Industry news

As we enter what we are all hoping is a period of steady economic recovery, the focus of many companies has shifted from survival to growth. Businesses have now reverted to an emphasis on growth and the notion of establishing a sustainable model that will deliver positive results in the long term.

For service-based companies – and outsourcers in particular – the volume of business remains key, but in order to maintain a healthy level of growth, this increase in volume should not come at the expense of quality. Improvements to basic processes, such as managing your workforce more effectively, can actually have a significant impact on the quality of service – but which changes are the easiest and most effective to implement?

Tight margins

Business Processing Outsourcers (BPOs) are notoriously squeezed by some of the tightest profit margins in business. In most cases, outsourcers sign up to very ambitious Service Level Agreements (SLAs) which leave little room for manoeuvre without sacrificing profitability. Back office resources are typically stretched to the limit, with an overworked workforce under a lot of pressure to complete an often unmanageable amount of tasks at record speed. This can mean that tasks are not being completed to the best possible standard, with knock-on implications for the both the end customer and the client. So just how do outsourcers provide a better level of service under such difficult conditions?

Productivity

As an operational director, you need to ensure that your administrative staff is as productive as possible. This requires a new way of working, with a greater emphasis on completing specific tasks quicker and to a higher standard. Technology can play a key role here, with software able to allocate tasks to workers based on their individual skills and availability. This ensures that the right work is given to the right people at the right time. Workers are able to specialise in specific processes, which greatly increases the likelihood of tasks being completed correctly first time – sometimes referred to as “one and done”. Work is therefore completed quicker and with fewer errors, increasing the level of service whilst reducing operational costs and maintaining profit margins.

But technology can take this one step further. Workflow management technology that tracks the progress of the customer journey can now be fully integrated with Quality Assurance software to make sure that each individual stage is being completed to the agreed level of service. This granularity allows for greater transparency between outsourcers and their clients.

Complaints down, quality up

Some BPOs are already experiencing the benefits of this new way of working. For example, insurance policy administrator HCL IBS has seen complaints reduce by 70 per cent since implementing these tools and tactics to improve its workforce culture. By increasing efficiency and quality of service simultaneously, outsourcers are able to protect their profit margins and hold onto the cash they need to reinvest for growth.

David Cameron has announced that the government will invest a further £45 million in developing the ‘Internet of Things’ (IoT).

The pledge raises the total fund to £73 million for services and technology relating to IoT.

Mr Cameron during an announcement in Hannover said: “I see the Internet of Things as a huge transformative development - a way of boosting productivity, of keeping us healthier, making transport more efficient, reducing energy needs, tackling climate change.”

The US Government has 18F, an in-house digital services group which reflects the UK’s Government Digital Service.

18F has been launched as part of the independent General Services Administration (GSA) which is focused on transforming government IT services, encouraging efficiency and increasing transparency.

18F will seek to deliver cutting edge in-house digital services, tools and support services, the agency will also be available to offer advice to government departments on how they themselves can implement internal services.

GSA Administrator Dan Tangherlini said: “The mission of 18F is to make the government's digital services simple, effective, and easier to use for the American people. This service delivery program will make GSA the home of the government's digital incubator.”

GDS moves to combine digital marketplaces

Japanese based Hitachi has announced plans to move its global rail business to the UK as part of a planned expansion programme.

The expansion programme is hoped to increase revenues from €2 billion to €3 billion and increase the workforce to 4,000 workers from the 2,500 currently employed.

The move by the Japanese manufacturer places the company in proximity to its main competitors such as German based Siemens.

The announcement follows Hitachi’s success in winning a £1.2 billion contract to build next generational inter-city trains in north-east England.

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3.2 million SMEs are collaborating with one another in order to fuel growth, with focus on outsourcing marketing & sales according to new research.

The research released by CitySprint, as annual report ‘Collaborate UK’ revealed that 3.2 million small and medium businesses are pooling their resources and outsourcing in order to achieve greater growth.

In particular the research found that SMEs are looking to bring in marketing and sales support and are working together in order to win new business.

The report is based on the opinions of over 1,000 SMEs across UK, and also shows that:

• A net 11% looking to hire but 49% still in ‘survival’ mode

• Familiar barriers of red tape (16%), limited access to talent (15%) and finance (13%) hindering growth

• 1m looking abroad for opportunities

• Nearly a third (29%) feel more prepared to take on bigger competitors for new business

Professor Robert Blackburn, Director, Small Business Research Centre, Kingston University, said: "SMEs turned to each other to maximise efficiency and output during the downturn and are now starting to collaborate in different ways. This includes a focus on bringing in support for functions which will help them grow their reach and market share, perhaps even into related activities and new geographical territories.”

China has entered talks to buy more than 150 Airbus jets worth £12 billion.

Sources speaking to Reuters revealed that the deal would form part of the visit by Chinese president Xi Jinping to Europe at the end of March.

The deal is expected to involve the purchase of A330 craft and include talks surrounding the creation of Airbus’s second major factory in the country, which is ranked as the fastest growing aviation market on the planet.

The talks are also expected to ease relations between the EU and China following a cooling in trade relationships following environmental policies.

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George Osborne’s latest budget continues and builds on the governments support of small and medium sized businesses.

In the budget announcement in the commons the chancellor detailed how SME support programmes would be built upon, as the government seeks to support SME growth and their contribution to the economy.

Mr Osborne announced that the budget will increase tax credits for SMEs involved with research and development while operating at a loss, with tax credits set to increase from 11 to 14.5 per cent in April.

The move to provide subsidies to SMEs involved in R&D comes as the new budget seeks to increase UK innovation

Genevieve Moore, a tax partner at London Chartered Accountants Blick Rothenberg LLP, said: “The way the R&D tax relief works for SME’s means the real cash impact will be an increase in the repayment due to the SME from 24.75p to 32.63p for every £1 spent on qualifying R&D.

Peter Grant, CEO, CloudApps, said: “With the business rate discounts that the Chancellor has announced today, SMBs have been given the chance to pursue growth. Receiving these benefits means that companies are able to focus on improving their own workforce and invest time and money in driving innovation internally."

Autumn Statement pushes continued austerity

The Chancellor George Osborne detailed the success of the UK’s austerity programme while moving to increase SME support and encourage outside investment in today’s budget announcement.

The budget announcement along with statistics from the Office for Budget Responsibility (OBR) highlighting the success of the Chancellors overall economic programme measures, included announcements of tax reliefs for small and medium businesses, support for the manufacturing sector and social programmes in preparation for next year’s elections.

Future predictions from the OBR highlighted continued recovery from deficit, with a predicted surplus of £5 billion by 2018-19, but the Chancellor warned that while the new budget is designed to build on growth, their was need for continued caution and austerity, with the OBR warning of future of uncertainty.

Annual budget policies included:

1: Business tax cuts with corporation tax reduced to 21 per cent.

2. Increased funding for businesses working in UK sciences and technology including funding for big data.

3. Manufacturing subsidies including £140 million in funding to be made available for flooding damages and infrastructure repairs, with £200 million being made available for for local infrastructure projects including pot-hole repairs.

4. Development of housing projects including £150 million to be made available for the right to buy housing scheme along with housing construction programs.

5. Polices aimed at highlighting links to Scotland including tax breaks for North Sea Oil & Gas.

6. Plans to support export growth, which the OBR expects to double, backed by increased funding and reduced taxes.

7. Social policies including the removal of inheritance tax for emergency services personal that die in the line of duty.

8. Stamp Duty changes designed to prevent avoidance abuse and loopholes.

9. The introduction of a new £1 coin to reduce current high levels of fraud impacting the old coinage.

Chancellors budget continues government SME support

Capita has succeeded in winning a bid for a five year contract to create a deliver an online contact centre for supermarket chain John Lewis.

The contract is valued at £93.5 million and will see the development of a digital service designed to provide integrated services to customers, both online and in store and help to fuel the companies continued success from online sales.

The new contract replaces the incumbent supplier Teleperformance with the switchover scheduled to occur over the next few months, with 500 employees moving under TUPE from Teleperformance to Capita under the contract.

The online site will be based in Glasgow, where Capita currently have 5,000 employees situated, with expectations of expansion over the contracts lifecycle to an additional 2,000 extra employees.

Andy Parker, Capita chief executive said: "Capita has extensive experience of working with household names from across the private sector, including major retailers. We appreciate the importance of becoming fully immersed in a company's brand values to ensure that customer experience is at the heart of service delivery."

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Atos has signed a five year contract with IT provider Kelway, which will see the provision of datacentre and framework services alongside support services.

The contract is believed to be worth around £150 million over the five year period is expected to deliver significant efficiency savings.

Phil Doye, CEO of Kelway, said: “We’re continuing to impress leading global brands with our comprehensive range of solutions and services. Working with Atos will provide another opportunity to help a successful organisation achieve competitive advantage with the right technology.”

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