Industry news

  • 5 May 2015 12:00 AM | Anonymous

    March 2013 saw Cornwall County Council sign a 10-year outsourcing deal with BT, which involved the running of IT, HR and document management, along with other services. Now, just two years into the contract, Cornwall councillors are threatening to sack BT if it doesn’t improves its performance over the next few months.

    A strategic partnership review carried out by the Council in April found that BT are only achieving 64 per cent of the mutually agreed KPIs (well below what is expected), while “service transformation” guarantees were only measured at 38 per cent.

    Andrew Wallis, an independent Cornwall councillor, made his feelings known on his personal blog: "BTC [BT Cornwall] has had two years to deliver this contract and have failed. There are only so many second-chances you can give. For me if, by summer, BTC does not deliver its commitments, than [sic] I am afraid we must be in the area of looking to terminate the contract. I feel if this was a full private sector deal, the contract most likely have already been torn-up [sic]."

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    Read this next: Sopra Steria Signs £37m Contract with Harrow Council

  • 5 May 2015 12:00 AM | Anonymous

    The Federal Bureau of Investigation (FBI) is requesting proposals from external suppliers for professional, management and support services for up to $100 million.

    The provider will be expected to offer a wide range of support services, including “providing consultation, data collection and analysis, intelligence interviewing, training, and assisting with project implementation and management, and policy and program development”.

    The request for proposals is expected to be released by 6th May, with the contract to be awarded by September.

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    Read this next: Metropolitan Police Outsources 700 IT Roles to Save $800m

  • 1 May 2015 12:00 AM | Anonymous

    T K Kurien, CEO of Wipro, has announced that he expects his company’s recent investments in automation and artificial intelligence to bring about a 30 per cent reduction in headcount over the next three years.

    He added that this will not lead to employees being laid off; rather attrition will be balanced with redeployment to new, high growth revenue streams.

    Kurien believes that Wipro’s main future focus will be digital technology. “We expect digital to be among the top three service lines in the next three years,” Kurien revealed, speaking at Wipro’s analyst day.

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    Read this next: Wipro Healthcare Expects $2 Billion in Revenue By 2018

  • 1 May 2015 12:00 AM | Anonymous

    Capita Property and Infrastructure has been chosen by the Welsh Government to design a road linking Cardiff Bay to the M4, the building of which will cost £27.3 million.

    Capita will be cooperating with Dawnus Construction Holdings and Ferrovial Agroman UK, both of whom have been chosen to build the road, which is expected to open in December 2016.

    Capita Property and Infrastructure’s business director, James Allard, expressed enthusiasm over what the road will do to help residents of Cardiff Bay: “This project will create a seamless route from the M4 to the eastern end of Cardiff Bay, which will improve journey times and help ease congestion in the city centre.

    "By improving infrastructure in the area, the scheme will also bring real business and development opportunities to this thriving city, and it is exciting that Capita is at the heart of this project.”

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    Read this next: Capita Unworried by Halved Dividends in First Quarter

  • 1 May 2015 12:00 AM | Anonymous

    Amid intense debate over a bill lifting outsourcing restrictions in the Brazilian National Congress, President Dilma Rousseff has instead called for further regulation.

    Currently, Brazilian law only allows firms to outsource services which are secondary to the company’s main activity, such as cleaning and maintenance. The proposed bill currently being discussed in the Senate, having been passed by the Lower House, could potentially lift these restraints.

    However Rousseff has thrown her weight behind the bill’s opponents, saying: "It is urgent and necessary to regulate outsourcing, so that millions of workers have job security and decent salaries. It is also important for business owners, because clear rules on outsourcing lead to more security for them as well."

    The President holds vetoing powers and can reject parts of the law she disagrees with, even if the bill is approved by the Senate.

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    Read this next: Brazil’s Lower House Approves Outsourcing Bill amid Protests

  • 1 May 2015 12:00 AM | Anonymous

    The introduction of the Mortgage Market Review (MMR) in April last year was one of the biggest changes we have seen to the mortgage market for nearly a decade. Most industry commentary has been focused on how the new rules have affected lenders and brokers, looking at the potential increase in application times and the change of process needed in order to remain compliant. Fewer people have devoted their comments to the customers’ perceptions following the MMR.

    Customer view

    We recently partnered with YouGov to conduct a research survey of 2,000 consumers, looking into borrower spending habits following the MMR. With more rigorous checks being undertaken by mortgage lenders, 42% of respondents said that they would change their spending patterns in an effort to ensure they got the mortgage deal they were happy with. A further 33% of borrowers said that they would be more likely to take out a new mortgage with their existing lender if it meant that they would face fewer checks and fewer questions.

    Borrowers are clearly aware that there has been a shift in the way mortgage applications are being processed, even if they don’t fully understand the new requirements. They need more help than ever from advisers who can alleviate any fears or concerns they may have by explaining the process and ensuring that borrowers are only put forward for deals that are suitable for their specific circumstances. Advisers who have the right systems in place to do this, and can stay in tune with changing lender criteria, have an opportunity to win over consumer trust and confidence.

    Outsourcing helps lenders keep a competitive advantage

    Whilst the MMR is still bedding in, lenders need to continue to streamline and improve their processes. In addition to supporting compliance and easing administrative pain, outsourcing can also help lenders retain a competitive advantage. Third party administrators are in a position to undertake multiple roles dependent on the lender’s requirements. By outsourcing these processes, management teams are free to focus on improving and diversifying propositions and driving their business growth.

    Outsourcing is more relevant than ever in today’s market, especially with these tighter regulatory rules. Selecting an outsourcer with the right experience can enable lenders to access improved technology, enhanced processes, market insight and operational expertise. This results in good practice so that lenders can focus on what they are there to do. Aside from the tangibles, it also comes with the assurance of predictable costs and leveraging a regulated servicer to deal with the ever shifting regulatory landscape.

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    Target Group is one of the longest standing servicing and software providers, with over 35 years of experience across 50 major international financial institutions.

  • 1 May 2015 12:00 AM | Anonymous

    Read part 2 of 'Is the Future Bright for Outsourcing?'

    National Rail Enquiries holds all the contracts in this diagram but has the SIAM in place to triage problems and run the service desk side across hosting and applications. The SIAM also manages the migration of the applications to the cloud hosting and manages the capacity arrangements. With cloud there is considerable capacity available but you need to be able to scale up and down to make the best use of that capacity. That involves setting up auto-scaling and learning how to maximise the cost advantages of cloud hosting.

    That gives us the cost and flexibility benefits of cloud hosting with the service levels of a fully managed service.

    This service integration model is one of the models Paul Corrall described (Corrall 2013) and is becoming more popular with a trend to more but smaller deals. It is also ideal for organisations moving to commodity-based hosting, such as cloud, where the service provided by the hosting provider is usually not that in-depth. Whilst the client still owns the service this is a highly technical and specialised area and some help in moving applications to the virtualised environment and managing the capacity and help desk issues can be helpful.

    As well as things like cloud I see in the future a continued move to smaller deals and more multi-sourcing. As mentioned there is a big push for this in the public sector (they sometimes call it tower sourcing) to give more flexibility, help SMEs gain business and erode the oligopoly of the big suppliers. This will impact on the client side skill set as clients will need to develop the outsourcing skill set and move away from their traditional business skills. Governance will become more important and things such as the Life Cycle outsourcing framework will need to be incorporated into the client side thinking.

    For clients this is going to be a paradigm shift, meaning a change in their way of thinking and operating. My experience is that there is a huge difference between single-sourcing and multi-sourcing. Not just in the technicalities but in the skill set required and the mindset of the client. The latter is one of the biggest shifts as you need to move from a relatively simplistic view of

    outsourcing to a holistic governance approach and with that comes the need for a different skill set.

    This move will also involve changes for the suppliers. It will create a bigger market for the smaller players. The smaller deals will allow the small and medium enterprises to compete for work and use their flexibility and innovative skills to give them a competitive advantage. The UK Government have a target to have 25 per cent of its spend on goods and services going to Small and Medium Enterprises (SMEs) (Morse 2013b). This includes work done by SMEs through larger organisations but it does recognise the value these companies can bring.

    At the other end of the scale, whilst there will still be the big contracts (it will take a while for the public sector to be in a position to fully embrace multi-sourcing), there will be a growing need for the big outsourcers to work on smaller discrete pieces of work as mentioned earlier. They will need to adapt to compete with the smaller companies that in a single-sourcing environment would have been subcontractors rather than competitors.

    At both ends of the supplier scale there will be opportunities and threats. Suppliers need to recognise this and adapt.

    This move to multi-sourcing may well see a rise in the systems integration and applications management organisations. Whilst it would not be singlesourcing, in some circumstances, such as National Rail Enquiries have found with cloud hosting, there may be a need to bring in a company to oversee a number of other suppliers to coordinate and optimise delivery of a service.

    Summary

    Through all these changes to the outsourcing landscape, be it cloud, SIAM, multi-sourcing etc., the underlying need for better governance of the outsourcing structure and suppliers is a common thread. This has been recognised in many industries, both in the public and private sector, and is slowly being actioned especially by initiatives from departments such as the Cabinet Office and Home Office. However the need is urgent as the governance needs to be designed as part of the outsourcing process rather than afterwards. As the framework in Chapter 10 shows, the governance develops through the outsourcing Life Cycle and touches each phase. That not only helps the phases but gets the governance process embedded in the minds and systems of the client and supplier. That is not so easy to do once the service is transitioned and then up and running.

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    Derek Parlour's book, Successful Outsourcing and Multi-Sourcing, is available to purchase here. Members of the National Outsourcing Association are currently eligible for a significant discount - just use the code G14IZN30 on the Gower Publishing website.

  • 30 Apr 2015 12:00 AM | Anonymous

    British department store group House of Fraser has outsourced its IT infrastructure to Indian service provider Infosys, days after Uday Kotla, Infosys’ former global head of technology, was hired as House of Fraser’s new CIO.

    Infosys will also be responsible for overseeing the development of internet and multichannel facilities, as House of Fraser looks to gain ground on its rivals’ online platforms.

    Frank Slevin, House of Fraser’s chairman, said: "This programme will help us realise faster time to market as we adopt new and advanced technologies to enhance our multichannel business.

    "The benefits from this programme will also enable us to achieve our business goals as we go global. We look forward to building a long-term strategic relationship with Infosys."

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    Read this next: Infosys CEO to Personally Oversee Outsourcing Projects

  • 30 Apr 2015 12:00 AM | Anonymous

    Centrica has achieved a two-month high on the FTSE 100, while the overall London market fell by one per cent.

    Some have speculated that the rise in share value may have been caused by widespread belief that Centrica is vulnerable to a takeover.

    A representative from brokerage firm RBC commented: “With the incidence of deals in the energy sector on the rise it is not that surprising that Centrica may have been seen as a target... It has underperformed on the weak commodity environment but remains a company with a strong competitive position in the market generating robust free cash flow.”

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    Read this next: Capita Unworried by Halved Dividends in First Quarter

  • 30 Apr 2015 12:00 AM | Anonymous

    American private equity firm Blackstone and Filipino BPO service provider SPi Global are the two front runners in the race to buy Serco India BPO, which is currently listed on the London stock exchange.

    Serco announced its intention to sell off parts of its BPO portfolio back in March 2015, after a poor financial year in 2014 where the company announced operating losses of £1.3 billion. Serco now intends to focus on acting as a business-to-government service provider.

    Business Standard ranks Serco India as India’s third top BPO with a workforce of 30,000, closely following Genpact (68,000) and TCS (45,000).

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    Read this next: Serco’s Decline in Contracts Continues

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