Queensland IT integrator Data#3 received a handy boost to its revenue stream last week when it clinched an outsourcing contract with Tower Life Australia. The deal is worth $A2 million and is expected to be accompanied by additional projects worth $A3 million over two years.
Under the terms of the contract Data#3 will provide help desk and desktop management services and will be called on for special projects, including resource supplementation, management of remote sites, standard operating environment configurations, hardware audits and procurement of hardware and software.
Data#3 and Tower worked together for nine months on selective outsourcing of the insurer's help desk before negotiating the contract. Tony Kesby, CIO with Tower, said that Data#3's services cost 25 per cent less than the incumbent supplier and its strategic procurement service saved up to 18 per cent. "In the first nine months working with Data#3, complaints to my desk dropped by 92 per cent," he added.
Kesby also said that outsourcing gave Tower flexibility in terms of IT resource levels and access to a much wider skills set at short notice. "We found that very clearly in our 1999 merger with FAI Life, which led to many special projects, and with a recent standard operating environment migration.
"It frees our internal IT people to build their knowledge of the business processes, which is where they add the most value. The business knowledge lives with our people and they work with the supplier," he concluded.
Last week Data#3 released its annual results, showing a loss of $A84,000 after revenue had slipped 1.5 per cent to $A130.4 million.
Intellect cracks big sale in Austria
West Australian smart card specialist Intellect has maintained its export momentum by picking up an order valued at $A20 million for the supply of a combination of more than 15,000 smart card-capable terminals and hand-held mobile payment systems for banks, police, telecommunications and other organisations in Austria. The largest component of the deal is the provision of highly-secure IPT2000 to card issuer Europay Austria Zahlunghsverkehrssysteme (EPA).
EPA is owned by all Austrian banks and is responsible for issuing Eurocards/Mastercards, Maestro/Cirrus cards and private label cards. It already has more than 30,000 Intellect systems installed, a spokesman explained.
The second part of the contract involves the provision of mobile payment terminals to Austria's police service, a telecommunications company and other customers.
The deals were clinched by Austrian Payment Systems Services, which provides the national EFT network and an online authorisation centre for debit cards, credit cards, fleet cards and an electronic purse scheme.
"Europay is strongly encouraging the use of electronic purse transactions and electronic payments," explained Francis De Vrieze, Intellect's chief marketing officer. "In doing so they are making the technology more widely available and the number of transactions is growing exponentially."
Telstra takes the battle to the watchdogA feisty Telstra has made a pre-emptive strike against the Australian Competition and Consumer Commission by daring it to make a final determination on PSTN access pricing to competitors - so that Telstra can formally appeal against it.
A statement released by the carrier noted that for the past 12 months the ACCC has fixed the price that some competitors pay to interconnect with Telstra's network using interim determinations that Telstra could not challenge. "The effect of ACCC's use of hypothetical models is that competitors get to use Telstra's infrastructure at below the cost of building and maintaining the network," explained Bruce Akhurst, Telstra's group managing director, legal and regulatory. "Cheap access to Telstra's infrastructure discourages competitors from investing in their own infrastructure and providing network competition."
Akhurst said that if the ACCC made a final determination in an access pricing arbitration it would clear the way for the Australian Competition Tribunal to review the ACCC's methodology. "All Telstra wants is an independent review of the ACCC's position," he explained.
"Only when the ACCC makes a final determination and the matter is appealed to the higher authority of the Australian Competition Tribunal will these industry disputes be finally resolved," Akhurst said.
Nortel gets nod for Optus centre
Nortel has been selected as the supplier of equipment for an Internet data centre (IDC) that Cable & Wireless Optus plans to build in Sydney. The centre will have access to the existing Optus IP backbone and will offer dense wave-division multiplexing connectivity.
David Stokes-McKeon, director of e-solutions at Optus, said that when the centre opens in October it will offer optical Internet access, Web hosting, application software and service capabilities, application hosting, and a robust, high-performance infrastructure capable of moving electronic business content across optical networks. "As well as offering hosted solutions we will actively partner to develop new and different software solutions for the market," he explained.
"It clearly signals our intent to establish a leadership position in Australia's rapidly-growing ASP and hosting markets."
Optus has also launched a commercial General Packet Radio Service for fast mobile data applications. "You can now access all the information that is available on your desktop computer when you are away from the office using WAP on a mobile phone, using a laptop or using a palm device," a spokesman explained.
Passlow keeps it all in the family
Open Telecommunications has won a $A90 million contract to design and build software solutions for COMindico Holdings, which intends to build "Australia's largest Cisco-powered Next Generation Internet Protocol network". The network will carry a full range of OT's operational support systems, intelligent switching and other telephony solutions.
COMindico is a newly formed company that is funded by a group of investors, including Wayne Passlow -- who just happens to be managing director of OT -- with vendor finance sourced from Cisco Capital. However, while Passlow has a non-controlling shareholding, OT has no equity interest in COMindico.
A spokesman said the COMindico contract is OT's first major end-to-end network delivery project.
Cheers for CTI in grog shop contract
Recently-listed company CTI Communications has won a contract worth about $A100,000 to supply a call centre system for Theo's Liquor Markets. The contract includes CTI's new eShare Xchange Contact Centre Automation Systems, which includes predictive dialling. It is expected to help Theo's call centre operators, who market wine and provide customer service by phone, to increase the effectiveness and the number of customer contacts.
"CTI were able to show proven implementations of integrated leading edge technologies and demonstrate actual productivity increases in a very short time," noted Gary Ryan, Theo's call centre manager.
Audit office picks holes in outsourcing
The Australian National Audit Office (ANAO) has made 20 recommendations of how to fix problems it found when reviewing the Commonwealth Government's IT outsourcing program. While the government takes a sanguine approach to the number of recommendations and criticism's contained within the ANAO's 247 page report, the opposition and some observers are more concerned.
Under the government's outsourcing regime five contracts covering 23 government agencies have already been awarded at a total contract value of about $A1.2 billion. Tenders covering a further seven agencies are in progress, and two others are being prepared for 11 more agencies.
John Fahey, Minister for Finance & Administration, said the ANAO's report showed the implementation of the government's IT initiative "has been demonstrated to be fundamentally sound".
Fahey did not mention the report's comment's on the outsourcing program running two years late and costing almost three times as much as originally expected. The budget of the Office of Asset Sales and IT Outsourcing blew out from $A13 million to $A33.17 million, according to Senator Kate Lundy, the Labor Party spokeswoman on IT. "The report identified the extraordinary amount of money spent on strategic advisers to OASITO," she noted. "$A25.78 million went on advisers' fees".
ANAO's third recommendation was, in fact, that OASITO "improve its management of the strategic adviser consultancy for the remaining duration of the IT initiative".
ANAO also found serious problems in assessing the realised cost savings from outsourcing and allocating funds to the agencies concerned.
Copies of the report may be obtained from the ANAO's Web site at www.anao.gov.au, and Fahey's statement from the media release section at www.dofa.gov.au.
US wakes up to outsourcing rorts
Ironically, just as the Australian Government is considering the ANAO's report into IT outsourcing, the US Congress is considering a bill titled The Truthfulness, Responsibility and Accountability in Contracting Act, which is designed to force Federal agencies to trace outsourcing costs and savings more effectively and to force competition between government workers and the private sector.
The bill has brought an immediate reaction from IT organisations, several of which have banded together to oppose the bill on the grounds it could derail what they see as a growing movement toward government IT outsourcing.
"The TRAC Bill would prevent agencies from awarding new outsourcing contracts until the can demonstrate cost savings and other benefits. This would likely take years, if it could be accomplished at all," claimed the Information Technology Association of America in a letter to Congress. "The Bill has the potential to slow - if not cripple - critical government programs," it concluded.
Microsoft awaits Supreme Court ruling
Observers believe the US Supreme Court may announce today (Friday) whether it will hear Microsoft's appeal of the antitrust ruling against it, or whether the appeal will be passed instead to a lower court of appeals.
Microsoft believes the court of appeals would be more sympathetic to its cause, but is believed to be preparing for the worst by pushing ahead with plans for a Supreme Court Appearance. Supreme Court sessions begin on the first Monday in October.