Industry news

Capgemini has announced that it has signed a new five-year contract with Nationwide which will revolve around the provision of IT infrastructure services.

The global service provider’s three main areas of focus will be service integration, service desk operations and end user services. The aim of the collaboration will be to improve user experience for the building society, as well as to meet growing customer demand and achieve Nationwide’s goal of becoming the number one choice for financial services in the UK.

According to a recent Everest Group report which identified the UK’s leaders in digital banking, Nationwide is currently below average in terms of digital functionality but above average for the business impact of its digital capabilities. The report ranks Nationwide well behind frontrunners Barclays, Lloyds, HSBC and Santander.

Capgemini will also supply scalable contract compliance and optimisation (CCO) services through its BPO team for greater visibility and control of Nationwide’s IT vendor ecosystem, which should result in cost savings, risk avoidance and better informed decision-making.

Craig Conte, head of CCO at Capgemini, commented: “This is an excellent example of how Capgemini can combine strengths across different business units to deliver an assembled-to-order solution that addresses our clients’ needs.

“Capgemini’s Infrastructure Services business has a terrific product in Service Integration, and with its layers of technology, process and service, CCO complements it extremely well to deliver a single solution that drives business outcome of greater value in and greater cost control over vendor relationships.”

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Related: Capgemini renews £1.2 million contract with Capita Travel and Events after acquisition

On 15th October Bulgaria held a ceremony to recognise the good work of outsourcing and IT companies, as well as several government institutions, from all around the country. Here the President of the Republic of Bulgaria – Mr Rosen Plevneliev – celebrated his country’s victory at the European Outsourcing Association (EOA) Awards for the “Offshoring Destination of the Year” category.

The award was delivered by Stefan Bumov, chairman of the Bulgarian Outsourcing Association, to the President, who expressed pleasure at his nation’s achievement. Bulgaria has also been shortlisted for the same category at the NOA Awards, along with Slovakia, South Africa and Sri Lanka. Winners for the NOA Awards will be announced on Thursday 19th November at the five-star Landmark Hotel in London.

Below, Mr Plevneliev – who was previously managing director of the team responsible for the creation of Sofia Business Park, now home to many tech-based service providers in Bulgaria’s capital – can be seen accepting his country’s EOA Award with great pride!

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The NOA Awards is the National Outsourcing Association’s flagship awards ceremony, showcasing the best examples of collaborative outsourcing and boasting attendances over 450+ outsourcing leaders each year.

Have you booked your ticket yet? You can do so via the NOA website.

Global trade is never at a standstill, and to stay competitive in today’s challenging markets with ever increasing consumer demands, all regions and industry sectors need to be on their toes at all times. I had an interesting discussion recently with Frans Kok, the General Manager of our Asia Pacific team, based in Singapore. Frans explained that the direction of trade in Asia is shifting dramatically as the balance of economic power is shifting from West to East.

This also applies to the logistics and transport sectors with the ones willing to take a risk finding plenty of opportunities there. What do shippers and manufacturers have to do to take advantage of these opportunities? And how will Indonesia proceed on its way to being a global powerhouse? Let me share with you a bit of what I’ve learned:

The past few years have seen rapid growth in Southeast Asian economies and consumer markets. The transport of large quantities of goods around the region is leading to an ever-growing requirement for supply chain solutions.

Traditionally, China has dominated the manufacturing landscape, but rising costs led investors to now look towards the South East, where emerging economies seem full of promise. Manufacturers, particularly those producing automotive and electronic parts, have begun to shift their operations to Indonesia and Thailand, mainly because labour is cheaper there. As companies are looking to base their operations in countries where economic conditions enable them to remain price-competitive, this trend is likely to continue.

At the same time, Southeast Asian countries have very different laws and regulations, which exporters may find difficult to understand and navigate. Customs procedures can slow down cross-border shipping, e.g. when deliveries are being held due to insufficient or incorrect information. Corruption and inconsistent customs duties can also lead to irregular costs, impacting on logistics companies’ ability to set accurate pricing frameworks.

Indonesia – do opportunities outweigh its challenges?

Indonesia is quickly turning into the new darling of Southeast Asia’s growing economies. According to a 2012 report by the McKinsey Global Institute, this dynamic archipelago - currently the 16th-largest economy in the world - has the potential to be the seventh-biggest market by 2030.

Yet despite its market potential, various factors including the country’s weak transport infrastructure and the lacking internal economic integration and development has prevented it from making inroads into regional production chains.

Insufficient visibility and control in transport and logistics is a real danger and could put off some investors. To counter these issues, the Indonesian government and the private sector established the National Logistics Blueprint, a cohesive strategy to ensure thatIndonesia’s logistics sector grows to be regionally and globally competitive (see PDF), and a number of infrastructure projects are also underway.

Technology – how it leads the way to sustainable growth

In addition to investments in infrastructure, technology has great potential when it comes to improving the performance of Indonesia’s logistics sector, and the country’s future as a manufacturing hub. GPS tracking and radio-frequency identification (RFID), which are widely used in Western and other Asian markets, have not yet caught on.

However, simplified technologies that benefit from the wide penetration of mobile phones could be game-changing. Online portals that simplify freight swapping and shipment matchmaking may also represent a golden opportunity.

If industry and government cooperate in order to improve infrastructure and technology adoption across Indonesia, the country can certainly realise its ambitious growth potential. We look forward to following the developments in this region, and to supporting the industry’s changing and growing need for technology to achieve long-term and sustainable success.

For us in the European Union, these developments are of high interest of course, with procurement teams always looking for the best deal. Hopefully latest initiatives by local government and industry collaborations will soon bear fruits so that the development will keep its momentum.

Outsourcing your digital product development needs is a complex and intricate process, regardless of your industry or marketplace – there’s no point in denying this reality. Because of this, it’s more important than ever before for the expectations of executives and managers behind startups to be fluid and adjustable. Otherwise, don’t be surprised when unrealistic expectations creep into the picture and dampen – or even ruin – the development of your digital products.

In total, 52 percent of all brands that outsource product development end up restructuring these projects because of the problems and shortcomings that arise from unrealistic expectations. If you think this outlook is an overreaction or a bit dramatic, then this stat from the experts at Technology Partners International should do a good job of proving that this concern is a very real issue that requires your attention.

To help keep your brand from joining the ranks of organizations that have succumbed to the ill effects of this unwarranted mindset, join us as we take a look at seven of the most damaging unrealistic expectations, starting with the most important expectation and working down the list.

Expectation #1: Preferring Cheaper Quotes and Not the Overall ROI Your Outsourcing Partner Brings to the Table

At the top of the list is the expectation that placing a preference on cheaper digital product development quotes, and not putting the emphasis on the overall return on investment (ROI) that your outsourcing partner brings to the table, is an acceptable way to approach this process.

“If you outsource your software development… you want the majority of your money being spent on development, not on bug fixes and re-releases.” – AppTestNow Team

The truth of the matter, as the above quote from the team at AppTestNow shows, is that pinching pennies as a startup can often lead to even more costs – and headaches – during the creation of your digital product. This isn’t to say that you should spend your budget haphazardly, but rather that it pays in the long run to work with a team of development experts that know how to emphasize quality and help maximize the ROI of your unique project.

Expectation #2: Assuming Your Intellectual Property Rights Are Safe without Non-Disclosure Agreements (NDAs)

As sad as it may be to admit, not all digital product developers and specialists have your best interests in mind. In fact, as Tech Crunch’s Vivek Wadhwa explains, there are plenty of horror stories of outsourced developers running off with intellectual property during the creation of an app or other digital offering.

“Responsible mobile app developers are very familiar with NDAs and may offer their clients a standard NDA as a general business practice.” – Alexandre Rogers, Magnet Media

So what can you do to reel in the unrealistic expectation that your intellectual property is universally safe? The answer, as highlighted by Alexandre Rogers of Magnet Media, is found by working with a team that can offer a non-disclosure agreement (NDA) that protects your property as it works toward a live release.

To attack this expectation from a different angle, talent is only half of the equation. Your startup also needs to find a firm that it can trust and that has a reputable history – specifically via issuing and upholding NDAs.

Expectation #3: Depending on Only a Single Partner for All of the Skills Required for Your Project

Another major oversight that many startups fall prey to is the expectation that every digital product development organization specializes in all of the skills needed to pull off the project in question. The reality of the situation is that there are a plethora of skillsets found within the developer community, including the following:

• Engineering

• Testing and quality assurance

• Content creation

• Marketing

If you can find an organization that covers all of these services – and the myriad others that aren’t listed here – you’re looking at a hefty bill in return for this “one-stop” approach. Generally, you’ll need to work will multiple partners that each play a unique – and vital – role to ensure that your digital product stays on track for a successful launch and on budget.

Also, if an issue arises on the startup’s end of the process – user experience design, web hosting or data malfunctions, security breaches, etc. – it’s again not reasonable to expect the outsourced, specialized professional to have an immediate answer to this problem. Should this team of experts have the ability to craft a solution, this work naturally will require additional time, effort, funding, and other resource to enact.

Expectation #4: The Bid or Proposal Related to Your Digital Product Development Isn’t Immune to Change

Turning the discussion toward the initial project proposal, far too many startups assume that this figure or estimate is set in stone. While plenty of developers are able to stick to this rigid pricing guideline, there’s also quite a few instance in which the bid or proposal must shift to accommodate new factors or variables.

“No matter how detailed and specific your contract and agreed requirements are, there are always multiple ways of interpreting human language.” – Christian Sims, Botonomy

As Christian Sims of Botonomy explains, even the most detailed technology contract is subject to interpretation and changes. For this reason, it’s a good idea to work under a more flexible agreement and avoid dashed expectations that arise from getting stuck on an unrealistically rigid bid or proposal number.

For those struggling with this concept, try to think of product development as an iterative process that evolves over time. The initial bid or proposal covers the first stream of inputs, but a quality digital product will naturally go through several iterations and adjustments before it moves to a release-ready state. Fixed-pricing models simply can’t account for these new requirements and considerations that occur throughout the course of the project and enhance the quality of the final product.

If you’d like to read more about the perils of fixed-price engagement models, feel free to check out our in-depth and comprehensive look at this pricing system here.

Expectation #5: The Quality and Skills of All Outsourced Professionals Are Exactly the Same

When it comes to the abilities of outsourced designers and developers, it’s important to understand that the quality of work and skills of these professionals can vary from individual to individual. This concept – referred to as “skill scarcity” by experts like Tech Crunch’s Wadhwa – leads to plenty of unrealistic assumptions on the part of startups and substandard results during the development and creation of digital products.

“The specialized skill and mindset that tech companies look for are hard to find.” – Vivek Wadhwa, Tech Crunch

Aside from the fact that not all developers and outsourced professionals are created equal is the realization that expecting just any vendor to have the tools to be able to handle your unique startup needs and requirements compounds the adverse effects generated by skill scarcity.

For your startup to overcome this unrealistic expectation, it’s a good idea to start off the process of finding a digital product partner with a few key questions:

• Can you accurately communicate your needs to this team of developers?

• Do these professionals have all of the skills necessary to handle your specific project needs and requirements?

• If not, do you have a plan for integrating multiple teams in different locations as they work together on your digital product?

Taking the time to conduct this research and delve into the capabilities of your digital product partner, as well as emphasizing the need for open and transparent channels of communication, ensures that your startup project stays on track and never succumbs to the threat of skill scarcity.

Expectation #6: Technology Is Static, So What Works at the Beginning of the Project Will Still Hold True Throughout the Creation of Your Product

While other industries might rely on the same processes and practices for decades on end, the world of technology – specifically app and site development – is a constantly shifting and fluid landscape, full of change and innovation. Every day that passes leads to new development methods or technical requirements for a project of this nature, so it’s necessary to prepare yourself for the reality that technology can – and most likely will – change during the creation of your digital product.

1. Successful IT Outsourcing: From Choosing a Provider to Managing the Project, by Elizabeth Sparrow

“Technology continues to develop at a rapid rate pace and it is very difficult to forecast with any certainty IT service requirements in future years.” – Elizabeth Sparrow, Successful IT Outsourcing: From Choosing a Provider to Managing the Project

These words, from Elizabeth Sparrow’s book, Successful IT Outsourcing: From Choosing a Provider to Managing the Project, help explain why failing to account for the shifting technological needs of your project can lead to an unsatisfactory final digital product.

In reality, it’s much better to have a secure and functional product at launch that’s based around modern requirements and technological needs than one that relies on older technology and practices that were considered acceptable at the start of development.

Expectation #7: There’s Only One Person or Channel Through Which Communications Flow Throughout the Lifecycle of Your Product

As we’ve discussed earlier, most projects related to the development of digital projects for startups require multiple experts along each step of the creation process. Even if you’re able to work with a firm that keeps all of these professionals in-house, there’s still a chain of command and multiple channels through which communications flow before reaching the startup side of the equation.

This means that a healthy relationship between digital product developer and startup project manager operates under the assumption that communications, inquiries, and general responses don’t happen in the blink of an eye; accurate answers and responses take time to formulate and move down the aforementioned chain of command.

Adding in the geographical and time zone gaps that generally occur in this outsourced relationship can also shift the timeframe related to communications. Even so, your chosen development experts should do everything in their power to communicate in a manner that is as expedient as possible.

A Look at the Lessons Learned

As you can see, unrealistic expectations can tangibly alter the course of your digital product development, potentially leading to an over-budget or outright unsuccessful project. From failing to properly understand the bid process and how to maximize the skills of your digital product partners, to lacking both transparent communications and a willingness to remain flexible in the face of technological changes, these issues require a significant amount of effort and research to overcome. Thankfully, with the information that you’ve acquired here leading the way, there’s no reason why your startup can’t successfully navigate the world of outsourcing digital services and lay claim to a successful – and prosperous – digital project.

Net Solutions creates unique digital moments to engage both customers and employees, building experiences that create high growth opportunities by converging technologies like web, mobile, social, cloud and IoT. Follow them on twitter @netsolutions.

Part four: Spotlight on Czech Republic as an Outsourcing Destination

Recent world news has put the name of Turkey back into the headlines, and some commentators have raised doubts about the near-future stability of this dynamic economy.

The consensus, though, is that this regional power-broker and founding G20 member of 75 million citizens enjoys so many structural advantages as a modern state. Let’s look at the country’s fiscal profile first. Turkey was the seventeenth largest economy in the world in 2014 with a very respectable GDP of $1.5 trillion, states the CEEMA Business group’s latest data on the nation, which also says that per capita income has risen 300 per cent in the last ten years alone.

The same source suggest that 23 per cent of Turkish companies across all sectors forecast double-digit sales growth this year and next. The consensus is that the country remains on the growth path, despite current pressures – a judgement backed by its latest (Q2) GDP figures that show a rise of 3.8 per cent year-on-year, higher than expectations.

Those pressures will, over the long term, be assuaged by basic facts about Turkish business life, perhaps. There are many young, educated and multi-lingual Turkish professionals seeking careers in service industries, which has given the country a sound track record already in fields like IT infrastructure, web development and hosting, software and application development, support and many other fields. IT spending on hardware, software, IT services and telecommunication services in Turkey is expected to increase to $25 billion as early as next year, for instance.

Near to Europe – but other markets too

There is also a growing, and strong, domestic market to tap into. More than half of all households in Turkey have computers with internet access, a proportion expected to rise to 66 per cent over the next five years, while the percentage of Internet users will approach one in two by as soon as 2017. Those young Turkish knowledge workers are also heavily invested in communications tech, with the total number of mobile phone subscribers is expected to reach 75 million by 2017, for example.

Finally, Turkey is in a very interesting position simply by dint of where it is located. Some businesses worry about saturation of the growing CEE ICT markets of Poland, Hungary and Slovakia, and like the idea of another local option. The proximity of Turkey to not just these nearshoring destinations but also to Western Europe itself is a positive factor for many global businesses. At the same time, Turkey is a neighbour of Russia, an unpredictable player in global politics; many experts recommend keeping a close eye on both of these highly-promising emerging markets.

The verdict has to be, then, that while there are challenges for Turkey, they are in many ways not as great as other offshoring locations (think North Africa) – and that there remains vast potential in this modern, well-connected, European neighbour of ours.

Turkey As An IT Power – The Facts

• Analyst Ovum has reported that there is ample opportunity to recruit customer contact centre staff (mainly in Istanbul) fluent in not just English but also German and Dutch

• Turkey has already been chosen as a regional hub by many market leaders including Microsoft, Intel and Hewlett-Packard

• Finally, Ankara’s ambitious ‘2023’ growth plan calls for investment to Increase ICT’s contribution to GDP from 2.9% to 8%, creating a local ICT market of $160b, fuelled by increasing national R&D spend from today’s less than 1% to more like 3%

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This week the United Kingdom will be subject to a visit from Xi Jinping, President of the People’s Party of China, his first since he started his presidency.

Britain’s “visionary and strategic choice” – as Xi put it – to become Beijing’s strongest ally in the West, within 10 years, could bring further strength to the UK’s outsourcing industry, prompting far more foreign direct investment and potentially increasing the use of UK-based service providers by Asian companies.

The Guardian reported that roughly 150 deals will be sealed this week alone, in sectors such as healthcare, aircraft manufacturing and energy. The financial backing needed to kick-start the Hinkley Point nuclear reactor may also be found.

When tackling this subject, the FT points out that Osborne currently has a poor record when it comes to infrastructure investment. Since 2010 capital expenditure on infrastructure projects has fallen 5.4 per cent, at a time when extra spending in this area is crucial to unlocking Britain’s outsourcing potential and increasing national productivity. With the government reluctant to commit more taxpayer money to this cause during its current term, contributions will probably have to come from organisations based in foreign nations.

As a provider of services, China is one of the UK’s biggest competitors. In terms of expansion, China is way ahead. In the time it would take to build Heathrow’s third runway (assuming the project doesn’t fall through), KPMG estimates that China will have built 17 new airports of its own.

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Related: UK outsourcing to benefit from China stock market woes

A group of Interserve cleaners contracted to work onsite at the Foreign and Commonwealth Office have been put under disciplinary investigation and could be facing redundancy, after grouping together to write a letter to foreign secretary Philip Hammond on the subject of their pay.

The cleaners are currently paid £7.05 an hour and this will be brought up to £7.20 an hour next April, falling in line with George Osborne’s new national minimum wage. The cleaners were looking to discuss the discrepancy between this wage and the London living wage, as calculated by the Living Wage Foundation, which is £9.15 an hour.

A protest has been planned outside the Foreign Office next Monday.

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Related: Mitie joins Serco and G4S in embracing government’s national wage hike

Gloucester City Council has opted to extend its current outsourcing contract with Civica for another three years, lengthening the deal until at least October 2021.

The council has achieved savings to the tune of over £200,000 a year thanks to its collaboration with Civica, and expects the three-year contract extension to reduce costs by another £100,000. The outsourcing partnership has also allowed Gloucester City Council to increase the amount of council tax it collects and has vastly improved the efficiency of its benefits-claiming process.

The original deal involved the provision of the council’s IT services. However, in 2014 the council increased the scope of the contract, outsourcing back office, transactional and corporate support services to Civica.

Cabinet minister David Normal heralded the success Gloucester City Council’s outsourcing: “It demonstrates how a public-private partnership can help local authorities achieve savings while continuing to deliver an excellent service to the residents of Gloucester. I am pleased we will be continuing this partnership arrangement.”

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Related: Unison queries West Sussex County Council’s plans to improve customer service

Wipro has elected to sponsor a recently established non-profit research centre, which focuses on the application and development of technology related to the Internet of Things (IoT).

The Georgia Tech Research Institute (GTRI) aims to “bring forth radical new capabilities throughout the Internet of Things value chain”.

Wipro joins Samsung, AT&T and AirWatch as a founding sponsor; between them, these companies will help to shape the director of the centre’s IoT research.

“Today, enterprises and academic institutions collaborate in a manner previously impossible to harness collective knowledge and innovate. We are happy to join forces with Georgia Tech and explore the possibilities of how the IoT explosion can transform the world in which we live,” said Dr. Alan Atkins, vice president and global head of IoT at Wipro.

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Related: Chelsea FC select Wipro as official digital and IT partner

Last night in Portugal, the winners of the European Outsourcing Association (EOA) Awards 2015 were officially announced.

The EOA Awards ceremony celebrated the successes of outsourcing buyers and service providers who have demonstrated the very best practice in pan-European outsourcing.

Kerry Hallard, CEO of the National Outsourcing Association (NOA), had high praise for the quality of the winning submissions, as well as those shortlisted:

“Once again we’ve seen a fantastic array of organisations offering up some of the best outsourcing examples that Europe and beyond has to offer, making this year’s awards ceremony particularly competitive. The winners must be immensely proud – every entrant and outsourcing partnership on the shortlist showcased the ability to provide business value in an exciting and innovative manner.

“It was fantastic to see such a wide variety of representatives from our industry sharing experiences, knowledge and ideas with one another. There was clearly some great networking going on, for the new-comers and more established firms alike. I’d like to take this opportunity to thank our sponsors CGI, AICEP, Portugal Outsourcing and Miratech for their contributions and support.”

The winners of the EOA Awards 2015 are as follows:

European BPO Contract of the Year

Intetics

European IT Outsourcing Project of the Year

Miratech and Lindorff

European Outsourcing Service Provider of the Year

Conectys

European Outsourcing Advisory of the Year

Elixirr

Offshoring Destination of the Year

Bulgaria

Award for Corporate Social Responsibility

Avasant

Pan-European Buyer of Outsourcing Services of the Year

Minsk City Authorities

Outsourcing Works: Award for Delivering Business Value in European Outsourcing

ITC Infotech and Holland & Barrett International

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Related:

National Outsourcing Association Awards shortlist announcement