Industry news

A spokesman for an elite club of some 50 European industry bosses said the new industrial plan announced by Mrs May this week will do little to dampen the effect of leaving the EU. Kurt Bock, head of German chemicals giant BASF who speaks for the European industry chiefs, said, "If we're talking about an industrial policy that aims to control what should grow and what should shrink, I can't really see that having been successful in any open society." Bock said tax cuts would do little to lure investments and jobs to Britain. British finance minister Philip Hammond this month hinted at this option should Britain be denied a comprehensive trading deal with the EU after Brexit. Read more here.

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After the result yesterday in the supreme court, sourcingfocus.com is looking again at the impact of Brexit on the sourcing industry. John Keppel, partner and President of ISG says “While it is too soon to predict the full impact of the UK’s vote to leave the European Union, it has had minimal impact on contracting to date. The emergence of As-A-Service sourcing has given a huge boost to the UK market, with 2016 seeing a significant uplift in contract values for this type of activity, and we expect even stronger growth in this area going forward. This means that Britain is in a healthy place to deal with any macro-economic turbulence in 2017. One area that could be boosted by Brexit is public sector contracting, as governments departments address new challenges outside of Europe and look for more efficient ways to improve public services.”

UBS AG, the Swiss global financial services company, renewed its Finance Operations services contract with HCL Technologies, a leading global IT services company, announced HCL. HCL will continue to deliver key Finance Operations services to UBS AG, supporting cost transparency and continuous improvements to the operating model of its finance department for the next three and half years. HCL will further invest in developing Proof of Concepts (POC) for robotics use cases to deliver efficiency gains through the automation of mutually selected business processes within UBS AG’s Finance department. To read the full press release, click here.

An article in the Economist this week explains why Indian ITO companies need to change, adapting to market forces. The rise of RPA and AI technology and the inauguration of President Trump create headwinds for the outsourcing companies based in India. Increasingly, focus has moved towards research and development but Indian firms have a long way to go to catch up with western rivals. As globalisation is threatened, companies that built themselves off its opportunities find themselves weakened by its suppression.

Arvato has been recognised as one of the UK’s best apprentice employers by the National Apprenticeship Service. The business process outsourcing (BPO) partner, which works with several public-sector organisations and international businesses in the UK, including Renault, BMW and Slough Borough Council, has been featured in the annual Top 100 Apprenticeship Employer List. Inclusion recognises those organisations with the highest standards of excellence in employing apprentices. Debra Maxwell, CEO, CRM Solutions, Arvato UK & Ireland, said: “Apprenticeships not only provide an important route into the workplace for young people, but they deliver a fresh source of ideas and can help build up the skills sets and talent organisations need for the future.” To read about the awards, click here.

Luton Borough Council has extended its strategic partnership with Civica, a market leader in software applications, digital solutions and outsourcing, with a new ITO contract which will support the council’s drive to transform digitally and deliver continuously improved services for residents. The partnership will support Luton as it delivers a £1.5 billion investment framework package into the borough. “Civica will deliver the IT services and flexible infrastructure required for us to achieve our digital ambition to revolutionise the way that residents access services. More of our offerings will now be automated and available 24/7 online, allowing for rapid self-service. And everything is secure by design so we and our users can do so with complete peace of mind.” says Trevor Holden, Chief Executive, Luton Borough Council. To read more about Civica, click here.

After the unveiling of a new industrial strategy, focused on infrastructure, training and research and development, the government appears to be addressing a problem that has persisted in the UK economy since the financial crisis of 2007-08, low productivity growth. Ash Merchant, Fujitsu’s Director of Education comments “It’s encouraging to see the Government intends to boost STEM skills, digital skills and numeracy as well as set up specialist institutions. It’s a sign that the conversation is moving onto more granular and specific skill sets that will become more and more valuable to the UK economy in years to come. However, the challenge that will come to the fore is who will teach the students these skills?” Now that the government is making the right noises, we await action. To read more, click here.

A lot of news this morning surrounds the inauguration of President Trump and his effect on the sourcing industry. Mr Trump’s statement of ‘America first’ has put a lot of worry into major outsourcing destinations such as India and the Philippines. Nasscom (The National Association of Software and Service Companies) of India has warned Trump of the dangers of reducing outsourcing. Nasscom President R Chandrasekhar said the US lacked the high-skill workers required to keep the country’s economy “globally competitive”. To read more about the NASSCOM warning, click here.

According to Computerweekly.com, cloud-based contracts made up a third of IT outsourcing contracts in 2016. Using the information gathered by ISG it was found that a quarter of total spending on IT and business process outsourcing contracts was on cloud-based services, or as-a-service contracts. John Keppel, president at ISG, welcomed the emergence of as-a-service contracting “Although growth in the use of these new technologies and services has been slow to take off in EMEA, we expect to see the impetus around these systems build in the region as public cloud providers expand their datacentre footprint across Europe,”. To read the article by ComputerWeekly.com, click here.

Prime Minister, Theresa May, will be unveiling a more interventionist business strategy today to help the UK economy as negotiations begin on Brexit. The plan is expected to include information on topics such as investing in science, research and innovation, encouraging trade and inward investment, developing skills and upgrading infrastructure. The hope is that the plan will help new technologies such as smart energy, robotics, artificial intelligence and 5G mobile network technology. To read more, click here.