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Servelec serves up strong FY14 results

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Servelec LogoIn the year to 31st December 2014, Servelec, provider of software, hardware and services to the health & social care, oil & gas, power & nuclear, water, utilities and broadcast sectors, increased revenues by 23.2% to £51.8m. Underlying operating profit growth was 8.4% to £12.2m, while pre-tax profits were down 2.9% to £10.6m. In the UK – the company’s biggest revenue contributor – revenues increased from £36.7m to £40.8m.

Servelec is a business of two ‘halves’. The bigger of the ‘halves’ is Servelec Automation (Controls & Technologies). In the year to 31st December 2014, this part of the business grew revenues by 29% to £35.1m, due to a strong performance from Servelec Technologies.  Servelec Technologies reported a 70% increase in revenue, which included a full year’s contribution from Semaphore (acquired in October 2013). However, the order intake was not as strong as hoped due to delays in a number of large control systems orders and a dip in activity in the UK water sector in advance of the next water investment period (April 2015). Moreover, the other part of Servelec Automation – Controls – saw revenues decline by 2% due to challenging market conditions in oil & gas.

While the outlook in ‘Automation’ is good due to strong market demand drivers, the more positive story overall seems to be coming from the smaller part of the business: Servelec Health & Social Care (the Social Care label was added following the acquisition of CoreLogic– see Servelec sees CoreLogic of social care move). The division reported total revenue growth of 11.9%, and organic revenue growth of 10% to £16.3m. During the period it benefited from the go-live of RiO for West London Mental Health Trust, the first full exit from the National Programme for IT (NPfIT). It also achieved a very high success rate in the London NPfIT Refresh, with 17 preferred bidder wins out of a total of 29. Now, the addition of CoreLogic adds the social care string to Servelec’s bow in this space. As well as adding to the order bank (by £15.4m) resulting in a divisional order bank of £49.1m, the addition of CoreLogic gives Servelec the opportunity to develop an integrated health & social care offering. If Servelec gets it right, it will be well placed to meet the increasing urgency to provide patients and service users with a converged approach to health & social care service delivery.


UK goes into reverse for Adecco

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lZurich-headquartered global staffing giant Adecco is really starting to struggle in the UK market after several quarters of declining growth (see here).

In Q414, revenue from the UK & Ireland region actually went into reverse, declining 2%  to 524m (although up 3% in the full year), vs. 7% growth for Q4 2013. Adecco’s UK margin was also disappointing, down 10 bps to 2.4%.

Adecco saw a 2% decline in IT staffing, its largest sector within its professional division. General ‘office’ staffing also fell 2%. Some good news though, permanent placement revenues grew 9%.

We don’t however see Adecco’s UK results being symptomatic of a weakening UK market. Smaller UK IT staffing agency InterQuest notched up 31% growth in the UK in FY14 (see here), meanwhile larger player Hays achieved 13% growth (+24% in IT) (see here).

The differing performances among the major IT recruiters shows real ‘diversity of performance’. And it's clear to see which are the ‘winners’ and 'losers' currently in this race.

UK growth fuels Michael Page

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michael page logoRevenues at Michael Page Internationalplc ("PageGroup") for the twelve months ended 31 December 2014 grew by 4.1% to £1,046.9m (2013: £1,005.5m) and gross profit increased 3.7% to £532.8m (2013: £513.9m). The company added that at constant exchange rates, the Group's revenue increased 9.9% and gross profit by 10.0%.

Operating under the 3 brands of Michael Page, Page Personnel and Page Executive; the UK remains the largest single market with revenues rising by 9% to £326m (2013: £299m). Gross profits in the UK jumped by 12% to £138m (2013: £124m) and accounted for 26% of gross profits.

The company paints an optimistic picture of the UK economy with the recovery maintaining ‘steady momentum’ with ‘greater client confidence both in London and the regions’.  In particular the company highlights that the Property & Construction, HR, and Finance & Accounting disciplines are performing strongly.

As we have also seen in Confidence boosts Hays UK IT recruitment and Robert Walters growth belies gross margin squeeze; there is cause for optimism in UK plc.

Computacenter UK confirms strong year for services

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CCCComputacenter today announced its FY14 (to the end of December 2014), with few surprises. As previously outlined in a pre-close update, the UK services business grew 8.6% to £497.6m. Broken down, that equates to 6.9% growth in Managed Services and 14% growth in Professional Services. Some of the most notable wins during the year include the Post Office (as well as the Royal Mail Group) and the large renewal atAstraZeneca. Group revenue increased 4.2% to £3.1bn – marking the fifth successive year of growth.

Computacenter is the UK’s largest corporate reseller, but it is also one of the best performing providers of infrastructure services. Furthermore, deals such as the Post Office, Transport for London (and the Rolls Royce deal, which has now been running for several years) are services-led. In other words, this is not Computacenter going in as a product reseller and ‘tagging on’ services.

So why is Computacenter doing so consistently well (its growth rate as been above most of its competitors for the past three years)? Firstly, market dynamics are helping – specifically the tower model where its focus is the end user component. Staying very tightly focused on what it’s good at, and not being tempted to stray away from this, has really helped the company over the past few years. In terms of innovation, it is never going to be at the ‘bleeding edge’ of technology – that’s not its positioning. However, Computacenter's ongoing investment in areas such as mobility and Next Generation Service Desk shows it has put more focus on developing key technology capabilities, something to which customers are responding well in our view.

As we have said before, the UK services business is motoring along nicely, and we see no reason why that should change materially. Indeed, CEO Mike Norris believes sustained growth at the mid-single digit mark and beyond is possible for foreseeable future.

Eagle Eye: locked on and focused in H1

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LogoAIM listed Eagle Eye, the provider of digital consumer engagement solutions to the retail and hospitality industries, reaped the top line benefits of the ‘network effect’ and its mobile messaging 2ergo acquisition in H1 (to December 31), as revenue soared 276% albeit only to £2.3m. Strip out 2ergo and organic growth was still an impressive 81%, to £1.1m.

The company is embedded in the shift from paper to digital coupons, loyalty cards and rewards, generating revenue from network transactions plus monthly connection fees. Volume of transactions and connections is vital and the £1.8m (vs. the £0.4m of the year ago period) shows the rate of progress. Big brand names underpin the network effect and Eagle Eye does not disappoint with the likes of Tesco One Stores, M&S, JD Sport, Greggs and Ladbrokes among its 110 live customers (40 in H113).

A minimum 2 year contact with Asda, signed post period, is a signiicant win, providing an early and important reference site in the large grocery market. However, the scale of change needed in the digitalisation process and the time to close significant digital deals is apparent - Eagle Eye says it spent a year on the development process with Asda prior to the contract. This reminds us of IT services provider Endava who has been signing some chunky digital contracts but spent a good two years building relationships and proving competency (see here).

Building the business is costly so operating losses have deepened from £434m to £1.6m in H1 (close to the figure for the whole of 2013), so it is not surprising the company is looking to raise funds from a £4m share placing. Eagle Eye needs to spend to capitalise on its early mover advantage but needs to ensure excitement does not displace discipline.    

Fresh faces hope to Enables IT’s business reset

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logoIt's been a very rocky ride for Surrey-based AIM-listed IT managed services minnow Enables IT in recent times  (see Enables IT yet to enable profit), which led to a major overhaul of the board and senior personnel. As a result, the company recorded net losses of £2.1m for the year to 30th Sept. '14 on revenues of £7.0m, 6% higher than in 2013. CEO Michael Walliss expects the company to remain in loss for the first half of this year (almost over now) but reckons the business will now be set fair for longer term growth. A couple of directors have also fronted a £125k loan facility if the company needs the cash.

It’s hard to share management’s optimism for this ‘buy and build’ outfit (see Enables IT reaches its Nexus), especially as some of the buy and build has been in the US (see Enables IT builds in a busy market). There also seems to be little to differentiate its ‘cloud’ and managed services proposition on either side of the Atlantic. With little cash left in the bank, and a share price seemingly in graceful decline, you have to wonder how they are going to build, let alone buy!

Serco's 'extremely difficult' year

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l2014 was predictably ‘extremely difficult’ for Serco according to CE Rupert Soames, who completes his first year at the helm (see Serco chairman resigns and work back).

FY14 was the first time since listing 25 years ago that Serco experienced a revenue decline, down 7.7% to £3.995m. Serco dived into the red too with an operating loss (before the nasty bits) of £656m vs. a £236m profit last time. Including write offs, losses reached £1.3bn. Serco completed its £555m rights issue to pay off debts. However investors looked dimly on the headlines and slashed another 15% off its shares. They are now down c60% in the past year.

Unsurprisingly, it was Serco’s largest UK central government division that delivered the biggest losses (see here and work back). Revenue was down 10.4% to £962m, and losses reached £243m vs. a £115m profit last time. This shows the extent of the costs Serco has borne against its scandal hit contracts.

A less severe performance came from the UK and Europe Local and Regional Government division, now headed up by former UK CSC head Liz Benison (see here). Revenue here was flat (or up 3% after disposals), thanks to recent wins and extensions (see here), but it still made heavy losses, largely due to BPO deals like the Anglia Support Partnership, Hertfordshire CC and Citizen Services.

We do think Serco is doing the right thing refocusing as Government-focused (B2G) supplier. However as past experience shows, intense supplier competition and Government cost pressures are always going to make this a particularly tricky market.

Serco’s problems are still wide and varied. Its various disposals, including the private sector BPO business, are taking longer to offload and there's no certainty of a closure any time soon. This is no doubt causing further distractions and uncertainty. The benefits of Serco's turnaround plans are going to take longer to come to fruition.

We will have more to say on Serco's challenges and prospects in a future TechMarketView Analyst Views comment. 

UK tech cities offer higher IT salaries to challenge London in the war on talent

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Experis company logoFrom silicon roundabout start-ups and Shoreditch design houses to global banks and insurance companies, the UK’s boom in IT talent and job creation is a London success story.

However, this is by no means the whole story.

Introducing Experis Tech Cities Job Watch, our survey of hiring demand and salaries.  Each quarter we look at evolving IT opportunities and identify changing trends within 10 UK tech cities.

Experts white paper coversHighlights from this quarters report include:

  • Prominence of roles in Mobile and Web Development
  • Recent push for Big Data has resulted in the highest average salaries
  • Manchester tops the non-London cities for IT contractor rates but falls down the rankings for perm salaries
  • Cambridge is the second highest paying city for perm roles and second lowest for contractor day rates
  • Candidate shortage in Glasgow driving up day rates and salaries
  • High average IT salaries in Bristol and Birmingham

Receive your copy of the report here.

Experis is the largest IT recruitment specialist in Europe and has been at the forefront of the search for the best in IT talent for over 25 years. 

Please note all text, images and URL links have been provided by Experis. If you would like to place a Sponsored Post in UKHotViews please email hmcteer@techmarketview.com for more details.


Venkatasamy named new CSC UK public sector lead

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CSC logoCSC has announced the appointment of Damien Venkatasamy as industry general manager for its public sector business in the UK, Ireland and the Netherlands. He will report to Sanjiv Gossain, CSC’s VP and General Manager for the region. His appointment follows the departure of Chris Doutney from the role (see CSC: Targeting central government). Damien has worked in the public sector for the last 18 years. Most recently we knew him as head of TCS’ UK public sector business (we understand TCS currently has an interim public sector lead in place). He has also worked in various roles for Steria, CGI and Unisys. Damien is also Chair of techUK’s Public Sector Board.

Venkatasamy photoThe largest part of CSC’s UK public sector business is in healthcare, thanks to the company’s NHS National Programme for IT (NPfIT) contract. But, as was the case when Doutney held the role, healthcare falls outside Damien’s remit; Phillipe Houssiau leads the UK healthcare and life sciences business. The rest of CSC’s UK public sector business falls into either central government or defence. The company’s major clients include HM Passport Office (passport production, which runs until 2019), the organisations represented by the Single Intelligence Account (where change is afoot), and the MoD’s Service Personnel & Veteran’s Agency (SPVA). Until early this year, Transport for London was also on the list; however, when TfL recompeted under a Tower model, CSC missed out to Atos (service desk) and Computacenter (see Computacenter wins at TfL).

With a relatively small footprint in central government (and indeed in the broader public sector), it appears Damien’s primary focus will be on expanding CSC’s presence across Whitehall. Theoretically CSC should be in a good position to benefit from the disaggregation of the major IT services contracts. However, with ever evolving Cabinet Office policies on ICT procurement and management, Damien will need to try and keep one step ahead of the rest of the pack - his role at techUK puts him in a good position to do just that.

Celebrating Success with our tech friends at the Prince's Trust

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PTSamsungCelebrate Success is the premier event in the Prince’s Trust calendar when we celebrate the best of the best of the youngsters that the Trust helps.

It was truly great to see so many supporters from the tech sector – indeed so many TMV ‘friends’ – at the event today. Celebrate Success was again sponsored by Samsung and it was inspiring to seHPe CEO Andy Griffith (along with Thierry Henry) presenting the Young Achievers Award to Joel Fields. Also great to see HP’s Andy Isherwood (along with Rod Stewart and his wife Penny Lancaster) present the Flying Start Award to Michael Tyler.

I’ve been involved with the Prince’s Trust for 13 years now and the Technology Sector really has ‘stepped up to the mark’. It now represents a major part of the Trust’s fundraising, thus enabling the Trust to help nearly 60,000 disadvantaged youngsters each year. Indeed nearly 800,000 since HRH started the Trust 39 years ago.

If you have any interest in joining probably the very best tech networking club in the UK – and ‘Doing Good’ – you know where to come!

Regulator and contracts trip up Lombard Risk Management, again

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logoAt the half year, see here, the management of Lombard Risk Management, and admittedly TechMarketView, were confident about near term growth for this provider of regulatory and compliance solutions. Unfortunately this optimism has been dented by the news of delays in this week’s Trading Update.

Underlying growth is still strong with a weighting to the second half as usual. However, regulatory delays around IOSCO rules and the consequent postponement of both the signing of contracts and the generation of revenue from recent alliances will drive second half revenues “slightly” short of market forecasts. As Lombard will not have been reimbursed to cover implementation and integration costs for these contracts, this will have a bigger impact on profit. The company warns that second-half EBITDA will be “significantly” lower than the £5.8m needed to meet market expectations. The shares have fallen by 20% on the news.

We should have known better. The company has been hit by regulatory delays before, see here, but had successfully built a business around its increasingly capable platform. As we have seen with several companies, including Gresham Computing, delays and failure to meet “market forecasts” mean a long time on the naughty step and require a consistent and considered approach to rehabilitation.

Nonetheless, the approach of Lombard to this growing and fundamentally important subsector appears sound. It has a large share of the top banks and a growing proportion of annuity-based revenues. It is also broadening the regulatory services it offers at a time when market participants are looking for quick, easy and scale-advantaged solutions to a growing pile of regulatory requirements. This stumble should only be temporary but provides a useful reminder to management, shareholders – and observers – of the difficulty in building growth businesses in this sector.

European TMT deal valuations down again

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chartValuation multiples of European TMT trade deals were down again in February, according to latest data from corporate finance firm Regent Partners. However,deal activity remained almost unchanged with 285 deals announced. The median Price/Sales ratio for these deals dropped to 1.5x and the Price/EBITDA fell to 8.4x. The total value of all deals dropped by about 12% to $21bn. In contrast, the UK FTSE Techmark 100 index was up 5.4% in February.

Although presaged in January, BT’s £12.5bn acquisition of the UK’s largest mobile operator EE was formally announced in February (see here). What goes around, comes around. Plus there was the usual flurry of M&A activity involving UK software and IT services companies last month, including a change of backers for Cirencester-headquartered 'learning and talent management' software firm Kallidus (formerly e2train), the purchase of a 47% stake in US-based Laser Scan by 1Spatial, another link in the Daisy chain, with the recently privatised infrastructure services firm’s acquisition of Horsham-based network and data centre services provider, Damovo, and another change of abode for Calyx Managed Services, as ownership passed from Better Capital to TechMarketView Little British Battler partner, MXC Capital.

As ever, subscribers to the TechMarketView Foundation Service can read our quarterly summary of corporate activity in the UK software and IT services sector in IndustryViews Corporate Activity.

ICT recruitment resurgence as SThree kicks off new FY

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logoAfter what seemed to be an inexorable decline in the proportion of its business deriving from ICT staffing at UK-headquartered, diversified international recruitment firm SThree, the trend reversed in Q1. Gross profit in SThree’s worldwide ICT recruitment activities grew by 22% to £22.2m in the 3 months to 28th Feb. ’15, twice the pace of non-ICT GP growth. However, ICT recruitment still represents 41% of total GP, albeit a point higher than the prior year.

Group GP rose by 17% to £53.5m, almost twice as fast as the prior year. Total UK GP growth was off the pace at 13%. However, UK permanent recruitment GP grew by 16% vs 6% at group level.

It would be a bit previous to read too much into the resurgence in ICT growth just yet. It could be that this is just the pleasing result of SThree ‘doing things better’ (see SThree pedals harder, works smarter). But similar growth in ICT recruitment GP at staffing giant Hays (see Confidence boosts Hays UK IT recruitment) rather suggests that IT projects are back on the corporate agenda.

Intel warns on Q1 revenue

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intelJust before entering its quiet period, Intel has warned that Q1 revenue will come in below its previous estimates. Revenue is now expected to hit $12.8bn (plus or minus $300m), down from its previous forecast of $13.7bn (plus or minus $500m) – which already represented a decline of 7% over Q4 FY14. Shares dipped almost 5% on the news.

Intel is blaming several factors for the reduced guidance. Firstly, there has been weaker than expected demand for desktop PCs in the enterprise market. This is a very different tale from Q2 FY14 when Intel raised its financial outlook for the first time in five years thanks to stronger demand for PCs in the enterprise space. Secondly, Intel says that “lower than expected inventory levels across the PC supply chain” have also contributed to a weaker top line performance. For this it specifically points to lower than expected Windows XP refresh rates amongst SMEs. Clearly many smaller firms just don’t feel they can afford to make the upgrade right now. Like other suppliers, Intel is also putting some blame on the macroeconomic climate and currency conditions – most notably in Europe.

Outside of the PC chip business there is slightly better news. The Data Center business (which is being lifted by the cloud and data analytics markets) is “meeting expectations”. And in terms of profitability, Intel says gross margin will remain at the mid-point of the forecast range at 60% (plus or minus a couple of percentage points). This is because higher end products are able to offset the reduced volume of PC chips. 

The company will release Q1 results on April 14th.

TSB – the challenger bank that likes to say “Si!”

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tsbbsBanco Sabadell, the fifth-largest Spanish bank is to accelerate its international growth through the purchase of TSB, the “challenger bank” de-merged from Lloyds Bank. Sabadell has offered £3.40 per share or £1.7bn, a 30% premium to the issue price as of June last year.

From a technology perspective, this deal has some interesting repercussions. TSB processes are currently driven off the Lloyds Bank IT infrastructure, see here, tying it to complex, slow-moving and obsolescent systems. TSB’s management were wanting to accelerate the proportion of digital interactions (at IPO 41% of customers were on-line), but its scope was limited by the dependence on Lloyds IT and having to go cap in hand to Lloyds for major changes. After December 2016 the dependence on Lloyds would taper off, although TSB would actually pay more (c.£200m p.a).

However, in the event of an acquisition, Lloyds has undertaken to pay £450m of TSB’s migration costs (a large proportion of which would be paid back to Lloyds IT team on a T&M basis). This will provide a substantial sweetener to Sabadell which will probably integrate its own technology quickly into TSB. Along with alignment with newer core banking processes, Sabadell should also be able to introduce some innovation (or at least differentiation) into TSB’s customer engagement. For example, Sabadell Spain has just launched a new mobile wallet using contactless and HCE technology in conjunction with MasterCard. As such, Sabadell’s arrival could enable TSB to escape Lloyds’ legacy faster and act as a true challenger in terms of new services, lower cost and real competition.

Elsewhere, the challenger bank Aldermore had a successful market debut earlier this week, being valued at £651m, c.40% of TSB’s valuation. Shawbrook will join the ranks of listed challengers in April.


Brady rewards the patient with improved full year results

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LogoAt the end of FY13 we said patience would be rewarded at Brady Plc (see Timing’s the thing at Brady), the provider of trading, risk management and settlement solutions to the energy, metals, recycling and soft commodities sectors, and FY14 results delivered.

The impact of the focus on larger contracts that take time to negotiate and the shift to the cloud model is smoothing out and the company ended the year with revenue up 13% at constant currency to £31m, but it was EBITDA that really stood out with an 80% increase to £6.3m, which was enough to meet its margin target of 20%.

A record 20 new contracts were signed during the year (30% of new contracts were cloud based) and Brady is also benefitting from migrations. Overall, growth across the business was reassuring but although the energy division signed up 6 new contracts and 4 migrations, and the company seems to be building a solid base in renewables, especially in Europe, it was impacted by exceptional items and the integration of its two energy units in Switzerland and Norway. So although the overall operating position is positive, the energy division suffered a £2.5m non-cash impairment and corresponding exceptional P&L charge.

As previously noted (see here) Brady did have a confident end to the year but there is volatility in its markets, so there is always the risk of contract postponement. However, for the moment business is coming in and prospects are encouraging, with the hint of acquisitions during the year to extend the Brady offering and increase growth.

Contract delays cost Tribal

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tribal logoIn December we highlighted (see here) that education systems and solutions provider Tribal was set to miss its profit targets for the year.  Results for year ended 31 December 2014 not only confirmed a fall in profits (adjusted operating profit of £14.5m (2013: £15.8m)) but also revenues from continuing operations fell to £123.7m (2013: £125.5m). The company cites extensions to customers' decision-making cycles extended for not meeting their financial targets.

Going forward the company will be adversely affected by Ofsted’s decision in May 2014 to bring its schools review work in-house as from September 2014. Tribal will continue to provide quality assurance in relation to nurseries until at least August 2016.

In FY14 30% of revenues were generated from activities outside the UK, compared to 26% in the prior year. In 2015 Tribal will increase its focus on the delivery of student management systems to international markets; including via acquisitions (see Tribal makes further inroads down under).  

The company has implemented a new divisional structure including product development and customer services (sales of software and subsequent maintenance and support services), implementation services (deployment and configuration of Tribal’s software), professional and business solutions (a portfolio of performance improvement tools and services, including analytics, benchmarking and transformation services) and quality assurance solutions (inspection and review services).

Tribal has set itself some ambitious performance indicators to be achieved by 2017. These include software and analytics-related revenues to account for at least an 80% share (63% share in 2014), at least 30% of revenues to be recurring software revenues, performance improvement tools being utilised by 20% of the software customer base plus international revenues to be at least 50% of total revenues. We will be paying close attention to those performance criteria in the coming quarters.

HP wins large DC and cloud deal at TNT

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hpHP has inked a deal with TNT to provide data centre services to the Dutch delivery firm. HP will be tasked with reducing TNT’s estate from 11 data centres down to just two pairs (in Singapore and the UK). As part of the deal, HP will host parts of TNT’s application estate (those apps that are new and cloud-ready) in its Helion Virtual Private Cloud environment. HP will also provide IaaS for TNT.

Alongside the HP deal, TNT has awarded Infosys an applications contract and Verizon a network and communications deal. As part of its “Outlook” strategy to transform the company, TNT needs to improve the performance of its IT estate while bringing down costs. Financial terms of the deals have not been disclosed, but we estimate HP’s share (which represents a first-time outsource for TNT) to be worth $100m+ over six years.

HP needed this win. Its Enterprise Services business has been under immense pressure, declining almost 7% in FY14 due to key account revenue run off and “weakness” in EMEA. We estimate the UK services business also declined in FY14, but has seen improvements in FY15 due to recent contract wins – such as TNT, Halfords, Ted Baker, Sheffield Teaching Hospitals, and Amey.

Furthermore, last month HP announced a ten-year multi-billion dollar IT infrastructure deal with Deutsche Bank. Again, Helion was a key component. We believe that the TNT and Deutsche Bank deals demonstrate that HP is convincing buyers of its ability to provide cloud-delivered services in parallel with a traditional environment, alongside managing the transition from the latter into the cloud. Indeed, we believe the ability of suppliers to simultaneously support/deliver these ‘parallel universes’ (i.e. legacy and ‘new world’ technologies) is becoming absolutely essential (read more here: UK Infrastructure Services Market Trends and Forecasts 2014-15).

Is Wipro CEO TK Kurien throwing in the towel?

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logoIt’s been just over four years since TK Kurien was promoted to CEO of Bangalore-based Wipro (see Wipro surges in Europe and turfs joint CEOs), bringing to an end the company’s unfortunate experiment in two-headed running. And it’s been a struggle. Wipro’s growth and margins have usually lagged top tier Indian-centric peers, though in recent times Bangalore Blues BrotherInfosys has joined Wipro in the doldrums.

So today’s appointment of ex-TCS veteran, Abid Ali Neemuchwala, to the newly created role of Wipro Group President and Chief Operating Officer has set tongues wagging, with many (including me) seeing this as a succession play. If so, we should expect another exit of Wipro top management who had pinned their hopes on succeeding Kurien – although there always was (and perhaps still is) the ‘wild card’ in the shape and form of Wipro Chief Strategy Officer Rishad Premji, son of founding majority shareholder and chairman, Azim Premji.

Watch this space.

NEW RESEARCH: Customer experience meets back office optimisation

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Commitment to customer experience strategies has driven investment across the front office but left areas of the back office, and technologies that straddle front and back office, starved of investment. Yet if back office operations are not up to standard, it is impossible to deliver a positive and consistent experience. Growing awareness of the long technology tail of customer experience enablement and the need meaningfully join the Logomany components is driving expansion in the back office operations management market and aiding its shift to a more strategic role. And it is a great example of the TechMarketView 'Join the Dots' theme in action. Back office operations management is a small component competing in a broad market so has to fight for visibility and budget but has the potential to punch above its weight and UK suppliers like AOMi and eg Solutions, along with significant providers such as NICE and Verint are showing how it is done.

Subscribers to the Enterprise Software & Application Services (ESAS) research stream can get the inside track on “Why you need back office optimisation for customer experience delivery” by clicking here. Non-subscribers can contact Deb Seth for details of how to take this service.    

While customer experience provides a topical focus for operations management it is not the only driver for this emerging market. Organisations struggling with economies of scale, those moving through digital transformation programmes, dealing with requirements to leverage global capacity or run shared services, are also investing in this back office area, as a means of achieving operational improvement and consistency through standardisation. Where service delivery is the core of the business (such as in BPS or outsourcing), back office operational management is a key part of efficient delivery, playing to cost management and differentiation through quality of service. While operations management stands on its own merits with scope for growth within enterprises, another growth area is within IT and business process services providers, as part of their own quality of service delivery enablement.

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