Industry news

The Confederation of British Industry (CBI) has called on the UK government to employ greater transparency and simpler contracts when dealing with outsourcing firms.

The recommendations included the public release of contract information, with data being made available online, a move to open-book accounting and NAO oversight into government contracts.

The CBI also said that the government was failing to display positivity towards outsourcing, despite the role that the outsourcing industry had in reducing costs and in helping to develop the economy.

CBI director-general, John Cridland, said: “Public services businesses recognise they operate in an industry which rightly demands close public scrutiny, which is why we are unveiling a range of measures to boost transparency and accountability.”

Skills in public procurement fail to improve

CBI survey reveals dip in SME orders

Six business leaders have been appointed by the Cabinet Office as new Crown Representatives as part of a strategy to improve the Whitehall’s procurement.

The new Crown Representatives will undertake to increase efficiencies and reduce the numbers of poorly managed contracts in order to promote value for money through their private sector expertise and experience.

The appointment of six additional Crown Representatives brings their total to 21, with the new recruits having backgrounds in financial services, telecommunications, consultancy and defence.

Cabinet Office minister Francis Maude said: “As part of this Government's long-term economic plan we are driving down the cost of Whitehall, saving £10 billion last year alone. Hard-working taxpayers expect us to get best value for their money so we are now using experts to scrutinise contracts and negotiate with suppliers. With hundreds of millions already saved through the existing Crown Representatives, these new additions will help us do even more".

Council procurement overhaul saves over £20 million

Whitehall departments move to share information across government

Royal Bank of Scotland (RBS) is considering merging its subsidiary the Ulster Bank with Irish rivals according to a new report.

The proposed move would come as part of a move to reduce costs according to the Sunday Times, after the Ulster Bank was reported to be operating with rising losses, with £1.5 billion in losses in 2013, compared to £1 billion in 2012.

Ulster Bank has suffered from bad property loans following the countries property crash, with the bank now accounting for a fifth of all bad debt charges in RBS.

Potential Irish banking candidates for the takeover include Permanent TSB, KBC or Irish based subsidiaries of Danske Bank.

RBS plans major reconstruction

RBS rejects U.S. bid

The current uncertainty surrounding the political situation in Ukraine is likely to impact the outsourcing service providers operating in the country.

Ukraine has become known for IT outsourcing services over recent years, due to a skilled workforce, capable infrastructure and low costs, with the industry contributing £1 billion to the economy per annum. Multiple companies based in the country offer services to a range of international clients.

Companies currently employing Ukrainian vendors are moving to put safeguards in place, should services be disrupted.

Past interference with critical infrastructure including internet access has been recorded before in past disputes with Russia. This includes the 2008 Russo-Georgian conflict, which saw suspected electronic warfare being employed by both sides.

The presence of a military draft in the Ukraine means that the mobilisation of the armed services is likely to impact the outsourcing provider workforce in the country, as majority of the men working in the industry are of draft age.

So far services have not been significantly disrupted, with the large outsourcing firm LuxSoft which has a substantial presence in the country releasing a statement confirming continued operation:

“In light of the new developments and news headlines, we would like to confirm that Luxoft’s business operations in Kiev, Odessa and Dnepropetrovsk are stable and no incidents have been reported in any of these cities. There are no disruptions in transportation, telecommunication or other infrastructure and logistics. We plan to operate on business as usual basis in all three of our delivery centers in Ukraine and will continue posting timely status updates.”

Intercepting Backsourcing

Unrest puts Egypt’s outsourcing credentials at risk

Salesforce has move to open its first data centre in the UK, in a move to bypass data protection laws which prohibits sensitive data from being stored in non UK or non EU locals. The move comes as part of an expansion program in Europe which is expected to create 500 new jobs.

Successful expansion in Europe, with a 41 per cent increase in revenue growth, has resulted in Salesforce moving to open data centre facilities in France and Germany alongside the UK.

The new UK site is planned to open in August 2014, while the German and French sites are scheduled to be operational in 2015.

The new site will be used by existing customers, with European customers including BMW, Pernod Ricard and Zeiss all benefiting from the locally hosted facilities.

President of EMEA at salesforce.com, Miguel Milano, said: "Our tremendous growth and customer momentum is why salesforce.com is significantly increasing its investment in Europe, by adding 500 new jobs and opening three new data centres across Europe, in the UK, France and Germany."

Salesforce acquires Exact Target for $2.5 billion

Salesforce.com launches storage application Chatterbox

Civica, an outsourcing services provider has moved to acquire Bristol based Coldharbour Systems, which specialises in providing application software services to the UK healthcare sector.

Coldharbour Systems provides software services to over 160 customers and has worked on projects with Civicabefore.

While payment details were not disclosed, a statement released by Civica regarding the acquisition, said that: “The acquisition of Coldharbour extends Civica's presence and expertise in sectors adjacent to its existing customer base while the combined product and service portfolio will enable the company to offer broader solutions to the health care sector including cloud and managed services."

The acquisition by Civica will provide the outsourcing group with a broader service offering and an additional business arm which enjoyed a profitable 2013.

CEO of Civica, Simon Downing, said: “Coldharbour brings a market-leading product set and an excellent reputation, and the combined business is very well placed to respond to the needs of customers across the healthcare sector.”

NHS award £3.1 mil IT contract

NHS moves forward with GP data collection

Outsourcing firm Capgemini has teamed up with Aston University to develop workplace degrees in IT.

Two degrees in software engineering and information systems have been developed by the partnership, with the majority of the five-year courses taking place within the workplace.

The degrees will include a two year placement on the Capgemini Higher Apprenticeship scheme and three years undertaking a BSc degree.

Capgemini has revealed that 120 degrees places will be available in 2014, and that it is also in the early stages of developing a cyber-security apprenticeship, with plans to offer five positions.

Professor Dame Julia King, Aston University vice chancellor, said: “Over the past two years, 14 of Aston’s own graduates have been recruited to Capgemini’s graduate training programme and I look forward to welcoming the Higher Apprentice graduates to Aston University and the next stage of their educational journey.”

Capgemini awarded seven year police contract

Capgemini wins SAP contract from Hitachi Rail Europe

One in six firms has moved re-shore work back to the UK due to savings in the face of rising costs in traditional offshoring destinations.

In a report entitled ‘Backing Britain – a manufacturing base for the future’ found that manufacturing companies were increasing sourcing back to the UK, due to competitive logistics costs and improved quality.

The report compiled by EEF and law firm Squire Sanders, identified that reshoring had increased over the last three years, with only one in seven firms bringing work back to the UK in 2009. The report found that 40 per cent of companies that did reshore services experienced increased turnover, while 60 per cent saw increased profit.

The report concluded that: “It is now key that government policy supports the most competitive business environment possible so that we continue to see more high value, innovative manufacturers invest in and sell from the UK.”

The G-Cloud director Tony Singleton has revealed that nearly 90 per cent of local authorities have not heard of the G-Cloud.

The G-Cloud director posted on his blog that despite the benefits of the procurement framework, “research carried out by the 6 Degree Group suggests that nearly 90 percent of local authorities have not heard of G-Cloud.”

The director detailed that the G-Cloud needed to be publicised more with the benefits communicated to local authority in order to drive uptake.

Mr Singleton said that the publication of clear guides designed to help buyers to better understand the procurement framework would help authorities understand how the cloud could reduce procurement times and improve competitive pricing.

Suppliers call for G-Cloud changes

Oracle opens new datacentre to support UK G-Cloud

Liverpool Council has moved to end its multi-service joint venture known as Liverpool Direct Ltd (LDL), with BT after the telecommunications giant was unable to agree to price reductions.

The council in order to meet public sector savings targets after reduced budgets has asked BT to further reduced service prices, but will now move to take complete ownership of the joint venture, bringing services back in house, after BT failed to agree to the cost cuts.

LDL had provided a range of services including payroll, HR, IT, and revenue services, with the contract planned to cover up services until 2017.

The mayor Joe Anderson said: ”Over the last three years as much as possible has been done to protect services to the vulnerable from the budget cuts. However going forward this cannot continue.”

He acknowledged that despite price cuts by BT, these changes would not be enough: "Unfortunately BT feels unable to commit to any further price reduction within the contract as they need to sustain their own financial position. Moreover, the City Council is now well placed, as a result of the long collaboration with BT and the learning gained from the Partnership, to continue to drive forward business transformation and run the services with consequent cost savings to the city."

Wolverhampton City Council looks to outsource services in order to save millions

Merseyside councils in governance review to create a “Combined Authority”