Industry news

  • 21 Apr 2015 12:00 AM | Anonymous

    A report by the Centre for Health and Public Interest (CHPI), an independent think-tank, has revealed that the NHS is struggling to manage and assess the effectiveness of its private sector outsourcing providers.

    The report estimates that Local Clinical Commissioning Groups (CCG) spend 16 per cent of their budgets in the private sector, requiring the oversight of almost 15,000 outsourced contracts. The CHPI findings reveal that 60 per cent of CCGs either did not record the number of site inspections undertaken or were simply unable to say. Worryingly, 12 per cent of CCGS disclosed that they had not carried out any inspections at all.

    Colin Leys, the report’s co-author, said: “The picture that is emerging is of an NHS poorly equipped to ensure that healthcare services outsourced to for-profit providers will provide safe, high-quality care and good value for money.”

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    Read this next: MPs Condemn Failure of NHS Outsourcing Contract

  • 21 Apr 2015 12:00 AM | Anonymous

    I have been working in outsourcing for almost 30 years and have seen how the industry has changed in that time. The changes in the past have mainly been about commercial approach, engagement and the structure of the outsourcing model. But over the past few years we have seen the increasing impact of technology on outsourcing and the changes that it brings about are fundamental and far reaching.

    Technology impacts on outsourcing in a number of ways but, for me, some of the most important are on how services are delivered, how those services are perceived and the impact this has on the clients approach to outsourcing.

    Services can now be delivered in very different ways to how they were 5-10 years ago. IVR and RPO has impacted on the BPO sector. This reduces costs but we need to look beyond the direct impact of these changes. The automation of services cuts the costs by using less people but beyond that it impacts on how end users perceive the service and can impact on how clients want the service delivered. I have seen how increased automation reduces the “service” perception of end users and reduces the service being supplied to a commodity.

    This isn’t necessarily a bad thing for the end user but it is a different perception. Also, from the client point of view, the reduction in staff changes the outsourcing decision. Labour costs were a big factor in the decision to outsource to countries such as India. Not the only factor but a big one. With automation reducing the human element of the service this is not as important as before. This alters the commercial dynamic of the services being provided. Are we going to see more on-shoring because of this?

    In the B2B world technology has also had an impact. Years ago if you needed a website built with large capacity behind it you went to a big SI because they had the specialist expertise and the server capacity to support you. The move to cloud hosting has changed that. If you want a website (or any other service) that needs to be able to handle high volumes you can sign up with a cloud supplier and pay for what you use. If you don’t need the big SI for the hosting then do you need them for the application? As we are seeing the answer is increasingly no. Over the past few years we have seen the rise of the smaller application developers providing services to larger and larger companies as cloud hosting and open source software open the market to them.

    Open source reduces the advantage of proprietary software and opens up the market to more competition. For most services you don’t need expensive bespoke applications and huge data centres any more. IT is becoming more of a commodity. We are even seeing this at the small business/consumer end of the IT market. New products such as Office 365 mean you don’t have to shell out for a one off application licence anymore but can have the software on a pay as you go basis.

    The increase in automation makes services more of a commodity to end users and the increase in technology is making IT more of a commodity in the B2B world. In both perception and reality this reduces the tie to a particular service and can encourage people, and businesses, to move services more rapidly. So is this a good thing or a bad thing for the industry?

    It obviously depends on who you are but on balance I would say this is a good thing. The commoditisation of IT has reduced costs dramatically and has lowered the barriers to entry in certain parts of the industry. Cloud hosting itself may leave a lot of the hosting market to huge organisations such as Amazon and Azure, but the existence of cheap, pay as you go server capacity can only help the smaller application developers. This gives both the smaller companies, and the clients, a great opportunity to develop new relationships and new services but what does this mean for the client?

    As we all know governance is key for a successful outsourcing relationship and the need for governance increases with the number of suppliers and the complexity of the relationships. The commoditisation of IT and increasing automation of processes gives the opportunity to use a larger number of smaller, more specialised suppliers rather than single large BPO or Service Integration suppliers. Whilst that should be good for the client it also increases the governance overhead and the level of skill required to manage the relationship.

    Going back to the beginning of this piece, where I talked of the changes to the commercial approach and outsourcing structures used, the changes in technology are having the same impact in that if the outsourcing changes then the governance has to follow.

    Changes in technology are having far reaching impacts on the outsourcing industry but, as is often the case, if we manage it well we should not be afraid of these changes.

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  • 20 Apr 2015 12:00 AM | Anonymous

    Information Services Group (ISG) has released its Outsourcing Index for the first quarter of 2015, which has revealed that the global outsourcing market has slowed at the beginning of this year.

    The volume of outsourcing business has declined since 2014, along with the value of contracts dropping due to an industry price war. 2014 was a ‘near-record’ year in terms of outsourcing business value, volume and industry growth.

    ISG is a leading technology insights, market intelligence and advisory services company – the Outsourcing Index is a quarterly study which measures commercial outsourcing contracts with an annual contract value (ACV) of $5 million or more.

    The report found that the global ACV of outsourcing stands at $5.1 billion for this quarter. This is well below the average of $6 billion seen in first quarters since 2006, and 18 per cent less than the first quarter of 2014.

    ‘The slow pace of the quarter is not a surprise, based on the activity we noted at the year’s end, but we don’t view it as a portent of things to come,’ said John Keppel, partner and president of ISG. ‘Smaller deals continue to flow, and value and volume for the trailing 12 months remains in positive territory.

    ‘Still, what goes up must come down, especially against the strength of last quarter and the vigorous start the industry had in the first quarter of 2014. Across markets this quarter, we found examples of value increasingly being challenged while volume remained strong as clients sought out great deals in a buyer’s market.”

    The ISG has suggested that the lull in Europe could also be due to the UK’s up-coming General Election causing business uncertainty, as well a slight decline of sourcing in France after an all-time peak in 2014.

    The Americas represent a ‘lone bright spot’ with ACV up 10 per cent to $2.1 billion – this is the fourth consecutive quarter where the Americas have reached an ACV higher than $2 billion.

    For further information, see ISG’s full press release regarding the Outsourcing Index.

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  • 20 Apr 2015 12:00 AM | Anonymous

    Twelve historical sites based in Lincolnshire, including Lincoln Castle, may be outsourced to the private sector in order to save local government millions of pounds a year in upkeep and maintenance costs.

    Lincoln Castle, Gainsborough Old Hall, Museum of Lincolnshire Life, The Collection, The Battle of Britain Memorial Flight Visitor Centre, The Tennyson Research Centre, Aviation Heritage Lincolnshire, Lincolnshire Archives and various windmills in the area are all potential targets.

    Council leader Martin Hill has said that he has an ‘open mind’ and that no final decision has been made.

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

  • 20 Apr 2015 12:00 AM | Anonymous

    Accenture has been awarded a 10-year contract by the US Department of Education to continue the operations and maintenance of the federal financial aid system for students, worth $966 million.

    Continuing a relationship that first began in 2001, where the firm provided integrated system operations, customer service, application maintenance and hosting support for federal student aid programs, the new deal will oversee the assessment and delivery of over $1 trillion in federal loans and grants.

    ‘We are proud to be able to continue supporting the department’s efforts to deliver federal student financial aid to millions of post-secondary students in a secure and reliable manner,’ said Paul Peck, who leads Accenture’s work at the Department of Education.

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    Read this next: Accenture Wins £350m NHSmail Contract

  • 17 Apr 2015 12:00 AM | Anonymous

    Genpact, the global company specialising in designing, transforming and running intelligent business operations, has been named a ‘Leader’ in Everest Group’s latest PEAK Matrix Assessments of service providers of order-to-cash (O2C) and record-to-report (R2R) services.

    For O2C, Genpact was the only service provider assessed that received top scores in all areas: scale; scope; technology solutions; delivery footprint; buyer satisfaction and overall market success.

    This has proven to be a great accolade for Genpact - the firm has been delivering end-to-end finance and accounting process delivery solutions for over 16 years.

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    Read this next: HP and Aecus Release ‘The Innovation Agenda’

  • 17 Apr 2015 12:00 AM | Anonymous

    BPO firm eClerx has announced the acquisition of CLX Europe, in a deal worth up to €25 million.

    CLX Europe creates, manages and delivers creative assets globally for luxury brands and major retailers. Based in Italy, the company has over 40 years of experience working with some of the biggest in the global retail industry.

    Commenting on the deal, eClerx co-founder PD Mundhra declared that “Today’s acquisition of CLX Europe will deliver consolidated digital marketing services to our current and future clients around the globe. Uniting our service offerings and respective client bases will build on our high quality and cost-effective solutions to accelerate and expand our Digital division revenue streams.”

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  • 17 Apr 2015 12:00 AM | Anonymous

    Accenture has been selected as the preferred supplier for the NHSmail service.

    The framework is valued at £350 million, is open to use across the public sector and relates to services delivered at a minimum of IL2 security level.

    The Health and Social Care Information Centre (HSCIC) has confirmed that the service is expected to be implemented over the coming year. Accenture was selected from a shortlist of five suppliers which also included BT, CSC, Vodafone and GDIT.

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    Read this next: MPs Condemn Failure of NHS Outsourcing Contract

  • 16 Apr 2015 12:00 AM | Anonymous

    Aecus, in collaboration with HP, have published the findings from their global innovation survey. The resulting ‘Innovation Agenda’ report sets out to explore the fundamental questions about what innovation means for businesses today: What is innovation? Why does it matter? What tools and technologies are driving it? How can it be achieved?

    The analysis was based on 84 responses; the methodology involved a survey, followed by a series of follow-up interviews.

    The survey found that, for 91 per cent of respondents, innovation has never been more important to their organisation, yet only 31 per cent of those questioned believed that their organisation has been successful at harnessing innovation. 57 per cent thought this was due to lack of internal resources; 33 per cent cited a lack of leadership.

    The report concludes that innovation is not one thing – it is a spectrum of ideas that can be driven either internally or in an open-ecosystem of collaborators. It goes on to acknowledge that, while fostering innovation can be difficult, it is a critical factor for the future success of businesses.

    Download your free copy of the full report for more information.

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  • 16 Apr 2015 12:00 AM | Anonymous

    Harrow Council has selected Sopra Steria as a new IT partner, to provide IT services and deliver technological improvements that will benefit users of the Council and local residents.

    The contract, valued at £37 million, will commence on 1 November 2015 and will continue for an initial period of five years. Sopra Steria aims to deliver savings of roughly 20 per cent for the Council and ensure that staff and residents start taking advantage of the new digital services at their disposal.

    The service provider has also committed to a number of initiatives including apprenticeships, work placements, jobs for residents and support for local events, along with committing to pay its employees the London Living Wage.

    Sopra Steria has already seen some phenomenal success working with the public sector – its ongoing contract with Cleveland Police being a prime example.

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    Read this next: Northamptonshire Council Expands Outsourcing Operations

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