Vertical IT Spending to Go Upwards

According to a new report from IT research and advisory firm Gartner, IT spending across all industry markets is forecast to exceed $2.4 trillion in 2010, an increase of 4.1% compared to same period last year, with banking and financial industries leading the way. Government agencies and health care providers are also expected to boost their IT this year.

The report says that IT spending by banking and financial industries will grow by 4.6% to $396.9bn in 2010, while total IT spending by communications media and services market is expected to reach $394.2bn, marking a 4.4% increase from the previous year. National and international government will show the strongest growth in 2010, with an increase of 6.2% in IT spending. Manufacturing and natural resources, and wholesale trade will experience the weakest growth through 2014, growing at 2009-2014 CAGRs of 3.0% and 3.1%, respectively.

"2010 will see IT spending in all major industries returning to growth, although that growth will vary by individual sector", Gartner analyst Kenneth Brant said.

Source: CBRonline.com

Read more...

Europe or North America – Who Will Spend More on Software Outsourcing?

With anti-crisis plans adopted and the first shock and mess settling down, the ITO buyers and providers are back to daily work. In a challenging environment requirements and priorities change, and new trends surface. Most market players talk of increasing demand for nearhsore software development services in Western Europe, and stay generally optimistic about offshore outsourcing as an important element of the global economic equation.

According to the latest edition of global management consulting firm A.T. Kearney’s Global Services Location Index (GSLI), a ranking of the most attractive offshore destinations, the outsourcing landscape has changed worldwide as Europe already spends more on outsourced services than North America. North America has been regarded as the leading user of offshore services for many years.

Western Europe displays increased interest in using nearshore locations. One of the best options is engaging a software services provider with conveniently located software development centers in Central and Eastern Europe, a region most promising in terms of quality, stability, and costs.

Moreover, A.T. Kearney study reveals a rather optimistic forecast regarding the future of offshore outsourcing, stating that offshoring has become an integral part of the supply chain for the financial, banking,and IT sectors, and expects the industry to continue to grow over the long term.

Source: ITO News

Read more...

Wealth Management Technologies in Russia

In a report published by US financial management and advisory firm, Merrill Lynch, half of Europe’s millionaires are Russian and their number is growing twice as fast as the global rate. So with all this money is the Russian financial sector geared up for wealth management? Sergey Shelyagin, director at EPAM Systems, observes that although the Russian banks are quite keen to offer such services, overall, they noticeably yield to the longstanding experience, knowledge and efficiency of European banks in this sector (such as UBS and Credit Suisse).

Shelyagin, whose employer, EPAM Systems, assists banks and various financial institutions with the development of wealth management technologies, observes that the interest in wealth management in Russia manifests itself in a host of dedicated conferences and forums. The neighboring countries of Kazakhstan and Ukraine are also promising markets, as well as Belarus. Product development, software maintenance and support, and application testing are up to the word’s highest quality standards at these countries due to a well-established education system. ‘Unfortunately, it is hard to gauge this type of market, as it is quite closed and understandably reluctant to go public,’ says Shelyagin. ‘So, there is more speculation than fact.’

In terms of IT, Shelyagin observes that more and more wealth management organizations turn to the CRM systems that enable a holistic view of the customer’s capital structure and allow operating these funds more efficiently. The tendency with the CRM solutions is to acquire a third party system and then customize it under the entity’s own steam or outsource the customization to a specialist firm.

EPAM has experience in the field although the company is under obligation not to disclose the names of its wealth management customers. EPAM customized Pivotal CRM – a CRM product suite from a Canadian provider, CDC Software. ‘We changed about 50 per cent of the software, leaving the main engine – document flow – intact,’ says Shelyagin. ‘We also developed a portal application so that a client has access to his/her portfolio via a personalized window.’

Source: IBS Publishing

Read more...

Financial Recession and Outsourcing: Who is in the Saddle?

In one respect it has been a record couple of weeks for “outsourcing”. Around the world, governments and taxpayers have agreed to help ailing financial firms offload their toxic loans and resolve their liquidity worries. Banks are not the only ones hoping that this will help keep them afloat. The multi-billion-dollar outsourcing industry that runs computer systems and other things on companies’ behalf is keeping its fingers crossed, too. After all, financial giants have helped drive the industry’s stellar growth in the past few years. Now they threaten to undermine it.

But let’s look on the bright side as huge outsourcing deals involving banks are still being done, though the figures may be a bit lower compared to the previous year. Moreover, some outsourcing folk claim that the financial crisis could ultimately help their business, even though it threatens to harm it in the short term.

Furthermore, they say banking survivors that already use outside contractors will give them more to do as they cut costs. Banks that have hitherto shunned outsourcing will have to embrace it to protect their margins. And those with their own offshore activities will be more likely to turn them over to specialists.

Source:Economist.com

Read more...

Everest Reveals Q2 Trends in Outsourcing

The Everest Research Institute’s Market Vista: Q2 2008 Report on global outsourcing and offshoring revealed that, despite the unstable economic conditions in the United States, the outsourcing market continues to stably grow with help from European investments. Europe accounted for 41% of all outsourcing contracts in the second quarter, signing 417 new outsourcing contracts (70% of which were ITO, 28% of which were BPO, and 2% of which were both ITO and BPO) with a contract value of $2.6 billion dollars. Similarly, the report demonstrated an increase in the use of the captive model, in which a company builds a captive offshore center to either eliminate the middleman (thus saving money) or to exercise total control over outsourced operations. Additionally, Everest, based on the Q2 report’s profiles of outsourcing activity in Central and South America, deducted that labor savings in Brazil, Chile, and Mexico, will not be realistic for the next five to ten years.

According to the Everest Q2 Report, the outsourcing market experienced a 3% growth in outsourcing contracts compared to the first quarter. This growth is largely attributed to Europe (particularly the UK, whose outsourcing activity has gathered incredible speed) where contracts were signed in the UK, Germany, Sweden, and Switzerland with manufacturing and telecom industries. Fifty four deals were made with financial services in the second quarter, with $240 in annual contract values; a marked increase was seen in the amount of these contracts signed by North American companies - 41% compared to 26% in the first quarter. The captive model, despite much negative speculation, is also growing in popularity; with 18 new set-ups and 3 divestitures, the 2008 total for captive offshore centers has totaled 34 set-ups and 6 divestitures.

Source: Everest Research Institute

Read more...

EPAM acquires pass to stock exchanges

EPAM Systems has acquired the B2Bits Company, an IT consultant providing services to stock exchanges and brokers. A special Capital Markets Competency Center headed by B2Bits president has been set up at EPAM, which enables the company to expand the range of services provided for the financial sector clients.

The EPAM Systems Company, a software development outsourcing services provider, has announced to acquire a 100% stake in B2btis, a provider of solutions and consulting services to professional stock market players.

One of EPAM’s service lines is development of mission-critical business applications for the financial sector organizations. About 600 of the company’s 4,000 employees are engaged in corresponding projects. EPAM now covers the entire value chain from domain knowledge and process consulting through customized high-performance architecture as well as product and application development, maintenance and support, and testing software. Russia, Western Europe and the USA are among EPAM’s top target markets.

‘The acquisition proves EPAM Systems is seeking to expand the range of services provided and become a leading service provider for stock market’, - states Arkadiy Dobkin, president and CEO at EPAM Systems.

Services for the financial sector will be provided by a specialized Competency Center headed by Mark Bisker, B2Bits president, who has worked for more than 25-year for leading technology companies, such as Schwab Capital Markets and Lava Trading.

If the IT consulting market grew by 20% in 2007, the financial segment growth was at least 1.5-fold higher, experts say. Due to transaction with B2Bits, EPAM Systems pledges to intensify related operations on the Russian market. ‘The given market is sure to continue developing due to growing professionalism of local players, foreign companies’ expansion and competition intensification’, - says EPAM. ‘Consulting for financial organizations is in greater demand than on the market in general, as financial organization are far ahead in IT implementation as compared to other entities, - says Alexander Lyubinsky, CMO at ISG. – The easy money period has finished for the financial sector, so competitive advantages might be achieved only when using updated infocom technologies’.

...According to CNews Analytics, EPAM Systems’ consolidated revenue has grown by 37.7% in 2007.

Source: CNews

Read more...

EPAM under full steam to true full service in Finance

On the third of April, 2008 EPAM Systems Inc. announced the acquisition of B2BITS Corp, a provider of solutions and consulting services to capital markets organizations within the financial services sector. Since its foundation in 2000 B2BITS has been known for its unexceptionable performance delivering pre-built solutions, customizable frameworks, specialized testing tools as well as process consulting for Client Connectivity, FIX, FX, Options, Fixed Income, market data feeds, exchange gateways and electronic payment services.

The acquisition allowed EPAM to combine the extensive domain knowledge of B2BITS and EPAM’s high- qualified team of software engineers developing, maintaining and supporting mission critical applications for the Financial industry. That’s good news for both current and prospective clients from financial services industry as EPAM now covers the entire value chain starting from expert analysis and consultancy to the development, maintenance and 24/7 support.

As Mark Bisker, the head of EPAM’s new Competency Center and CEO of B2BITS Corp, said: “By leveraging the scale and experience of the most disciplined and efficient software engineering organization in the region, we can now better leverage our domain knowledge and consulting skills.” In his turn Arkadiy Dobkin, CEO and President of EPAM Systems, noted: “The management and consulting teams from B2BITS significantly enhance EPAM’s expertise and capabilities in this important market segment”.

Source: EPAM Systems, Inc.

Read more...