By Clancy Yeates

NAB chief executive Cameron Clyne has pledged to cut costs by $800 million a year by encouraging customers to do more ”self service” banking, as he seeks to ditch its reputation as the weakest of the big four Australian banks.

After spending the past four years focused on rebuilding the bank’s battered reputation and restoring its financial position, Mr Clyne  vowed to rein in expenses and simplify its range of products.

In response to rapid growth in online banking, NAB will overhaul its outdated technological systems so that customers can do more of their banking through digital channels.

It expects the investments, coupled with moves to cut expenses across its branch network, to produce $800 million in annual savings in five years’ time.

It also unveiled a shuffle of its senior management ranks, with chief financial officer Mark Joiner retiring and the long-serving head of MLC, Steve Tucker, leaving the bank by mutual agreement.

The push to cut costs comes after investors grew increasingly frustrated with NAB last year because of the ongoing drag caused by its struggling UK business.

But NAB Chief Mr Clyne denied the bank was reshaping its Australian business and management team to appease investors who were upset with its share price performance, which was much weaker than its rivals last year.

Instead, Mr Clyne said the cost cutting and shuffle were driven by the need to offer customers better services in an age of slower credit growth, higher costs and rapid technological change.

”It’s not tenable for us to bring forward the sort of changes that customers are increasingly demanding with 1970s infrastructure and architecture,” Mr Clyne said.

”We need a much better customer experience; our customers are demanding it.”

In other staff changes, Rick Sawers, who now runs the wholesale bank, will be appointed to a new role as the group executive in charge of product and markets. This position will involve simplifying the bank’s product range.

Retail banking boss Lisa Gray has been moved to a role in charge of enterprise services and transformation, with responsibilities for cutting duplication.

Mr Clyne said there would be no wide-scale job cuts and he expected to achieve reduction in staff numbers through attrition.

As banks look to profit from Asia’s economic rise, Mr Clyne indicated NAB would take a more cautious approach than some of its rivals, given the problems created by its UK business, which has been plagued by losses.

”If you take a realistic assessment, every Australian bank, to varying degrees, has mostly destroyed shareholder value by going overseas,” he said.

Read more: http://www.smh.com.au/business/nab-pledges-to-cut-800m-costs-20130313-2g0sr.html#ixzz2NTEAyqAU

Datacom has announced plans to build a new tier 3 data centre in Hamilton following the success of its bid to be a preferred supplier of cloud and data centre services to the New Zealand Government.

The contract, signed yesterday, is for a period of 10 years with an optional 5 year extension. This initiative is part of a cross-government ICT programme led by the Department of Internal Affairs to reduce costs and improve the effectiveness of government.

Sydney-based Datacom Group CEO Jonathan Ladd said Datacom is continuing to invest in new cloud infrastructure right across the region.

“With Australia and particularly New Zealand recognised as high growth markets for cloud services, Datacom is continuing to invest significantly in infrastructure across the region, including expanding its Sydney cloud platform and establishing nodes in Melbourne and Brisbane to meet demand,” Jonathan Ladd said.

“Datacom applauds the NZ Government’s progressive initiative in establishing the provision of infrastructure as a service to its agencies, which we believe is a world-first on this all-of-government scale for a national administration,” Jonathan Ladd said.

Technology to operate Datacom’s cloud services is sourced from Cisco, EMC, HP, IBM, Microsoft, NetApp, Symantec and VMware.

Datacom’s New Zealand CEO Greg Davidson said a standalone cloud computing platform, Datacom Cloud Services for Government, will be available within 90 days.

Storage and computer services will be provided in a range of price, performance, and availability tiers to meet varying agency requirements. An online portal will provide agencies with ‘a single pane of glass’ to view, provision and manage the services provided. The portal will be secured using the NZ Government’s igovt identity verification service.

The Datacom Cloud Services for Government computing platform is based on the expertise gained by Datacom’s operation of its established commercial cloud platform in New Zealand, running across three of its data centres in Auckland, Wellington and Christchurch.

This commercial platform now provides cloud services to more than 100 clients via 1,500 machines, with over one petabyte of storage under management. These numbers are growing at 15 per cent per month.

To ensure ongoing data centre capacity Datacom will build a new tier-3 data centre in Hamilton on the North Island and extend existing cloud and data centre infrastructure in Auckland, Wellington and Christchurch. Work on the new data centre has commenced and it will open in early 2013.

Datacom expects the very low earthquake risk profile of Hamilton to make that location an attractive site for both NZ government and commercial organisations to house IT systems.

Design consultants for the new data centre in Hamilton will be Beca Carter with construction services being provided by Fletcher Building, forming the same team that delivered Datacom’s successful Auckland tier-3+ facility, commissioned 2 years ago as NZ’s most energy-efficient data centre.

“Datacom’s commitment to providing the benefits of technology advances to its clients through its early and proven investment in cloud computing now enables us to offer infrastructure as a service to all NZ Government agencies,” Greg Davidson said.

“Our selection is highly significant for Datacom and will allow us to bring the benefits of efficient cloud computing to many public sector organisations. The NZ Government’s embrace of this innovative technology paradigm will further spur its adoption across the country, which can only be good for productivity and the economy.”

Datacom is a New Zealand owned IT infrastructure, software and outsourcing services company employing over 3,500 staff across New Zealand, Australia and Asia. Revenues in the last financial year ended 31/3/11 exceeded NZ$725m.

By Shraddha Nair & Harini Subramani

Private equity investors Franklin Templeton Private Equity Strategy, a fund managed by Franklin Templeton Asset Management (India); Aureos South Asia Fund and ePlanet Capital have bought a majority stake in Newgen Imaging Systems a Chennai-based unlisted e-publishing outsourcing firm, two people familiar with the development said.

“We are convinced about the opportunity in the outsourced publishing space, specifically in the opportunity that presents itself in the digitization of books,” said Balaji Srinivas, managing director, Aureos India Advisors Pvt. Ltd.

The buyers have purchased a 60% stake in Newgen, said a person directly involved with the deal, asking not to be named as he is not authorized to speak to the media.

The stake was purchased from Carlyle Asia Venture Partners II, a growth capital fund managed by global investment manager Carlyle Group, which invested $10 million in 2004 and increased its stake by investing later in 2006. Carlyle will exit the company with the stake sale, both the persons cited above said.

A Carlyle spokesperson declined to comment.

Newgen, founded in 1996, provides outsourced publishing services, particularly to publishers in the US and Europe. It offers project management service for books and journals, taking on processes such as author liaison, development editing, copyediting, design, artwork and permission, typesetting, composition and eBook delivery.

Some well known e-publishers include Macmillan Publishers, International Typesetting and Composition, Mizpah Publishing Services and Cadgraf Digitals.

“The industry is not very organized and very few well-known players exist,” said Pradeep Udhas, executive director and national head, information technology and business process outsourcing, at consulting firm KPMG India.

The Indian e-publishing offshoring industry is estimated to grow at a compounded annual growth rate of 35% to $1.2 billion by 2012, employing nearly 74,000 people in around 1,500 companies, according to KPMG.

“E-Publishing is primarily growing on account of increased outsourcing being done internationally in the publishing space,” said Udhas. “Other drivers include increase in broadband penetration, private schools adopting hybrid teaching methods, and foreign universities offering online courses.”

Secondary deals, or sale from one private equity fund to another, have emerged as a popular mode of exit by investors due to volatility in the capital markets. The value of secondary deals more than doubled to $125 million across eight deals in January-June this year, compared with $59 million across nine transactions in the year-ago period.

shraddha.n@livemint.com

Deals India, published jointly by Mint, Dow Jones Newswires and The Wall Street Journal, is a one-stop destination for investment professionals following deal flow, deals news, private equity and venture capital activity in India.

By Romy Udanga

Two of the largest telecommunication companies in the Philippines were among the information and communication technology (ICT) businesses that met with their New Zealand counterparts in Auckland last week to explore potential business opportunities between the two countries.

Philippine Long Distance Telephone Company, the leading telecommunications provider in the Philippines, and Globe Communications were among eight companies that pitched their business propositions at the New Zealand Trade and Enterprise-organised meet and greet.

NZTE ICT and creative services acting director Matt Richie said the event aims to raise the profile of New Zealand’s ICT industry, which has a market turnover of about $20 billion yearly and exports of about $1.5b, in the Philippines.

Of most interest to the Filipinos was the NZ health IT and agricultural technology sector while the Kiwis were keen on the Philippines’ telecommunication and business processing outsourcing sectors, including call centres.

Philippine Information and Communications Technology commissioner Monchito Ibrahim said the capability of the Philippine ICT industry – whose business processing outsourcing services revenue alone exceeded $11.5b (US$9b) in 2010 – is not well known in New Zealand.

“The Philippines surpassed India for the first time this year in terms of total revenues for call centre operations. We achieved revenues of US$5.7b against India’s US$5.6b in pure voice-based services alone,” Ibrahim said.

BPO umbrella organisation Business Process Association of the Philippines executive director Gillian Joyce Virata said the association could help Kiwi companies with their “business matching” needs. “We have 280 corporate members that are engaged in BPO. Together with the government, BPAP leads local talent recruitment and development,” Virata said.

Exist Software Labs business development manager Donna Alix said the Philippines was “an undiscovered talent” among New Zealand business.

“We’ve been developing software in the Philippines since 2001. What we want to introduce to the New Zealand market is that ability.”

Auckland-based Ian Allan, marketing manager at Mobilis Networks, developer of real time, pre-paid and post-paid billing software for mobile and wireless networks, and software for data and voice switching among others, said there were real opportunities for partnership.

“Exist, which has outsourcing contract software development, is going to be the one I’d be talking to. They seem to have a lot of expertise in iPhone and Android development. This is something that we can take advantage of because it is not our core competency … but if we can utilise services like that it will be a great advantage to us.

“And, of course, PLDT and Globe Telecom are here as well, and they are a potential customer to us. They have been a customer to us in a previous company,” Allan said.

NZTE’s Richie said that apart from the business-to-business meet, he is optimistic for a government-to-government outcome “that will pave the way for New Zealand ICT companies to go to the Philippines on a mission” one day.

Source: Stuff.Co.NZ

European Union and ASEAN ministers met last week and they endorsed increased trade ties between the two regions.

“The ministers… agreed on the importance of involving the private sector in the development and implementation of the ASEAN-EU trade agenda,” the ministers said in a statement issued after the meeting.

An EU-ASEAN Business Council was also launched last week and the European Chamber of Commerce in the Philippines (ECCP) said the country should move to strengthen its foothold.

“Europe is a huge market that has not been fully recognized by the Philippines yet, since it has, in the past, spent more time and effort on developing its trade relations with the [US],” ECCP Executive Vice-President Henry Schumacher said in an e-mail.

“… Europe matters, but these European markets are not being delivered on a silver plate, so Philippine businesses have to go for it and become more visible in this region,” he continued.
Among others, Mr. Schumacher noted that “The Philippine market share of the EU BPO/IT (business process outsourcing/information technology) industry is only 10%, but much more could be done here.”

Source: AFP, Reuters

According to the Xinhua News Agency – There are some foreign banks coming to the Chinese mainland to probe the possibility of cooperation on fund back-office business outsourcing with local funds, according to a report of the Securities Times.

HSBC has been in frequent contacts with some funds in Shanghai, and afterwards, it will go to Beijing to probe the possibility of cooperation with competent departments.

Legally, China has not opened the “gate” to this business yet, but overseas institutions have taken the initiative, eyeing the huge fund market on the Chinese mainland.

By fund service outsourcing, fund companies outsource their non-core business departments to other professional institutions, and will focus more on investment and research business. It is a universal practice adopted on the international market.

Source: iStockAnalyst.com

Love them or hate them you cannot deny the generosity of spirit that America is renowned for. The US Agency for International Development (USAID), headed by Obama-appointee Rajiv Shah, has launched a US$ 36 million programme to train 3,000 IT specialists and workers in South Asia, despite President Obama’s promise to lessen the outsourcing of hi-tech jobs.

According to the website of the US embassy in Sri Lanka, USAID is partnering with the top BPO, IT and English language training firms to put up skills development training centres. Courses in business process outsourcing, Java, and English language will be given for free to more than 3,000 students. These students will then undergo on-the-job training and hopefully fill workforce shortages in BPO and IT.

Not only is USAID limiting its reach to Sri Lanka’s BPO and IT industries – it will also give aide to the construction and garment industries to create 10,000 jobs in the country.

All these seem consistent with what the US usually does – help other countries get back on their feet. However, the above-mentioned programmes of USAID appear to contradict President Obama’s pledge to reduce offshoring.

Vietnamese software company IMT Solutions partners with Danish company Conscensia to set up a business process outsourcing centre in Ho Chi Minh City. This partnership increases Conscensia’s advantages as it can provide 24-hour service and develop their client response.

This partnership will also implement the SCRUM Business-to-Business programme, where DKK 910,000 is allotted for a pilot project, technical training for local employees, and improvement of existing facilities. IMT Solutions and Conscensia foresee the creation of 40 new jobs and DKK 1.6 million initial turnover in the coming 12 months.

Training for local employees will include information on HIV/AIDS and Occupational health and Safety protection. A seminar to improve cultural understanding and how to communicate more effectively within international standards will also be given.

Cognizant Technology Solutions, a multinational business process outsourcing provider with 54 centres worldwide, established its new 600-seat facility on 4^th August 2010. It is located at McKinley Hill, part of Bonifacio Global City in Metro Manila.

“The company is continuously hiring, and we expect to utilise our new site’s capacity very soon,” said R Chandrasekaran, president and managing director for global delivery. “There is significant growth opportunity here. We are also looking at establishing sites in other areas outside Metro Manila to tap the available talent as well as the lower cost of doing business there.”

Cognizant operated another facility in Taguig City. Albeit a small site, Chandrasekaran revealed that they were getting good client feedback about the performance of their Philippine centres. The newer and bigger facility will absorb operations from this existing centre.

Cognizant in the Philippines provides business process outsourcing, knowledge process outsourcing, IT infrastructure services, and soon direct IT services for the financial, retail and telecommunications industries.

New York listed Stream Global Services and eTelecare Global Solutions, a subsidiary of one of the largest companies in the Philippines Ayala Corporation, have merged creating an outsourcing monster.

Stream has 50 contact centers located in 22 countries. It manages a staggering 100 million voice, e-mail, and chat contacts a year from customers around the globe.

Sources close to Stream indicated that they have a strong investment appetite and they intend to invest heavily in the Philippines this year. The company currently employs approximately 12,000 people over eight sites in the Philippines.

“We’re here to build a business of size,” said a Stream senior executive, adding that the Philippines has the potential to surpass India as the leading outsourcing destination in the world. “The Philippines has a workforce that can serve high-value clients in back-office functions and also potentially in technology,” he added.

Stream’s expansion plans have delighted the Business Processing Association of the Philippines (BPAP) who forecasts 26 percent growth in the sector as economies recover from the recent global financial downturn.

Walden International, Olympus Capital, and other investors have pump primed Quatrro BPO Solutions, which employs 3,000 people and has established its presence in India, China, Sri Lanka, and the United States in anticipation of a growth spurt in the Business Process Outsourcing industry worldwide. The initial trench is US$13 million.

Founder Raman Roy says, “The additional funding gives us dry powder to work on deals.” The company aims to implement its organic and inorganic growth strategy through its newly acquired venture capital.

Walden India managing director Rajesh Subramanium says, “We are backing best in breed companies that don’t play in a cluttered segment. The Quatrro model presents the next generation of the BPO wave. Quattro BPO Solutions is their first investment in an outsourcing company in India.

“The client engagement model of Quatrro is outcome based. There is non-linear growth opportunity here unlike in several BPOs where revenue growth is in sync with manpower growth. Hence we see a better realisation opportunity in Quatrro.”

Quatrro BPO Solutions focuses on SMEs, and has already made six investments such as in Auxicogent, gaming business Babel, Flexitronics BPO, and Scope eKnowledge, to name some.

As the Philippines’ Business Process Outsourcing industry matures and looks to new locations to bring into the surging industry, this year’s Top 10 “Next Wave” Cities for outsourcing companies, compiled by the Commission on ICT, Business Processing Association of the Philippines (BPAP) and the Department of Trade and Industry, was announced recently.

Davao City in the Southern Philippines emerged as the front runner while cities of Bacolod, Baguio, Cagayan de Oro, Dumaguete, Malolos, and Sta. Rosa (Laguna) also make it to the list.

Davao was highly rated for human talent, infrastructure, operating costs and its business environment. Currently, Davao employs 6,500 agents and is home to 20 outsourcing companies.

“There were 10 travel advisories by embassies issued last year and Davao was mention in six of those,” said Gillian Joyce Virata, BPAP executive VP

The study also showed that BPO and IT in Metro Manila went down from 82 percent in 2007 to 78 percent, and that this year’s top 10 cities posted an amazing 148 percent employment growth in 2009.