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European IT Services Majors Deliver on Margin Improvements in H1; H2 Margins Will Be Impacted by Consolidation
Aug 05, 2014, by Rachael StormonthThe H1 results from the European majors Atos, Capgemini, Sopra, all France-headquartered, are now in - also those of Sopra, about to merge with Steria. So what does this tell us, about the progress of these firms and the state of the European market and what should we expect in H2 2014? The average constant currency revenue growth experienced by these firms in H1 2014 was 1.4% with Steria and S[...]
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HCL Q4 FY 2014 Results: IT Infrastructure Services, Europe Dominate Growth; Application Services Relatively Soft
Aug 05, 2014, by Rachael StormonthAt first glance, its Q4 FY 2014 results look like another impressive quarter’s performance from HCL Technologies (HCL), with the strongest y/y topline growth since Q2 FY 12 (to 14/6%) and ongoing y/y margin improvement (to 24.1%). (See here for full details). Look more closely, however, and, while the performance is undoubtedly very strong, it tends to be concentrated in a few service lines [...]
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Raytheon, GM and the U.S. Army Partner to Provide Training to Returning U.S. Soldiers
Aug 04, 2014, by Gary BragarRaytheon has partnered with the U.S. Army and General Motors to provide training to returning soldiers to be GM Service Technicians at GM dealerships. The GM dealerships hire ~2,500 technicians annually and often have difficulty finding the talent needed. The Shifting Gears: Automotive Technician Training Program, is a multi-year partnership between Raytheon, GM and the U.S. Army. The training,[...]
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MPHRO Supplier Focus on the Core Reflected In NEAT CSAT
Aug 04, 2014, by Gary BragarIn addition to providing assessments of MPHRO vendor capability, the NelsonHall Evaluation and Assessment Tool (NEAT) for MPHRO, published July 29, 2014, http://bit.ly/1uDunOq supports an analysis of customer satisfaction within MPHRO by service line. Based on client interviews conducted globally covering vendors providing MPHRO across all regions, the analysis covers satisfaction within the [...]
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Mastercard is Growing Faster than Visa in the Fast Growing Markets
Aug 01, 2014, by Andy EfstathiouMastercard and Visa are taking very different approaches to the payments market, resulting in very different operating outcomes. Mastercard is focusing on growth in emerging markets and merchant acquiring (especially consulting services for merchants); Visa is pursuing mature markets with aggressive cost control and sales incentives to drive revenue growth. Top line results for [...]
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Genpact Q2 Results: The Transformation Remains a 'Wait & See' Game
Aug 01, 2014, by NelsonHall AnalystGenpact’s Q2 2014 results show similar mid-single digit (5%) top line growth to Q1 (4.9%), in line with prior guidance for the year of 4%-6% (this has now been adjusted to 5-7% to include a revenue contribution from its Q2 acquisition of Pharmalink). But it is substantially below the 12.1% growth seen in 2013. EBIT margin was 13.0%, down both sequentially (-7 bps) and y/y (-157 bps[...]
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NelsonHall Launches “Speed-to-Source” Vendor Evaluation Tool for Multi-Process HR Outsourcing
Aug 01, 2014, by NelsonHall AnalystNelsonHall, the leading global BPO and IT outsourcing analyst firm, has today launched a new tool to assist strategic sourcing managers in assessing vendor capability in multi-process HR outsourcing (MPHRO). The MPHRO tool is available to NelsonHall clients and is also available for a limited period free-of-charge to strategic sourcing managers. In addition to a comparison of overall ve[...]
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Buy Rather than Build Continues to be a Key Theme in Insurance BPO in EMEA
Aug 01, 2014, by NelsonHall AnalystBe it in support of healthcare, the London market or consulting capabilities, the U.K. insurance BPO market is seeing a lot of acquisitive action from four major players who have already made significant acquisitions in the H1 2014. Starting with two of the most acquisitive vendors in insurance BPO: Innovation Group and Quindell continue to build operational scale Earlier this month, A[...]
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Teleperformance H1 Results: Recent Acquisitions Look Set to Bear Fruit
Jul 31, 2014, by NelsonHall AnalystWith like-for-like growth of 10.3% this is another strong quarter for Teleperformance although it continues to be challenged to its exposure to exchange rate fluctuations in the LATAM region resulting in reported revenue growth of 4.1%. Its Brazil business is contending with a stalling economy and a sharply depreciating currency, although it is still profitable and[...]
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NelsonHall Launches “Speed-to-Source” Vendor Evaluation Tool for Payroll Outsourcing
Jul 30, 2014, by Gary BragarThe NelsonHall Vendor Evaluation and Assessment Tool (NEAT) for Payroll Outsourcing is now available to NelsonHall clients, and is also available for a period free-of-charge to buy-side organizations through NelsonHall and through its partners SIG and SSON. The NEAT tool for Payroll Outsourcing is part of NelsonHall’s “speed-to-source” initia[...]
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Xerox Services Q2 Results: Further Problems in Government Healthcare Business, but Beginning to Grapple With Margins
Jul 25, 2014, by Rachael StormonthXerox Services has had a challenging half year: In Q1 it announced it was taking an impairment charge ($80m for the year) related to HIX platform impairment (see here for discussion). In Q2 it lost the Texas Medicaid contract. The impact of this is significant (around 1.5% of revenues): Q2 2014 Services contract renewal rate was 63%, well below the company’s target range of 85% to 90[...]
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Wipro Q1 FY 2015 Results: Good in Parts....
Jul 24, 2014, by Rachael StormonthWipro announced its Q1 FY 2015 results today (for full details see here:). Bit of a mixed bag from Wipro this quarter, generally positive, but with a few areas where we would hope to see improve over the next few quarters. Looking at overall topline performance, revenues were towards the higher end of prior guidance of $1,715m-$1,755m, and the 9.6% reported y/y growth was[...]
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Another F&A BPO Win in the Nordics for Cognizant: Significant Potential for Expansion
Jul 23, 2014, by NelsonHall AnalystCognizant recently announced a F&A BPO contract award by facility management services group ISS, covering its operations in the Nordics. This is the third F&A BPO client win for Cognizant in the Nordics. The first award was with Volvo, announced March 2011, followed by one at Norway Post, in partnership with local partner Visma, in July 2011. Cognizant’s clie[...]
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TSYS Faces Pricing Pressure in Q2 2014 Growing Revenues 34.2% by Acquisitions and Reduced Pricing
Jul 22, 2014, by Andy EfstathiouTSYS has announced Q2 2014 revenues, for the period ending June 30, 2014, of $538.1m, up 34.2% year-over-year. Revenues including reimbursables were $602.0m up 30.4% year-over-year. Q2 2014 revenues (and revenue change) by activity, excluding reimbursables, were: North America: $233.2m (+8.7%) International: $84.7m (+10.6%) Merchant services: $108.3m (-4.1%) [...]
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EXL Acquires Blue Slate Solutions to Enhance Business Process Analytics in the Healthcare Payer Sector
Jul 20, 2014, by NelsonHall AnalystEXL recently announced the acquisition of Albany, NY-based Blue Slate Solutions. Blue Slate, founded in 2000 by CEO Rick Barnett, has from its inception focused on data driven business consulting and services. Today, with a staff of 35, it focuses on developing simplified data models and business processes for health insurers (~85% of its business, including large insurers and Medicare contractors[...]
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TCS: "Big, Broad, and Bold"
Jul 18, 2014, by Rachael StormonthIn case anyone has missed the phenomenon that is TCS, it has achieved over 16% y/y growth in four of the last five quarters (with “just” 15.3% in the fifth). This quarter, it reported a y/y increase of nearly $530m in revenue. If TCS continues at this pace – and management commentary is of a strong pipeline – then revenues this fiscal year should be around $15.5bn. TCS has [...]
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"Insights" on Ceridian LifeWorks: Connecting Dayforce to EAP & Wellness Offerings
Jul 18, 2014, by NelsonHall AnalystI recently attended Ceridian’s annual client event in Las Vegas with the assumption that the event would revolve around Dayforce. And it did, but I was also pleasantly surprised to learn how Ceridian is tying Dayforce and LifeWorks, Ceridian’s EAP and wellness offering, together. Over the years, I’ve watched Ceridian shift from a mostly services-oriented organi[...]
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Tieto Q2 2014 Revenues: Product Development Business Remains Problematic
Jul 18, 2014, by Dominique RaviartTieto's Q2 2014 revenues were €386.4m, down 7.3% y/y, and down 1.3% y/y at constant currency. (for full details see here) Q2 2014 revenue (and growth both on an actual and CC/organic basis) by service line was: Managed Services: €132m (+5%, +9%). Half of the CC organic growth this quarter resulted from hardware reselling as part of a large IT infrastruct[...]
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Spotlight on Talent2: HR Cloud SaaS meets Payroll Services
Jul 15, 2014, by Gary BragarHow Talent2 addresses the HR Cloud SaaS puzzle with payroll Talent2’s cloud-based HR SaaS with integrated payroll services offering now represents 25% of the company’s HR/payroll revenues. Its revenues have been growing at ~10 % per annum and NelsonHall expects cloud based HR SaaS with payroll services to represent 30% of Talent2’s HR/payroll revenue by 2015. Talent2’[...]
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Infosys' Last Quarterly Results Before Arrival of New CEO: Any Surprises?
Jul 11, 2014, by Rachael StormonthWhat do Infosys’ Q1 FY 2015 results indicate about its current performance and its general health as a new CEO arrives? (a full breakdown of the results are available here) Revenue growth of 7.1% was in the 7% to 9% guided range for the full year, albeit at the low end. This was the third quarter in a row of decelerating growth, in both reported and constant currency gro[...]
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