March 2010 Archives

Will skills transfer be open to abuse by overseas IT firms?

Karl Flinders | 1 Comment
| More
Strengthening the Points-Based SystemChanges to the rules regarding oversees workers coming to the UK on Intra Company Transfers are an attempt to control alleged abuses to the system, but will a new element open it up to more abuse?

The border agency has changed the rules of the points based system which could reduce the number of IT workers in the UK on Intra Company Transfers (ICTs).

ICTs are allegedly being abused by overseas IT suppliers. According to data obtained by the Association of Professional Staffing Companies from the Home Office under the Freedom of Information Act, 35,430 non-EU IT workers came to work in the UK last year. This compared to 12,726 during the dotcom boom in 2000.

One rule change states that a worker must have worked for the company involved for at least 12 months, compared to six months previously. This will tighten up alleged abuses.

The government has also introduced a graduate scheme for "new graduates who need to come to the UK as part of a structured training programme." This is limited to three months and only five are permitted per company, which will not be open to abuse.

But a new rule, known as the skills transfer, is being brought in which enables companies to bring workers to the UK without any experience with it. Although these workers can only stay for 6 months it could lead to foreign workers being trained how to do UK jobs, before replacing UK staff and carrying out the jobs in their home countries.

The border agency said the skills transfer should not however be used as a means of replacing UK staff.

Jeremy Oppenheim national lead for temporary migration at the UK Border Agency, said: "Our tough Points Based System gives us an unprecedented level of control over those who wish to come to the UK to work and study, and prevents migrants coming to take UK-based jobs where local labour is available.

"The UK Border Agency has no control over a company's commercial decision to outsource their operations. Furthermore we do not accept that enabling a temporary transfer of workers to the UK would be conclusive in any such decision."

But Mark Lewis, lawyer at Berwin Leighton Paisner said the skills transfer could be open to potential abuse unless the rules are properly enforced. "The government says that it should not be used to displace UK staff but this makes it easier."

Immigration poilitical hot potato will mean promises galore for ICT shake-up

Karl Flinders | No Comments
| More
Gordon Brown is today going to outline his policies on immigration. He is expected to put a stop to the immigration of unskilled workers.

Immigration is a political hot potato. Apparently the second most important issue for voters.

IT workers from oversees, such as India, make up a significant proportion of foreign workers in the UK. Their employers often use the Intra Company Transfer system to get them in.

Brown will, quite rightly, point out that foreign workers are important to the UK.

The Conservatives have already said they will introduce caps on the number of workers entering the UK.

I have just spoke to the Liberals and they said they will tell me their line once Brown has completed his speech.

What do you think?

Lobby group distances itself from claims it influenced immigration policy for Indian suppliers

Karl Flinders | No Comments
| More
Cross industry parliamentary lobby group Eurim has distanced itself from allegations that its chairman MP Margaret Moran used her influence to change the government's immigration policy.

The story alleges that Moran boasted about getting the government to change its plans to tighten up the rules which were being used by companies, including large Indian IT suppliers, to bring oversees workers to the UK on Intra Company Transfers (ICTs).

A Eurim spokesman told me that the organisation has not lobbied in regard to the points based system (immigration rules) and if Moran has made claims of doing so it is without the Eurim backing.

"When this issue came up because Intellect had a group looking at this issue we passed it to them and we did nothing."

In response to the allegations a Home Office spokesperson said: "ICTs are controlled under the points based system (PBS) and was designed to allow multinational companies to transfer staff to a skilled job in a UK branch of the company for posts that would not otherwise be filled by resident workers.

"The PBS was developed over a number of years in consultation with a wide range of stakeholders -- all the consultation materials are currently available on the Home Office website.

"The independent Migration Advisory Committee has also provided government with advice on how it can tighten the rules for workers entering the UK through the intra-company transfer route, which it has accepted, this includes extending the time someone has to have worked for a company overseas from 6 to 12 months before they can come to the UK."

Parliamentary lobby group brags of changing ICT rules

Karl Flinders | No Comments
| More
This is an interesting story.

Apparently the chairman of the EURIM lobby group has bragged that she has influenced government policy on behalf of its IT supplier members.

Margaret Moran, the chairman, even bragged about getting the imigration rules changes so Tata could still bring in cheap labour for large projects.

Here is the story in full.

Any thoughts




Our ousted IT blogger has landed a job

Karl Flinders | 1 Comment
| More
This is part eleven of a series of blog posts written by an IT professional that was ousted when his employer offshored IT jobs. This week will sadly be the last of the blog posts because the ousted blogger has got a job.

See part 1, part 2, part 3, part 4, part 5, part 6, part 7, part 8, part 9 and part 10.

Situation: working as an analyst on a short-term contract with the prospect of an extension.

by I.T. Jobseeker

Success at last! After extending the internet job search to cover the whole of the UK (a kind of virtual, Norman Tebbitt style, getting on my bike), I've found a job. It's a long commute from home, but just about do-able, saving a fortune in hotel bills. The location would be a nightmare drive - a complete semi-circle of the M25, so it's the train, or rather trains, for me.

I also had an interview lined up with a company in Edinburgh. I was happy to cancel it.

Having been made redundant at the height of the worst recession for many years, now I have a job I am dependent on rail travel at the start of the first national rail strike for many years. The forces of Murphy seem to be conspiring against me. Bob Crow is coming up fast on the rails in the person-most-loathed-by-IT-Jobseeker handicap stakes. And at post the winner is... Phil Woolas MP.  

The job market seems to have picked up for me in the last month or so, and I think that there is more to it than just my widening the search. It's a bit early to open the champagne, but with a new financial year almost here with fresh budgets, a backlog of shelved projects and the prospect of a clamp down on ICT abuse, happy days could be here again soon, or at least in the not-to-distant-future.

I would like to thank Karl for giving me the space in his blog to tell my woeful tale. Unemployment has been an interesting and unforgettable experience, one that I don't want to repeat any time soon.   

Is there a bright side for L&G IT staff as they face transfer to a supplier?

Karl Flinders | No Comments
| More
The latest outsourcing plans by Legal & General made me think about how the staff must feel receiving an email which basically said that if a contract is signed "you will probably not work here anymore."

It might involve relocating and a massive change in working culture.

If you look at this blogs Ousted Blogger posts you will get a feel for the situation for many workers transferred to suppliers. In this case the Ousted Blogger was transfered to an Indian Supplier and later made redundant.

The email sent to Legal & General IT workers telling them about the management's progress in selecting possible suppliers to take over its IT infrastructure and some IT services must have set minds into overload.

Being told that you will be transferred to a supplier as part of an outsourcing deal is not nice. On many occasions it often leads to people leaving their jobs and even being made redundant.

You only have to look at the industrial relations strife at the DWP and the BBC to understand that TUPE transfers are not perfect for everyone.

But there is hope. If you didn't see it I recently wrote a blog post about Bob Scott of Capgemini. He transferred to a company later acquired by Capgemini from British Coal in the 1980's as part of an outsourcing deal.

He went on to hold several senior global roles at the outsourcing giant. He said it opened up lots of opportunities for him. Most IT workers have the skills to do many jobs if they out their minds to it. Scott chose business development but their are other potential roles within suppliers.

So could being transferred to a supplier actual be a way for IT workers to build more diverse and even more successful careers?


Another IT supplier strike threatens customer continuity

Karl Flinders | No Comments
| More
Staff at HP working at organisations, including the Department of Work and Pensions, are going to strike for four days. These strikes will be split into two separate 48 hour walk outs.

This is another example of suppliers not looking after staff when they transfer to them via TUPE legislation.

Again this should send a message to companies such as Siemens which is currently involved in a dispute with its staff working at the BBC.




Foreign workers in the UK could be in for a pay rise

Karl Flinders | 3 Comments
| More
A campaigner against abuses of the Intra Company Transfer scheme has provided me with some comment about some of the changes the government recently introduced to prevent abuse.

He outlines that the government has acknowledged that some ICTs are being under paid.

Here it is:

"The UK Border Agency announced changes to the tier 1 and tier 2 visa rules last Thursday. The new rules will come into force in April, and include changes which will affect both the offshoring of IT work, and the use of intra company transfer visas (ICTs) to bring in IT workers from outside Europe to client sites (onshoring).

One of the more unusual clarifications in the new rules is that companies should actually pay the stated salary on the ICT's certificate of sponsorship. There have been many accusations made in the past that Indian IT workers brought in on ICT visas are underpaid by some companies and used to undercut UK IT workers. The UKBA appears to have uncovered such abuse.

The UKBA statement suggests companies have been using tax exemptions to multiply up net salaries to an artificial figure. The following is a rough example of how this might work: an ICT is paid net salary and allowances of £25k; this would be a gross salary of £31.5k if full income tax and employee national insurance were paid, and this is the artificially high figure put on the Certificate of Sponsorship; the ICT's employer has a dispensation from HMRC to exempt part of the ICTs salary from tax, and only pays £3k income tax and employee national insurance. Therefore the ICT's actual gross salary is £28k.

The UKBA are secretive about their dealings with sponsors, but, faced with the threat of losing their sponsorship licence, some companies may be forced to pay their ICTs more very soon.

There are only a few weeks left of this tax year, so some ICTs may be receiving a very welcome Easter bonus, and a big pay rise."

Internal email reveals difficult times for Legal & General IT staff

Karl Flinders | No Comments
| More
It seems that Legal & General.s plans to outsource its It infrastructure are quite advanced. IBM or Fujitsu  are likley to win the business which is currently an in-house service carried out by the company's Business Tecnology Services (BTS).

Following a couple of blogs and a news story about this I wrote I was sent an internal email from  from an L&G worker,

It makes interesting reading.

Email sent to Legal & General workers last week:

"This morning you were invited to attend a briefing session where you were taken through our current thinking in relation to the data centre. I am now writing to you to restate the points that arose in thebriefing.

In January I wrote to you to let you know that we were considering options for the provisioning of our data centre to ensure that our infrastructure is capable of supporting future business growth, and to reduce the risks associated with provisioning our own internal bespoke
data centre. At that time I mentioned that we had asked a small number of suppliers to develop proposals with the expectation that we would have completed evaluation of the proposals in March.

I can confirm that we have received viable proposals from two potential suppliers and we will now move forward into more detailed analysis with these two suppliers. The successful bidder would host our IT infrastructure in their own locations and would also be asked to deliver a number of associated IT services; the services under consideration include Infrastructure & Operations, IT Security Operations and Assurance and parts of IT Procurement and IT Supplier Relationship Management (SRM). We are considering outsourcing these services with a single provider because we believe this will give us the most straightforward operating model - with clear accountability or provision of service. It will also allow us to make best use of the third party's technical and operational expertise.

We will now be entering into a more detailed analysis phase with Fujitsu and IBM. This will enable Fujitsu and IBM to understand our current infrastructure and how we deliver related services in more depth. You can find information about Fujitsu and IBM at their websites. As mentioned this morning, IBM uses Manpower to provide resources for Help Desk and Desk side support services.

There is still a long way to go, but if we are able to reach agreement the likely outcome is that the services described above would be outsourced to one of these suppliers and employees currently carrying out those services would see their employment transferred in accordance
with TUPE legislation. You can find out more about TUPE at this link


At this stage we are unable to clarify exactly what this will mean for every team or individual and we are unlikely to be able to provide much more information until more detailed analysis is complete. We have consulted with Unite and MCF on the business case supporting the
proposed changes and consultation with both will continue.

If the proposed outsource goes ahead there will be a need for a number of new roles to be defined and retained within Legal & General to ensure effective oversight and interface. These roles will be advertised internally in due course and suitably qualified employees may apply for them. We will let you know more about this when we have identified and specified the roles that will be required.

We are aware from feedback you have provided about previous communications that you would like more opportunities to express your views and ask questions and so a number of round table sessions are planned in each location where you can talk about what you have heard today and raise any questions you might have. Details of these sessions will be circulated later today - attendance is entirely optional. I also encourage you to speak with your manager and raise questions with them.  You can also send your comments and questions to MBX - BIS, today if you would prefer to raise them confidentially.

I know that the coming weeks and months may be a difficult time for those individuals who may be impacted by any potential outsource and I will keep you in touch with any significant developments.  I aim to provide you with an update monthly although this may be limited in the near term as I do not expect to be in a position to provide anysignificant detail until July. If the outsource were to go ahead I anticipate the transfer would take place no sooner than Q4 of this year."

Is the government services sell off Labour's privatisation?

Karl Flinders | No Comments
| More
I was interested to read that the government's plans to create public services service providers seems to have moved on since I wrote about it in December.

Gordon Brown used a speech this week to give a bit of detail.

In December, courtesy of the FT, I wrote the story that former civil servant Gerry Grimstone had been asked to find ways of making money out of government resources. Grimstone had the idea of creating large companies that specialise in providing business process services to
public sector organisations. The plan is to sell these companies to private investors.

It all seems highly logical to me. What is the point having seperate IT supporting identical back office functions?

If you include central government, local government and even quangos the savings and possible earnings are massive.

This could be devastating for companies that currently make their money providing these very services. Unless they buy them ofcourse

The strategy will undoubtedly raise lots of funds as privatisation did in the past. It will also cut the public sector wage bill. But it will not be easy to for private sector companies to take control and profit unless these organisations are transformed.

Public sector employment rights do not always fit well in the private sector. Look at BT. The telco is held back by expensive pension rights inherited from its publis sector days,.

Ousted IT blogger has highs and lows but occupies himself

Karl Flinders | 1 Comment
| More
This is part ten of a series of blog posts written by an IT professional that was ousted when his employer offshored IT jobs. This week he talks about the highs and lows of jobseeking.

See part 1, part 2, part 3, part 4, part 5, part 6, part 7, part 8 and part 9.

Situation: vacant

by I.T. Jobseeker

The jobseeker's journey certainly has its highs and lows. The highs come, for example, when an agent calls out of the blue, having seen your CV on a recruitment website, and asks if he can put you forward for an ideal job - good money and near to home. He says that you are an ideal fit for the role. The lows happen when you chase the agent about such a prospect, only to be told that his client is 'awaiting funding' for the position, in other words it was not a real job in the first place.

I try to manage the highs and lows by smoothing them out in my head; trying not to get too optimistic about likely prospects or too disappointed when they fall flat. Forget them and move on.

I find it best to appear up-beat about things even when I feel distinctly down-beat or dead-beat. When I let my guard down in the pub the other evening, the local cheerful, cheeky chappie (every pub has one) said to me:

'Cheer up, mate, it might never 'appen,  Ha Ha Ha!'     

'A pint of lager, please, and an ambulance for this man.'

I've tried to stay employed physically and mentally. I get up at the sort of time I would do if I had a job to go to. In between internet jobseeking sessions, I do jobs around the house and garden. I still have all my fingers, despite my attempts at DIY. My culinary skills are improving. I've become a dab hand at Sudoko. I'm reading a lot and I get to write this blog. All in, I'm as busy as I was when I had a regular paid job.

Keeping busy is important. Otherwise it would be easy to go from being simply fed up to clinical depression, as I mentioned in part 6 of this blog.  Things are getting better now with the weather improving, lighter mornings and evenings making it easier to get out and about. Then there's those green shoots of recovery...

Government changes IT immigration rules

Karl Flinders | 1 Comment
| More
The government has made some changes to the law regarding workers from overseas working in the UK for their employers.

This comes after some advice from the Migration advisory Committe back in August.

I was with a campaigner against the alledged abuses of the Intra Company Transfer system as it is known by IT suppliers. IT workers make up the largest slice of ITC workers in the UK. Mist are from India.

He says the changes which mean a worker has to have been with their employer one year rather than six months to qualify for an ICT makes little difference.

Such is the controversy surrounding the ICT abuses that the Tory party has outlined its  policy. This will see ICTs capoped.


BBC IT workers in favour of strike

Karl Flinders | No Comments
| More
I had meetings on friday and was unable to update you on the situation at the BBC.

Well, the result of the ballot of Siemens workers who are members of th Bectu union at the BBC has been revealed.

A massive 65% of of union members voted to strike.

That means Siemens will get back around the table with the union.

But if nothing is agreed there will be at least one 24 hour strike.

Suresh Chawla, national officer at Bectu said: "Our members have clearly demonstrated that this situation is unacceptable and we're hopeful that by getting back round the table with the employer we can avoid industrial action and reach an amicable settlement."

I think Siemens should have agreed to get around the table before the ballot result just to show that they are really committed to a fair resolution and not just doing as little as possible.

Will BBC IT staff vote for strike and shut Cameron, Clegg and Brown up?

Karl Flinders | No Comments
| More
Tomorrow (19 March) is the day when the result of the ballot of Siemens workers at the BBC , who are members of the union Bectu, is revealed.

This is yet another example of the risks businesses take when they hand control of the welfare of critical workers to a supplier.

Bectu members will attempt to maximise disruption if the ballot results in support for industrial action. Potential action could include a 24 hour strike.

Could you imagine if they strike for 24 hours when the BBC hosts the pre-election debates between leaders of they political parties. Looking on the bright side it could shut Brown, Clegg and Cameron up for a while.

I will be in contact with the union tomorrow.

Legal & General is having detailed discussions with more than one IT outsourcing supplier

Karl Flinders | 1 Comment
| More
This is an update to my earlier blog.

I have had a more comprehensive response from L & G to my question: Are your outsourcing your Business Technology Serives to IBM?

"Legal & General has been reviewing how best to manage its IT infrastructure. Options available are in-house or external partnership. No final decision has yet been on the preferred outcome of the review, but L&G has started detailed discussions with a number of potential partners," said an L&G spokesman.

The outsourced coal miner that got to the top of the IT industry

Karl Flinders | No Comments
| More
I want to tell a story about a coal miner who has transformed his career and life after being TUPE transferred to a supplier (Capgemini) from  British Coal.

Outsourcing is controversial because it involves workers being transferred to suppliers. This is not only life changing but often leads to workers leaving either voluntarily or not.

These transfers, which guarantee workers certain rights under TUPE legislation, in many cases cause major friction and often lead to major redundancies and resignations.

As my blog has explained in recent weeks being outsourced and offshored is often a painful experience.

Bob Scott started working for British Coal in the 1980s. He got his mine manager certificate in 1987 and became a fully qualified mine engineer. Now he is the global head of testing at Capgemini and has held many senior global roles.

Bob Scott 1.JPG

But how did he do it?

1982 - Started working at British Coal - initially as part of engineering course

1985 - Qualified as a mining engineer at Nottingham University

1992 - Part of a mathematical modelling team that was outsourced to hoskyns. British Coal needed the skills but could not justify having it in-house because the mining industry was declining.

A total of 75 people were transferred as part of the deal including Scott.

1992 - hoskyns acquired by Capgemini. Scott says the transferred workers did not know much about Capgemini but it was made clear to the workers what it's strategy and vision was.

Scott said: "From this we could see why we were valuable."

But he added: "In April 1992 if you had bet me that I would still be working for Capgemini in 18 years I would have taken the bet."

Oct 1992 - Scott completed a masters at the London School of economics, along with four colleagues. This was supported and funded by Capgemini.

1995 - Became head of the team that was outsourced. By now it had actually grown to 100 people from 75. More people were brought in via TUPE from British Steel and British Gas. Again declining industries taht could not justify the resources internally.

1996 - Scott was given the task of heading up business development for Capgemini in the UK.

1997 - Asked by Capgemnini CEO to take control of the new e commerce and internet business at Capgemini, which was a new business at the time. He relocated to Paris from 1997 to 2001.

2002 - Took over the Capgemini services business in the UK.

2003 - The head of outsourcing asked Scott to develop this business

2004 - Scott was injured playing cricket and was off work for a lengthy period. During this time he contemplated his life and decided he wanted to do something different.

As a result he was asked to lead the bid for work at the Metropolitan Police. In 2005 the Met signed a £350m outsourcing deal.  Scott was the account director.

2007 - He took over the role to develop a market strategy for services related to the police.

2008 - Scott became head of UK public sector business

January 2010 - He was appointed head of Capgemini's global testing business, where he remains today.

So Scott has used the fact that he was transferred to a supplier, as part of an outsourcing contract, to build a varied and successful career. He said he took the decision early to take up business development roles and has not looked back.

He said had he not moved to Capgemini he would probably have ended up using his Mine Manager certificate to work in the mining industry overseas, South Africa for instance.

He told me that quite a few of the people that were transferred to Capgemini back in 1992 are still at Capgemini, some in very senior positions.

"It is not everyone's cup of tea but for those that go out of their way and take something out of it being transferred in an outsourcing deal can be a massive opportunity," said Scott.

he said if transferred workers should try and take opportunities and build networks.

I imagine at the time Scott's transfer to Capgemini was something that caused many sleepless nights. He was entering the unknown.

I thought this story is a good one to tell because it is a TUPE transfer with a happy ending. Well a happy beginning, middle and end.








Legal & General looking at outsourcing more

Karl Flinders | No Comments
| More
I have just been told that Legal & General is outsourcing its Business Technology Services (BTS) arm, which is basically its IT infrastructure, to IBM.

I spoke to Legal & General and although the spokesman was not sure if this was the case he did say that Legal & General has "taken a decision to look at whether there is any possibility of outsourcing any more IT."

The company already offshores its application development to TCS.

Watch out for more on this.

Capgemini talks conceptually about the cloud

Karl Flinders | No Comments
| More

After meeting two Indian IT giants in the form of Infosys and Wipro to talk about their plans for cloud computing, I have turned to a European giant in the form of Capgemini.

I met up with Cagemini's Greg Hyttenrauch who heads up the UK outsourcing business.


capgemini.JPG


We started the conversation talking about Cap's new Infostructure Transformation Services (ITS) business arm. ITS is another layer on the Capgemini cake. This layer will be the contact point for customers that want cloud computing services. Because cloud computing crosses Capgemini's different arms it wanted an organisation that gives the customers a single point of contact.

The company has done some thinking which became clear after a few minutes talking to Greg. There was lots discussed but I will focus on one concept in this blog post.

Why not sell the raw computing power you do not need?

Capgemini could virtualise a customer's datacentre and free up 50% of the computing power. This could then be segregated through security technology and made available to other customers of Capgemini if they require more raw computing power during peak demand.

This solves major problems for two types of companies.

Example 1:

In retail you have very large retailers who spend millions on ensuring they have enough computing power to cope with the highest possible demand. They always have this in place just in case, but probably only need it at Christmas. But they pay for all the hardware and continuous power and maintenance.

But instead of this they can pay for an average computing power and allow Capgemini to make the rest available to other businesses, the customer can also plug into the cloud to get access to more when required.

Example 2:

A small retailer which cannot afford to pay for a large IT infrastructure will be in trouble during peak demand. But if it is linked to a cloud it can call on the resources when required.

At first I thought no company would want to give other companies, including competitors, access to computing power. But then I thought, why not? It is just raw power and after all we share electricity providers. And the big companies are benefiting from significantly lower costs.


I will be covering some of the other stuff we talked about, including breaking up applications into pieces and repackaging them, in another article with some of the other things Wipro and Infosys are doing.




BT writes me a cheque for 3 pence

Karl Flinders | No Comments
| More
Last week I got excited when a large cheque came through my letterbox. Well it was physically quite big, as cheques go, but only for 3 pence (see picture).

BT cheque.JPG


The letter that came with the cheque said "as agreed" but I don't actually know what it is for.

But what I do know is BT must have efficient processes to make processing a cheque for 3 pence viable.

Don't worry BT it won't be claimed because it is a great souvenir 










What is Infosys doing in the cloud, apart from using buckets?

Karl Flinders | No Comments
| More
On Thursday I met Infosys' head of SAP Rajesh Krishna Murthy. As I did with Wipro's CTO the other day I focused on cloud computing, and more to the point where Infosys is with its strategy to deliver cloud computing services to its enterprise customers.

Don't worry the buckets link will be clear later.

Rajesh Krishnamurthy.JPG

It seems Infosys is well on the way to having a full suite of cloud services and is already working with customers on these services. Like most suppliers, however, at the moment they cannot name names when it comes to customers.

Infosys has three platforms that it has already created.

These are:

1 - HR Platform, which runs a companies HR systems

2 - Source to Pay, which runs procurement services

3 - Order to Cash, which is a niche platform targeted at the advertising industry. It manages transactions from the time an advert is ordered.

Murthy says the company has another three platforms that will be ready in the next six months.

These are:

4 - Billing platform
5 - Order management platform
6 - Healthcare industry platform

He says that customers will start to look at their cloud computing in "two buckets"

The first bucket is for processes where businesses need to be on a par with competitors. The second bucket will give unique processes that can improve competitiveness. This is the bucket that will give the most value.

But he says businesses need a mix of buckets.

Murthy said what customers really want are examples of other companies using these services. So the Catch 22 makes it hard to get a cloud service up and running at customers. But once a customer is signed up more will follow.

Murthy says the moment it signed one customer for a new platform it immediately won three more contracts.

Infosys is ready to offer European customers its cloud services through a deal with Colt, which will provide the datacentre part of the services.

He says the four challenges for getting cloud services into the enterprise are:

1 - While you might have a very good understanding of a business developers have to work with the customer to understand what Murthy describes at the "nitty gritty" of the business. This will include things that happen in the business that might not be that obvious and are therefore hard to plan for unless you experience them.

2 - Overcome fears around data protection and data ownership.

3 - The backward integration of other processes

4 - Winning the first customer

Today I met Capgemini's head of outsourcing in the UK, Greg Hyttenrauch. We talked about cloud computing at length. Look out for a blog here soon about pour conversation. 


Ousted IT blogger has refreshing change but competition for jobs is fierce

Karl Flinders | No Comments
| More
This is part nine of a series of blog posts written by an IT professional that was ousted when his employer offshored IT jobs. This week he, like last week, is more positive about his opportunities but the competition for jobs is fierce.

See part 1, part 2, part 3, part 4, part 5, part 6, part 7 and part 8

Situation: vacant

by I.T. Jobseeker


I was speaking to yet another agency last week. I am glad to say that they were different from many of the others, a refreshing change from some I have dealt with so far.  

An ad was posted on a recruitment site at 17.15 last Thursday and I sent my CV in response at around 18.00. I got a call from 'Dead Straight Recruitment' first thing on Friday  morning. After a brief chat, the recruiter said that he thought I was a good fit for the role.

'So you will be putting me forward to your client?' I asked, not unreasonably.

'Well, normally I would say yes right away,' he said with a little hesitation, 'but I've got lots of other people to speak to. It's only fair that I look at all of the CV's and have a brief chat with likely candidates, as I just have with you.'

'How many people have applied in this short time?' I asked.

'Sixty Seven,' he told me. 'I've taken the ad down because I can't handle anymore'.

'And how many positions are there?'

'Just the one'

'Are you a sole agent?'

'I'm afraid not. There's one other and the brief is for each of us to send their best three CV's,' he said, rather apologetically. 'I will call you on Monday if you are in the top three. Otherwise you should assume that you are not. Sorry.'

He didn't call. Maybe I came fourth. Despite not being put forward, this agency were up front about everything and I wish they would all act in such a fair manner.

I was glad of the insight into the response to this single vacancy.  Up until now I have only been looking for jobs within a reasonable commute from home. Time to spread the net a lot further.

Mahindra Satyam gets more customer faith

Karl Flinders | No Comments
| More
Mahindra Satyam gets another contract renewal.

This time it is with Danish IT firm KMD. The deal is worth about $48m and will run until 2013.

The contract sees Mahindra Satyam supply, application development and testing services. Large parts of this involve SAP software.


C P Gurnani, CEO of Mahindra Satyam said the renewal is great endorsement.

 

Who will win the race to the cloud?

Karl Flinders | No Comments
| More
I am currently working on a story about what the outsourcing suppliers are doing about the cloud. This follows on from an interview I did with Wipro's CTO Vijay Kumar.

He told me how the company has applied cloud computing to its own core business of software development. It has had staggering results. Basically it makes the distribution of computing power to project teams easier and cuts the cost of hardware.

But Wipro is going further and beginning to work out the best way to provide these services to customers.

Meanwhile Capgemini has launched a dedicated cloud services business.

I will be talking to Infosys tomorrow about what it is doing in the cloud.

Who will win in the cloud and what do customers want from the cloud?



 



Will BskyB victory over EDS increase prices for CIOs?

Karl Flinders | 1 Comment
| More
Could a court ruling in favour of a customer in a long battle with an IT supplier, over a failed IT system, result in higher prices for businesses?

The ruling that EDS, now part of HP, misrepresented its capabilities when bidding for, and selling, a CRM system to BSkyB was not a landmark judgement but it will change the processes used to reach the final contract.

The fact that EDS, which has already been ordered to pay £270m damages, lost on the grounds of fraudulent misrepresentation meant the law has not changed. But suppliers have received a warning that unless they change pre-sales processes there could be more rulings of fraudulent misrepresentation.

But these changes come at a cost and the clients could be charged more to meet additional supplier overheads.

In the past the relationship between supplier and client usually allowed some room to renegotiate, but EDS's defeat gives customers another option.

An event sponsored by Computer Weekly and outsourcing consultancy Burnt-Oak Partners, attended by businesses that outsource, suppliers and lawyers revealed how the industry sees the ruling change the way they do business.

Jean-Louis Bravard, director at Burnt-Oak and former global head of financial services at EDS, says the costs for suppliers will increase and this could be passed on to their clients. "Suppliers are not going to absorb these extra costs but add them to the cost of the [delivery] model."

According to a contact of mine there has already been a 20% to 30% increase in insurance premiums.

Lee Ayling, UK head at sourcing consultancy Equaterra, says the added costs will come in the pre-sales and process, which does not always end in a sale. "Inevitable certain suppliers will incur more costs and will get the cost back from their customers somewhere."

He says that service providers should have repeatable processes which will lower the costs in the longer term.

Ayling says suppliers that provide standard outsourcing projects will not be affected but those doing large complex one-off projects will have to go through internal validation and qualification before agreeing contracts. "In the past some used to wing it but this will not be possible anymore."

Mark Lewis, head of outsourcing at law firm Berwin Leighton Paisner, agrees that supplier bid costs will increase. But he does not expect the customers to be charged more as a result.

"The costs will be operational for the suppliers and they will not necessarily be able to pass this on to customers," he says. For example legal costs will not rise but suppliers will have "to put robust processes in place which will add to management costs," adds Lewis.

But Lewis says if suppliers start putting their prices up there will be others with more efficient processes that will step in and bid for the business.

"If suppliers are tempted to put their increased bid cots on customers those that are more efficient, have better management processes and do not lie to their customers will do better. They will not need to pass on the extra cost."

Peter Brudenall, lawyer at Hunton & Williams, says there are still some suppliers and customers that do the minimal work to ensure contracts are deliverable. He says following the EDS/BskyB decision suppliers will have to invest in improving pre sales processes in the UK.

"I do not think they will be able to pass on the extra cost because it is a very competitive market."

Stephen Boulton, head of IT at Leek United Building Society, says increased prices would put off many IT decision makers. He says the company currently favours in-house services and "If outsourcing prices raised it would disincentives them and make it less likely that we would outsource in the future."

BskyB's victory over EDS in a dispute over a failed CRM system will increase the fixed costs of outsourcing service providers but whether it increases prices for end customers is less certain. The healthy competition in the sector could limit the increases.

HP strike should be a message to Siemens

Karl Flinders | No Comments
| More
HP workers are on strike again in the UK. The workers many of which are former EDS employees are unhappy with redundancies and pay freezes.

In the light of the various industrial relations disputes going on, I spoke to Siemens last week about it's own industrial relations troubles. Workers at Siemens, on the BBC contract have, been balloted over industrial action by union Bectu.

If workers vote in favour of a strike their will almost certainly be a 24 hour strike of workers as well as other disruptions. This action could hit the coverage of the election build-up as well as sporting events.

I asked Siemens if it was planning on talking to the union. Its representative told me that if the ballot voted in favour of action it would. I think this is a bit negative. Would it not be better to talk now to show that the company is committed to helping its staff?

Getting around the table should not be something you do at teh last minute. It is not good for business when workers are unhappy, is it?





Ousted IT blogger doesn't need to scrape the jobs barrel anymore

Karl Flinders | 2 Comments
| More
This is part 8 of a series of blogs following the life of an IT professional that lost his job as a result of his employer offshoring IT. This week he is a little more optimistic about the IT jobs market.

His optimism is echoed in a recent survey from ReThink Recruitment.

See part 1, part 2, part 3, part 4, part 5, part 6, part 7

Situation: vacant

by IT Jobseeker

And so to the next phase of the Jobseeker Journey. I've been unemployed for over six months now, so the DWP have stopped paying me Jobseekers Allowance. The old coffers will no longer swell by the princely sum of £64.30 a week, but the DWP will keep my National Insurance contributions up to date as long as I continue to sign on.  

I now get to report to a different section of the Job Centre, a promotion of sorts, I suppose, and there is a different crowd in the waiting area. At my recent visit, a middle aged man stood out because he was wearing a smart suit. He sat uncomfortably amongst a small group of 'neets' who were listening to rap music on their not-so-personal MP3s. I imagined him as having not told his wife about losing his job, putting on his suit every morning and leaving as if for the office.  Probably just my imagination running wild in this place, maybe he had an interview to go to later. I do hope so.

When my name was called, I was pleasantly surprised to find that the advisor was Janet, a lady who used to work in an estate agency in my local high street, until she had been made redundant.  She had taken this new job last spring, with one of the few employers who at that time were experiencing a boom in business! I suppose that whenever the employment situation improves, she could be made redundant by the Jobcentre, but by that time the housing market should have picked up and she can get another job with an estate agent. A work strategy for boom and for bust. Brilliant!  

As for things picking up, I think that prospects in my line of work may have improved from bleak to just bad. Since the 'Far Fields' fiasco, I have had two more interviews and agencies have actually started calling me rather than just me constantly calling them. 

Are the famous 'green shoots' of recovery starting to appear? Watch this space.

IT salespeople beware customers will now "crawl over contracts"

Karl Flinders | No Comments
| More
Further to my earlier blog I thought I would expand a bit on one of the points I made.

The general feeling at last week's event, co-sponsored by Computer Weekly and Burnt-Oak Partners, about the EDS/BskyB case was that lying is endemic in the IT supplies sector.

Strong words you might think, but words that came from suppliers themselves.

What the EDS/BskyB case ruling will do is open up more avenues for the clients to redress any grievances they have with suppliers later down the line.

If a salesperson has been a little elastic with the truth when the contract was singed the customer will use this against them in the future. Now that there is a case that has ruled in favour of the customer more businesses that are unhappy will go through contracts with a fine tooth comb to find fault.

In the words of Mark Lewis, lawyer at Berwin Leighton Paisner, the fact that EDS was defeated on the grounds of fraudulent misrepresentation is a warning to suppliers.

"Clients will crawl over contracts to find fault if deadlines and targets are missed. The IT supplies industry will have to be careful." He said before the EDS/BskyB ruling clients and suppliers would usually talk over things if there was a problem and renegotiate but it might be different now.


 

Will EDS/BskyB case stop IT salespeople lying?

Karl Flinders | No Comments
| More
I attended a seminar on Friday that looked at what the fall-out of BskyB's court victory over EDS will actually be.

BskyB won a court case against EDS in relation to a failed CRM system. EDS was ordered to pay an initial £200m in damages.

The event was held at the offices of legal firm Berwin Leighton Paisner and was attended by outsourcing clients, suppliers and lawyers.

Computer Weekly co-sponsored the event with Burnt Oak partners
, a consultancy that focuses on ensuring outsourcing agreements deliver results.

I will be writing an article about some of the questions raised, but here are some of the interesting discussion points.

- The case is not a landmark judgement because it doesn't change law
- The case does not change the law but the appeal could be different
- The cost of insurance  related to contracts will rise between 20% band 30% as a result of the case.
- The case might stop salespeople lying to clients about what they can deliver in order to win contracts
- large numbers suppliers will implement process changes
- It is a fact of life that salespeople over-sell
- Suppliers will have to take a look at how they train pre-sales people
- Marketing material is often cut and pasted into RFPs
- The project delivery teams should be brought into the pre-sales process as early as possible
- Contracts might now take longer to complete
- The use of third party sourcing consultancies will increase
- It will now be more difficult for suppliers to renegotiate contracts
- there are other similar cases ongoing
- Should PWC seek compensation for losses because it was beaten to the original contract by EDS, which overstated its capability?
- Customers need to better understand what they want. This is difficult because of long time frames for implementing contracts?

There was lots more to come out of the event. But what do you think?

PADA deal sees public sector IT roles start offshore

Karl Flinders | No Comments
| More
The government this week awarded TCS with the contract to administer the new pension scheme it has created to provide low and middle income people with pensions.

The National Employment Savings Trust or NEST for short will be administered by Tata. Because this is a new scheme there are no jobs to offshore. Rather the government is offshoring them from the start. Well apart from front line customer services.

It is also keeping the data in the UK.

This is less painful a way to offshore because there are no UK workers made redundant. But isn't it just as bad not giving UK IT workers the opportunity in the first place?

World Cup 2010 has its own hand of God

Karl Flinders | No Comments
| More
It was nice to talk to Mahindra Satyam yesterday about something other than the internal fraud that hit the company last year.

This time it was about the World Cup 2010, in South Africa, and the company's development of the software that underpins the event. This software manages the activities of hundreds of thousands of workers at the event as well as competitors and supporters. Like the "hand of God" that nobody can see.

While you are sitting comfortable watching England fail again as Argentina, with its Newcastle stars, get a shock tournament victory there is software running the show.

Click here is a story I wrote.

See here for a picture story about the same thing.

I did try and get some free tickets but I was blanked quite rightly. I think I blew it when I asked for a private jet.


Wipro's bold cloud computing strategy is well on its way says CTO

Karl Flinders | No Comments
| More
A couple of weeks ago I wrote a blog post about an cloud computing experiment that Wipro was carrying out. I first saw it in the Financial Times but thought I should speak to Wipro directly to get more information.

Wipro kindly provided their CTO, I Vijay Kumar, who filled me in on a programme that has gone well beyond the experiment phase.

In the US and India, where Wipro owns lots of datacentres it is already building its cloud computing infrastructure. Customers will soon be able to buy cloud services from Wipro.

I will soon be writing an analysis of what Wipro is doing but in the meantime I thought I would blog some of the headline grabbers.

Kumar said that cloud computing today is at the stage that the Internet was at ten years ago. He says in its native form it is known as virtualisation by techies.

Wipro tested cloud computing  out in  relation to its software development business. It built an internal cloud and connecting between 350 and 500 people to it.

He said the reason Wipro wanted to experiment was because cloud computing is actually very complex with many variations.

Wipro has found that setting up a software project is made faster and more cost effective by doing it in a cloud. This is all about the allocation of computing power.

Traditionally when Wipro sets up a software development project the team would have to get hold of some computing power in the form of servers. This would take some time because they would have to go through the long process of requesting the kit, having it approved and then wait for it to arrive.

But through the internet cloud an email is sent to the cloud management asking for the computing power and it is allocated via the cloud. So the time and cost savings are easy to identify.

The other massive advantage is the removal of waste. Computing power can be more accurately allocated. Rather than having a dedicated server or servers which are never fully utilised cloud computing means computing power can be allocated depending on the need of the users. Kumar said typical utilisation levels are between 20% and 30%.

Also when the projects are complete you are left with computing power in the form of servers that you do not need anymore.

So the test worked well relating to software development but what about other sectors?

Well Wipro is already building a cloud infrastructure in India and the US as I said earlier. This will also start in Europe when Wipro has datacentres.










Broken BBC phone system failures add fuel to BBC/Siemens fire

Karl Flinders | No Comments
| More
The relationship between the BBC and its IT services partner is not at its best at the moment. Workers at Siemens have recently been balloted for strike, which could lead to disruptions including a 24 hour stoppage.

BBC workers are also having to work using a faulty telephone system. According to a source the phone system doesn't work at intermittent times and workers have to use mobiles.

The BBC said: "We are aware that there are issues with the phone system and are working with our technology partner Siemens to resolve it."

I also here from the industry and within the BBC that the relationship between the supplier and customer is somewhat strained.

But the relationship goes back quite a few years and the original deal; involved Siemens buying some of the BBC's IT infrastructure and taking on 1,400 of its staff.

This deal is difficult to get out of for both parties. This raises questions over signing deals that tie customers and suppliers up, with the hope that commitment leads to a better service.




Is desktop as a service the outsourcing hot spot?

Karl Flinders | No Comments
| More
I just had an interesting conversation with Citrix's  VP for UK, Ireland and South Africa, James Stevenson. The interview was arranged on the back of a deal that Fujitsu won with the DWP which Citrix was a key part of.

Citrix is providing the software to create a Thin Client computing environment.

Stevenson said the DWP chose a thin client environment but businesses can build environments that use any hardware device.

This is basically desktop as a service, where workers chose their own device that links to applications.

IT service providers will have to build business models that support this type of desktop service.

Findings from the recently launched Citrix Virtualisation Index (CVI)

- 27% UK CIOs will be rolling out their use of desktop virtualisation in the next 12 months
 
- 33.4% of companies intend to explore the uptake of desktop virtualisation technologies in the next 18 months
 
- However, 13.6 per cent of UK CIOs are not currently using desktop virtualisation at all - (Germany: 2.2%, Japan: 3.75%, US: 1.44%)

24 hour IT strike likely at the BBC if ballot says yes

Karl Flinders | No Comments
| More
Just got off the phone with union Bectu, which amongst others represents many of the Siemens workers embedded at the BBC.

The spokesman said talks yesterday concluded that a 24-hour strike will be held if the recent ballot over industrial action reveals an apetite for action.

The union is unhappy with a pay freeze, redundancies and the possibility of servers being sent to Romania.

The union said it will attempt to maximise the impact of strikes which means sporting events and the build up to the general election could be hit.

I wonder if the Union has thought about striking while the BBC hosts the live debates between the party leaders. There will be three 90-minute debates, the first on ITV1, the second on Sky News and the last on BBC One.

PA Consulting will answer your sourcing questions for free

Karl Flinders | No Comments
| More
Today PA Consulting has launched a service that promises to give an opinion on any question put to it about IT sourcing from C level executives.

It is called Ask:PA and can be accessed by clicking here.

See a story I wrote this morning here.

I am looking forward to seeing some of recurring themes that emerge.

The service has basically just been launched so why not get a question in quick. Sorry to repeat but it can be accessed by clicking here.

Could NHS IT spend commitment be a poison pill for Tories?

Karl Flinders | No Comments
| More

Following Labour's decision to rush through National Project for IT supplier agreements that will tie the next government to billions of spend, the National Outsourcing Association's chairman Martyn Hart says this could be dangerous bad for the projects long term viability.

"Labour's decision to try and push through a new agreement on the NPfIT before the election could be dangerous for its long-term viability. Of course we are still waiting for further details to emerge, but I would hate to think Labour was pushing this through as some kind of 'poison pill' simply to commit the Tories to one of its pet projects. Of course, if Labour wins this could be a sizeable own-goal!

"One would hope that government IT failures of the past have taught the appropriate lessons to guard against such a move. These lessons surround areas like: conducting appropriate supplier diligence; planning meticulously; setting realistic expectations; and aiming for short-term milestones rather than one distant 'Holy Grail'. Failing to properly address these areas on the NHS Patient Records system has apparently already cost taxpayers more than £12bn since 2002.
 
"The need for the NHS patient records system is of course still very apparent -doctors clearly need full access to complete patient histories, wherever they may be, to make appropriate diagnoses regardless of location. However, too much money has already been wasted on this project through mismanagement. Whatever the political agenda, it is paramount that any new deal is not rushed. Falling into the traps of the past could see mooted savings of £600m paling into insignificance against likely future losses."
 

Bectu meets today to plan BBC IT strike action

Karl Flinders | No Comments
| More

The union representing IT workers working for Siemens at the BBC is meeting today to plan what type of industrial action it will take.

If members, who were balloted last week regarding potential industrial action, vote in favour Bectu wants to maximise the impact of the action. The union could time strikes to disrupt the BBC's coverage of the general election build-up for example.

Today's meeting will consider when would be the best time to hold a 24 hour strike and what other stoppages could be held.

A spokesman at Bectu expects that the BBC will be eager to get Siemens' management to meet with Bectu to prevent disruption. "The BBC will be putting pressure on Siemens to get them around the table," he told me.

Industrial relations trouble makes ousted IT blogger smile

Karl Flinders | 3 Comments
| More
This is part 7 of a series of blogs following the life of an IT professional that lost his job as a result of his employer offshoring IT. This week he reveals how news of industrial relations troubles at suppliers made him smile.

See part 1, part 2, part 3, part 4, part 5, part 6

Situation: vacant

by IT Jobseeker

Last week's story, about the Department of Work and Pensions and the BBC facing disruption because staff working for their outsourcing companies were to strike, made me smile.  When they first thought about outsourcing, did their respective bean counters consider the potential downside of depending on staff over whom they had no direct control? Probably not. The balance sheet is all.

Will the service level agreements the DWP and BBC signed with their outsourcers provide for compensation? Let's hope so.

In a broader sense, the effects of relying on outsource staff go deep. Organisations who directly employ staff recognise who is an asset and who is a liability and can act accordingly. If a key member of staff threatens to leave, he or she can be offered inducements to stay, while a non-performer can be shown the door. In an outsourcing agreement, a company has little or no say over who does what.

From a staff point of view, working directly for a company provides a sense of belonging. This does not necessarily mean it's a recipe for a contented workforce, but most people will see that they are part of the company's success or failure.  Schemes run by some companies that provide share ownership, for example, help to promote this sense of involvement.   

For a new account, an outsourcing company will provide the keenest, brightest and best staff they have available, often moving staff in from other accounts. When they feel established, they will start to rotate staff, possibly moving in the not-so-bright. The client has no control.

It is perhaps for these reasons that Barclays have decided to bring their IT work back in house. A large British company has gone against the trend, hopefully more will follow.

Are company accountants finally noticing the (Indian) elephant in the room?

Still time to find out how EDS/BskyB case affects your business.

Karl Flinders | No Comments
| More
There are still free places left for an event being hosted by Computer Weekly, Burnt-Oak Partners and legal firm Berwin Leighton Paisner looking at the fallout of the EDS/BskyB case.

The"Promises!  Promises!" event will be held at the offices of law firm Berwin Leighton Paisner on Friday 05 March.

The event will be chaired by Computer Weekly Editor Bryan Glick.

There is no charge, but places are limited and are likely to fill up quickly.  If you do not have a direct invite you can sign up by emailing events@burntoak-partners.com

Below are the details that appear on the invite.

"Will the BSkyB/EDS case become a defining moment for change in the IT outsourcing industry?

BSkyB won its five-year legal battle against HP/EDS after the judge in the case accepted BSkyB's claim that HP/EDS had misrepresented its capabilities in selling a CRM system.  Appeal or not, what will be the repercussions for the outsourcing industry and its customers?  How will suppliers need to adapt in order to protect themselves from future litigation of this type?  We will look at how suppliers may need to change their approach to assess their risks and protect themselves from future similar cases, and how this might impact bidding costs and willingness to supply, and also on bid prices offered to customers.  Where does this case leave customers?  What should they do to guard against such cases? We would like to invite you to attend a special event to explore the repercussions of this case.

Date:             Friday 5th March 2010

Time:             Registration 08:00am.  Seminar 08.30am to 10.00am.

Location:       The Auditorium, Berwin Leighton Paisner LLP, Adelaide House, London Bridge, London, EC4R 9HA

Will local government "perfect storm" create outsourcing frenzy?

Karl Flinders | No Comments
| More
Multiple reports in the press today talk about the massive job cuts expected in local government.

Up to 100,000 job cuts in local government are being predicted by some.

The Guardian, quoted Dame Margaret Eaton the chair of the local government, as saying local government is in a "perfect storm" in that during recession there is increased demand for council services but less money to provide services.

Back in January Socitm said there was a 10% cut in IT staff at local authorities last year. It also said that outsourcing will increase as a result.

Councils have to provide services by law therefore service providers could allow them to offload costs and retain service levels. The services that councils offer lend themselves to being outsourced in many cases but the difficulty in making public sector workers redundant is an expensive problem.

The government might decide to transfer thousands of workers to outsourced service providers to take them off the wage bill. If thousands of workers are transferred the outsourcing suppliers could have a TUPE overload.

But according to a contact of mine a legal president known as Beckmann Martin makes it expensive for any public sector organisation to offload workers to outsourcing service providers. Basically this means that workers over 50 will get massive redundancy packages and a new employer would not want.

 


Does the BBC's IT agreement with Siemens need a kick up the backside?

Karl Flinders | No Comments
| More
Following the news that Siemens workers at the BBC have been balloted over industrial action I have been speaking to various people close to the story.

This includes staff at the BBC.

It appears that the five year old technology outsourcing relationship is under serious strain. A strike could hit the BBC's coverage of the general election.

Although the BBC and Siemens said any industrial action will not disrupt the BBC's business the relationship between the two companies appears strained.

One BBC worker told me that if you ask any member of staff about the Siemens service they will complain at length about it.

Apparently there are periods when the telephone system, at White City, doesn't work. As a journalist I know you are stuffed without a phone so BBC journalists must suffer.

Another source told me that the relationship is at a low point.

A contact of mine within the sourcing industry tells me the relationship has had problems for years.


Have you entered our awards yet?

About this Archive

This page is an archive of entries from March 2010 listed from newest to oldest.

February 2010 is the previous archive.

April 2010 is the next archive.

Find recent content on the main index or look in the archives to find all content.

 

-- Advertisement --