Keane Goes (Profitably) Down Under; Accenture Looks OverseasBy John Moore | Print
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Keane nabs a 10-year transportation automation contract in Australia, while Accenture's growth overseas is so fast it has to be careful not to saturate some areas and eat up all the local IT talent.Keane Inc. has been selected for a $367 million contract to develop and manage a ticketing system for the Australian state of Victoria.
The pending contract is the first ever for Keane in Australia, where the Boston-based company has been pursuing the ticketing deal for about a year. "We looked at this as an opportunity to open up a new geography for Keane," said David Malcolmson, a vice president at Keane. Keane's selection was announced Tuesday.
A Keane subsidiary will hold the contract, which will include a two-year development phase and 10 years of operations and maintenance. Keane Australia Micropayment Consortium Pty Ltd., dubbed Kamco, leads a partnership that includes Ascom, ERG, and Giesecke & Devrient Australasia.
The latter company also provides smart-card technology for Amtrak, the Chicago Transit Authority, and the Washington Metropolitan Area Transit Authority.
The Victoria ticketing system will use contactless smart cards that are waved near a reader, unlike magstripe cards that are swiped through a reader. Malcolmson said the smart cards represent an improvement over magstripe readers, which can be disabled more easily by gum in the slot and other simplistic methods, he said. The use of contactless smart cards enables transportation authorities to collect more fare revenue, he added.
The ticketing solution will consist of a combination of off-the-shelf and custom-developed components. The package-to-custom ratio will be 70-30, according to Keane. Among the off-the-shelf elements will be Microsoft Corp.'s Axapta ERP (enterprise resource planning) application. The solution also will employ Microsoft's .Net Web services development environment.
Malcolmson emphasized that the Victoria ticketing solution may be replicated for other transportation authorities.
"This is not a system that will be built once and never be used anywhere else in the world," he said. He said other cities around the world will be looking to replace magstripe systems with smart-card-based ticketing.
Keane views transportation ticketing as providing a solid vertical market opportunity, Malcolmson said.
The Victoria ticketing system will cover the state's 270 railway stations, 480 trams, and 1,650 buses. The new system is slated to go into production in 2007, according to Keane.
CGI-AMS wins bank deal.
CGI-AMS Wins Bank Deal
Union Bank of California has tapped CGI-AMS Inc. for trade finance technology.
Specifically, the bank chose CGI-AMS' Proponix solution, which will support its domestic trade finance business. Proponix is a hosted, Web-based trade platform. In 2003, CGI-AMS acquired Proponix's brand, trade processing technology and other assets.
In addition to Union Bank of California, the Proponix solution has been sold to customers including Australia and New Zealand Banking Group Ltd. and the Bank of Montreal.
Accenture Plots Offshore Course
Accenture Inc. officials provided some insight into the company's offshoring strategy during a recent analyst teleconference.
The company, which has been cautious in its offshore moves, is hedging its bets globally. Instead of relying on a single city or country, the company pursues multiple sites for offshore operations. Steve Rohleder, Accenture's chief operating officer, said he believes this model will shield the company from unfavorable cost trends that might arise in a single locality.
"If we get into a situation, for example, in India where a specific city has reached saturation from a salary standpoint and from a cost structure standpoint, we have the flexibility to move and to grow a different location," he said.
And those locations, he added, are not only other cities within India, but sites in China and the Philippines. The company has also started the process of developing locations in Eastern Europe and Latin America.
Some industry executives view China as the next India in terms of offshoring hot spots. India, they contend, will become less attractive over time due to wage inflation and rapid turnover among development teams. That situation puts the onus on vendors to cultivate news software development centers with less cost pressure.
Accenture employs more than 19,000 people in India, China, and the Philippines. Rohleder said he sees that figure growing to 30,000 to 50,000 people over the next three years, assuming demand continues apace. In May alone, Accenture hired about 1,600 people in India.
Accenture officials said the growth of the company's offshore operations hasn't cannibalized the company's domestic service offerings. Bill Green, Accenture's CEO, said most of the company's offshore business represents "incremental revenue and profits. The majority of our work that we're contracting and performing on behalf of clients in our offshore facilities is work that we would not otherwise have been doing."
In the United States, Accenture continues to hire "aggressively," Green said
Avnet Names New IBM Chief
Avnet Partner Solutions has appointed a familiar face to lead its IBM Business Unit.
Dennis O'Connell, now vice president and general manager of the unit, had previously managed IBM's relationship with Avnet as a channel executive with IBM. O'Connell said when he began working with Avnet six-and-a-half years ago that the IBM-Avnet relationship produced roughly $180 million in revenue worldwide. Today IBM-Avnet brings in about $2 billion in business.
O'Connell said he sees an opportunity to continue to grow the partnership in the small and midsize business space. He also aims to continue Avnet's push into solutions selling. Avnet, for example, participates in IBM's eServer BladeCenter Business Express initiative, which lets resellers build customized solutions around a customer's specific requirements.