Industry news

Orange may have recently terminated its beloved ‘Orange Wednesdays’, but the mobile network operator clearly has its eyes on a much bigger prize.

At the Mobile World Congress yesterday, Orange’s technical strategy director Yves Bellego announced that the company is considering offshoring with a move into Africa, shortly after the success of a major deal with Sweden’s Ericsson closed late last year.

The Ericsson contract was announced on the same day, and will cover five European markets where the Swedish multinational communications provider serves over 30 million customers.

The arrangement is expected to economically benefit both companies and improve service provided to customers in Spain, Belgium, Romania, Slovakia and Moldova.

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United Airlines revealed on Tuesday that they expect non-fuel costs to fall by almost $800 million by the close of this year, as it seeks to cut annual costs by $1 billion within two years.

The American airline, headquartered in Chicago, suggested that the cuts were driven in some part by the outsourcing of 1150 positions across 16 airports in the USA.

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NHS England has had their public funding for integrated digital care cut to £43m instead of £240m. This may result in several NHS IT projects having to be severely scaled back or cut altogether.

The funds are believed to have been cut to accommodate hospitals that have been struggling.

The first round of the integrated digital care fund was open to NHS Trusts to support the transfer of paper-based clinical record-keeping to integrated digital care records (IDCRs).

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On Monday 2nd March 2015, Infosys broke the news that it had signed a five-year outsourcing deal with TNT to help improve the Dutch company's technology applications.

Infosys is an Indian business technology consulting, IT solutions and IT services company, specialising in both BPO and ITO. TNT is a courier business offering global express distribution, logistics and international mail services, founded in the Netherlands.

The new business transformation strategy, dubbed by TNT as 'Outlook', involves overhauling the company's IT capability in order to reduce its complexity and boost its flexibility.

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The Ayala group, the holding company for one of the oldest and largest business groups in the Philippines, has announced that it has launched a search for digitally-based companies to take over.

Affinity Express Holdings Ltd, a business which Alfredo I Ayala himself heavily invests in, is hoping to acquire a company based oversees this year. Mr Ayala said he was on the look out for 'anything that can accelerate [Affinity's] digital transformation' and that his company was looking for 'inorganic opportunities'.

Affinity Express specialise in digital and print marketing production, as well as media solutions, on behalf of SMEs. The company recently made the transition from being primarily print to digital, hence the search for digital acquisitions.

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One of India’s biggest engineering outsourcing companies, Quest Global Engineering, has purchased the automotive engineering firm EDF for an undisclosed sum.

Following a spate of acquisitions, the Indian company has gained a firmer foothold in the European market. Through EDF, Quest is now a supplier to a roster of manufacturers including BMW, Ford and Chrysler.

Commenting on the news, Quest co-founder Ajit Prabhu observed that his company would “use EDF to expand our offerings in Europe”, allowing it “do a lot more for our clients in the region like Airbus, Rolls Royce and Siemens”.

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In the build up to the UK general election, the IT trade association TechUK has called out the UK government over its public procurement policies.

The trade body has accused the government of casting too much uncertainty over the procurement of its public contracts, mainly regarding alleged plans to reduce the number of large-scale IT contracts that the government outsources.

TechUK emphasised that contracts between the government and tech industry are responsible for a £100bn contribution to the UK economy and 500,000 jobs; further uncertainty could put both factors in a precarious situation.

This controversy was sparked in late 2014, when government digital chief Mike Brackan publically criticised the ‘tower model’ of outsourcing, whereby IT contracts are broken down and outsourced to a number of third party specialists. This stance was followed up in a Government Digital Service (GDS) blog post written by deputy director Alex Holmes, who stated that ‘the tower model is not condoned and not in line with government policy’.

The proceeding argument spilled over onto social media. TechUK pointed out that the tower model had previously been favoured by certain bodies in the public sector, and that it was not helpful that this nebulous stance had been announced in a blog post rather than in any official capacity.

Holmes responded on Twitter that he was only outlining current policy, to which TechUK retorted that the government’s policies clearly lacked the clarity which will be key to the success of future public-private outsourcing relationships.

Late in February, the UK government changed its procurement laws to be more in line with the EU, with a number of rule changes intended to simplify the bidding process and make public contracts more accessible to small and medium-sized enterprises (SMEs). It is yet to be seen whether these rule changes will also help the government achieve a level of clarity that TechUK and others in the IT outsourcing industry will find acceptable.

Holmes’s attack on the ‘tower model’ is reminiscent of plans outlined by Labour Policy Chief Jon Cruddas earlier in the year, who called for public contracts to go to companies with a ‘social purpose’ rather than those that are purely driven by profit.

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Related content:

The New EU Public Procurement Laws: What you need to know

Labour’s Outsourcing Plans Put Public Sector at Risk

Do you remember how the business press used to report outsourcing as a strategy about ten years ago? The debate focused largely on the relative merits of keeping processes in-house or working with an expert to outsource them.

Both sides of the debate would fiercely argue the relative merits of ‘retaining more control’ compared to ‘accessing the best expertise in the market’ and the debate often got more complex once access to global resources via offshoring was introduced into the mix.

Over the subsequent years, outsourcing became accepted as a standard management strategy. It’s now just a part of the toolkit for any executive, a way of getting the job done. But I believe that in many industries we have crossed into an environment where the use of outsourcing has matured to the extent that it would be very difficult to even deliver the same level of service using internal teams.

Customer service is a great example and is the area where I am personally focused most of the time. A decade ago we would have been talking about a contact centre supporting voice calls, emails, and possibly some chat or instant messaging. Today the contact centre sits at the heart of a Customer Relationship Management strategy where customer loyalty and engagement are managed. Customers are interacting 24/7 on multiple communication channels, including social networks. The contact centre used to be a post-purchase function that mainly handled questions and complaints, now it is a critical part of the sales and marketing infrastructure in many businesses.

Of course a large company might be able to handle this complexity in-house, but for all but the largest organisations this is now such a complex process that it just makes sense to work with an industry expert. I’m sure this applies to several other industries too, but have you observed the same changes and do you also think that we have moved past the outsource/don’t outsource argument long ago?

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Crowdsourcing is sometimes hailed as outsourcing modernised for the 21st century. In theory, crowdsourcing should offer companies more flexibility, less overhead costs, and plenty of healthy competition which will boost outsourcee productivity.

However, those perks come hand-in-hand with some less appealing aspects. Those who opt to crowdsource rather than outsource also encounter less reliability and rarely have one single party that they can hold accountable if anything goes wrong. Furthermore, there are simply too many other variable factors that need to be considered - as a result, outsourcing feels like the safer option.

How can these problems with crowdsourcing be solved? There's good news for crowdsourcing fans - as so often seems to be the case nowadays, the 21st century's digital currency of choice might just be the answer.

What is Bitcoin?

Bitcoin was once perceived as the currency of the 'Dark Web', used to buy drugs and hire assassins; now the currency mainly features in stories about hacked online exchanges, individuals being cheated and the general loss of funds through unforeseen price fluctuations.

However, that's just one side of the bitcoin. The currency could one day change the face of modern finance, removing the fees that come with online transactions and generally democratising the world of online payments.

Blockchain and Crowdsourcing

Bitcoin, along with a handful of other digital currencies, is reliant on blockchain, an online accounting system that keeps track of every single Bitcoin payment made. Bitcoins are granted off the back of computers running very complex mathematical equations - blockchain technology is central to this and also used to verify whether a Bitcoin transaction is legitimate.

This is the technology that can be applied to business crowdsourcing. When individuals are granted certain responsibilities or chunks of business, a blockchain-like system could determine which of those individuals are worthy of credit. The distribution system will only give credit if the solutions are correct and delivered on time, cutting down on wasted time and increasing the speed at which overall projects are completed.

This approach to group-based problem solving would be most applicable to computer programming and other technical fields, but success in those areas could lead to a more comprehensive use of the same system long-term.

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The UK outsourced switchboard and telephone answering service Moneypenny has opened a new base in Charleston, South Carolina- its first foray into the North American continent.

Co-founder Ed Reeves remarked that “We answer calls either on an overflow or fully outsourced basis for thousands of companies throughout the UK, and are thrilled to now be able to offer our exceptional service to the US. We have revolutionised this service in the UK and are confident that we will be a game changer for businesses in the US too”.

The firm, which leads the market in the UK, handles upwards of 9 million calls yearly in its UK bases, as well as at a further site in Auckland, New Zealand, for overnight calls. Reeves revealed that Moneypenny is already attracting substantial interest, with “an impressive list of clients” waiting in the wings to take advantage of their services.

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