Capita has announced that its CEO, Jon Lewis, is to retire by the end of 2023 and will be replaced Adolfo Hernandez, vice president for global telecommunications at AWS. 

Lewis will remain with Capita until July 2024 to ensure a smooth transition. 

The announcement ends a period of leadership uncertainty for Capita. Lewis had informed the board in 2022 that he intended to depart, which started a succession-planning process. 

Hernandez will join Capita, having worked for Amazon Web Services for almost three years. Before AWS, he worked for Sun Microsystems and Alcatel-Lucent. 

Lewis took on the role of Capita CEO in December 2017, having served just over a year as CEO at Amec Foster Wheeler. Before that, he spent just over ten years at Halliburton.  

As well as overseeing the group's transformation, Lewis was also at the helm during several incidents. The outsourcing firm said in May that it expected to incur $25 million in costs in the wake of a cyber attack. 

The turnaround in the company's fortunes has been marked during Lewis’s tenure. A 10% decline in revenue from Capita Experience in 2021 became a 0.9% rise in 2022, while adjusted revenue increased by 2.4% to £2.8 billion. 2021’s growth was 0.1%. 

It also reported 50% of its pipeline was from growth with existing and new clients. 

David Lowden, chairman of Capita, said the company was delighted to have secured Hernandez. He said: “Adolfo has a great track record in accelerating revenue growth driven by digital services”. 

Lowden also paid tribute to Lewis and his decision to delay his retirement following March’s cyber incident. 

Lewis thanked Capita’s 50,000-strong workforce and commended them “for their hard work, commitment, and professionalism” during his time as CEO. 

Hernandez expressed excitement to join Capita, saying: “The Group is in strong financial health and well positioned for accelerated revenue growth in both its public service and customer experience markets, with a healthy pipeline of future opportunities”. 

While half-year results are not expected until 4 August, Capita described trading in the first six months of the year as “in line with company expectations”.  

In its most recent set of financial results, it said it expected further acceleration of revenue growth in Capita Public Service and continued revenue stability in Capita Experience. 

IT outsourcer Capita has admitted its “cyber incident” resulted in a data breach, with “around 4%” of its server estate impacted.

It said “there is currently some evidence of limited data exfiltration” and that the data “might include” customer, supplier, or colleague data.

The announcement is the most transparent account of the incident, the details of which  have been speculated for weeks.

Capita said that the “cyber incident” mainly affected staff access to Microsoft 365 products, but this access has now been restored.

The majority of Capita’s client services were not impacted by the incident and remained in operation, and Capita has now restored virtually all client services that were impacted,” it said in a regulatory notice today.

Capita said investigations have shown that the intrusion began on 22 March and was “interrupted” by the company on 31 March.

That day, Capita said it was experiencing “an IT issue” but it wasn’t until 3 April that it described it as a “cyber incident”.

Ransomware group Black Basta claimed responsibility for the attack, posting a number of documents online, but Capita has still not named the group in public-facing communications.

Earlier this week, Capita emailed shareholders explaining that they were still investigating whether the leak was genuine and if the files actually came from Capita, suggesting they could have come from other sources or the public domain.

The files included in the leak were sensitive in nature, such as passport scans, job applications, building floorplans, documents marked ‘confidential’, and files related to “Capita Nuclear”.

Capita’s client list includes major organizations in the UK including mobile operators O2 - the call centers of which experienced outages - and Vodafone; the NHS; various government departments such as the Department for Work and Pensions; plus the British Army and Royal Navy, among others.

According to industry expert Kevin Beaumont, threat intelligence data, which does not appear to have been made public, indicated earlier this week that Capita’s endpoints were found in their monitoring telemetry for Qakbot malware over a week prior to Capita’s announcement of an IT incident. 

“In English, Capita had hackers inside for weeks,” he said.

If true, the data would confirm Capita's admission that the intrusion began in March.

Although Black Basta is a known ransomware group, there is currently no indication that the incident involved the group’s encryptor.

If operating under a pure extortion model, the attack follows several in recent weeks from known ransomware gangs opting to avoid using encryptors in their attacks.

ALPHV’s attack on Western Digital appears to be a pure extortion incident, as does the myriad attacks from Cl0p abusing the GoAnywhere MFT vulnerability back in February and throughout March.

Black Basta is considered a sophisticated threat actor and usually operates using double extortion tactics. 

First discovered in 2022, according to Kroll, it uses a range of unique tactics to conduct attacks to steal data and infect systems with its ransomware payload.

Creator membership platform Patreon and its former staff have confirmed that the company has parted ways with its entire cyber security team.

Security and privacy engineer, and former senior security engineer at Patreon Emily Metcalfe, confirmed the news via a LinkedIn post that the company has let its security team leave.

“So for better or worse, I and the rest of the Patreon Security Team are no longer with the company,” she said. “As a result, I'm looking for a new Security or Privacy Engineering role and would appreciate any connections, advice, or job opportunities from folks in my network.”

Patreon has confirmed the reports to the wider media, saying that it will now outsource much of the security to external organisations after having “parted ways” with five employees.

“As a global platform, we will always prioritise the security of our creators’ and customers’ data,” it said in a statement to IT Pro. “As part of a strategic shift of a portion of our security programme, we have parted ways with five employees.

“We also partner with a number of external organisations to continuously develop our security capabilities and conduct regular security assessments to ensure we meet or exceed the highest industry standards. The changes made this week will have no impact on our ability to continue providing a secure and safe platform for our creators and patrons.”

The spokesperson for Patreon said the departing employees did not constitute its entire security team, however, they declined to specify what this meant and what security roles remain filled.

Cyber security experts have criticised Patreon’s decision to remove its in-house security team and rely on outsourced services.

“So basically they went with an MSSP probably because it's cheaper,” said one user discussing the situation online.

“They probably won't find it cheaper when they get hacked years from now and all they have is PowerPoint and Excel spreadsheets saying 'don't worry you're secure' for the previous years.”

“Not having in-house security is a disaster waiting to happen,” said another.

Patreon has a fairly strong history of avoiding cyber security crises; the only major incident it suffered was in 2015 in which it was hacked and customer data was leaked.

Users’ names and email addresses were involved in the breach, and there was the potential for encrypted passwords and social security numbers being exposed, too, it said at the time.

It was later revealed that 15GB worth of data was leaked online, which also included Patreon source code and database files, as reported by Ars Technica at the time.

UK retailer Next has apologised to employees for months of salary underpayment caused by a botched IT upgrade.

The company has been experiencing issues since February and the faults are related to a decision to outsource its payroll functions to US software giant Oracle, according to The Sunday Times.

It's unclear when or why Next opted to outsource its payroll systems to Oracle as neither company appears to have made any formal announcement of the move. The retail company usually develops software in-house but has struggled to make Oracle's systems work with its own and has been forced to implement a special team to spot-check errors manually. Oracle declined to comment on the issue.

Next also declined to say how many of its 43,000 workers had been affected, but reports suggest both weekly and monthly-paid staff have been short-changed with some missing as much as £200 per month. In some cases, staff have had their pension contributions deducted from their pay, though Next has said it will make sure that these problems will be rectified and all employee losses will be made good.

"Over the last few months we have experienced a number of issues with our new payroll system and have been tackling them as a matter of urgency," a Next spokesman said. "This is one of the very few instances where Next has outsourced critical software and we have learnt some important lessons about integrating our in-house applications with third-party platforms.

"We are acutely aware of the problems these payroll errors have caused some of our colleagues. We sincerely apologise to all those affected and assure them that we are resolving these problems as a priority."

This isn't the first time this year a UK retailer has experienced automated payroll issues; Supermarket Asda admitted that some workers lost out on as much as £500 due to problems with an external payroll system - some 5,500 members of staff were reportedly affected.

Indian IT outsourcing firm HCL Technologies has been accused of underpaying its workers on H-1B visas in the US by $95 million annually, with a call issued for the federal government to curb abuses of the programme.

Thousands of skilled migrants with H-1B visas working as subcontractors for corporations like Google and Disney appear to have been underpaid by at least $95 million, states a new report from the Economic Policy Institute (EPI). The workers were employed by HCL Technologies, which earned $11 billion in revenue last year.

EPI analysis of an internal HCL document, released as part of a whistleblower lawsuit against the firm shows large-scale illegal underpayment of H-1B workers is a core part of the company’s competitive strategy, allowing it to expand its business and increase profits.

The data from the company’s internal document suggests it underpays H-1B workers in virtually all jobs across all business lines.

The institute said the victims don’t only include H-1B workers, but also US workers who are either displaced or whose wages and working conditions degrade when employers are allowed to underpay skilled migrant workers with impunity.

EPI said that this apparent blatant lawbreaking by one of the leading H-1B outsourcing companies should finally prompt action by the federal government to curb abuses of the H-1B programme. The institute claimed that the abuses are likely to be widespread among H-1B employers as the Department of Labor (DOL) has done virtually nothing to ensure programme integrity by enforcing wage rules.

It added that the DOL props up the abusive outsourcing business model by treating contractor hires differently than direct hires when enforcing the wage and other provisions in the H-1B statute that are supposed to protect H-1B and US workers. This outsourcing loophole allows companies like HCL and big tech companies that use outsourcing firms to get around those provisions.

EPI said that the DOL is in effect subsidising the offshoring of high-paying US jobs in information technology that once served as a pathway to the middle class, including for workers of colour, due to its failure to enforce wage laws or close the outsourcing loophole.

“HCL Technologies is strictly compliant with all relevant rules and regulations and is committed to pay wages to all employees in accordance with applicable laws," a spokesperson from HCL Technologies said to IT Pro.

IT Pro has contacted the DOL for comment.

The report stated that HCL earned around $7 billion from its US operations in 2020, ranking eighth in total H-1B approvals with over 4,000 in 2020. It has also received more than 31,000 visas since 2009. It is India’s third-largest IT outsourcing firm, earning 63% of its $11 billion in revenue in 2020 from the US.

It maximises profit by finding H-1B workers who are significantly less expensive to employ than already-employed US workers.

This automatically-generated transcript is taken from the IT Pro Podcast episode ‘How umbrella companies exploit IT contractors’. To listen to the full episode, click here. We apologise for any errors.

Adam Shepherd

Hi, I'm Adam Shepherd.

Jane McCallion

And I'm Jane McCallion.

Adam

And you're listening to the IT Pro Podcast. It seems that Summer is officially over, so fittingly, we’re talking this week about umbrellas - or more specifically, umbrella companies.

Jane

Now, rather than manufacturing rain deflection devices, umbrella companies act as an intermediary between contractors and their clients. They're commonly used within the IT industry. And if you've been in the game for a while, chances are you've probably interacted with one in some capacity.

Adam

However, concerns have been raised about the conduct and ethics of umbrella companies. Together with Rebecca Seeley Harris, chair of the Employment Status Forum. InniAccounts CEO James Poyser has been campaigning for government action, accusing umbrella companies of dodging taxes, scamming workers and skirting their rights.

Jane

He joins us this week to discuss why this has become such a critical issue and how both government and the private sector can address it. James, it's pleasure to have you back with us.

James Poyser

Indeed, yeah, absolutely. And a lot's happened since we last spoke!

Jane

Just a bit.

Adam

So James, for those who might not be familiar, what is an umbrella company? And why have they become so relevant now?

James

So the easiest way to think about an umbrella company, it's like an outsourced payroll provider. So if you're an IT contractor, you get a temporary contract, the client is going to hand over some money that's, that's gross, that hasn't been taxed. And somebody along the way needs to deduct the taxes, pay a pay slip, pay the money over to HMRC. And if the end client doesn't want to do this themselves, then they can use an umbrella company. And that's essentially what an umbrella does, takes this untaxed income, and passes it on to HMRC, and passes net pay to the contractor. It's slightly different, though, to just being purely an outsourced payroll provider, because when you use an umbrella company, they become your employer. So if you think if you're an end client, this is great because they don't have to deal with any of the complexities of employment law, unemployment issues like discrimination, maternity, pesky redundancy pay, and all of those things. They can hand it off entirely to an umbrella company who take care of all of that for them. And to your question about why is it so relevant right now? Well, if you think about the IR35 change, which I'm sure many of your listeners are aware of, where with IR35, your end client has to determine whether you are an employee who needs to be taxed like an employee, or whether you're actually self employed, and you can take responsibility for your own tax. So you would appoint an accountant and work together to pay the right amount of tax. Now, the challenge with IR35 is that end clients have got to assess each individual contractor to figure out whether an employee or whether they're self employed. And if you're a large bank with thousands of contractors, it's a really big task. So a lot of the end clients are taking the easy option, which is saying, you know what, we're not going to bother doing these assessments, all we're going to do is mandate that everybody uses an umbrella company, so everybody becomes employees for tax purposes. And better still, you know, a bonus for the clients. They don't have to deal with those employment issues. And that's why there's been such a huge influx of umbrella users over the last year or so. And one of the challenges is the umbrella market is unregulated. And even the head of a professional body who represents umbrella companies has described it as the Wild West, it's full of opportunists. And contractors for many umbrellas are seen as a commodity that needs to be exploited. And that's the challenges that we're facing at the moment.

Jane

So, I mean, this sounds like it could be quite convenient, especially for the end client and for the umbrella company itself, but to an extent for contractors as well, but you've alleged that some umbrella companies are being used to facilitate unethical business practices. What kind of infractions have you seen in the space?

James

Sure, well, I mean, that there's really, there's the quite egregious stuff that I'm sure a lot of people have heard of. So something that's quite famous is something called the loan charge. So that's one extreme where umbrella companies were paying contractors via loans, and these loans didn't attract income tax and National Insurance. And they sold these schemes to the contractor saying, you know, this is QC approved, or it's HMRC approved; use our umbrella company, and we can help you to maximise, maximise your take home pay, and kind of so so some people went into that with their eyes open, many of the workers were forced into it, their recruitment agents, made them use a particular umbrella company that was using these types of loan schemes because the agent was getting great kickbacks by pushing business in their way. And so that's the kind of the one extreme. HMRC have clamped down on this. The challenge with this so HMRC have gone after contractors who have used these schemes and making them pay back taxes that they've missed plus really, really big penalties on top of that, which have led, i'm sure again, your listeners will know, to a number of suicides on the back of that because this is life changing amounts of money that have been demanded. And one of the challenges there is that the scheme operators themselves, the people who set up these elaborate loan schemes, have never been prosecuted, and they are very rich from the back of selling these schemes. So that's kind of one extreme, and they're still out there in the market. And you know, for each one that springs up HMRC is trying pretty hard to close them down as quickly as they can. So that's, that's the big stuff a lot of people would have heard of, but there's a big problem, which is the things that are lawful, but deeply unethical. So it's things like giving back holiday pay, so you know, an umbrella company who holds back some of your income for holiday pay. And if you don't take that holiday, then they pocket the money. There's things like skimming from payslips. So we know of a few umbrella companies and these are large umbrella companies, these aren't, these aren't tinpot organisations, these are large umbrella companies where their pay slips don't add up. And each week you're out of pocket by, you know, five to 20 pounds a week. When you multiply that through 10,000 contractors with that umbrella company, it's a lot of money. Some of the umbrella companies will sell bogus products without you knowing, such as one umbrella company sells a very poor imitation of income protection insurance. But they've structured it in such a way that they don't have to be FCA, FCA regulated to sell it and they just add it onto your pay slip without you knowing. Overcharging National Insurance. So making you pay more National Insurance than is due but then paying the correct amount to HMRC and keeping the bit in the middle. Overcharging the apprenticeship levy, right down to things like forcing people to opt out of regulations that are designed to protect them and making that a condition of employment. So you know, these schemes are absolutely rife. And these are all, you know, it's just the sum of these little skims and scams, that make umbrellas so profitable. It's got so bad. So last week, the TUC called for an outright ban on umbrella companies. And they turned around and said, these scandalous workplace practices have no place in modern Britain. So it is a really big problem.

Jane

Do you know what, it' s funny, especially listening to the first part of the problem with the loans.

James

Yeah.

Jane

It really reminds me of the sub-postmasters and Horizon, which has only recently been resolved, that it was the subpostmasters who were, you know, fined and put in jail, rather than the company that developed Horizon, or indeed the Post Office itself, not that we want to put the whole Post Office in jail. But it's, it sounds very similar to that kind of thing. And the impact that it's having on people's lives sounds very similar.

James

Indeed, yeah, it's one thing to talk about, you know, I suspect if you're, if you're, you know, working in IT, and you're earning £500 a day, you probably won't attract much sympathy from the Daily Mail, if you got caught out with one of these, one of these schemes. But let's say that you are, you know, a minimum wage worker, you're a bank nurse or care worker who has been pushed into one of these schemes without knowing it, and then you're on the hook for back taxes, and a large penalty as well. That's when it's, you know, it's really, it's quite, quite troublesome.

Adam

So, as you've mentioned, this affects a wide variety of different kind of job roles and industries. But why is it such an important issue for IT professionals in particular?

James

Okay, so it's a good question. In our experience of working with, with IT professionals who are contracting and consulting, there's kind of there's a couple of camps, you're either, you know, you're a high earner, you know, so you might be, you know, think about the kind of the in demand roles, that moment, things like, you know, cybersecurity, cloud architects, that people where it's, you know, it's, it's, it's rocking horse teeth, trying to find people to do those roles at the moment. So they're commanding, you know, good, good daily rates. And from an umbrella point of view, you're very rich pickings, because let's take somebody who was earning £500 a day, you would probably pay an umbrella company about £900 a year, in fees, so that that's your cost that you would pay over. But from you, an umbrella company, we did our calculations, and they can lift about £3,200 a year on top of that, without you knowing, and that's money from you, from HMRC. So, you know, when you talk about those big numbers, there's a big opportunity there. And if you do fall in that category, so if you are in one of these, you know, a fortunate position where you're a high earner, and you've got in demand skills, my advice to you would be to work really, really hard to push to get yourself outside IR35. So you don't have to go near an umbrella company at all and you can take responsibility for your income and paying the right amount of tax and making sure that nobody has got their fingers in the till on the way. So that's the, that's the first cohort of IT workers. The second one are if we look at people who are in roles where there's a lot of supply, so let's think about something like first line IT support where there's a lot of people out there and a lot of the work there is temporary. It's contract-based. A lot of people who are willing to fill those roles. And the challenge with that, because there's a lot of supply, those kind of workers are ripe to be exploited. And that's where things like recruitment agents say, you have to use an umbrella company, and you have to use this specific one, so you don't even get a choice about the umbrella company that you use. My advice, if you're in that position, push really hard, because if you are, if you're a lower paid worker, push really hard to see if you can get a fixed term contract employed directly with the end client, you can still go through a recruitment agent, so that bit's absolutely fine. But you can push hard and say, Actually, I want to go on the books at the end client, and they can employ you as a temporary worker, and it means that you're in a market that's gonna be regulated when it comes to payroll, and you're gonna have more rights and protections. If they can't do that, push your recruitment agent, and ask to go on the agency payroll instead of going on to an umbrella. The thing is with this, so a lot of agents will offer payroll, but you've got to remember the commercials here. If a recruitment agent puts you on the payroll, you suddenly become a cost centre, they've got to run the payroll, they can't charge you for that; it's a cost to them. If they push you down the umbrella route, then the umbrellas will pay referral fees and kickbacks to the recruitment agent. And then you become a profit centre. So that's why a lot of recruitment agents are reluctant to support agency payroll, because they see you as a means to generate more profit.

Jane

If you find yourself in this situation, is it worth just walking away? I know everybody wants work, and nobody likes to have no income. But you know, if you're going to end up worse off for it, is it worth if they're just really pushing you to go to an umbrella company and they're just not having it any other way, should you just walk away?

James

I mean, it's a, it's a good question. It's, it depends, doesn't it? Because it depends on your personal circumstance. It depends on the skills that you've got, it depends how many roles are out there that you could, that you could, you could fill. And this is the challenge isn't it, if you don't have any options, then it's kind of, it's a red flag for being exploited. Because you know, you your power has kind of diminished if you don't have that ability to walk away. But just keep in mind some of the risks that if you do get pushed into one of these rogue schemes, that you're on the hook, you know, it's not going to be a recruitment agent, or the umbrella company who HMRC are going to be knocking on the door for - it's going to be you. So you need to go into it with your, with your eyes open.

Adam

So James, you've called, along with your colleague Rebecca Seeley Harris, for more regulation to address the issue of umbrella companies and the lack of regulation in this space. Can you tell us a little bit more about some of the recommendations that you've made?

James

Yes, yeah, absolutely. And I think a lot of people will be very surprised to learn that this market isn't regulated. It's absolutely bonkers when you consider how many people are employed by umbrella companies, we're talking hundreds of thousands of people in many different industries. And it's not regulated. So myself and Rebecca have put a paper forward to the government, which is basically a blueprint on how to get from where we are today, to get to a place where this market is regulated. And some of the recommendations that we've got are things like, you know, fixing holiday pay, so making, you know, giving absolute clarity about expectations around holiday pay, to stop that pocketing of holiday pay. Making sure that pay slips are clearer to stop those skims and scams. And, you know, use an umbrella company, your pay slip's in two parts. One is a pay slip that you would recognise as an employee. And you never see any problems there. Because there's a good amount of legislation that covers that bit. There's also a second part to your pay slip, which is called something like a reconciliation statement or whatever term they want to use. And that's completely unregulated. And they can put what they want on there. And we want to see regulation that tidies that whole thing up. So you can see that money when it comes in from your end client, right the way to when it goes into your, into your bank account, and everything that happens along the way. From a regulation point of view, there's a few different government bodies at the moment that look after the temporary workforce market. And what we called for is the setting up of a single enforcement body to look after this entire market and umbrella companies. The great news is the government has already responded to that and said, Yes, we are going to do it. So they are charging ahead and getting a single enforcement body together. So that's one government organisation that will take responsibility for this market and the regulation of it. And then underneath that, there's some things that we want to do in terms of strengthening existing regulations, bringing things in and just tightening up and tidying up this market. So it's things like stopping recruitment agents forcing workers to use an umbrella as a condition of employment, that is not okay. Making the kickbacks that go from umbrella companies to recruitment agents illegal because that really does drive a lot of these behaviours. The stopping advertising contracts at an inflated rate. And so you know, there's something that's very, it's quite bonkers. It's quite unique to IT as well. When we talk about these umbrella rates, it's that daily rates are advertised before any tax, and it wouldn't happen anywhere else. If you, if your teenage kids are going to get a job, a temporary job flipping, flipping burgers at McDonald's, it would be a gross rate of pay, you know, after all the employment taxes have been paid. But for some reason, it's kind of okay in IT to advertise these rates before things like employers National Insurance and the apprenticeship levy are taken off. So those are the kind of things we want to see stopped, and for a fair rate of pay to be advertised, and things like the loan charges. So as we said, right at the start of the podcast, at the moment, the individuals, the taxpayers themselves, the IT contractors are on the hook for loan charges. And what we want to see is to make the promoters responsible for any tax issues, not the individuals.

Adam

The thing that I keep coming back to throughout all this is the 1920s and 30s. In the US in America, this, this kind of has the air of the kind of situation that you used to get with like railroad workers, and the kind of railway robber barons, you know, the idea of being forced to work for one specific umbrella company, as a condition of employment is crazy to me.

James

Yeah. I mean, and the fact that they, you know, in many places that they exist in the first place is a little bit bonkers, because there's plenty of ways out there to pay people fairly and to make sure they're protected. And it feels like that's the kind of economy that we, that we should have, and we should be proud of is where temporary work is absolutely fine. And people, you know, both, both, both ends of the spectrum can benefit from that, be it the end client or the workers themselves. But let's just make sure it's fair, right, let's make sure that people aren't getting exploited along the way. And that's one of the challenges with this not being regulated is there's just too much opportunity for, for exploitation. And, you know, it kind of, it feels like, so there's a chap called Matthew Taylor, who wrote a report on modern Britain and, and working and the future of working in the UK. And, you know, there's this, there's this real opportunity for the UK to be really famous for things like having a really flexible, contingent, temporary workforce that allows us just to move quickly, be very agile and get things done. Yet that hasn't translated into into legislation. I feel like you know, our contractors and consultants and temporary workers, they should be celebrated. And they should be protected, because I think it gives a great, as an economy, it gives a great advantage against many other developed economies. But unfortunately, legislation isn't keeping up with this. And this is the problem we're facing today.

Jane

Yeah, and that's a good point. Plenty of people in IT, indeed, in journalism, nursing, whatever, choose to become independent contractors, because that suits them better as well. And like you say, for companies, it suits them better. So it does seem to me as well, a little bit, a little bit mad. You know, we're kind of undermining the fact that there is something that could be really good with something that feels almost like a pyramid scheme.

Adam

I mean, the irony is, for me, a lot of contractors, you know, become free agents and freelancers, specifically to get away from restrictive employment conditions and to have more freedom in who they work for, how they work, all of that kind of stuff. So for them to get kind of almost accidentally sucked into these exploitative situations seems very unfair.

James

Yes. Yeah, absolutely. And, you know, it's, I think, sometimes you can't help but feel that if you looked at it through the lens of HMRC, they would assume that every single IT contractor became a contractor with one objective in mind, which is to dodge tax. And, you know, if you spend time talking to IT, to IT contractors, it's absolutely not the case. It's things like, you know, you know this well, so, you're a technical specialist, and you realise, if you stay as a perm, you're going to have to become a manager, and that really isn't your jam. So you're going to become a contractor, you're going to become a consultant, you want to work on a variety of different products, you want more flexibility, work life balance, perhaps you've got kids who need a bit more help at home. So you can work that three day week and have a couple of days at home, and still earn the same as if you're a permanent employee. There's all these, there's many, many reasons why people move into becoming a contractor or a consultant. And let's just make sure it's fair, right? It's not okay for people to make that decision. And then for somebody in the supply chain to think it's okay to exploit them. And that's the problem that we've got today.

Adam

So, James, how can both employers and contractors spot a good umbrella, an umbrella that isn't going to take advantage of them, that isn't going to place these restrictions on them and dip their hands into their pockets?

James

Yeah, that's, I mean, it's a really good question. I mean, the good news is there are lots of umbrella companies out there so there is a lot of choice. The bad news is it's very difficult to sort the wheat from the chaff, particularly if you're standing there as an outsider, you know, I've been in this market for, you know, 15 years now. And I can tell you who some of the really good guys are. But that's just through developing personal relationships with them. And so I think it's a good starting point. So you can, you can consider some of the professional bodies, there's two professional bodies, that look after umbrella companies. The thing to bear in mind with these, though, are that the professional bodies are there to look after the umbrella companies, not you as a consultant or contractor. So it's a good starter for 10. But don't think by any stretch of imagination, because an umbrella company's got a badge, that they're always going to act in your best interests. So instead, I think it's really worthwhile reaching out and talking to umbrella companies directly and having a few conversations. And there's so much choice out there that if something smells wrong, then you can walk away, if you just get the slightest whiff of suspicion, then walk away from that umbrella company and start asking around and go to a different umbrella company. And the things that you ought to look out for are, ask them for an example payslip and see how things are broken down. Ask them about their holiday pay, and how that works. Go out there and ask them about recruitment agent referral fees, because the good umbrellas will put their hands up and say, You know what, we don't like doing it, but we do it. And this is how we approach it. And if they skirt the question altogether, then that's a big, big red flag for me. Certainly, you know, with your recruitment agent, if they're asking you, if they're recommending umbrella companies, if they're a member of a recruitment professional body, they, they're obliged to be transparent. So you can ask your recruitment agency, okay, so you're going to recommend these, these umbrella companies to me, what's in it for you. And if one of those umbrella companies is paying more in commission to that recruitment agent than you're paying them as a fee, then that's a massive red flag, because the only place that can come from is from these skims and scams that we've, that we've, that we've mentioned. And the, you know, again, I don't, I don't want to name any names in terms of who you should go for. But in my experience, the, the big guys are generally best avoided, and go out there for the smaller, independently owned companies, there's a number of firms out there, who are people who've worked in the umbrella industry for a long time, and don't really like what they've seen and thought, you know what, I'm gonna do this, do this differently, and go out there and set up my own umbrella company. A lot of smaller umbrella companies are owner managed. So pick up the phone, have a chat to them. Take a look on LinkedIn. So a lot of the umbrella companies, the smaller umbrella company owners are active on LinkedIn, and you'll very quickly be able to figure out what's going on. Are they giving out good solid advice? Or are they just delivering a constant sales pitch? And you'll soon figure out who the good guys are and and who's worth avoiding.

Adam

Am I right in thinking that Off-Payroll includes a section for kind of comparison of umbrella companies, for contractors to share their experiences?

James

So the moment Off-Payroll has got a section on umbrellas, but we're specifically on there talking about how they worked through Coronavirus and the the job retention scheme. However, in the second half of this year, we are about to launch a new feature, a new section. And for each umbrella company, we're coming up with a checklist of about 30 items that covers a lot of the things that were discussed in this podcast. So yeah, stay tuned, we're a couple months away from getting that over line. It's an IT project, after all! So we're running a little bit, a little bit behind. But hopefully yes, that will help to bring a bit more transparency to the market and help people to find the good umbrella companies.

Jane

So obviously, you know, most of the client companies want to behave and act ethically as well. What can they do to make sure that any umbrella company they are using or working with is behaving in an ethical way as well?

James

Yeah, I mean, it's a great question. I think it varies from organisation to organisation, so many organisations know what's going on in their supply chain. And for many others, an umbrella company is very, very far down supply chain, they just don't have a visibility of it, because it might go through two or three different recruitment agents, and then to the umbrella and then to the end worker. And so many organisations in our experience don't actually have that much visibility because they don't have day to day contact with umbrella companies. But they need to think quite carefully about that, for two reasons. One's very tangible and one's a bit more intangible. Let's talk about something very tangible, which is something called the Criminal Finances Act. So if you're an end client, and somebody in your supply chain is carrying out tax evasion, you're on the hook for it. So as an end client, you are criminally liable if you do not prevent an umbrella company from carrying out tax evasion. So to put your hands up and say I knew nothing about it guv doesn't wash so end clients have actually got to think very carefully about what's going on and who they've got in their labour supply chain. And the second part is more about the, the kind of, the Corporate Social Responsibility risk. So is this really a market that you want to be part of when you're seeing workers exploited, the skims, the scams, the commissions that have been paid to recruitment agents. Some of the umbrella companies out there have links to organised crime...

Adam

Really?

James

Yeah, did I not mention that?

Jane

When you were talking about, when you, Adam, raised, you know, kind of like a flashback to 100 years ago, I was thinking, wow, this sounds like a protection racket as well.

Adam

Yeah, it really does!

James

Yeah, yeah, there is, there is that yeah, that goes off, particularly in offshore tax jurisdictions. There's, there's quite a big operation going on, at the moment, in the Isle of Man, where umbrella companies are implicated in that. And it's kind of organised crime, you know, it's not, it's not some guy on the street, you know, flogging you car stereos, you know, it's far more sophisticated than that, involving things like VAT fraud. You know, but but it but it's happening, it's going on out there because, you know, the money involved is is huge, right? You know, when, when you've got, you know, a thousand IT contractors earning £500 a day, it's, it's quite a tempting proposition to have your, have your fingers in the till, so that that's why these things happen. So that's, you know, that the risk to an organisation, think about that corporate response and social responsibility and who you want to be. And some end clients are getting this right, and what they're doing is realising that they need to audit their labour supply chain from end to end. And there is a very large online retailer, for example, who are getting this right, so they use umbrella companies throughout their supply chain, but they partner and they select the umbrella companies, they do a thorough audit of everything, they make sure their workers are protected. And we've seen things like you know, so throughout Coronavirus, the employees of the umbrellas working for this particular end client, very well protected, very well looked after throughout the, throughout the pandemic. So you can do things correctly, it is possible to have an umbrella in your supply chain, and to be a good, honest, ethical employer, as well. And if you just kind of sit back, sit there at arm's length and say, it's something that happens further down supply chain, it's the recruiters problem, then you need to be very, very careful that you don't end up with a few problems in the future around the Criminal Finances Act.

Adam

I mean, fundamentally, you should treat your labour supply chain the same way you treat any other supply chain, you know, if you know, if you don't know what's going on throughout it, there's a huge amount of risk of kind of, of suppliers, doing, you know, unscrupulous things, skirting regulations and saying, Oh, no, you know, we, we had no knowledge of it, you know, Your Honour. Yes. Doesn't, doesn't always wash. And you know, even if you managed to dodge, you know, the legal ramifications and managed to dodge prosecution, it's not gonna look great from a reputational perspective, you know, organisations might think twice with, about partnering with you, if you are one of these companies that kind of distances themselves from what happens in their own supply chain.

Jane

So we've laid out quite a dire landscape here. Are things improving? Or are they likely to get worse, before they get better? Are they going to get better?

James

I have seen no sign of improving as of yet. And obviously, myself and Rebecca are pushing for regulation. And the government is saying yep, we're setting up a single enforcement body. But the machine that is government takes time, it is going to be many years until the cavalry arrives with the legislation to sort this out. So, so don't count on something happening from a legislative point of view anytime soon to fix this market. So then it's down to the power of the contractors. And we've seen this with Off-Payroll. So contractors who are avoiding unfair clients, clients who can't deliver fair IR35 determinations. And I think we're going to see the same thing start to happen here. The IT contractor community is very tightly knit, contractors know one another, they ask each other for recommendations. And if one of them has a bad experience with an umbrella company, it's going to be on that WhatsApp group, it's going to be shared. And those those kind of things will start to ripple through the the IT contractor community. And hopefully, conversely, the recommendations for the good umbrellas will also go out through the, through the community as well. So whilst I don't think the legislation is going to have a big impact, I think probably what's going to happen is that as the number of people who are using umbrella companies starts to increase. I think the story won't go away. I think we'll hear more and more about the problems that are going on, contractors coming out with specific examples and saying yes, you know, I was impacted by that as well. I've lost out on £2,000 of holiday pay because of this industry giant who pocketed it. So I think we will see more of a grassroots approach to umbrella companies and helping people to find good umbrella companies. This is obviously great for the IT world, because we're talking about mainly professional people, well connected in a place where they've got a choice and they can do something about it. But we still need this legislation to protect people who aren't in a position to have those choices.

Adam

Well, I'm afraid that's what we've got time for this week. But James, thank you for coming back to join us.

James

Thank you.

Jane

You can find links to all of the topics we've spoken about today in the show notes and even more on our website itpro.co.uk.

Adam

You can also follow us on Twitter at @ITPro as well as Facebook, LinkedIn, and YouTube.

Jane

If you're enjoying the IT Pro Podcast, don't forget to subscribe and if you can, leave a rating and a review wherever you listen to podcasts, and we'll be back next week with more from the world of IT. But until then, goodbye.

Adam

Bye.

For many IT professionals, the decision to move from a permanent position to a contractor or consultant role has given them more flexibility, better earning potential and a healthier work-life balance. There are those, however, who use legal loopholes to prey on IT contractors, lining their own pockets by cheating both them and HMRC out of rightful earnings.

In this episode of the IT Pro Podcast, we’re joined by James Poyser, InniAccounts CEO and founder of OffPayroll.org, to discuss the role that umbrella companies play in the IT industry, and why regulation is needed to stop unscrupulous umbrellas from dipping their hands into the cookie jar.

Highlights

“One of the challenges is the umbrella market is unregulated. And even the head of a professional body who represents umbrella companies has described it as the Wild West; it's full of opportunists. And contractors for many umbrellas are seen as a commodity that needs to be exploited.”

“When we talk about these umbrella rates, it's that daily rates are advertised before any tax, and it wouldn't happen anywhere else. If your teenage kids are going to get a temporary job flipping burgers at McDonald's, it would be a gross rate of pay, after all the employment taxes have been paid. But for some reason, it's kind of okay in IT to advertise these rates before things like employers National Insurance and the apprenticeship levy are taken off. So those are the kind of things we want to see stopped, and for a fair rate of pay to be advertised.”

“The IT contractor community is very tightly knit; contractors know one another, they ask each other for recommendations. And if one of them has a bad experience with an umbrella company, it's going to be on that WhatsApp group, it's going to be shared. And those kind of things will start to ripple through the IT contractor community. And hopefully, conversely, the recommendations for the good umbrellas will also go out through the community as well.”

Read the full transcript here.

Footnotes

• IR35 news: HM Courts & Tribunal Service faces £12.5 million IR35 bill
• IR35 insurance: What is it and do you need it?
• The IT Pro Podcast: IR35 - what happens now?
• What is IR35?
• IT Pro 20/20: How regulation is shaping innovation
• Most tech workers plan to leave their roles in the next 12 months
• Blaze your career path with these seven high-tech freelance jobs
• IT Pro Panel: The truth about talent

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The financial services industry is not doing enough to mitigate a rising volume of IT failures, spurred on by a reluctance to upgrade legacy technology, a parliamentary inquiry has found.

Regulators, such as the Financial Conduct Authority (FCA), are also not doing enough to clamp down on management failures within UK banks, which often use cost or difficulty as "excuses" not to make vital upgrades to legacy systems.

With online banking rising in popularity, the severity of system failures and service outages has also seen an "unacceptable" rise, according to findings published by the House of Commons' Treasury Select Committee.

The report concluded the impact of these failures range from an inconvenience to customer harm, and even threats to a business' viability. The lack of consistent and accurate recording of data on such incidents is also concerning.

"The number of IT failures that have occurred in the financial services sector, including TSB, Visa and Barclays, and the harm caused to consumers is unacceptable," said the inquiry's lead member Steve Baker MP.

"The regulators must take action to improve the operational resilience of financial services sector firms. They should increase the financial sector levies if greater resources are required, ensure individuals and firms are held to account for their role in IT failures, and ensure that firms resolve customer complaints and award compensation quickly.

"For too long, financial institutions issue hollow words after their systems have failed, which is of no help to customers left cashless and cut-off. And for too long, we have waited for a comprehensive account of what happened during the TSB IT failure."

MPs launched this inquiry to examine the cause behind such incidents, reasons for their frequency, and what regulators can do to mitigate the damage.

As the report identified, TSB's IT meltdown during 2018 is the most prominent example of an online banking outage in recent years.

The major incident, which lasted several days, was caused by a major transfer of 1.3 billion customer records to a new IT system. A post-mortem analysis by IBM subsequently showed the bank did not carry out rigorous enough testing.

TSB has not been the only institution to have suffered banking outages, with figures compiled by the consumer watchdog Which? showing customers with major banks suffered outages 302 incidents in the last nine months of 2018. Another example of a prominent incident saw NatWest, RBS and Ulster Bank hit by website outages in August this year.

Beyond the work banks must do to ensure their systems are resilient, the MPs found that regulators must do far more to hold industry giants to account when failures do occur. Poor management and short-sightedness, for example, are key reasons why regulators must intervene to ensure banks aren't exposing customers to risk due to legacy systems.

When companies embrace new technology, poor management of the transitions required is one of the major causes of IT failure, the report added, with time and cost pressures leading banks to "cut corners".

Banks themselves, moreover, must adopt an attitude to ensure robust procedures are in place when incidents do occur, treating them not as a possibility but a probability.

Meanwhile, the use of third-party providers has also come under scrutiny, with the select committee urging regulators to highlight the risks of using services such as cloud providers.

The report highlighted Bank of England statistics that show a quarter of major banks, and a third of payment activity, is hosted on the public cloud. This means banks and regulators must think about the implications for concentrating operations in the hands of just a few platforms.

The risks to services of a major operational incident at cloud providers like Amazon Web Services (AWS) or Google Cloud Platform (GCP) could be significant, with the market posing a "systemic risk". There should, therefore, be a case for regulating these cloud service providers to ensure high standards of operational resilience.

The report listed a number of suggestions for mitigating the risk of concentration, but conceded the market is already saturated and there was "probably nothing the Government or Regulators can do" to reduce this in the short-term.

Some measures, such as establishing channels of communication with suppliers during an incident, and building applications that can substitute a critical supplier with another, could go towards mitigating damage.

"This call for regulation and financial levies is a step in the right direction towards holding banks accountable for their actions," said Ivanti's VP for EMEA Andy Baldin.

"Some calls to action have already been taken to restrict how long banking services are allowed to be down for without consequence, such as last year's initiative to restrict maximum outage time to two days. However, the stakes are constantly increasing and soon even this will become unacceptable.

"Banks must adopt new processes and tools that leverage the very best of the systems utilised in industries such as military and infrastructure. These systems have the capability to reduce the two-day maximum to a matter of minutes in the next few years - working towards a new model of virtually zero-downtime."

Apple is being investigated for allegedly coercive and bullying behaviour towards companies in its Japanese supply chain.

The Japan Fair Trade Commission (JFTC), equivalent to the UK Competition and Markets Authority, has opened an investigation into whether the tech giant forced 10 Japanese companies to hand over information on their technology, manufacturing processes and other IP free of charge.

At least one firm has said that in conversations with Apple, the industry heavyweight refused to renegotiate the supposedly unlawful terms of its contract, according to Japanese outlet Mainichi.

This contract stipulated that Apple and its affiliates are allowed to use technologies, manufacturing processes and other intellectual property provided by these companies for free. The unnamed suplier disputed the contract was on the ground that these terms violated intellectual property rights. Apple, it's claimed, retaliated by threatening to discontinue all business discussions with the parts maker.

Another company told the JFTC that Apple had previously forced Japanese companies to lower their prices by disclosing the information it had gained through these contractual clauses to other parts manufacturers.

The JFTC learned of this behaviour in late 2018 after conducting an industrial survey regarding associations between Japanes companies and other firms, and subsequently interviewed them for further details.

A client of such a size as Apple would be a huge advantage to firms in the region, and other parts of the world, given the value of having such a major company as a client.

The JFTC is considering whether Japanese firms were therefore put in such a position as to accept unfair terms to any agreement based on the idea that any business with Apple would be far more desirable than losing Apple as a client.

IT Pro approached Apple for a response to the allegations, but hadn't received a response at the time of publication.

Digital transformation involves integrating cutting-edge digital technologies such as artificial intelligence, cloud computing, and advanced analytics across all business operations, fundamentally reshaping how organizations function and deliver value. This process is inherently complex and highly customized, varying widely between industries and individual businesses. To navigate these challenges, organizations increasingly turn to managed IT service providers (MSPs).

MSPs assume responsibility for managing and securing IT infrastructure, enabling companies to focus on innovation and core business objectives. From deploying cloud-native applications to upgrading physical and virtual systems, MSPs handle ongoing maintenance and optimization. This partnership allows internal teams to leverage new digital capabilities such as AI-driven automation and real-time analytics without being sidetracked by technical complexities.

While the shift to remote and hybrid work accelerated during the COVID-19 pandemic, these flexible models have become the new standard. MSPs continue to play a vital role, supporting organizations as they adopt new software, hardware, and security measures tailored for distributed teams. Services such as VoIP, remote monitoring and management (RMM), and advanced cybersecurity are now essential for maintaining productivity and business resilience.

Digital transformation is an ongoing journey, not a one-time project. As businesses increasingly embrace emerging technologies, including generative AI, IoT, and automation, the demand for MSPs remains strong. Organizations that partner with MSPs are better positioned to stay agile, secure, and competitive in today’s fast-evolving digital landscape.

What can managed IT do for your business?

Managed IT services have moved far beyond the outdated break/fix approach. Today’s MSPs deliver proactive, continuously monitored solutions often via subscription-based models that offer predictable costs and highly reliable IT operations. This modern approach empowers businesses to budget more effectively and experience fewer disruptions.

The range of MSP services is now broader than ever. In addition to essential daily support, MSPs offer advanced capabilities such as disaster recovery, robust network security, cloud management, and even AI-driven analytics. This model is ideal for organizations aiming to scale efficiently, avoid heavy internal IT investments, or focus internal resources on strategic innovation rather than routine maintenance.

Service level agreements (SLAs) remain a cornerstone of outsourced IT relationships. They clearly define performance standards, response times, and remedies for service shortfalls, ensuring transparency and accountability for both provider and client.

Modern managed IT services cover a comprehensive suite of business functions, including application management, network and server administration, payroll system oversight, and backup/recovery solutions. Managed print services (MPS) for workstations and printers are also commonly included, streamlining device management across the organization.

MSPs can simplify hardware procurement, especially for remote and hybrid teams, by handling device sourcing, deployment, and lifecycle management. This streamlines IT management, ensures policy compliance, and maintains oversight for corporate purchasing and IT departments.

Cloud services management is a significant component of modern managed IT offerings. MSPs can manage multi-cloud environments, optimise resource usage, and act as intermediaries with cloud providers. This expertise is particularly valuable for small and medium-sized businesses (SMBs) that may lack the internal resources to effectively manage complex cloud environments.

Security continues to be a top priority. Many MSPs now operate as managed security service providers (MSSPs), offering end-to-end protection through threat detection, vulnerability management, patch management, and rapid incident response. These comprehensive security solutions help companies maintain a robust defense in the light of increasingly sophisticated cyber threats.

Compliance and regulatory support have also become standard MSP offerings. Providers help businesses meet industry-specific requirements such as GDPR, HIPAA, or PCI DSS through regular audits, reporting, and guidance, ensuring ongoing compliance and reducing risk.

Flexibility is a hallmark of managed IT services. Companies can choose hybrid models that blend internal IT with managed services, or opt for co-managed arrangements where MSPs collaborate with in-house IT teams. This adaptability allows organizations to tailor IT support to their unique needs and strategic objectives.

By partnering with the right MSP, businesses can transform IT from a cost center into a strategic asset. MSPs provide the expertise, technology, and support needed to navigate the evolving digital landscape, empowering organizations to focus on growth and success in their core areas. As technology continues to advance with innovations like generative AI, edge computing, and automation reshaping business operations, the value of managed IT services only grows, making them an essential consideration for organizations of all sizes.

Advantages of managed IT services

• Access to specialized expertise: MSPs provide access to a deep pool of technical experts with specialized skills in areas like cybersecurity, cloud architecture, and AI implementation. This allows businesses to leverage enterprise-level knowledge without the high cost of hiring and retaining a diverse in-house team. The IT talent shortage continues to be a significant challenge for businesses, making access to an MSP's team even more valuable.
• Proactive support and enhanced security: Modern MSPs have moved beyond the traditional break-fix model and now focus on proactive monitoring and maintenance to prevent issues before they disrupt business operations. With cyberattacks becoming more sophisticated, many MSPs now offer advanced security services, including 24/7 threat monitoring, vulnerability management, and incident response, to protect against threats like ransomware.
• Predictable costs and scalability: Managed services are typically offered on a subscription basis, which provides businesses with a predictable monthly fee for their IT operations. This model eliminates the unexpected and often high costs associated with IT emergencies. MSPs also offer scalable solutions, allowing businesses to easily adjust their service levels as their needs change.
• Focus on core business objectives: By outsourcing IT management, businesses can free up internal resources to concentrate on strategic initiatives that drive growth and innovation. This allows companies to be more agile and competitive in their respective markets.
• Improved compliance and risk management: Navigating the complex landscape of regulatory compliance (like GDPR, HIPAA, and others) is a significant challenge for many businesses. MSPs help organizations meet these requirements by implementing robust security controls, conducting regular audits, and ensuring that data management practices align with legal standards.

Disadvantages of managed IT services

• Potential lack of control: Some businesses may find it challenging to hand over control of their IT infrastructure to a third party. During a service outage or a security incident, the inability to directly intervene can be a source of frustration.
• Security and third-party risk: While MSPs can enhance security, they also introduce third-party risk. If an MSP has weak security practices, it can expose its clients to significant vulnerabilities, including data breaches. The global average cost of a data breach reached an all-time high of $4.88 million in 2024, a 10% increase from the previous year, highlighting the heightened financial and reputational risks involved.
• Standardized services may lack flexibility: MSPs often provide services in standardized packages. This can be a drawback for businesses with highly specialized needs, as they may end up paying for services they don't require or lacking the customized support necessary for their unique operations.
• Communication and cultural fit: Effective and clear communication is crucial for a successful partnership with an MSP. Misunderstandings or a lack of responsiveness can lead to delays and operational friction. Additionally, a mismatch in company culture can create challenges in aligning the MSP's services with the client's business objectives.
• Vendor lock-in and transitioning: Businesses can become dependent on their MSP, making it difficult to switch providers or bring IT operations back in-house. The process of transitioning to a new provider can be complex, time-consuming, and potentially disruptive to business operations.

Despite these potential drawbacks, many businesses find that the advantages of managed IT services outweigh the disadvantages, especially when partnering with a provider that closely aligns with their unique requirements.

No two businesses are the same, and while some prefer to manage their IT internally, the market for MSPs continues to grow. According to recent data, the managed services market is projected to reach $511 billion by 2029, growing at a compound annual growth rate (CAGR) of 6.9% from 2024 to 2029. Another estimate suggests the market will grow from $297.2 billion in 2024 to $878.71 billion by 2032, exhibiting a CAGR of 15% during the forecast period.

As organizations navigate the evolving digital landscape and embrace new tools like AI, automation, and cloud-native solutions, managed IT services are proving essential for business agility and resilience. This ongoing evolution cements managed IT as a future-proof industry, central to the success of modern enterprises.

Trends in managed IT services

The managed IT services landscape is in a state of rapid transformation, driven by technological advancements and shifting business needs. For 2025, several key trends are shaping the future of the industry, moving from foundational IT support to strategic business enablement.

AI-powered automation and predictive operations

Artificial intelligence (AI) and machine learning (ML) are no longer just buzzwords; they are becoming core to MSP operations. In 2025, MSPs are leveraging AI to deliver predictive maintenance, which helps detect and resolve IT issues before they can impact business operations. AI-driven tools and machine learning are automating routine tasks like ticket management and IT support, enhancing efficiency and allowing technicians to focus on more complex challenges. This shift toward proactive, automated support is helping businesses increase uptime and improve overall productivity.

A "cybersecurity-first" approach

With the increasing sophistication of cyber threats, security is a top priority for organizations of all sizes. As a result, many MSPs have adopted a "cybersecurity-first" model, where security is integrated into every aspect of their service offerings. Zero Trust security models, which operate on a "never trust, always verify" principle, are becoming the industry standard. MSPs are also offering advanced services like managed detection and response (MDR), which provide real-time threat monitoring and automated incident response to protect against attacks.

Advanced cloud management and optimization

As more businesses adopt multi-cloud and hybrid cloud strategies, the focus has shifted from simple cloud adoption to optimizing these complex environments.MSPs are now playing a crucial role in helping organizations manage their cloud spending, streamline data access, and ensure security across multiple cloud providers. This includes leveraging the unique strengths of different platforms to improve performance and enhance resilience.

Expansion of IoT and edge computing services

The number of Internet of Things (IoT) devices in use continues to grow exponentially, creating new opportunities and challenges for businesses. The IoT managed services market is projected to grow from $88.38 billion in 2024 to $108.22 billion in 2025. MSPs are developing specialized services to monitor, manage, and secure these sprawling IoT ecosystems. At the same time, edge computing is becoming more important for processing data closer to its source, which reduces latency and improves performance for real-time applications.

Focus on sustainability and green IT

Sustainability has become a key consideration for businesses when choosing an IT provider/. MSPs increasingly incorporate "Green IT" practices into their services, such as promoting energy-efficient data centers and helping clients recycle outdated hardware responsibly. This focus not only helps businesses meet their environmental goals but can also lead to cost savings.

A reduction in the number of EU tech graduates moving into the UK is making it difficult to recruit and retain talent in the finance sector, and Brexit could be partially to blame.

A TheCityUK report found that the already limited pool of tech talent is exacerbated by the lack of outside talent working in the UK.

Since the initial Brexit vote, there has been a "significant decrease of graduates coming to the UK from France and Germany in particular," the financial and professional services body said.

The report noted that there is a dearth of data on skills demand within the fintech industry as well as a lack of diversity. It calls for the industry to collect and publish skills demand data and push for more diversity of talent.

"While the focus of the research was on graduates and new entrants to the financial services industry, there were also some interesting leadership lessons which emerged," said Anne Murphy, Odgers Berndtson's Managing Partner Financial Services.

"These related to communicating a clear social purpose, promoting diversity and improving understanding of technology at all levels of an organisation ... Employers looking to get the best talent need to find ways to make the financial services industry more attractive to a wider range of people, as well as looking further afield than the traditional narrow graduate base."

The organisation also made several other suggestions, including learning from industries, such as pharma, who've successfully partnered with academia and taken the initiative when reskilling current employees.

TheCityUK isn't alone in calling for more international fintech partnership in the UK. In an opinion piece, MP Mark Field described last week's visit from prominent members of Vietnam and Thailand's fintech community.

The Southeastern Asian countries are set to be major players of the fintech industry in the years to come, and Field stressed the importance of maintaining and deepening the relationship between them and the UK.

"...London has repeatedly been identified as the leading global Fintech hub," said Field. "We believe that maintaining this lead requires continuous, ambitious policy development. If innovative regulation is one pillar of the UK's strategy for Fintech success, building strong international links is another. As we leave the EU, the UK is working harder than ever to build Fintech partnerships with others."

A senior military officer told MPs on Tuesday that the MoD, British Army and its contractor Capita had "made some bad mistakes" with a contract to outsource its recruitment.

The original contract awarded to Capita in 2012 was part of a 1.36 billion digital transformation project to reform the army's recruitment process, but it saw several failings, including mass delays to an online recruitment tool and rising costs. According to the National Audit Office (NAO), the army has failed to hit the recruitment targets every year since the contract began.

Speaking to the Public Accounts Committee, seen via Forces.net, Lieutenant General Tyrone Urch detailed the multiple flaws with the forces recruitment contract, laying blame at both Capita and the army itself. Urch said that the Army's approach was "naive" and called its insistence on using its Defence Information Infrastructure (DII) IT system a "big mistake".

DII is a secure military network owned by the MoD and developed in partnership with the Atlas Consortium. Deploying DII proved to be a long and expensive project that ran over its estimated time frame and almost doubled its estimated costs.

"I think we insisted that Capita would use an antiquated IT system, colloquially called DII and run by Atlas if my memory serves me correct," he said. "And we insisted that they would go after recruitment and that they would use that system.

"In hindsight, knowing how badly performing DII was, that was a big mistake and yet, we kind of insisted on it with Capita. And they tried to do that for a number of years until 2014."

The NAO savaged Capita's handling of the IT project saying that the firm failed to recognise the level of customisation the army demanded. Once the system was up and running, Capita staff were also found difficulties in processing applications, leading to 13,000 few applications between November 2017 and March 2018.

"I think we allowed Capita, instead of being more persistent, to engage in a centralised call system way of doing business in Uphaven at the National Recruiting Centre," added Urch. "And in hindsight, we lost our ability to nurture our candidates and to look after them and to kind of pay them the attention they deserved.

"From an army's perspective of things that we got wrong, we had a hugely complicated career structure in the British Army. Something like 240 career employment groups and we kind of just assumed naturally that Capita would get on a do that and just sort of be able to take that on board. And the program that we actually insisted on, with 10,000 lines, or areas of contract compliance was just way to complicated."

Outsourcing has become so ubiquitous in IT that it can feel suspiciously like a fad. But it's a mistake to dismiss an idea solely because it's popular. And this one is no flash in the pan: in the past decade, half a dozen techie trends have been and gone, while outsourcing has continued to grow.

When issues such as edge versus fog are long forgotten, it's a safe bet that smart businesses will still be availing themselves of the advantages of outsourcing.

That's not to suggest that outsourcing isn't the right solution to every problem. But it's common to see businesses sticking with what they know for longer than they should. Here are five potential red flags that could mean it's time for you to join the ranks of successful outsourcers.

1) The business is built around the boss

I've worked with numerous enterprises where the CEO was also the primary technician, developer and head of procurement. I don't just mean little startups, but bona fide enterprises, with big names and turnovers in the tens of millions.

These were smart people, but this is putting an uncomfortable number of eggs in a single basket. Any movement of responsibility and knowledge out of that individual's head and onto a professional team is a win for the business, for reasons I'm sure I don't have to detail.

The only problem is that the boss is very unlikely to reach this conclusion by themselves. Such types are rarely eager to give up their high level of control, so moving to an outsourced model becomes not so much an organisational challenge as a psychological one even if, in practice, all the boss is really giving up is the work of implementing applications and websites.

What if you are that boss? I've personally known quite a few of those people who write the code, design the web pages, build the PCs, set up the router and take pictures for the product catalogue. In that case, you just need to understand this: if you can say "this place would collapse without me", that's not an indicator of success it's an indicator of risk.

Perhaps you will find it reassuring to know that you don't necessarily have to hand everything over to a third party: outsourcing always involves balance and compromise. Even so, the more diverse your IT arrangements, the better they'll be able to survive unexpected disasters.

Indeed, the requirement to document and detail what you're handing over can itself provide a very valuable kick in the pants, exposing bodge-up solutions before they become a serious problem. I've lost count of the times I've heard bosses laugh about how they've cleverly evaded their licensing obligations, or copied and pasted entire systems from online libraries without fully understanding how they work. No professional support or services provider will put up with that, and good thing, too.

2) Your home-grown practices are attracting questions

Every business is unique, and many of them are proud of the fact. When I bring up industry standards in client meetings, the proprietor will often take that as a cue to wax lyrical about the company's distinctive history and practices, often with a few digs thrown in at rivals and professional associations that have the gall to do things differently.

But more than ever, business technology is attracting the attention of insurance underwriters, and if the whole nature of your IT estate hasn't already come under scrutiny, you can bet it will. Insurers are becoming canny and well connected enough to ask pointed questions about why Company B isn't doing the same things that Company A does. If you are finding yourself on the receiving end of such an inquisition, you could dedicate time and energy to responding or you could outsource, and sidestep those questions in the first place.

As with most projects, the art of the deal lies in working out how to preserve the good bits of your uniqueness, while merrily jettisoning the bad bits to someone else. Another possible concern these days is that the industry experts and associations may well be a step or two behind the leading edge and the same may apply to your outsourcing partner. You could end up finding that, for example, you can't satisfy GDPR declarations because you're not the actual owner-of-record of the whole platform.

Lines of accountability can get murky, too. In one noteworthy case, I've recently seen, a certain business created a visitor access system that runs on an iPad positioned at reception. Guests tap their details into the app, including their name and details of who they're visiting.

Unfortunately, once you type in "Steve", the iPad helpfully pops up details of all the people of that name who have ever logged in. It's an egregious data-protection hole but who's responsible? The particular office with the specific iPad? The app developer? The industry association that accredited them?

In short, the caveat is that, while outsourcing can rid you of a lot of procedural headaches, it also creates a new obligation to keep on top of who's responsible for what and who can be trusted with what.

3) Compliance is becoming an uphill struggle

Keeping insurers onside isn't the only challenge you face when you do things in-house. If you roll your own applications then you'll know that getting them through the approvals process for claiming professional capability is not simple.

Compliance used to be a rarefied priesthood thing, limited largely to code reviews, but these days it has crept further out into definitive statements about how certain types of data are stored, how traffic is delivered and so forth.

This makes it a painful business in the short term: all of your little tricks and bodges have to be disclosed and acknowledged. You also have to make a commitment to stay up to date. That's an open-ended promise that could involve some acute and expensive flurries of activity at inconvenient times.

Outsourcing isn't a silver bullet here. Contract out the ongoing development of your core business apps and what comes back may well be just as non-compliant, just as vulnerable and just as retro as your old in-house code. However, you can at least reduce the friction of switching by timing it intelligently. If you were preparing to upgrade to a new platform anyway, taking the opportunity to migrate to an outsourced, cloud-hosted platform instead doesn't involve much additional upheaval.

And, once you have made the initial leap into the cloud, you're in a much stronger position to move on again should the need arise. Certain outsourcing relationships can feel rather abusively one-sided, but when it comes to the cloud, we can thank the founding fathers for foreseeing the value of portability.

4) Your IT function isn't fully understood

We've already discussed the hands-on, do-it-all boss, but there's another type of leader who can also be a hazard, albeit a well-meaning one, to a growing business a boss who is self- deprecatingly awkward around the IT department.

You know, the sort who will stand up at the company Christmas lunch and warmly declare "I don't know how these guys have kept it all running so well..." Back when IT was a nascent function that organisations could either take or leave, this might have been quite charming, and plenty of people still laugh along with the idea that bosses know nothing at all about what the guys in the basement are doing. But today IT is part of the fundamental fabric of every business and if the boss isn't on top of what the nerds are doing, it implies that they're being given too much autonomy and not enough management.

This can lead to some very inefficient organisations and practices since the IT department will inevitably have its own priorities and instincts. It also raises the danger that, if relations grow sour, "accidents" can happen. In a poorly managed environment, a scorned ex-employee could do an alarming amount of damage on their way out.

The solution isn't to ditch the whole team in one brutal swoop. Leaving aside the ethics of such a move, handing over your entire network to a single external services provider is a risky leap. I have lost count of the number of small businesses whose site and domain registrations have been held hostage by a small, stroppy outsourcer looking for some extra cash.

A better approach is to hang onto your valuable, experienced IT nerds, but engineer a situation where they no longer operate as a de facto information silo. Blending a few specific outsourced functions into the mix will enforce both consistency and transparency. It might be something as simple as setting up a new, empty server, or applying updates to live systems: a good external specialist will be doing these same jobs with 50 other clients, and indeed will be able to tell you a lot about how your own processes stack up.

Your IT roadmap is long

When a business runs its own apps and its own website, it's natural to take a gradualist approach to development. For reasons of caution and practicality, enhancements and upgrades tend to be incremental improvements on what you had before, and project timelines are measured in years.

That's all very sensible and manageable but switching to an outsourced solution puts you on the fast track. You get systems that have been tried and tested by dozens of clients, a development team that's scaled up accordingly, and a head start on both research and implementation.

Working on your own, it might take you years to plan out of a system for extending your accounts and expenses systems onto a smartphone app, and who knows how long beyond that to implement it. In the meantime, you're stuck trying to pair up sticky notes and crumpled receipts, while your rivals are simply snapping their paperwork and heading off to their next meeting.

This may be a slightly facetious example, but it illustrates an important truth. Right now there's a lot of talk floating around about standards for code and communication, making up a whole movement called Industry 4.0. It sounds like jargon, and it is, but there's a significance to the fact that it's two whole version numbers on from what was being touted in 2014 (which focused mostly on the Internet of Things, smart manufacturing and smart cities).

The point is that the industry advances at a hell of a rate much faster than a small, in-house development team can ever be expected to keep up with. As the edges of IT expand, innovators and investors are constantly working on new, transformative ideas. Some of them have the potential to transform your business, and if you hesitate to embrace them, you're only holding yourself back. Sometimes you have to admit that it's better to give up on the slow road and join everyone else on the hype-wagon.

British Airways has blamed a supplier-side system issue for the cancellation of dozens of flights yesterday, with knock-on disruption continuing this morning.

The unidentified IT failures left passengers stranded as flights were cancelled to and from Heathrow Airport yesterday evening, and hundreds of people were reportedly told to return on Thursday in order to fly.

Problems were compounded by the temporary closure of Heathrow's air traffic control tower, reportedly due to a fire alarm, causing long queues at Terminal 5 and the diversion of flights to other airports.

"It's complete chaos," one traveller told Sky News, while another explained: "We're really not getting any information at the moment. Nobody's being sorted out... They can't re-book the flights because they've got no computer system. Everyone's just sitting here."

A BA spokeswoman said: "We are doing everything we can to help customers whose travel plans were disrupted yesterday from a supplier system issue affecting a number of airlines, and the temporary closure of Heathrow Airport's air traffic control tower."

She added that flights are operating today, now the supplier "has resolved the issue", but didn't explain what the root cause was when IT Pro asked.

It's not the first time BA passengers have suffered because of the airline's IT problems. Check in issues last August caused delays at Gatwick, Heathrow and London City airports, while a massive IT outage occurred in May 2017 after an engineer mistakenly cut the power to one of BA's data centres.

Picture: Shutterstock

A 330 million deal between NHS England and Capita to outsource administration and transform services, in part due to a legacy IT system NHS England considered unsustainable, had the potential to seriously harm patients.

The National Audit Office (NAO) slammed the seven-year deal struck in 2015 with Capita, a professional services firm, to undertake the duties of a newly formed unit named Primary Care Support England (PCSE) - all while cutting costs by 35%.

The NAO said neither NHS England nor Capita "fully understood the complexity and variation" of the service, which involved performing a range of back-office functions to support around 39,000 primary care practitioners including administering payments to GP practices, opticians and pharmacies; delivering pensions, ordering supplies and moving patients' medical records.

The NAO concluded: "The service to primary care practitioners, including Capita's delivery of PCSE, has fallen a long way below an acceptable standard. This had an impact on the delivery of primary care services and had the potential to seriously harm patients."

The report highlighted one instance of 87 women incorrectly told they were no longer part of the cervical cancer screening programme. Capita says the wrong letter was sent by mistake following an incorrect mail merge, and that the women affected were promptly issued correction letters.

NHS England undertook these back-office functions in April 2013, having previously been performed locally by primary care trusts, which were abolished in an NHS restructuring. These services, comprising 1,650 staff across 47 offices, were fragmented, and lacked coherent leadership or standards, according to the 51-page report, leading to variation in delivery.

Moreover, NHS England felt the 20-year-old IT system running across 82 databases was in urgent need of replacement, with the organisation concluding it "did not have the necessary skills in transforming services through better use of IT"; deciding to outsource the service to a private company.

As part of the deal, NHS England hoped to instigate digital transformation and deliver high-quality support services, all while reducing costs by 35% in the first year - aims the NAO branded "ambitious". The objectives involved moving services from 38 sites across England to three, opening a national customer support centre, and introducing an online portal to provide access to manage PCSE services, among others.

The terms of the deal also aimed to invest in new, modern information technology and updated processes.

"Neither NHS England nor Capita fully understood the complexity and variation of the services being outsourced," said Amyas Morse, the head of the NAO. "As a result, both parties misjudged the scale and nature of the risk in outsourcing these services.

"While NHS England has achieved financial savings and some services have now improved, value for money is about more than just cost reduction. It is deeply unsatisfactory that, two and a half years into the contract, NHS England and Capita have not yet reached the level of partnership working required to make a contract like this work effectively."

In February 2018 there were seven severe service failures recorded against performance indicators, while NHS England applied 5.3 million in contract penalties between January 2016 and April 2017.

NHS England has made savings, in line with expectations, of 60 million in the first two years of the contract, as the financial risk of increased costs sits with Capita who have made a 125 million loss over this period, according to the NAO.

A Capita spokesperson said the report concluded the complex nature of the support services outsourced by NHS England was not fully understood at the time the contract was signed.

"The report notes that several organisations and legacy issues all contributed to underperformance," she said.

"It has been acknowledged that performance has improved and Capita will continue to work with all parties to address the remaining service issues. We have accepted accountability for not meeting our high standards of service previously.

"Our new Chief Executive has made it clear that Capita previously has taken on some contracts that contained too many unknowns. Our new strategy will ensure we focus on doing fewer things better and securing business that we know can be delivered well."

This isn't the first time Capita has failed to deliver on a major government IT contract. In 2014 the Ministry of Defence (MoD) came under fire for wasting millions of pounds on the delayed deployment of an online recruitment tool for the military. The system, which was run by Capita, only went live in 2017 - five years after the deal was first signed, and was reportedly riddled with bugs.

The company, described as Britain's biggest outsourcing company, has failed to win a single government contract since it issued a shock profit warning in January that subsequently wiped 1 billion of its share values in one day. Only last month the ailing professional services firm also declared a pre-tax loss of 513 million for 2017.

IT Pro approached NHS England for comment.

When you have existing printers you've already bought and paid for, it's tempting to think that maintaining your existing fleet will cost less than purchasing new printers or signing up with a managed print services (MPS) provider. Why replace them if it's not absolutely necessary?

The costs of an ageing fleet stack up, and in the long term, managed print services are able to save you more than just money. Here are five benefits MPS could bring to your business.

1 - Cost savings

The consequences of sticking with an old printer are sometimes hidden, and can work at various levels, from running out of toner when you want to print an essential document, to the device breaking and your IT department being too busy to fix it. These consequences cost money, and the benefit of using managed print services is that you have the maximum availability of print when you need it most.

An MPS provider will look for ways to rationalise and consolidate your printers, replacing many old, large laser printers with a smaller number of newer, better distributed, faster devices or multi-function printers with all the necessary functions built in. Costs are visible and predictable, and you never have to worry about the expense of replacing ink and toners at different times across the business.

Maintaining your old printers might seem to help you keep costs low in the short term, but in the long term you'll miss out on cost-saving opportunities, while facing expenses and uncertainties that MPS providers are there to alleviate.

2 - Efficiency

Old printers waste valuable time, which always has an impact on the bottom line. Not only does the time spent waiting for a slower printer really add up over a business year, but every paper jam and malfunction means more wasted time that could be used more productively.

An MPS provider will come in and analyse your business, printers and requirements in terms of printing, scanning and copying. This doesn't mean pushing expensive hardware into every corner of the business, but instead they will look at where teams need specific capabilities, then will find the printer/s that will match those needs.

A really good provider will go further and look at ways that the business overall can print more efficiently, and save money by reducing the everyday print costs.

3 - Minimised downtime

In many organisations, employees can end up spending excessive amounts of time dealing with printers - not just waiting for old, slow devices to print, but dealing with malfunctions, changing cartridges, adding paper or waiting for someone from IT to fix a problem.

A good MPS provider will help reduce support costs and minimise downtime. Because it's their job to maintain your printers and keep them running with a steady stream of supplies, your own IT team frees up its time to work on other projects.

4 - Up-to-date security

Newer printers have better tools for maintenance, management and most importantly, security. This has never been more important, with every old and outdated device now a potential security risk. Options like pull-printing, cloud printing and printing from mobile devices have gone from being expensive extras to standard features, while NFC and ID card-based authentication are no longer the preserve of larger businesses.

MPS providers are there to sort out things like security updates or rapid changes to firmware. With more threats out there and greater penalties for data breaches, that's good news for businesses of every size.

5 - Environmental benefits

Do your existing printers have effective, high-performance duplex printing enabled? If not, you could be missing out on features that could save you up to 40% of your paper costs, according to some studies.

MPS providers look for ways to reduce waste, helping businesses make more effective use of more advanced printers and functions. Such printers have management features that prevent or discourage wastage, can restrict the use of colour, make duplex printing the default, or switch on pull printing, so that print jobs only print when actively requested from the printer. This can see drastic reductions in the number of printed pages left abandoned in the output tray.

Meanwhile, more modern, high-quality draft and eco-printing settings could use up to 50% less ink than standard modes, while producing output that's easily good enough for both internal and external usage.

Picture: Shutterstock

Consulting and outsourcing services provider Infosys has partnered with database software company MongoDB to help enterprises scale their legacy systems.

The two companies are collaborating to help businesses address issues with cost, performance and scalability of legacy database technologies.

Ravi Kumar, president and chief delivery officer at Infosys, said: "Through our collaboration, Infosys can help organisations realise the full value on MongoDB to quickly and efficiently create state-of-the-art, high performance and scalable applications. Our relationship with MongoDB and decades of association with our longstanding customers gives us the knowledge and insight to help our clients modernise their mission-critical applications."

Infosys said 1,000 of its consultants will now specialise on NoSQL database MongoDB, whose tech will be integrated into its consulting solutions.

The companies established a joint Innovation Lab in Bangalore, India, where a team of MongoDB-trained architects are working to develop tools for companies wishing to modernise their business.

Dev Ittycheria, president and chief executive officer at MongoDB, said: "This partnership will tap into the huge market opportunity of replacing legacy, monolithic applications that are inflexible to change and unable to scale with high data growth."

The partnership has already led to the development of Infosys Digital Agri Solution, technology that helps agriculture companies and farmers increase crop yields based on IoT and real time data, as well as the Infosys Field Services Command Centre, IoT-based solution for manufacturing and industrial companies.

Ittycheria added: "Infosys strengthens our ability to tackle very large scale, mission-critical applications and accelerate growth for the company. Together, we combine the three pillars needed for success - outstanding technology, the right skills, and the business smarts to deliver excellent results."

Don't think robots will take your job? Tell that to Capita employees.

The outsourcing company is slashing 2,250 UK jobs after posting another profit warning, with 200 of the roles headed to India and others automated to hand to robots.

Capita manages a host of public sector projects, including collecting the BBC licence fee and overseeing the London congestion charge, but has struggled as clients cut their spending due to "near-term headwinds".

CEO Andy Parker said in the Guardian that robotic staff don't remove the need for humans entirely, but will speed up how they work and require fewer employees. "They can then do ten times the amount they used to, so you need less people to do the same amount of work," he added.

Academics have predicted as many as a third of existing jobs will be lost to robots and automation in the coming years, but a Capita report released at the end of last month ironically suggested that 85% of employers believe workplace automation will create more jobs that it will replace.

The perhaps poorly timed report, called "Workplace More Human", admitted 72% of workers surveyed were afraid of downsides losing their jobs or "de-socialisation" of the workplace. However, a quote from Capita Resourcing managing director Jo Matkin said: "Automation holds considerable advantages for companies and employees alike. Yet employee fears and concerns could present a significant barrier to realising its full potential."

With the now-announced job cuts, it appears those surveyed workers were right to have some fears. Capita hasn't said exactly what types of jobs are at risk, detailing in a pre-trading update that it would invest "in a proprietary robotic solution to achieve scale automation across some of our operations and, more significantly, to deliver benefits to new clients".

Alongside the job cuts, Capita said it will sell its asset services division, as the wider company's shares fell to their lowest in a decade.

Parker didn't directly pin the company's troubles on Brexit, but said spending was falling this year - particularly at its IT services division. "There's been a fall away in what we would call discretionary spend, like training and (providing) employee benefits. People are delaying making decisions on implementing technology, so there is a whole host of things going on," he told Reuters.

Three is outsourcing its customer services to Capita in a 70 million deal, as it seeks to improve its 3G and 4G offering.

The seven-year agreement, due to start early next year, will also see Three's 450 customer service and sales staff leave Three's Glasgow contact centre to join Capita's base in the city.

Capita will seek to develop Three's mobile and broadband customer service during the deal, as Three looks to make customer service something that differentiates it from other mobile and broadband operators like EE, recently bought by BT, and Vodafone.

EE and BT's customer services are seen as being particularly poor, and John O'Brien, research director at TechMarketView, said that focusing on customer service means Three does not have to compete on price alone.

"We are committed to giving our customers the best possible experience [and] we believe appointing a specialist customer services partner for some of our customer service operations in Glasgow is the best way of achieving that goal," said Gurpreet Gujral, Three's director of contact centres.

"We will now work hard to ensure all employees affected by this change are fully supported and we will be commencing consultations with them."

Capita's CEO, Andy Parker, added: "We will leverage our customer experience expertise, including service design, to jointly develop Three's customer management processes and tools."

Three is the latest firm to outsource its customer management services to Capita, which has signed a string of such deals, including a 140 million agreement with Tesco Mobile in June, another with Carphone Warehouse Talkmobile, and a 1.2 billion contract with O2.

These agreements are underpinned by Capita's acquisition of Voice Marketing, TechMarketView's O'Brien said, adding that customer data analytics is becoming more and more important.

He said: "Turning intelligence on customer data into actionable insights, is the key to driving process change that can lead to additional business outcomes like new sales, business opportunities or improved customer experience. [Capita is] now the 'go-to-player' for outsourced CM services for mobile operators in the UK."

Everyone knows the name HP. It has been one of the world's most recognised technology brands for decades, a stamp of trust whether it's on a printer, a laptop or a server.

It's earned that trust not just through producing high-quality equipment, but by backing it up with amazing support and services. Traditionally, that's just been for the benefit of enterprises. Now, thanks to HP Helpdesk, even small companies can take advantage.

The idea is simple: to give all sizes and businesses the security and support of an in-house IT team, without the overhead. Instead of running your own team, HP Helpdesk will provide all the phone and online tech assistance you need.

So much, so obvious. Well, here are six facts you might not know about HP Helpdesk.

1. HP Helpdesk supports all your hardware, including iOS and non-HP PCs

HP Helpdesk isn't concerned about what kit you're using: it's concerned about the person who needs support. Each employee plan will cover one primary device a computer, laptop, tablet and it definitely doesn't need to have an HP badge on: thanks to its global network of expertise, practically any hardware is covered (see a full list of operating systems at the end of this article).

There's also a huge range of software supported, covering Microsoft Office, financial applications such as Quicken, email tools such as Outlook, all the major web browsers, plus a number of major applications (think Adobe Acrobat, Microsoft Project, Carbonite, Flash, Silverlight, ACT!, Goldmine). Again, we publish a full list at the end of this article.

2. HP Helpdesk also includes peripherals so there's no need for additional third-party contracts

You may currently rely on an array of support services to cover printers, scanners, phones and backup devices. HP Helpdesk provides a simple way to bundle all that into one contract and one number to call if things do go wrong.

3. HP Helpdesk covers networking issues too

One recurring problem businesses face is getting their mix of technology working together. HP Helpdesk will help all your tech get "on the same page" to make setup, configuration, troubleshooting and connecting one phone call away.

4. Six days of support, not five, and extended hours

HP Helpdesk isn't there for 9-5, Monday to Friday. Its experts are available from 9.30am to 6pm during weekdays, and from 10am to 4pm on Saturdays.

5. HP Helpdesk can spot problems before they arise

This isn't a magical superpower: it's the benefit of installing the Business Ready Suite, which enables you to resolve potential issues for your users before those problems slow them down. Once you've registered for the Helpdesk service, you're one call away from a full check-up. HP's experts will diagnose your systems, tune up your PC, check security settings and even provide consultation on data migration from one PC to another.

6. HP isn't just remote support if you need in-person assistance, someone can be there the next business day

HP Helpdesk's experts will always try to solve problems over the phone or through remote control software, but there are times when you need in-person assistance. Assuming you aren't in a remote location, and that the relevant hardware is covered by an HP CarePack warranty, then someone from the HP Support team will be with you the next day.

To find out more about the Helpdesk service, head to HP's website (and see below for a full list of supported hardware and software).

HP Helpdesk is just one of the services HP provides to simply IT managers' lives. Download our free whitepaper here.

FULL LIST OF OPERATING SYSTEMS SUPPORTED:

Computers (laptops, desktop PCs)

• Windows 7/Pro onwards
• Windows XP/Pro onwards
• Chrome OS [all versions]
• MacOS X 10.4 onwards

Tablets/smartphones

• Android OS 2.3+ (Gingerbread, Honeycomb, Ice Cream Sandwich, Jelly Bean and KitKat)
• Apple iOS (version 3 through 6.x)
• Apple iOS 7+ (newer versions supported as released)
• Chrome OS
• Windows 8+ (newer versions as supported as released)
• Windows RT

FULL LIST OF SOFTWARE SUPPORTED:

Security software:

• F-Secure Internet Security Suite
• Microsoft Security Essentials
• Computer Associates Security Suite
• McAfee Antivirus and ToPs
• Symantec/Norton Internet Security
• Other major AV/AS products

Internet browsers:

• Internet Explorer
• Firefox
• Safari
• Chrome

Contact management:

• ACT!
• Goldmine

Office suites:

• Microsoft Office Suite
• OpenOffice
• Google Business Apps
• Google Web docs

Email clients:

• Microsoft Outlook
• Microsoft Outlook Express
• Commonly-used email applications (Gmail, Yahoo, AOL, etc.)

Email browser configuration:

• Microsoft Outlook
• Microsoft Outlook Express
• Entourage
• Commonly-used email applications (Gmail, Yahoo, AOL, etc.)

Microsoft Office:

• Microsoft Word
• Microsoft Excel
• Microsoft PowerPoint
• Microsoft Access
• Microsoft Publisher
• Microsoft Visio
• Microsoft Front Page
• Microsoft PowerPoint

Financial applications:

• Microsoft Money
• Quicken
• QuickBooks
• Turbo Tax

CD/DVD creation:

• Adaptec Easy CD Creator
• Roxio Easy CD Creator
• Nero Multimedia Software

Other products:

• Adobe Acrobat/Reader
• Microsoft Project
• Carbonite
• Winfax Pro
• Macromedia Shockwave
• Macromedia Flash
• Microsoft Silverlight

If you work in IT then it's easy to be sceptical about a service that promises to simplify your life. But hold on to your scepticism for a second, because HP Touchpoint manager is something different. Not only does it come from one of the world's most trusted IT brands, it's also been specifically designed to solve the problems afflicting a modern IT department.

Those problems can be broken down into three key areas: first, a proliferation of devices, often brought in by employees, that offer direct access to your business data but aren't under your control; second, the security nightmare that stems from such devices and cloud-based services; and managing the lifecycle of IT resources so that they're being exploited as efficiently as possible.

We'll tackle those problems one by one.

Managing diverse devices

Tablets, phones, laptops, desktop PCs: it really doesn't matter what your employees use. Likewise whether they're using iOS, Android or Windows. The whole point of HP Touchpoint Manager is that it will work with them all, with an agent-based wizard that enrols them onto the service.

It's a simple process that takes as little as five minutes to set up. From that point on, you'll have one easy location from which to manage all devices. It doesn't even matter where you are: HP Touchpoint Manager is cloud-based, so even if you're in a different location to an employee who needs help you'll have access to the full power of HP's service.

The simplicity extends to the interface too. The intuitive dashboard can be viewed on everything from a huge desktop display to a phone, with shortcuts available for key critical tasks. These lead your IT admins (or external consultants if you don't have in-house staff) through jobs step by step. There are even point-and-click security policies that can be applied if you wish.

Because it's so easy to use, and it brings everything under one roof, it will both save time and stop devices and users slipping through the net. No need to log into five different applications to perform everyday IT management: now there's one interface to rule them all.

Removing the security nightmare

If the worst happens, and a laptop, phone or tablet is stolen along with all the data contained within, you'll have proper, corporate-grade weapons to deal with the problem. First, you can lock the device if you so choose. Second, providing the device is connected to the internet, you can find it (and even fire off an alarm). Should you decide drastic steps are needed, you can also wipe the device clean.

Tracking your inventory

Large companies have long enjoyed the benefits of a proper inventory service. They know how long assets such as PCs, phones and laptops have been used for, they can even monitor the health of key components. So why shouldn't you?

As just one example, what happens now if someone leaves your company? Do you have smooth systems in place to redeploy their laptop, say? Can you know they can't access information behind your firewall since they're still using the same phone?

Pro or Basic?

There are two versions of Touchpoint Manager available: Pro and Basic. With the Basic licensing option covering almost all of the services we mention above find device, firewall policy, hard disk health, lock device, wipe device, remote alarm and more and the Pro option adding advanced features such as mobile app deployment, remote control and phone support.

If this sounds like a service that can save you time and hassle, click here for a 30-day free trial. You won't even need to enter your credit card details.

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Hewlett Packard Enterprise (HPE) is dropping another division it once paid billions to own, spinning off its enterprise services division to let it merge with outsourcer CSC.

The move is the latest in a string of manoeuvres by CEO Meg Whitman to reorganise the tech behemoth, including splitting the company into HP Inc for consumer products and HPE for businesses.

HPE called the spin-off and tie-up with CSC the "next logical step" and said it will create a company worth $26 billion that focuses entirely on IT services.

"I am a devotee of focus, and this is going to be a laser-focused company," Whitman said according to the Financial Times.

HPE will hold half the stock of the combined firm, and the two will work together to serve existing customers. Mike Lawrie, currently chief of CSC, will become chairman, president and CEO of the new company, while Whitman will join the board.

The deal is set to be completed 31 March 2017. Shares in both CSC and HPE were up on the news.

Neither firm has said what the CSC and HPE division will be called, with reports it is currently being dubbed "Spinco".

HPE, then known as HP, boosted its enterprise services with a $14 billion purchase of Electronic Data System in 2008. It is not the only purchase HP has subsequently spun off: it bought Compaq in 2001 to compete in consumer PCs and printers only to hive them off in the split last year.

The remaining bits of HPE will be worth $33 billion in expected annual revenue, and will focus on its servers, storage, networking, infrastructure, and cloud.

Whitman said move leaves HPE "fully optimised" for higher growth, better margins and with "more robust" cash flow, while the company "will be in a stronger position to win than either organisation could have been on its own."

HPE is currently restructuring, cutting tens of thousands of jobs. Alongside the CSC announcement, HPE also reported its second quarter results, posting its first revenue growth in five years. That said, the growth was one per cent on year, and the company warned not too expect high growth in 2016.

Volvo has outsourced its IT operations to HCL Technologies, along with 2,500 staff from 11 countries that comprised part of its IT team.

The five-year outsourcing agreement marks a dramatic shift for Volvo, from providing and provisioning its IT largely in-house to relying on the Indian outsourcer to deliver its technology roadmap.

That roadmap requires HCL to prepare Volvo's infrastructure for cloud, automation and Big Data, and will see it look after 3,500 applications, 20 datacentres, 12PB of storage, 20,000 MIPS (millions of instructions per second) of mainframe capacity and more than 15,000 network devices.

HCL will also shift 65,000 Volvo employees onto Microsoft Office 365, as well as other productivity tools.

Olle Hgblom, CIO of the Volvo Group and president of Volvo IT, said: "Combining the strengths of HCL with those of the transferred parts of Volvo IT will result in an organisation with formidable capabilities and an intimate understanding of Volvo Group needs and opportunities.

"This, and the cultural fit between our two organisations, is the foundation for a partnership that will provide long term and strategic benefits for the Volvo Group."

Clive Longbottom, founder and service director of analyst firm Quocirca, told IT Pro that Volvo will keep its staff responsible for developing in-vehicle technology, and that outsourcing its infrastructure appears to make sense.

He said: "Going to HCL for IT support/management/operation should be OK - it is the basic systems that are being looked at here, not in-car IT."

Volvo IT

As well as transforming Volvo's infrastructure, HCL will also take over Volvo IT, the carmaker's division responsible for selling IT to external customers both Volvo partners and completely separate bodies, such as the City of Stockholm.

The Economic Times cited sources suggesting the business would be worth $1.8 billion to HCL over the length of the five-year deal.

The 2,500 Volvo IT staff who provided both internal and external support - will help HCL to continue to deliver services to 40 existing Nordic and French customers of Volvo IT, but also take Volvo's IT to its own clients.

Anant Gupta, CEO of HCL, said: "The Volvo Group employees and consultants will add great value for our customers with the skills and expertise that they bring. We are delighted to welcome them to our team. The deal perfectly embodies HCL's ongoing mission to develop its business with an innovation-led mind set.

"I am convinced that HCL will prove to be an outstanding partner also for the other customers of Volvo IT and that our former employees of Volvo now joining HCL will find themselves becoming an important part of a leading global IT services provider, with a very exciting and modern business philosophy."

One of HCL's priorities will be to build on the capabilities of Volvo IT's mainframe using IBM's midrange iSeries line of servers, delivering services from it to its existing set of customers.

Quocirca's Longbottom told IT Pro that HCL may not take all of Volvo IT's capabilities, which could yet be spun off into its own organisation.

"We will have to see what happens to Volvo IT - whether this goes wholesale to HCL, whether HCL cherry picks, or if the division does become its own company - with a lot of its capabilities being based in India, it could still carve itself a reasonable market in the region," he said.

BT has won a 9 million contract to supply desktop and datacentre services to Bromley Council as part of a London-wide procurement framework.

The deal, which lasts for five years, will see the telco deliver desktop services to more than 2,000 staff at Bromley Council, as well as looking after more than 350 servers.

BT said it would give the council "greater flexibility in running their ICT services with the ability to flex services up and down to suit demand".

The local authority expects to save 10 per cent on costs over the course of the agreement, with services planned to go live in April.

"As we move towards our vision of being a commissioning council, we needed a company that would deliver excellent service but also respond to the changing shape of our business," said councillor Stephen Carr, leader of Bromley Council.

"[The contract] provides us with clear and transparent pricing and a more efficient and streamlined buying process, helping us to speed up the delivery of projects and save money."

The contract is part of a wider "pan-London procurement framework" that was set up in 2014 by Westminster City Council, the Royal Borough of Kensington and Chelsea and Hammersmith and Fulham councils.

These existing BT agreements see it manage end user computing and datacentre services for Westminster City Council and the London Borough of Hammersmith and Fulham, while it provides strategic consultancy services to the London Borough of Islington.

Ian Dalton, president of global government and health at BT Global Services, said that his firm understood "the various challenges local government faces and look forward to helping to deliver efficiencies as well as providing new and innovative technologies".

"Ultimately this will not only make public money go further but benefit council staff and the services that are provided to residents across Bromley."

Council leaders said the deal would help ensure the local authority would be run "as efficiently and effectively as possible".

AGS Airports has outsourced IT support to allow its internal technology team to focus on streamlining the business, following its split from Heathrow Holdings last year.

AGS, which covers Aberdeen, Glasgow and Southampton airports, has struck a five-year deal with outsourcer Getronics to manage all its IT support now it is an independent company.

Its new owners, Ferrovial and Macquarie Infrastructure and Real Assets, decided to converge the three airports' IT systems into one central managed infrastructure, picking an outsourcer to lessen the burden on its IT team of just eight people across the three airports.

Around 13 million customers used the airports last year, and head of IT Chris Tames said it was crucial to find an outsource partner who could manage the transition quickly, without disrupting the airports' day-to-day activities.

After starting the tender early in 2015, AGS awarded the contract to Getronics over Heathrow incumbent Capgemini in August.

Tames told IT Pro that Getronics' ability to provide a local support base just three miles away from Glasgow Airport's runway was preferable to Capgemini's offshore support offering.

"We are a much smaller organisation than Heathrow, and Getronics is a similar company and is a better fit for us," he said. "We can get to know the people more, whereas with Capgemini it was an offshore service desk and offshore database support.

"We were keen as part of that service tender to bring the service desk on-shore and there's [support] at the other side of our runway three miles away."

Getronics brought an IT service desk online for all three airports on 17 December, and AGS said that end user satisfaction is improving as a result.

Tames added that the company has also proved easy to work with, saying: "No issue has been too much hassle and they bend over backwards."

The next stage will see AGS shift its networking systems to Getronics by the middle of February.

Tames said: "For us it's about making sure the business of keeping the lights on is taken care of so we can better provide service enhancements and look at projects for how IT can help streamline the business.

"I don't have to worry about the hardware infrastructure to take care of, which frees us up to focus on the operational side of it."

Innovation

Tames and his team are now turning their focus to innovative projects, looking at analytics and data integration to make the airports run more efficiently.

"There's a number of areas around the business we are looking at where we can help efficiency, from the check-in process to developing operations with better information provided to people at the right time," said Tames.

"We are trying to achieve overall efficiency through an innovative use of technology. It's about how to streamline things, how we can make better use of integrating the data from disparate systems from across the terminals and to help better manage operations."

Cloud will also play a role, with AGS Airports' ERP system already delivered as a virtualised service (which Getronics supports through a service desk function), and AGS using HP Enterprise's BladeSystem c7000 converged system to support cloud workloads.

Tames said: "It's becoming a much more virtual world. There's a lot more SaaS solutions than we have had previously and that takes away a burden from providing infrastructure to providing a service to the business."

NIIT Technologies has won a 23 million, four-year contract to supply communications regulator Ofcom with IT services and support.

NIIT will help the watchdog manage its infrastructure and application systems as well as offer a customer-focused service to improve user experience.

Ofcom's new IT partner has also been tasked with implementing a dedicated service that is tailored to the needs of the regulator, which operates as a watchdog for print, radio, television and digital media.

To begin with, NIIT will provide Ofcom with key services including a service desk, datacentre services, application management and product management.

The 23 million value of the contract is to be awarded over a six-year period, and includes an initial term of four years, plus extensions.

Satya Samal, head of Europe at NIIT Technologies, said: "We are confident that we will be able to deliver value to Ofcom through our strong understanding and proven capabilities in the application and infrastructure management services domain."

David Doherty, ICT Director at Ofcom, added: "We set out to select a partner who will align well with our organisational culture, manage transition smoothly, provide a robust technical solution and focus on innovation.

"NIIT's solution for Ofcom fits well to these needs and we look forward to working with the company over the coming years."

The notion of outsourcing has sometimes been given a bad rap.

At its most basic level, outsourcing takes a task that is normally carried out by staff working within an organisation and instead uses an external provider to deliver this process. The rationale for outsourcing is based on many factors but the two common drivers are to reduce the cost of a particular task and to gain a level of predictability around its delivery.

The complexity of

IT

makes it a great target of outsourcing, and according to outsourcing analyst NelsonHall, IT outsourcing (ITO) contracts agreed in 2014 totalled 3.44bin in value. And in the last few years, outsourcing, and not just across IT, has grown considerably with 2014 experiencing a 15 percent rise over the previous year.

Part of the increase is a response to the recent financial crisis and in the public sector especially, the massive cuts to public sector spending is forcing central and local government to look at ways of get more from slimmer budgets.

The heart of any outsourcing deal is the contract. Essentially, any existing internal processes will have a number of metrics that need to be delivered and an associated cost in full time employees, equipment, property, training and a whole myriad of factors that are required to deliver to that metric. In an IT world, that might be supporting a number of IT end users, applications and network devices. In a non-IT world that could mean collecting rubbish from residential properties or taking billing queries in a call centre.

Where outsourcing excels is in the ability to circumvent some of the costs that organisations have little control over. Wages are a major factor. Consider that average UK call centre worker is paid about 23,000 per year, a comparable call centre worker in New Deli, India earns barely a quarter of this amount and expects far fewer benefits in kind such as holiday, sick pay and maternity leave.

The other issue is staff hiring, retention and skills training. Specialist IT skills such as

application development

are expensive to gain and develop in-house, especially if organisations are just working toward a project that has little ongoing development.

The last factor that favours outsourcing is flexibility. Although most contracts are based on multiple year commitments, many have clauses to allow customers to increase supply, with suitable remuneration, which allows organisations to scale up based on a graded scale if for example demand increases. And if, in theory, the outsourcers fails to deliver on the deal; the customer can cancel the contract and in some cases get compensation.

It is in this last point that some of the theoretical benefits of outsourcing often fall down. Particularly in the public sector, the large outsourcing firms of the like of BT, Fujitsu, Capita et al tend to have better legal and technical minds working up contracts then public sector buyers. Which means that terms are often less competitive than they could be and the costs and complexity of ending a contract early may well outweigh the cost of just accepting an underperforming deal.

In addition, there is both complexity validating that the Service Level Agreements that underpin outsourcing agreements are actually being met. The very act of measurement can be a costly exercise in its own right.

Lastly, the reputational aspects of outsourcing are sometimes questioned. Although many large financial and service providers outsourced call centres overseas in the mid 2000's, in recent years, many of these early adopters have brought centres back to UK operators and in some cases, even back in house, to show a sense of patriotism in the face of the perception that outsourcing deprives UK workers of jobs.

In response to a slight backlash, a growing counter trend is insourcing. The idea is not new and is essentially the extended use of contractors and re-tasking processes to internal resources that may be underutilised. Insourcing has grown in lock step with a number of tends such as zero hours contracts which circumvent some of the employment rights that give workers protection and costs to employing full time staff - as well as the issues around skills shortages.

Insourcing is not always bringing in more resources on a contract bases. In some cases, it may mean transferring a process from one area of the organisation to another that is better equipped to deal with it. For example, relocating end user

IT support

from satellite offices to a central IT help desk with additional resources may be dressed up as insourcing.

For the IT industry and the channel, the separation between insourcing, outsourcing, contracting, body-shopping, which is essentially acting as a recruiting agent, and other derivatives can be relatively slight. The main delimiter is who has the responsibility for the employed staff, adherence to the corresponding legal employment legislations and how the project or processes is delivered and paid for.

Yet, actually working out savings is hard. Capita, a major IT outsourcer has stated that "We would expect customers to be saving at least 30 percent on a multi-year outsourced IT engagement. It really depends on how they adopt utility computing but cost savings and service transformation are what makes outsourcing compelling."

Yet this 30 percent saving is hard to pin down with independent evidence or non-partisan imperial studies thin on the ground or pre 2008. Even within the public sector with oversight from bodies such as the National Audit Office, definitive evidence that tally's up both successes and a failure to provide a baseline is scant.

With new technologies such as cloud and SaaS providing an enabler for more outsourcing, the growth is likely to continue. With government promotion of its G-Cloud supposedly encouraging ICT suppliers from the SME sector; getting into the outsourcing and insourcing field is easier than at any point in history especially as continued squeeze of the public sector forces more innovative ways of delivering services for less.

The one bit of advice for any VAR thinking of offering these services is show evidence. Even a small project that generates a tangible benefit should be documented and publicised with the help of the customers. The old fashioned case study backed up with hard data is the single best tool for winning more business. Offering better contract terms if a customer will agree to such a study is a good tactic to help bring these benefits to the fore.

This article originally appeared on sister title Channel Pro.

My late father always told me that in order to be successful I should play to my strengths. He was talking about life skills, but his words stuck with me when it came to business as well.

Nearly 25 years ago when a career change was being forced upon me, I reflected upon what I was good at and it turned out that my skills were: writing, conversation and hacking. So I put these things to good use and became a security consultant and journalist. Given that the 'focus on what you know' advice is pretty much business 101 stuff, why is it then that so many organisations find it so hard to outsource their security needs?

New research from Computer Economics says that when it comes to outsourcing, only eight per cent of technology budgets within larger enterprises are earmarked for outsourcing. Even though the report suggests that security is on an upward outsourcing trend, being one area where the enterprise sees real third-party vendor value, it still leaves me feeling that most organisations are simply running scared of letting go.

There is an argument that outsourcing is seen as a money saving move, nothing more and nothing less. This perception of the outsourcing market - a perception held more by consumers than corporates it has to be said - is amplified when it comes to security. After all if you suffer a breach and customer data is impacted then everyone looks for the weaknesses in your security posture that allowed it to happen. The fact you outsourced your security needs to some cheap offshore outfit is not going to do your brand reputation much good.

For a start, outsourcing your security needs does not automatically mean offshoring; one of the biggest cloud-based security outfits is based in Cardiff, for example. Not that it matters, especially when we are talking security-as-a-service, when it comes to cloud. Not only do we need to get over the whole outdated and arguably racist overseas call centre image of outsourcing, we need to stop confusing value with cheapness as well.

Get your security-as-a-service investment right and you may well be saving money courtesy of not having to employ or hire analysts for log monitoring and management, for threat research and investigation or find the capital expenditure and ongoing upkeep costs of in-house infrastructure. Outsourcing such things means it's all wrapped up in budgetable fixed fee. That is not the same as doing it on the cheap, that is delivering value to your enterprise and to your customers through improved security.

But it's not all about the money anyway; value isn't just measured in monetary terms. Improved security with better flexibility is a good thing, and even if it costs much the same as doing it less effectively in-house it still delivers value. It is also good practice. So stop avoiding the outsourcing option just because of bad experiences or unfair stereotypes. Anyone with an ounce of sense will realise that spending money where it makes a difference to the overall security posture of the enterprise is good, and throwing money at the security equivalent of treading water is bad.

Investing money in people that understand the security issues facing your organisation, and the processes required to mitigate those risks, is nothing to be scared of...

Manchester, Stansted and East Midlands airports are set to upgrade their enterprise resource planning (ERP) systems with Capgemini, focusing on cutting costs and increasing customer satisfaction.

Capgemini's priorities under the one-year contract will be integrating the various systems deployed across the four airports operated by Manchester Airports Group (MAG), which also include Bournemouth.

It will do so by implementing a digital platform that is easier to use and that connects people, devices and networks to enable digital strategies.

These strategies will focus on saving money, upgrading HR services, and improving customer service, with the airports serving 48 million passengers a year.

To carry out this change, Capgemini will deploy a hybrid cloud version of SAP's latest iteration of Business Suite, known as S/4 HANA.

This platform will also include HANA Enterprise Cloud and SaaS products like the SuccessFactors payroll solution, expenses system Concur and commerce apps from Ariba.

Garry Dowdle, CIO at MAG, said: "It is crucial that our IT capability provides a solid foundation for innovation and future growth.

"The ERP transformation programme is at the core of MAG's IT strategy and will provide finance, HR and procurement with the right processes, data and technology for the job, delivering a step change in the user experience and helping to make MAG a great place to work.

"The programme is focused on being a key enabler of profitable growth for MAG by delivering more efficient and higher quality information for business decision-making, supported by best practice processes and robust controls."

Nivedita Krishnamurthy, senior VP and head of markets at Capgemini, added: "This new contract is a fantastic extension to Capgemini's significant airport experience across the world, and we are proud to now be one of the leading providers of business application services to UK airports.

"We are excited to be working with such a forward thinking and passionate business as Manchester Airports Group that recognises the importance of making sophisticated technology choices to enable business transformation."

Neither party revealed the cost of the contract.

Circle Health has signed a 50 million deal for Tech Mahindra to develop new technology that will improve patient care.

The decade-long agreement tasks the Indian outsourcer with creating IT solutions for Circle Health's hospitals and NHS management contracts, such as mobile healthcare.

Some of its innovations will be adopted into the design of a new hospital in Birmingham that Circle Health is currently building.

Tech Mahindra will also help improve the company's musculoskeletal service in Bedfordshire, allowing patients to book their MRI appointments from their mobile phones, and enabling GPs to view scans and reports on mobile devices.

The outsourcer's UK subsidiary, nth Dimension, will deliver all solutions created under the project.

Circle Health CEO, Steve Melton, said: "This deal is a sign of the times. Healthcare has yet to see the tech-led disruption that we've seen in other sectors, but we think that is about to change.

"At the same time, there is a big push in UK government policy for transparency and better patient access to data while the need for healthcare operators to be efficient has never been higher."

Rajib Bhattacharya, VP of Tech Mahindra, added: "We will support [Circle] in improving their current infrastructure and co-creating new applications that will allow for patients to take more control of their healthcare.

"Circle are also building a new hospital in Birmingham which is the second largest city in the UK and we will be embedding our technologies into the build so that the hospital will benefit from mobile solutions that will allow for the clinical staff to operate at the highest levels of productivity and quickly."

Government must change its rhetoric on Big IT suppliers and refrain from coding in-house if it wants to transform public sector technology, it is claimed.

Think tank Policy Exchange warned that the new Conservative majority government risks stifling technological reform if it continues the last government's attitude to procurement.

Speaking at an event hosted by industry trade body TechUK, Policy Exchange's head of technology policy, Eddie Copeland, said: "[The mindset was that] it's the big tech companies who have been what is wrong with technology in government.

"The big failures, the excessive expense, [it's been] very much that narrative. It's been highly oversimplified and I hope and think it needs to improve."

Under former Cabinet Office minister Francis Maude, the last government ruled out deals worth more than 100 million with outsourcers like Atos and HP in favour of smaller contracts with SMBs.

It also created the Government Digital Service (GDS), Whitehall's coding arm responsible for developing more services in-house, such as website platform Gov.uk.

The GDS is now pushing ahead with Government-as-a-Platform (GaaP), a project to create common components that can be shared between departments cutting down on outsourcing and legacy IT.

But while voicing support for the GDS, Copeland warned developing these services in-house would take too long.

He added: "Government is creating code that doesn't exist anywhere else in the marketplace, which forevermore and a day they will have to update, maintain, ensure the security of it, innovate and make sure it's always at the cutting edge."

Instead, he called for Whitehall to open up to companies who are experts in their areas.

"There's a marketplace out there, there's great stuff already there, there's specialists who deal with one little thing," he said.

His comments come after the deputy director of the GDS, Alex Holmes, wrote a blog post denouncing outsourcing under the SIAM tower model and encouraging government departments to build their own IT in-house.

TechUK's CEO, Julian David, suggested companies instead needed to adapt and "do things differently" to become better government suppliers.

GDS' director of performance and delivery, Richard Sargeant, recently indicated that GDS is open to using the marketplace to work on GaaP.

Speaking at a previous TechUK event, he said: "This is not something that government alone can do, but something that will require a constructive engagement with the private sector, the third sector as well as all of the agencies and government departments involved in service delivery."

But Copeland argued that GDS must also adapt, however, moving from doing the actual coding to managing procurement which should be vendor-agnostic, according to Policy Exchange.

"GDS has every right to be guardians of the rules, to set the framework and say this is how we want government IT to work, but they should be agnostic as to who provides it," he said.

Junior coders are botching SAP customisations, increasing the cost to companies running the software.

This is according to Cast Software, which examined millions of lines of Abap (advanced business application programming) code written to customise 83 SAP applications.

Chief scientist Bill Curtis told IT Pro that most of these customisations were performed by outsourcers, including SAP partners that are responsible for implementing the German tech giant's software.

But he accused them of being inexperienced and bungling the job.

"You've got people who just don't know how to write good information management routines," he said. "You wonder how many of them really have a computer science background or at least an IT background."

The consequences for the customer are severe, he warned increasing the total cost of ownership because the complexity of the code is costlier to maintain.

It also makes it harder to add new functionality to the applications, meaning businesses upgrade their software at a slower rate.

"If they're in a very competitive environment, that puts companies at a disadvantage. The agility of a business is directly tied to the agility of their code," Curtis said.

The report found evidence of faulty code across several industries, including public sector, energy, IT consulting, manufacturing and retail.

It said: "The number and density of violations is high in every health factor, and this should be of concern for many applications."

Many of the applications Cast tested were business-critical systems, it added.

Curtis recommended companies introduce targets that outsourcers must meet when customising their applications, as well as quality assurance processes, to reduce the amount of complexity added to the software.

"Create a quality gate for everything that's coming back from your suppliers and set targets in your contract equivalent of service level agreements," he said.

"Say these are numbers I expect you to hit, and this is the rate at which I want to see improvement towards these targets', and measure the code as it comes in."

The Cabinet Office has created a joint venture to host government data all in one place, saving an estimated 105 million over seven years.

Crown Hosting Data Centres is the lovechild of Ark Data Centres and the Cabinet Office, and will host public sector data that's not already up in the cloud.

The creation of the company is Whitehall's attempt to tackle individual departments' tendency to outsource hosting or even build their own data centres, all at varying but generally expensive costs.

"It doesn't make sense for departments to host their servers in different ways and at different costs, and in the past Whitehall wasn't even sure how many of these centres there were," said Francis Maude, minister for the Cabinet Office.

"With this new joint venture, we will save millions and be able to access the necessary commercial and technical skills in the market to create a thriving new business that will deliver better services and allow government to share in its future success."

In fact, users will be able to use the service on a pay for what you use' basis, in order to avoid being locked into long-term contracts.

Ovum analyst Chris Pennell told IT Pro: "My understanding is that it is aimed at hoovering up all non-cloud based hosting and data centre requirements that reside in legacy contracts.

"The approach is interesting, as it is effectively saying we do not believe the traditional approach has worked."

Initial customers are the Department for Work and Pensions, the Home Office and the Highways Agency, but the Cabinet Office plans to open the service up to all departments, and the wider public sector.

"The joint venture company will simplify the data centre services selection process in government and further drive the unbundling of large legacy contracts," said Steve Hall, CEO at Crown Hosting Data Centres.

Maude has previously stated that Whitehall would be free of its last legacy contract by 2020, as the government aims to replace outsourced IT with Government-as-a-Platform (GaaP).

This initiative will see services largely created in-house, and Ovum analyst Chris Pennell said at the time that government could become its own monopoly supplier.

The latest news may add evidence to that claim, with the government retaining a 25 per cent stake in Crown Hosting Data Centres.

Ark will own a 75 per cent share of the joint venture, after signing a 495,000, two-year deal with the Ministry of Defence in December 2014 to provide data centre services.

"We are extremely proud to be selected as the joint venture partner and look forward to working together to drive real transformational change across the provision of the Government's data centre services," said Huw Owen, Ark CEO. "We are committed to realising the huge potential cost benefits for the UK public purse."

The Home Office has won an appeal against a damages claim to former IT contractor Raytheon, and avoided a 224 million payout relating to the cancellation of the e-Borders contract in the process.

The Whitehall department initially awarded the US defence firm a 750 million deal to design, develop and implement a technology deployment aimed at reforming the UK's border controls back in 2007.

The computer system was meant to perform police, security and immigration checks on people entering and leaving Britain.

However, the Home Office cancelled the contract three years later, claiming Raytheon had missed key milestones, while some parts of the project were running at least a year behind schedule.

Raytheon filed for unlawful termination of its contract against the Home Office in 2011, claiming substantial damages of 500 million.

Its claim was upheld by an arbitration tribunal last year, which awarded 224 million in compensation.

This sum comprised 50 million for damages, 9.6 million for disputes over changes to the original contract, 126 million for assets acquired from Raytheon by the Home Office, and legal costs.

However, the Home Office won its appeal in two judgements made public today.

Its lawyers, from Pinsent Masons law firm, said in a statement the High Court determined "the award had been tainted by serious irregularity so as to cause substantial injustice within the meaning of the Arbitration Act".

The ruling means, while the damages will not be paid, the case will be reheard by a new tribunal.

A Home Office spokesperson said: "We are pleased with the judgement handed down today by the court.

"However, the legal process is ongoing and it would be inappropriate for us to comment further at this time."

Raytheon said it plans to contest the decision with its own appeal.

A spokesperson said: "It is a fundamental principle of international business that awards of arbitral tribunals are respected and enforced by national courts.

"We believe that the arbitral tribunal considered and decided all relevant issues before it. Raytheon Systems Limited (RSL) is determined to pursue an appeal of this decision, to enforce the tribunal's award and to recover the sums due to RSL for wrongful termination of the e-Borders contract."

Atos has made an "opportunistic" play for Whitehall's Government-as-a-Platform (GaaP) business, despite the initiative being designed to steer public sector procurement away from Big IT.

The technology outsourcer has rebranded several of its G-Cloud-listed services as GaaP-friendly, following the Cabinet Office's introduction of the concept at a recent conference.

Outgoing minister Francis Maude wants to replace costly, siloed IT systems in central government with common platforms that can be shared by different departments.

This, he hopes, will cut costs and make it easy to build new services out of common components, instead of the public sector simply signing more deals with large outsourcers.

He wants Whitehall to be rid of all legacy contracts by 2020, earlier this month blasting old government contracts for being "too long, too big and too opaque".

But today Atos, the public sector's fourth largest IT provider according to the Institute for Government, indicated it wants a piece of the GaaP pie.

It earned 400 million from public sector deals in 2013, and has now revealed a messaging service as one of six products it's listing on G-Cloud 6 that it claims are suitable for GaaP.

A messaging platform, alongside a payments offering and a bookings platform, will have a prototype built early next Parliament by the Government Digital Service (GDS the team behind Whitehall's digital transition).

Kable analyst Jessica Figueras told IT Pro the move was more marketing fluff than truly transformative.

She said: "This is opportunistic, but hardly surprising. Everyone is talking GaaP, but no one knows what it means in practice yet.

"So inevitably suppliers will rush to rebrand their existing offerings as GaaP-friendly; they need to have a story just in case GaaP comes up in customer conversations."

Ovum analyst Chris Pennell concurred, adding: "My initial impression is that Atos are simply marketing their cloud/utility based services as supporting GaaP objectives."

The Cabinet Office will use external suppliers for its platforms it's already seeking up to five for identity assurance platform Gov.uk Verify.

But IT Pro had received no response from the body at the time of publication after asking whether it would involve large suppliers in GaaP.

However, Figueras said: "I don't believe GaaP will preclude any particular type of supplier. There's most likely to be a mixed economy, and any supplier that can adapt to the new climate of government IT can win business."

She suggested attitudes would differ widely among public sector groups, with some developing services in-house, others using off-the-shelf IT and others setting up joint ventures with suppliers.

Ovum's Pennell said: "These services will have their part to play in the GaaP market, after all government is not going to build everything in-house. But, it does want to consume products in a utility fashion."

Other Atos services targeted at GaaP include a predictive analytics platform, a cloud migration service,and systems integration and management (SIAM) for cloud service.

Transport for London (TfL) has handed a 6 million contract to Atos to handle its service desk operations.

The transport body has tasked the outsourcer with driving service improvements, cost efficiencies and various innovations under the three-year deal, which could be extended to four years.

It comes as TfL moves towards a new SIAM (systems integration and management) service delivery model, and the organisation picked Atos because of its experience implementing such models.

The outsourcer's technicians will be responsible for identifying cross-tower issues and trends by gathering real-time data across TfL.

Its service desk will need to spot these emerging trends and try to come up with soluutioins improving the end user experience.

Steve Townsend, CIO at TfL, said: "[We] promised we were going to transform the way we provide our information management services to our business and ultimately our customers.

"Atos provided a compelling bid and their approach complemented our transformation plan, making them the ideal partner to help take our plans forward."

Atos's Gerry Sheridan added: "We are delighted to be joining the TfL information management team. We believe our appointment will bring considerable benefits to the TfL team by delivering new and better business-focussed service targets and measures that will provide significant savings in ICT spend."

Royal Mail has tasked Computacenter with providing desktop services for 30,000 of its staff.

The outsourcer will manage IT for the service desk, security operations centre and distributed desktop services to improve user experience for Royal Mail employees.

Royal Mail, partly privatised last year, hopes the deal will improve efficiency and service performance across its head office, sorting and distribution locations.

Catherine Doran, Royal Mail CIO, said: "Delivery companies are technology-led companies and IT transformation throughout Royal Mail is central to the company's parcels and letters business.

"The transition to our new IT suppliers will help promote innovation and ensure best practice is embedded into our IT function.

"This will provide the technological backbone required to deliver further innovations for our customers. Computacenter will perform a vital role in this delivery."

The contract is part of Royal Mail's wider IT transformation programme, and it hopes to inject competition into its IT services provision by increasing its number of suppliers to get greater value for money.

It already announced a 130 million investment in October 2014 to provide postmen and women with 76,000 handheld devices to improve the delivery of letters and parcels.

BT will cover the day-to-day management of those devices under a five-year deal.

Computacenter did not reveal the length or value of the contract, but signed an IT transformation deal with the Post Office in December 2014 that TechMarketView valued at upwards of 100 million.

That four-year deal will see Computacenter roll out more than 30,000 tablets and PCs to staff.

John Beard, director of Computacenter's financial services and retail sector, said: "We understand that IT will play a critical role in the transformation of Royal Mail. We will be implementing and managing new workplace technologies to help them maintain service excellence and further enable their users."

Scottish Water has extended Fujitsu's contract to provide IT support services by two years to August 2018.

The extension means Fujitsu will continue to support 4,500 employees of Scottish Water and its partners, managing day-to-day issues and support for 4,600 devices.

Those include 2,700 laptops and 1,200 desktops, as well as 700 tougher devices designed for the water services body's field workforce.

The contract extension comes after Fujitsu won the initial eight-year deal back in 2008.

The infrastructure management part of the contract tasks the tech giant with looking after 1,400 servers, 200 databases and 20 storage area networks.

Mark Dickson, director of technology and information at Scottish Water, said: "We are pleased to be continuing our partnership with Fujitsu and look forward to ensuring that technology enables Scottish Water to build on our improved performance for the benefit of customers."

Fujitsu is one of three firms working with Scottish Water as part of a Master Services Agreement covering much of the organisation's IT.

BT is providing network and communication services while Tata Consultancy Services is responsible for application development.

Scottish Water claims the agreement will help cut operating costs by 1 million a year.

Jeph Hamilton, of Fujitsu UK & Ireland, said: "Service quality, competitiveness and commercial sensibility are central to our role as a key IT partner of Scottish Water, and we're honoured to help them define and deliver on their ongoing IT strategy."

EDF Energy has signed a 12 million extension to its outsourcing contract with Capgemini, adding standardised services to desktop support.

The renewal will see Capgemini continue to provide service desk, procurement and managed desktop services to the French energy giant until the end of 2015.

Those services include support for email, instant messaging and file-sharing to more than 20,000 employees and business partners of the firm.

The extended contract will make safety and security of IT services a priority, said EDF, which has also tasked Capgemini with standardising its IT infrastructure.

Capgemini will provide some of the outsourced IT through Rightshore, its global delivery model, which will deliver 70 per cent of the services from onshore locations and 30 per cent from experts in other countries.

A total of 150 Capgemini employees will work on the contract, which was originally signed for three years in 2010 at a cost of 100 million.

Gary Rowan, head of function and service management at EDF, said: "We are very happy with the service Capgemini provides; their level of expertise in the nuclear arena sets them apart.

"Capgemini's collaborative approach and commitment to flexibility were important in order to future-proof the company against developments involving additional services or user numbers, and in view of the EDF Energy investment programme in low-carbon generation."

Lufthansa today signed an 800 million outsourcing contract for IBM to provide its entire IT infrastructure.

The seven-year deal will see IBM improve IT efficiency for the German airline and save an annual 55 million, according to the tech giant.

The optimised infrastructure will help Lufthansa accelerate its move to cloud computing and big data analytics, it added, suggesting the airline could use IBM's own Watson-based analytics services.

It will also gradually incorporate business analytics solutions with mobile computing and social business tools to boost employee productivity and create new customer services.

Lufthansa CFO Simone Menne said: "Outsourcing the IT infrastructure to IBM will strengthen the competitiveness of the Lufthansa Group as a whole. The transformation plan will directly improve our cost base.

"Together with IBM we will have access to the latest IT technologies, not only to lower our cost but also to continue digitalising our business processes in order to increase efficiency and customer focus."

However, the deal is still subject to approval from the Lufthansa Supervisory Board and antitrust authorities.

If approval is granted, IBM will start by implementing collaboration and messaging tools for staff as well as new network and voice services.

It will then deploy its MobileFirst device management framework to help Lufthansa provision, secure and manage mobile devices and apps.

The tech industry veteran wil also manage Lufthansa's datacentre operations, help desk and printer services.

Around 1,400 Lufthansa staff will transfer to IBM under the deal, and IBM will begin delivering infrastructure services from April next year.

Martina Koederitz, general manager of IBM Germany, said: "The agreement provides Lufthansa constant access to IBM research and development. This will enable Lufthansa to incorporate the latest technology and innovation into the Lufthansa IT infrastructure, including strategic areas such as cloud computing, big data analytics or cognitive computing systems like Watson."

The nature of outsourcing has changed and modern CIOs demand different types of relationship with their external partners. Rather than simply working with one or two major suppliers, IT leaders in search of best value now work with a broad range of external providers across a series of contract types.

External service provision used to be characterised by CIOs using a trusted partner as part of a mega-deal. Technology chiefs passing the management of non-core IT services to a single provider typified such contracts. But big outsourcing deals are becoming rare indeed. The recently released European ISG Outsourcing Index confirmed the continued demise of the mega-deal.

There were just 11 deals with an annual contract value of more than 32 million in the second quarter of 2013. That relatively small number of mega-deals represented the weakest performance for providers since the third quarter of 2010. The change in outsourcing, however, cannot simply be characterised by a reduction in the total number of big deals.

Rather than focusing on large-scale IT outsourcing contracts, C-suite executives are now using external service specialists to cover a broad range of business demands. The ISG Index shows how business process outsourcing in Europe continues to flourish, with a 22 per cent year-on-year rise during the second quarter of 2013 that helped create a total annual contract value of 700 million.

The cloud is also providing another key route to external service specialism, with executives using the inherent flexibility offered through on-demand provision. Researcher IDC predicts the cloud will account for $1 of every $5 spent on software by 2016.

Modern service provision, therefore, is best viewed as a complex collection of contract terms that helps executives manage an ever-expanding range of business concerns.

So, how can CIOs successfully manage a patchwork of providers to create benefits for the rest of the organisation? ISG director Andrew Walker, whose firm compiles the aforementioned Outsourcing Index, confirms organisations are increasingly breaking up their IT contracts and using multiple service providers, whether internal or external.

He says the main driver behind the trend is to allow businesses to maximise their performance by tapping into the expertise offered by specialist providers, rather than working with one specific supplier. "This approach can both increase the standard of outputs and have significant cost benefits," says Walker.

"Along with the on-going decline in contract durations, [it] goes some way to explain the decline in mega-deals seen during the past five years."

"Effective service management, therefore, becomes the key ingredient to ensuring that these models are successful."

Walker says the need for effective management becomes even more pivotal as organisations introduce cloud-related services. He says the IT industry has been responding with the development of service integration and management (SIAM). This remains an embryonic area, but the aim of SIAM is to maximise performance across all providers and services.

"For this function to be as effective as possible, it requires a consistent, shared vision, a robust project structure and perhaps, most importantly, a continuous service improvement culture," says Walker. "This comes with its difficulties but as the ecosystem becomes more mature, it should be easier to manage."

Smart IT leaders are already working with change. Indeed, organisations that have taken a pro-active approach to the changes enabled by digital technology will probably not need to rely on outsourcing, according to JJ Van Oosten, group CIO at building supplies specialist Travis Perkins.

"They have built in-house capabilities which are giving them real competitive advantages," he says.

"They might even be adopting cloud services, and managing those to adopt velocity and agility, or embracing collaboration," he adds, pointing to the fact that his own organisation, Travis Perkins, is working with Google to transform business operations as quickly as possible. "The move is sending a big signal to our 25,000 employees: Travis Perkins is going digital." he says.

"We already see huge benefits from an enterprise social networking perspective, such as travel reductions and faster meetings. Those who have been sleep walking have little choice but to transform through outsourcing and that is not a great position to be in."

Mark Foulsham, CIO at insurance specialist esure, also recognises that a shift in outsourcing is taking place. He says Cap Gemini is his firm's key provider and that HCL has a significant presence, too. But like many of his CIO peers, Foulsham also works with a collection of suppliers on smaller contracts.

"There's a swing taking place across the market towards more balanced service provision and tailored partnering," says Foulsham, who recognises that some executives are looking at service integration specialists to help make the most of a diverse supplier base. He believes the demand for different types of outsourcing can only be considered within the particular business context.

"Some organisations might prefer the economies of scale associated to working with just one or two key providers. Others might be more interested in the innovation that can be generated through multiple suppliers. There is no magic equation CIOs must make decisions based on their business requirements," says Foulsham.

"CIOs need to consider where they draw the line in regards to back-end infrastructure, apps and front-end services. For us, we must keep tight control over databases and the front-end those areas are the crown jewels of our business."

Danny Reeves is another IT leader who is still looking to use outsourcing as a tactical solution to non-core business challenges. As CIO of the services division at Balfour Beatty, he is responsible for IT across the firm's infrastructure services. His division also houses the WorkSmart business, a managed service provider that helps organisation's increase performance by reshaping systems and processes.

"We've taken the decision as an organisation to partner with providers who focus on our non-core business activities," says Reeves.

"We're not an IT company but we really appreciate the value of technology and using those capabilities on behalf of our customers. We want to use the knowledge of our external partners to help the business focus on its core strategic values of economic growth and customer service."

Balfour Beatty recently signed a five-year outsourcing deal with Fujitsu. As part of a transformation partnership, the IT specialist will host and manage the company's data in a shared storage environment, using a combination of physical and cloud-based virtual data centres. Fujitsu will also provide desktop services and support for 14,000 users in the UK. Reeves says the contract represents the new approach to outsourcing, where provider and customer work in combination to meet flexible line-of-business demands.

"We've been able to agree a unit-based price and a utility-like deal that allows us to grow locally and globally with agility," he says. "We're not locked into a minimum spend, but there are massive areas of change that we want to tackle. We can also work with other strategic partners. It's my job to integrate those partners as part of our WorkSmart business."

Infosys has blasted a newspaper report that claimed it was planning to fire up to 5,000 poorly performing workers, despite admitting that it encourages "chronic underperformers" to leave the firm.

The Economic Times newspaper had earlier said Bangalore-based Infosys, India's second-largest software services exporter and an icon in the country's $100 billion outsourcing sector, was sacking up to 5,000 workers to trim costs.

Infosys, which has more than 150,000 staff, said there was no mass lay-off planned at the company and the number of underperformers that could potentially leave was "significantly lower" than the 5,000 mentioned in the paper.

"We have a robust performance management system that includes structured appraisals and performance feedback," it said in a statement. "This is done regularly and is not a one-time event."

Infosys, for years an investor favorite for exceeding its earnings targets, has struggled recently as its big customers cut costs, missing its own revenue guidance in three of the past four quarters.

The software exporter may cut its revenue forecast for the year to March when it reports its December quarter earnings on January 11, as US business clients put off spending and balk at signing big deals.

With about 60 per cent of its business in the United States, Infosys is particularly vulnerable to swings in US corporate sentiment and has been hit hard by spending deferrals by the companies in the world's largest economy.

However, Infosys executive co-chairman S. Gopalakrishnan was quoted by other media reports on Friday as saying 2013 would be better than last year for India's export-driven information technology industry.

Gopalakrishnan was quoted as saying brighter prospects for the United States and China would help the IT sector, as he addressed an event for the Infosys Science Foundation on Thursday.

Pulsant, the hosting and datacentre company, has completed the first phase of its new south London facility.The 8,400 sq m site is in Croydon, and represents a three year, 14m investment by the vendor. The company has continued to build out its Croydon site, despite the riots that affected the town last year. However, the company said that the site is equipped with cutting edge physical and virtual security measures.Pulsant said that its site Pulsant South London will support high-density rack environments. The new centre can support higher power loads than most businesses' internal data rooms can accommodate, or indeed most central London datacentres, according to Matt Lovell, Pulsant's CTO.

"Most datacentres in inner London can't support the power loads businesses need for high-density IT applications, such as big data," he said.

"We are now commonly seeing rack power requests between seven and 14kW per rack and envisage this will become commonplace over the next 12 months. We are also starting to see even higher requests, of even 20 to 30kW, and we will have to design future phases of South London to support these higher density requirements." The site will offer 1,680 racks when it reaches full capacity.

According to Pulsant, higher densities, and a power efficiency, measured in PUE, of 1.3, will help businesses offset some of the rising costs of electricity. Economies of scale and hedging against electricity price rises will also control costs. "We can't influence the kilowatt hour charges, which can only go in one direction," said Lovell. "But we are looking to help customers migrate from internal IT to an environment that supports higher densities."

In the last few years, higher energy prices have prompted both datacentre operators and customers to look at alternatives to the UK, especially the Amsterdam area. Lovell, though, said that the cost gap between the UK and Dutch-based datacentres has narrowed over the last year, and added that UK datacentres benefit from their proximity to customers' main sites.

"We've seen with events such as the Olympics that customers need to be able to reach their data, with a 30 minute travel time being the target. Croydon is well connected."

Pulsant expects demand to grow for edge-of-town datacentres, as businesses look to consolidate their IT operations, increase outsourcing, and improve resilience by moving services out of city centre locations.

Dealing with larger volumes of data ranks highly on most IT directors' lists of priorities for the coming year. But research by economists suggests that big data could do more, and deliver a significant boost to the economy over the next five years.

There is little point in IT building sophisticated new analytics tools, if the business lacks the skills needed to interpret the results, and turn the data into decision making.

The report, from the Centre for Economics and Business Research (and funded by SAS, an analytics tool vendor), suggests that improved use of "big data" could boost the UK economy by 216 billion, and create some 58,000 jobs.

Calculations by the Cebr suggest that big data delivered economic benefits of 25.1 billion last year, with the contribution rising over the next few years as more firms adopt advanced analytics techniques. This would equate to a boost of about three per cent of GDP, something that will be very welcome given the UK economy's current fragility.

The idea behind the calculations is simple enough: if businesses have access to better information, they will be more efficient, and more profitable. The Cebr splits the benefits into three main areas: business creation, efficiency, and innovation.

Big data, for example, should help companies start up, because they will be better placed to identify and target their markets. Companies should become more efficient, for example through better customer intelligence, or streamlining the supply chain; these efficiency gains should contribute 149.5 billion to the economy by 2017.

And innovation should, the researchers suggest, also gain from big data, because it can improve research and development as well as the creation of new markets. Gains, the researchers say, will apply across all sectors of industry, and the public sector.

But there are concerns over whether UK businesses, and the UK IT sector in particular, has the skills it needs to help businesses exploit big data. In particular, the figure for the jobs boost from better data analytics depends heavily on UK companies increasing their IT and analytics teams' capabilities, or where work is outsourced, by that work going to UK firms.

This is by no means certain. Already, CIOs are reporting shortages of business intelligence and analytics specialists. The problem is, if anything, more acute in the lines of business themselves. There is little point in IT building sophisticated new analytics tools, if the business lacks the skills needed to interpret the results, and turn the data into decision making.

In fact, unless the skills gap is plugged, and plugged soon, it is not just the jobs benefits but the wider economic opportuntity presented by big data that could be lost. When it comes to skills, work could go to India, Eastern Europe or even the US. But companies ignoring the big data opportunity would be an even worse outcome.

This point is not lost on the Cebr: "the jobs figures do assume there is a labour market that is available, trained and skilled," said Shehan Mohamed, the report's main author, and a Cebr economist. "There is a need to close that gap over the next five years."

To an extent this is already happening, and the IT industry is playing a role, for example though SAS' Curriculum Pathways project, which aims to boost the understanding of statistics and analysis in schools.

But it is also an area where CIOs and IT directors can take a lead, and use this report, and others like it, to show that there is more to data management than good housekeeping.

Stephen Pritchard is a contributing editor at IT Pro

Research launched by Google today revealed chief financial officers (CFOs) will engage more in IT as cloud computing continues its rise in popularity among businesses.

The survey was conducted by Vanson Bourne in January 2012 among 100 senior decision makers within the finance functions of large UK-based companies.

According to the study, 50 per cent of financial business leaders believe CFOs will become more influential in the purchasing and management of IT services as cloud deployments continue to grow.

Support for the cloud is still on the up, as 66 per cent of senior financial decision makers believe the cloud increases the IT department's contribution to corporate strategy. Also, 69 per cent believe cloud computing boosts the IT department's ability to innovate.

A majority of respondents 93 per cent said cloud will be important to the success of their company over the next 12 to 18 months, while 94 per cent agreed the technology provides their businesses with notable benefits, including reductions in IT maintenance costs, IT spending and operational costs and improvements in process efficiency within business.

Overall, 64 per cent believe that cloud computing is more beneficial to business than traditional outsourcing.

Thomas Davies, head of Google enterprise for the UK and Ireland, explained why more businesses are being persuaded to make the switch.

"The benefits of cloud computing go far beyond the obvious cost savings on software and reducing the burden of maintenance," he said.

"The fact that 93 per cent of surveyed CFOs believed that cloud computing would be important to the success of their company in the next year to 18 months underlines that the board has woken up to the benefits of the cloud."

IT departments may have only just caught their breath, following the 2009 recession. But CIOs should be preparing for a few more lean years.

This is the stark message put forward by Peter Sondegaard, head of research at Gartner, during the analysts' European conference in Barcelona this week.

Analysis by Gartner suggest that spending in Europe, the Middle East and Africa (EMEA) on IT will fall by 1.4 per cent this year, and grow in the region of 2.3 per cent in 2012. Spending in western Europe, which Gartner says accounts for 80 per cent of all EMEA enterprise IT spending, will perform even worse: a fall of 1.8 per cent this year, and a recovery of just 1.5 per cent next year. Government spending in western Europe will be down 4.8 per cent this year, and will continue to fall in 2012. Public sector IT budgets are not expected, Sondegaard said, to recover before 2015.

The implications of this are far reaching. In the UK, inflation, measured by the Retail Price Index, or RPI, reached 5.6 per cent in September. Even if prices of IT hardware stay down, other IT costs, including staffing and premises, are heading upwards. Effectively, next year's low growth represents a cut in IT budgets, in real terms.

And the situation could even be worse, suggests Mr Sondegaard: a second recession is "knocking at the door" in Europe. CIOs will need to trim their spending plans, as businesses look for cost savings, in order to survive. The position is being made worse by

The result, Gartner predicts, is likely to be renewed interest in shared services and service consolidation, and an even greater appetite for what Sondegaard describes as "low cost cloud apps". There could also be a renewed interest in outsourcing IT services, as companies look to preserve capital spending, and avoid costs such as hardware refreshes, or new data centres. Gartner expects cloud services in EMEA to be worth 20bn next year, and the sector will grow at 10 times the rate of overall enterprise IT spending.

If that proves to be true, then one person's cloud really is another's silver lining.

Stephen Pritchard is a contributing editor at IT Pro.

Recent reports that Government departments paid over the odds for IT will surprise few who have dealt with public sector procurement.

The Public Administration Select Committee's findings that, in some cases, departments paid 3,500 for a bog-standard desktop computer is just one symptom of a wider malaise.

Public sector procurement is all too often over complicated, bureaucratic, and drawn out.

There are countless examples in organisations as diverse as the NHS and the Ministry of Defence where public sector buyers, and their suppliers, have somehow contrived to pay many times over the odds for generic, off the shelf services. It is aircraft carriers and hospitals that capture the headlines; it is the smaller, day-to-day purchases were "waste" could, and should, be cut out.

As MPs suggested, bringing in more, smaller firms could help to cut the public sector's IT spending. But all too often, smaller firms are put off from bidding for public sector contracts by the cost of bidding, by the form-filling, the obscure purchasing process, unfavourable payment terms (think bans on staged payments) and a perception, correct or not, that the purchasing process favours large, if not incumbent, suppliers.

But when it comes to IT, there is another problem and one that not only affects public sector organisations. Successive outsourcing contracts have reduced government departments' expertise in running IT, and even their knowledge of their own IT systems. The "retained organisation", to use the outsourcing jargon, is either too small, or lacks the skills to know what it wants and to manage the contracting process well.

This affects public sector IT contracts in three ways. Firstly, the organisations often lack the detailed in-house knowledge of their systems, and how they support the business processes, that they need in order to improve them. Managing this systems architecture expertise is a key function of the retained organisation.

Second, departments may not be very good at buying IT anymore; several years into a long-term IT outsourcing contract, with key staff and assets such as data centres, staff, and even mainframes transferred to the outsourcer, any IT buying that the department still does will be at a low level. The outsourcer will often make any significant purchasing decisions, as part of its contract.

And thirdly, smaller suppliers are reluctant to bid for contracts with organisations with a weak retained organisation. Such contracts are all too often hard to run at a profit, as the supplier either takes on too much risk, or has to give extensive support to its client's retained organisation. Leaving aside whether it is right for a supplier to do such work, it is often not chargeable, or something a smaller contractor has the resources to do.

The most recent outsourcing survey from TPI, the sourcing consultants, pointed out that the UK had led the way in public sector IT outsourcing. For all its failings, these contracts have undoubtedly saved the Government, and tax payers, far more than they have cost.

But if Government IT is to continue to improve, and manage costs, internal IT teams need to be refashioned. They do not have to be larger, but they need to be smarter, and they need to regain control of IT strategy.

Private sector companies have been doing this for four or five years now, often working closely with their IT partners. After all, it is not how much a PC costs, but how much using that PC saves, that really matters.

Stephen Pritchard is a contributing editor at IT PRO.

Comments? Questions? You can email him here

IT and business process outsourcing is shaking off the recession, according to the latest data from TPI, the outsourcing consultant.

The TPI Index, for the second quarter of 2011, found that the total value of outsourcing contracts increased by 13 per cent, to reach 7.6 billion (6.7 billion).

But the study also found that the average value of IT outsourcing contracts fell during the period, whilst the number of contracts increased. The value of business process outsourcing (BPO) deals more than doubled, to 6 billion (5.5 billion).

Globally, the overall value of the outsourcing market also declined, by 18 per cent compared to the second quarter of 2010. According to TPI, the decline resulted from a drop in the number of "mega-deal" and other large contracts. In the UK, however, TPI found that demand for outsourcing continued to grow, as it has in France and the Netherlands.

And, despite public sector cost cutting, the number of public sector outsourcing contracts has also increased. Again, though, the trend is towards a larger number of lower value contacts.

"We have actually seen the pace of UK public sector activity increase in 2011, but contract values have declined," said Duncan Aitchison, a partner at TPI. This, he said, reflects a change in emphasis in the public sector, with contracts that either offer best of breed solutions, or short-term cost savings, gaining ground at the expense of larger scale initiatives.

Logica and a partner firm have secured a 300 million (250 million) outsourcing deal with oil and gas giant Shell.

The 10-year agreement will see Logica and FleetCor Technologies deliver Shell's Commercial Fleet fuel cards programme across Europe and Asia.

Logica will takeover the management of Shell's current in-house system and will see through its replacement, with the first pilot expected by April 2012. Full roll-out is expected before the end of 2013.

The cards are designed to help fleet managers keep on top of fuel payments, so funds are not misused and transactions are secure.

The project will span some 35 countries in Europe and Asia.

Craig Boundy, Logica UK's chief executive (CEO), said it had been a good start to the year for his firm, coming off the back of a 157 million outsourcing contract with the Serious Organised Crime Agency.

Furthermore, Logica won the Shell contract after beating off stiff competition from rival outsourcing firm Accenture something Boundy was particularly pleased with.

"We've been slowly but surely publishing a number of good wins that we've had in the area," Boundy told IT PRO.

"Clients are interested in buying things you design, build and operate for them, and they want the outsourcing as part of that."

He disagreed that outsourcing could help bring about the end of the in-house IT department as it is known today.

However, he said outsourcing had changed the makeup of the corporate IT department.

"Sure, internal IT departments have changed in size, but they've also changed in role and strategic significance," he added.

"Now with their strategic significance their business is increasing, as technology becomes a core part of every organisation."