NCR seeks to extend managed services into verticals

TORONTO — NCR Corp. Tuesday said it plans to extend its data management expertise in financial and retail markets to include managed services.

The company plans to offer end-to-end customer support for IT infrastructure, particularly

around ATM management and point-of-sale (POS) systems and the networks they comprise.

Aside from the manufacture of these terminals, one of NCR’s key businesses is data mining under its Teradata subsidiary. Executives said they plan to bring this style of data-crunching (sometimes referred to as the “”beer and diapers”” model) to IT management itself.

Roland True, director of strategic marketing for worldwide centre services at NCR, said a lot of the company’s service competition focus on service level agreement (SLA) management. “”That says, over time, you’re not necessarily driving improvement.””

By using data mining tools, he said, NCR can examine a company’s network and isolate inefficiencies. Why, for example, provide 24×7 service to internal IT that’s only used on a shift or temporary basis? It’s a waste of resources, argued True. “”Without a change, it’s only going to get worse.””

Bob Gilchrist, vice-president of worldwide customer services for NCR Canada Ltd., said he knew of a food chain that suffered because its debit network went down. When a customer complained, the store manager directed her to an in-store ATM so she could pay for her food in cash. The customer pointed out that a cash withdrawal would cost her $1.50 in service charges. When the manager refused to reimburse her for the the surcharge, the customer stormed out leaving a full grocery cart at the check-out.

With managed services, said Gilchrist, NCR can measure when a debit system is likely to go down, then provide fault tolerance at peak periods. “”If that debit goes down long enough, that ATM will likely run out of cash,”” he pointed out.

NCR Canada counts Royal Bank of Canada, the Beer Store, Cara Operations Ltd., and McDonald’s Restaurants of Canada Ltd. among its customers. The company’s goal is to transform as many of those as it can into managed services customers.

Gilchrist acknowledged that the tremendous growth of outsourcing in the Canadian banking sector over the past few years may put some of the business that has been adopted by services companies like IBM Global Services and CGI out of its reach. However, he said there may be niche contracts available, either directly or on a subcontract basis.

Much slower to the outsourcing game are retailers — many of which are already NCR customers. They could represent a boon to NCR’s fledgling services business, said Gilchrist. “”You will typically not win one of these deals responding to an RFP (request for proposal),”” he said. NCR has longstanding relationships with many of these retail customers, which should work in the company’s favour.

IDC Canada Ltd. analyst Dan McLean said that NCR’s success in the services business will most likely come from its bread and butter retail business and expertise in managing networks.

The likes of IBM, CGI and EDS have already sown up back office outsourcing deals, he said, so NCR’s legacy of retail clients and data management may work in its favour, particularly in the under-served small and medium-sized business market. The outsourcing business is also shifting away from ROI and cost-savings. “”Services just aren’t about these pragmatic things anymore,”” said McLean. “”‘How will it transform my business?’ That’s a big key.””


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