Industry news

The IAOP has published its “Global Outsourcing 100” for 2016, a list of what the organisation considers to be the world’s 100 best outsourcing service providers, accompanied by the best 20 outsourcing advisors for this year.

Plenty of familiar names made the top 100 including Accenture, CGI, Firstsource, Intetics and Teleperformance. Notable names left out included Capgemini, G4S and Serco. Deloitte, EY and KPMG all featured in the top 20 advisories list.

Debi Hamill, CEO of IAOP, commented: “Choosing the right partners is more important than ever. Companies that outsource, not only in the traditional sense but also through the wide array of the ever-changing collaborative business models, are scrutinising their providers very closely."

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Related: Surprise as Cognizant tops list of IT leaders

Transport for London (TfL) CIO Steve Townsend has condoned the SIAM tower model approach to outsourcing and claimed that it works well for TfL, in an interview with Computing published yesterday.

However, Townsend added that plenty of organisations have struggled with tower-based strategies – particularly those within the government – often because they’ve “chosen to totally insource their towers” or have “gone fully outsourced with an integration services third party in charge of delivering technical services”.

Tower-based outsourcing involves the use of multiple service providers for the delivery of various functions, such as finance and accounts or customer service, where each function constitutes a tower, and each service provider is responsible for a separate tower.

Townsend attributed TfL’s own success with tower-based outsourcing to its step-by-step approach and its focus on “how services should be delivered back to the organisation to solve problems”.

Computing also highlighted the confusion surrounding the government’s current policy on using the tower model: the Department of Work and Pensions plans to abandon this approach altogether, while the Ministry of Justice appears to still have plans to transition to this model. Last year deputy director of Government Digital Services Alex Holmes slammed tower-based outsourcing claiming it “combines outsourcing with multi-sourcing but loses the benefits of either”.

High profile industry advisors, such as KPMG, have predicted the end of tower-based strategies over the next few years as many contracts come up for renewal and clients choose transition to as-a-service operations.

Are you involved with public sector outsourcing? The NOA's Public Sector conference in April will showcase how outsourcing and new technology can be used to delivery "more for less" in the public sector in the face of government cuts. Find out more.

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Related: TfL appoints Sopra Steria, Capita and Deloitte for IT solutions framework

Wipro has signed a definitive agreement to acquire HealthPlan Services for $460 million, in a bid to expand its offering to the US health insurance market.

Healthplan Services currently boasts 2,000 employed associates, market-leading technology platforms and a fully integrated business-process-as-a-service (BPaaS) solution, used to service buyers of outsourcing in individual, group and ancillary markets.

The introduction of Obamacare has dramatically altered the health insurance industry in the US – a market that is already responsible for 90 per cent of all healthcare-related contracts. ITO firms operating in the US are anticipating an increase in the amount of business available, due to states needing to upgrade their healthcare programmes.

Wipro’s latest acquisition expands their offering in this area, and will provide the company with a more “customer-centric” operating model.

Jeffery Heenan Jalil, senior vice president and head of healthcare life sciences at Wipro, commented:

“The partnership with HealthPlan Services positions Wipro to participate in the shift of the US health insurance industry towards a consumer-centric business model. HealthPlan Services strengthens Wipro’s position in the health insurance exchange market while offering synergies with Wipro’s presence in the managed Medicare and commercial group insurance markets.

“The addition of HealthPlan Services’ capabilities complements Wipro’s strengths in claims processing and back office services. This is a strategic move for us, as it advances Wipro’s vision of leveraging unique insights into customer buying behavior and applying this across the healthcare value chain. This will help us lower the cost of healthcare and transform the quality of the member experience.”

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Related: Cognizant gains more new business in 2015 than Wipro, TCS and Infosys combined

This week, Everest Group published its latest ranking of top IT service providers. Contrary to what might have been expected, IT powerhouses such as IBM and HP did not top the list. Instead, New Jersey-based Cognizant took the crown followed by Accenture and, coming in third place, IBM.

In the ranking, companies are evaluated on 26 different categories such as key business lines, geographies and technology. For each of the 26, Everest Group ranks service providers on a scale from aspirants to leaders. These individual category scores are then weighted and consolidated into an overall score.

The Group’s practice director declared that the results came as something of a surprise to Everest. According to Abhishek Singh, the consultancy had believed Accenture to be 2015’s IT leader followed by IBM at number two.

“But as we began to consolidate and analyse the data, it was clear that Cognizant had upped their game by way of year-on-year growth. That’s what landed them on top. Cognizant had a star performer rating in five areas,” Mr Singh revealed.

Top 10 IT Service Providers of the Year

1. Cognizant

2. Accenture

3. IBM

4. TCS

5. Wipro

6. HCL

7. Dell

8. Infosys

9. Capgemini (& IGATE)

10. CSC

This year, Everest changed its scoring methodology to increase the emphasis placed on innovation, intellectual property and emerging technology capabilities.

The ranking also relies on market success measures such as revenue growth, deals won and renewed, and margins generated.

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Related: Cognizant gains more new business in 2015 than Wipro, TCS and Infosys combined

The purpose of global trade management (GTM) is to manage the entire supply chain, from procurement and product development to distribution, efficiently and in compliance with all relevant rules and regulations. This includes all tasks for planning and controlling as well as trade relations.

AEB’s Global Trade Management Agenda is an annual study in partnership with the DHBW University in Stuttgart, Germany, that identifies key challenges in the year ahead. The 2016 study features responses from over 300 supply chain management experts in companies of various sizes and across a range of industry sectors – mainly based in the United Kingdom, Germany, Austria, Ireland, Singapore and Switzerland. The objective of the online survey was to find out which tasks companies that engage in international business consider of particular importance for 2016.

The main challenge identified for 2016 is reducing time to delivery and overall lead times. Of those surveyed, three-quarters are currently focusing on this, and 27% consider it a “very important issue”. The trendsetters are business-to-consumer (B2C) ecommerce businesses, which dominate not only development but also media coverage by offering same day delivery, drone delivery, as well as anticipatory shipping. These developments in the B2C sector also raise business customers’ expectations.

Another challenge identified by this years’ survey was ‘complying with embargo requirements’, which 60% of participants consider either “important” or “very important”. “Ensuring legal protection” is still regarded with the same importance as in last year’s survey (66.5%), but has been overtaken by other challenges such as “recruiting and training employees” and “implementing changes to customs laws”. Dr. Ulrich Lison, a global trade expert at AEB and one of the authors of the study, explains:

“The increasing professionalisation in the business of global trade has led to a shortage of personnel. Plus, the impact of the Union Customs Code, which takes effect on 1st May 2016, can already be felt, as businesses are expecting a few changes and know they’ll have to make preparations.”

In addition to assessing the key challenges for the year ahead, the study also explores how well businesses are equipped to face them. While the majority of respondents think they are well prepared, over one-third see potential for reducing lead times and time to delivery in their businesses. Only 3.1% concede “major shortcomings” in this area.

Most respondents also have a good idea of how to manage risks in their supply chains. Changes to customs laws don’t seem to be a problem – over three-quarters of those surveyed consider themselves as efficient or very efficient on this front.

However, when it comes to personnel management, over half of businesses see a need for action, and 8.6% admit to ‘major shortcomings’ in this area. Compared with last year’s survey, this issue has gained importance and occupies fourth spot among the greatest challenges for 2016.

More findings are available in the full Global Trade Management Agenda 2016. It is available at www.aeb.com/gtm-survey.

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The European Commission has signed £26.6m in contracts with a whole host of IT service providers in order to develop its cloud capabilities. BT won the majority of the contracts; as a result, the EC will be spending £7.7m with BT over the next four years for its private cloud service.

IBM, Accenture, ATOS and Cloud Team Alliance all signed deals to provide public cloud for the Commission, while Telecom Italia, Accenture, ATOS and IBM were also chosen to provide platform-as-a-service operations.

Corrado Sciolla, president of BT Global Services in Europe, said: “This is a milestone in our journey to be the leading global cloud services integrator, and demonstrates how we minimise the complexity, risks and costs for our customers as they move to the cloud.”

An official from the EC commented: “The Cloud will enable the Commission to follow the ceaseless pace of today’s technological race among infrastructure providers where costs of storage, bandwidth and computing power are decreasing day by day while enabling at the same time innovative solutions for new challenges such as big data.”

The contracts agreed for private and public cloud provision will be valid until 2020.

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Related: Cornwall Council officially terminates deal with BT

Members of the workers’ union Unison have claimed that they are willing to take Northamptonshire’s County Council to court over its latest outsourcing plans.

In reaction to prolonged austerity measures and sizeable cuts to local government funding, the council is in the process of adopting an innovative new outsourcing model where it acts as a smaller core council commissioning a group of “specialist social enterprises”. This will reduce the council’s core staff to 150 people, while 4,000 will be transferred to four new service providers, all of which will be created and part-owned by the council. In December, the Council created the first of these four companies – First for Wellbeing – which will be responsible for weight management programmes, smoking cessation clinics and debt advice, along with other services.

A recent Local Government Association report judged that, from the 27 county councils in England, Northamptonshire is currently the “least able to fund itself”. This “Next Generation Model” of outsourcing is expected to save the council up to £150 million by 2020.

Unison members are unhappy that these structural changes never went to a referendum. And while workers have been guaranteed job security, the union is concerned that the newly created companies could be outbid for council services in a few years’ time.

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Related: Kent Council launches a tender process in search for five suppliers

Capgemini has announced today it would be entering a three-year partnership with Celaton, an intelligent business process automation provider.

The deal will see Celaton deploying its intelligence automation platform, inSTREAM, to assist with Capgemini’s business services.

The platform has the ability to learn the pattern of unstructured content in customer services dealings. The ultimate goal is to deliver increased efficiency and improved customer service for Capgemini clients.

In a press release, Celaton declared that “artificial intelligence is still met with scepticism by organisations. Capgemini’s commitment to Celaton’s technology brings greater credibility and increases awareness”.

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Related: Capgemini signs robotic process automation deal with UiPath

The international business outsourcing partner arvato has won a five-year contract to provide a multichannel customer service operation for BMW Group in the UK and Ireland.

Through this partnership, arvato will support customers of brands owned by the group such as BMW, MINI and Motorrad across telephone, email, web chat, SMS and social media. As a result, arvato will handle approximately four million customer and retailer interactions per year.

Debra Maxwell, CEO, CRM & public sector, arvato UK & Ireland, said: “We’re excited to extend arvato’s successful relationship with the BMW Group into the UK and Ireland, applying our expertise in customer relationship management for the automotive industry to create a long term, flexible and successful partnership.”

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Related: UK outsourcing spend hits £2.21bn in Q3, more than treble that of previous quarter

A commercial venture set up by the Ministry of Justice in 2012 has cost the department upwards of £1m, the National Audit Office has revealed this Friday.

Just Solutions International, the commercial arm of the MoJ, provided consultancy and training to prisons in Saudi Arabia, Libya and Nigeria. It had been created in 2012 by former Justice Secretary Chris Grayling; however, the company was dissolved last year at the time Michael Gove took office at the ministry.

Michael Gove’s decision came after a human rights row with Saudi Arabia. At the time, the Secretary of State for Justice cited a “need to focus departmental resources on domestic priorities” as the main reason for JSI’s dissolution.

According the NAO report, income generated until the dissolution of Justice Solutions International was not enough to offset its founding costs.

JSI completed a number of profitable contracts, such as a £255,000 deal to train the Royal Oman Police and a £128,000 contract for prison consultancy services in Libya. However, its decision to scrap a £5.9m deal for the provision of training in Saudi prisons has been identified as the main reason for the company’s financial position three years after being set up.

Meg Hillier, the NAO’s public accounts committee chair, declared she was “concerned by the loss of taxpayers’ money on this failed venture, and the Ministry of Justice’s ongoing work with countries with questionable human rights records”.

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Related: Ministry of Defence to oust Serco and bring Defence Business Services in-house