Councils turning to technology to bridge cuts - Socitm

Mon, 23 Jan 2012 10:40:27 +0000

Public sector IT managers are exerting even more influence as local public services turn to technology to bring service delivery costs down and cope with dramatically reduced budgets. A new report from public sector ICT leadership group Socitm highlights growing emphasis on strategic, rather than utility use of IT, amid the largest reduction in IT staff numbers across the public sector in 25 years - a headcount drop of over 5,000. Its IT Trends 2011/12 report, published at the end of last week, finds that councils expect social media to play an increasingly important role in communicating with customers, alongside growth in the use of websites, email and e-forms. This reiterates the findings reported in Better Connected 2011, which showed 73% of councils using Twitter and 67% using Facebook. A whitepaper written by John Shewell, head of communications at Brighton & Hove City Council, at the end of last year warned that although social media was fast becoming an essential component in an organisation's business strategy, it is little more than a tactic designed to help build reputation. The study also finds that mobile computing, home working and virtualization have joined GIS, content management and e-forms as the top five technologies seen as delivering efficiency in participating organisations, while business process re-engineering (BPR), channel switching, and joint procurement remain the top three strategies for efficiency. Commenting on the findings, Socitm President Glyn Evans said: "The influence of ICT continues to rise as more services are directly delivered through lower cost ICT-assisted channels. Technology is also helping reduce accommodation costs as the workforce becomes more mobile. "However, with greater dependence on ICT, organisations must ensure processes and procedures are kept up to date, and greater attention is paid to accuracy, provenance and security of information." ...

News -> Computacenter in line for major council outsourcing win

Mon, 23 Jan 2012 10:39:08 +0000

Computacenter has been named as the Preferred Bidder for a five year contract to deliver ICT services to Cumbria County Council when its existing contract comes to an end on 31st March 2012. Cumbria announced it decision to move away from a large outsourced contract in August 2010 and split procurement of its ICT contract into two lots; one for the provision of ICT services to the council worth around £60m and another for the support of a county-wide initiative to provide public sector networks across Cumbria and superfast broadband across the County worth a similar amount. Shortlisted bidders for the contracts included BT Global Services, Commendim, Fujitsu and CSC. Incumbent supplier, Agilisys, which has been the Council's ICT supplier since 2005, was not included on the shortlist announced in June 2011. Though a press release issued by the Council said: "All credit has to go to the current supplier (Agilisys) who has served us well over the last five years and who have made a significant contribution to the council's improvement journey." Georgina O'Toole, an analyst at TechMarketView, said in a blog post, "It strikes us that the Council was looking for a very different type of supplier at re-tender in order to support the next phase of its ICT strategy. The next phase of Cumbria's ICT strategy has a heavy focus on transforming the Council's use of technology in order to support, for example, smart working, greening its ICT and self service enablement. It also needs to deliver its ICT with less resource." Computacenter is expected to earn around £10m in the first year of the contract (2012/13), giving a significant boost to the integrator's UK public sector revenues, which TechMarketView estimates stood at about £90m in 2011. Cumbria had previously outsourced to Capita but decided to bring things back in-house for a while in 2008. ...

News -> £1bn London outsourcing contract up for grabs

Mon, 23 Jan 2012 10:37:38 +0000

An outsourcing contract across three London boroughs worth up to £1.2bn is setting out to streamline back office services, improve efficiencies and slash costs. Westminster Council is leading procurement of the four-year tri-borough back office deal covering HR, business intelligence and disaster recovery. According to a notice in the Official Journal of the European Union published last week, the deal - on behalf of Hammersmith & Fulham, Kensington & Chelsea and other London authorities - has an estimated value of between £800,000 and £1.2bn. The notice warns prospective suppliers that each council could have different requirements. "Some are run and managed in-house, others are externally hosted and managed in-house or hosted and managed externally, and some are a combination of these methods. This means that the requirements of each of the council and the other participating authorities under the framework may vary." The aim of the contract is not just to provide "merely outsourced technology," but for the chosen supplier to ensure all councils receive a range of benefits including streamlined back office services, improved efficiencies, the capacity for staff self-service and cost savings. Better reporting, analytics and information and an improved quality of service are also expected as part of the deal. The procurement is being carried out under the ongoing Athena programme, the pan-London initiative which aims to improve procurement across the capital....

News -> "80% of schools expect ICT budget cut this year" - survey

Mon, 16 Jan 2012 11:07:57 +0000

Government pledges to radically expand use of ICT in schools are leading to little more than frustration after it was revealed that 83% of schools in the UK are facing real term ICT budget this year. Despite ICT access being widely recognised as fundamental to pupils' ability to learn, over 80% of UK schools anticipate an ICT budget decrease in the next financial year, a third of whom expect to lose more than a third of their budget, and 70% of respondents expect the cuts to have a negative impact on their pupils' ability to learn. The study, undertaken by market researcher Redshift Research on behalf of ICT provider Stone, found that 45% of respondents will prioritise spending on desktops to accommodate their budget reduction. That's because most respondents believe that the quality of the learning environment is actively improved if pupils are provided with dedicated access to a laptop/ PC at school. However, 91% of respondents are unable to provide dedicated access to a laptop/ PC for all of their pupils and in more than half (54%) of those surveyed, fewer than a quarter of pupils had access at all. James Bird, chief executive of the supplier behind the poll, said a key challenge for Head Teachers and Financial Directors across the UK education sector would be to find new opportunities for flexible financing in light of 2012's budget cuts. "No school wants to see its investment reduced or endure a decline in teaching standards as a result of poor ICT equipment and infrastructure. There is no 'one size fits all' approach. "The IT industry therefore needs to be innovative and more forthcoming in explaining the range of financing options that will support the very diverse needs of the UK's education system," he added. ...