Industry news

Celebrity musician Will.i.am and the Prince’s Trust have joined up to encourage young unemployed people to learn IT skills.

The rapper also donated half a million pounds to fund the outreach campaign. An Ipsos MORI survey revealed that one in ten unemployed young people avoided using computer completely.

The promotion of IT skills comes as Industries suffer from a shortage of skilled IT staff, with IT skills in demand and the IT jobs market remaining buoyant in a time of stagnation.

Will.i.am said: "These workshops are an amazing way to engage disadvantaged youngsters who don't have this sort of access to technology and science otherwise.”

He added: “Through this new initiative, we will connect many more disadvantaged youngsters to the worlds of computing, and science and technology."

Cloud-IT skills shortage grows

Atos has secured a three-year deal with oil giant Shell to provide framework services, including IT and non-IT support services.

Services provided by Atos will include finance, procurement, HR and accounting, focused on supporting Shell’s business activities in the Netherlands.

The contract comes as Shell downsizes the number of service suppliers it employs from 18 to 6 in order to reduce management costs.

As a remaining supplier Atos can expect to receive a greater slice from projects and to develop an increased position as an supplier to the oil industry.

Rob Pols, CEO of Atos, said of the deal: “Both Shell and Atos are satisfied with the cooperation. We will do whatever we can to further develop our partnership with Shell".

Shell Completes Transition of HR and Payroll Application Management to Accenture

“These are challenging times and that has restricted our industry growth rate to 10%. We expect to do better next year”. You will be excused if you think there is something fundamentally wrong with this statement. In the current economic environment, there are many industries that would love to have any growth. Then what’s the fuss?

There are not many that will sound apologetic about 10% growth, but as the Indian IT industry has been used to growing at over 20%, the leading Indian IT industry body NASSCOM was defending this “meagre” growth at its flagship event, held in Mumbai in February.

These are certainly curious times for Indian IT service providers. The offshore industry has been a well-documented story of phenomenal success that has taken the industry from $10 billion to $100 billion in the space of ten years. However, it appears that it is becoming clear to the industry players that the journey from here on will not be built on traditional services alone. Although the cost and quality story will remain the fundamental tenet, it will need to be augmented by a combination of other factors.

If Offshore 1.0 was about bodies and Offshore 2.0 was about scale, Offshore 3.0 needs some new tricks up its sleeve. So, what are these?

Efficiency, expansion, products and a conscious move up the value chain will be the four key pillars of future success.

Efficiency

Industry has had a linear growth trajectory with many players finding it difficult to attain significant growth in terms of revenues and profits per employee. As the fight for talent intensifies, efficiency of service delivery will emerge as a key focus. While increasing utilisation is important, increasing and maintaining consistent productivity will gain more focus and attention. As most deals now are fixed price, industry stands to gain substantially by improving its efficiency.

Expansion

Since the industry’s inception, the USA has remained the dominant market for Indian service providers. Conscious efforts by the suppliers over last few years to grow the clients in Europe and Asia Pacific has led to much needed re-balancing of the portfolio. However, the economic challenges in Europe means that the providers will need to invest in expanding their footprint out of traditional western markets and domestic growth is expected to play a big role. This was the first year that the domestic growth rate was higher than the export growth rate, a sign of times to come.

Products

The Indian IT industry has virtually ignored the products and has solely focused on services. This cannot remain the case if the industry has to meet its growth aspirations. Products are the vehicle of non-linear growth, something that industry so desperately wants. Improvements in cloud and mobile technologies mean that infrastructure is now available to be exploited by the product companies. Platform and IP based solutions, with a product centric approach will play a bigger role going forward. Pure play product companies and providers that exploit their relationships with their key customers to develop industry leading platforms stand a chance to gain.

Moving up the value chain

Last but not the least, moving up the value chain will be key to future growth. The offshore industry recognises that it will need to gain the status of the business partner, rather than remaining to be seen as a service provider. Such a shift will open the doors to large scale transformational opportunities. However, brands are difficult to build and equally difficult to re-position. Industry has some way to go before it is seen in the boardrooms as a business partner. Indian players are acutely aware of it and have been investing in domain and consulting skills with mixed success. These efforts will need to be redoubled, but if successful, Indian companies will be in a great place to offer “right sourcing” value propositions to its clients.

One thing is certain, industry remains in an envious position, where it is busy dealing with pains of growth rather than perils of stagnation. Not many can say that in today’s world. And that is reason enough for the offshore industry to remain deservedly excited and optimistic about the future.

The Great Indian IT crowd

A software meltdown must be every IT team’s nightmare, especially if it hits the front pages. Fortunately, many IT leaders have long known that outsourcing can be key to ensuring and managing software quality across IT systems and infrastructure. Typically, outsourcing quality not only increases efficiency and reduces costs (by as much as 40% in some cases), but also raises standards.

A relatively new phenomenon in the outsourced software quality sector is Global Quality Management (GQM). Aiming to centralise quality while reducing headcount and costs, GQM enables client organisations to focus on their core business. Internal testing teams are transferred to specialist testing providers and together focus on boosting expertise, improving motivation and encouraging innovation.

In GQM engagements, client organisations often employ small, skilled, internal teams to manage systems and software quality. Their skills are not in doubt. However, the fast changing IT landscape means that internal teams often need a boost in knowledge. Add to this the disadvantage of restricted budgets and teams working in isolation, effectively in an organisational “silo”, and the argument for transferring software quality and testing to an external, specialist organisation becomes clear.

Test Centres of Excellence

Outsourced Test Centres of Excellence (TCoEs), in financial, retail and manufacturing sectors, are a result of the GQM trend. As new technologies, such as mobile, cloud, social and Big Data, continue to change the IT landscape, TCoEs offer a coherent view for organisations that need to identify and prioritise all potential risk areas, while moving forward with these new technologies.

Aimed at large organisations that are working across multiple technologies or locations, TCoEs provide rigorous testing and support for complex systems from one source.

Quality in action

The banking industry is an early adopter of TCoEs. In 2012, UBS, a major European bank, announced the outsourcing of its quality assurance activities. The outsourcing process involved incorporating 23 IT specialists from the bank’s own staff.

An onsite testing team was installed in the bank’s European offices, supported by SQS specialists in nearshore and offshore testing centres, in Germany, Egypt and India.

The bank has the opportunity to increase or reduce the testing team size, in immediate response to any sudden change or requirement.

This quality management model therefore guarantees flexibility, security, cost efficiency and a high level of service and the approach is suitable across industries, not only the financial sector.

Partnerships and communication

Essential to the success of GQM is the close partnership between client organisation and the external specialist testing provider.

The quality programme must be an investment in knowledge transfer and mutual understanding. While external quality teams will be applying standardised and globally recognised methodology to a quality programme, both parties must invest time into ensuring that there is a complete understanding of the client organisation's specific requirements. This includes company culture and practices and other relevant factors, which must be embedded into the programme.

Communication is integral to the success of a GQM relationship. For multi-shore engagements in particular, all team members must, for example, understand the same technical terminology and be comfortable with working through different time zones and with different cultures.

Finally, time is a key consideration. We estimate that it takes 16 to 18 weeks to set up an IT sourcing project, for GQM a longer period is typical, especially if internal testing teams are large. If an experienced, outsourced, quality management company is engaged, this period of time can be reduced significantly, as standardised procedures are put in place far more efficiently.

Outsourcing quality management is not about farming out “your mess for less”. Both parties have to be prepared to put time into transferring the responsibility for quality to the external supplier. Ultimately, a successful GQM engagement will drive cost efficiencies and provide: effective risk control, scalability, sustainability, innovation, reliability and faster time to market.

Enterprises need to have a start-up approach in order to meet demand

The UK government has moved to increase the available funding on offer to businesses that practice innovative techniques, including energy efficiency in IT and networking improvements.

This second wave of funding follows a £10 million pot for companies carrying out research and development in December 2012 and £250 million for innovative projects including smart city development programs.

The rise in funding was announced by Universities and Science Minister, David Willett, with an extra £12 million in funding coming from the Technology Strategy Board (TSB). Eight new projects were created, designed to develop networking systems in areas including energy, environment and transport.

The innovation funding is designed to promote UK businesses to stay competitive and at the pinnacle of global technological research.

Other projects include innovation competitions, with a £1.25 million investment for the creation of energy efficient devices and £1.15 million for technology designed to extend battery life.

David Willett said: “Investing in new ideas for technology now means that the UK will maintain its position as a global leader for innovation”.

London Mayor develops plan for ‘Smart London’

The UK’s Financial Reporting Council (FRC) has moved to investigate the acquisition of Autonomy by HP, following U.S. investigations.

The investigation will focus on alleged suspect irregularities surrounding the $11.1 billion acquisition of the software company.

Since the buyout Autonomy has failed to deliver strong results, performing significantly below expectations. HP itself has said that it had discovered evidence of significant fraud surrounding accounts, in its fourth-quarter results.

HP and Autonomy founder and former CEO Mike Lynch, who attacked HP’s management of Autonomy, said : “We are fully confident in the financial reporting of the company and look forward to the opportunity to demonstrate this to the FRC."

HP Reports Third Quarter 2011 Results and Initiates Company Transformation

US President Barack Obama's national security advisor, Tom Donilon, called on China to take three steps in order to reduce the perceived cyberthreat that China represents to U.S. interests.

These included:

1. Recognition by China of the threat that cyberattacks pose to the countries international trade and its relationship with the U.S.

2. China should proactively move to stop cyberthreats throughout cyberspace.

3. Through diplomacy China should move to establish an understanding of acceptable practices in cyberspace between nations.

Tom Donilon, said in a speech to The Asia Society, that both countries shared common interests in these regards: "Economies as large as the United States and China have a tremendous shared stake in ensuring that the Internet remains open, interoperable, secure, reliable and stable".

The move comes as the U.S. steps up pressure on China’s suspected use of cyberattacks to gather technological information and sensitive data from western industries and government departments.

The move to clarify acceptable cyberspace practices, underlines the grey areas of international relations that cyberwarfare inhabits, despite having the ability to impact critical infrastructure, and the difficulty of proving attack origins.

Parties within the U.S. have pressured for an equal cyber policy response to such attacks. Donilon’s comments come as the U.S. seeks to force an ultimatum from China regarding its suspected offensive use of its cyber capabilities.

China calls for cooperation over global cyber threats

U.S. military IT infrastructure unprepared for cyber attacks

By transitioning email providers Warwickshire Council is expecting to see savings of £250,000.

Service options included Microsoft Office 365, Google, IBM, Exchange, and open source offering Zimbra via supplier Savv, with Google winning out on high cost-efficiency.

The council has now moved to a department wide roll-out of Google Gmail, the service transition will also allow the 4,500 council staff access to Google services including Google Docs, IM, video conferencing and greater archive space.

Cloud services provided by Google will meet suitable security accreditation for the majority of the council’s requirements. Tonino Ciuffini, CIO at Warwickshire County Council, said: “The real benefit has been instant availability of services. It reduces the time for delivery”.

The council is looking to future collaboration with G-Cloud services, with expectations on a major procurement contract being agreed on within the next 12 months.

NHS Trust looks for suppliers for IT supply contract worth up to 100 million

China’s foreign minister, Yang Jiechi, has called for increased “rules and cooperation” during a press conference, saying that China represented one of the countries that “faces the most severe cyber-attacks" in the whole world.

In the press conference Yang Jiechi described how China supported U.N. legislation on Internet security and pressed for the need for cooperation between nations, rather than the development of increasing cyberwarfare.

China has been repeatedly accused of carrying out state sponsored cyber-attacks against western government, with calls growing in the U.S. to retaliate in kind.

Yang Jiechi responded to the criticism, saying: “I hope that the relevant parties will stop the irresponsible attacks and criticism, and instead take practical actions to promote mutual trust and cooperation”.

U.S. military IT infrastructure unprepared for cyber attacks

According to research from the Computing Research Association (CRA), numbers of U.S. undergraduates taking computing majors increased by more than 29 percent during last year’s academic year.

The CRA survey also found that graduates were continuing in education to higher levels, with an 8.2 increase in those earning a Ph.D. from the previous year.

The rise has come as graduates increasingly become of aware of the importance of IT, with skills in high demand, with many science field demanding applicants with a high level of computer literacy.

Peter Harsha, the CRA's director of government affairs, said that computer degree uptake is based somewhat: “on the perceived strength of the IT sector”.

Under-utilisation of skills is hampering innovation