Industry news

BAE systems have been awarded a repair contract valued at $7 million. The defence giant has successfully secured the contract for the refit of the USS Vicksburg. The announcement comes as BAE moves to consolidate ERP services after amassing seven systems.

The move to consolidate services comes as defence contractors as a whole seek to reduce the costs of projects as they face tighter margins in times of reduced national defence budgets.

“This transformation project is born from the simple realisation that fewer applications lead to easier management and less distraction from our core activities,” said John Booth, BAE Systems’ Head of Project.

BAE secures $780 million U.S. Army contract

BAE selected as preferred bidder for Foreign and Commonwealth office framework

It seems to be accepted as a given that costs are rising across categories and verticals (or niche) markets and that this trend is set and likely continue for some time. There are a number of reasons for these increased costs, but the most significant are those, which, create fragility and could individually or collectively destroy an organisation’s supply management structures and networks of even the largest global corporations – no one is too big to fail. So what are these issues?

Well, inflation is back with a vengeance and commodity costs are rising around the world. According to the Economist Intelligence Unit global oil demand in 2013 may accelerate at almost double 2012’s pace amid growth in China and the U.S.

The Hightower Report predicts that few commodities have a more uncertain outlook than corn, meaning producers should account for the potential for high volatility. Cattle futures dropped sharply in early 2013, but shrinking beef supplies set the stage for price upside later this year and the severe U.S. drought in 2012 has persisted into 2013, sharpening grain market focus on the spring planting outlook. Credit clouds still hanging over global markets and the continued unwinding of the credit cycle will be the overriding force which shapes this year’s investment climate.

That said, the Economist Intelligence Unit reported that the global economy began in 2013 with stronger fundamentals, with the euro crisis eased and China poised to accelerate. The second major issue is that market growth has stagnated and as a result, so has job growth. Stagnated growth in markets will seriously limit businesses’ ability to increase the breadth of its strategic sourcing activities and get more spend under management, which is critical to controlling costs.

This deterioration in market activity should be seen as warning sign for CFO’s and CPOs to get spend management under control. Yet lack of adequate resource in the shape of commercially savvy talent and investment in and the application of new technology has held many organisations back in making the headway they need to grow their sourcing efficiency. In addition, slow market growth means that volume is not going to increase, and as a consequence a CPOs ability to negotiate (additional) volume-based savings will be restricted.

Finally, the perennial problem of risk identification and mitigation has worsened. A considerable amount of research on risk and the changing nature of risk in complexity has identified that the effective identification of risk and stratagem to mitigate and or reduce it are hard to pin down.

In a Delphi Study conducted by Professor Brian Squire from Bath School of Management, with procurement managers or directors from two countries (UK and China) provides useful insights into differing perspectives of risk in the supply chain.

The study revealed 300 individual risk factors from various sources and the urgent need for comprehensive risk management in organisations to address such a diversity of supply chain risk. The majority of risk lies upstream with over 60% of risks in the UK sample located upstream within the supply base.

The study also showed that organisations are not sufficiently prepared to manage supply chain risk with 50% of UK organisations confirming that they had no formal methods for identifying supply chain risks and this rose to 87% in China. Interestingly, mitigation was seen to be aligned with risk impact but not with risk probability. In the UK, organisations are closely aligning levels of mitigation with the impacts of disruptions but are ignoring the inherent variability in risk probability.

The five most significant threats to the resilience of supply chains in the UK are:

• Escalating costs of fuel and energy

• Lack of internal management maturity

• Conflicts in supply chain caused by current pressures on cost cutting and survival

• Financial instability of suppliers leading to supplier failure

• Exchange rate fluctuation

Here we have only examined three of the reasons why costs are increasingly difficult to manage across categories and verticals, but that said, this is food for thought for most CPOs with regard to how they tackle this problem.

The UK’s Department for Energy and Climate Change (DECC) are set to announce their preferred bidder shortlist for a series of lucrative contracts.

The contracts for the installation of a smart metering programme are valued at £2.8 billion, with the preferred bidder shortlist set to be announced this Wednesday.

Contracts up for tender include data collection and communications technology programmes that will form the backbone of the new smart metering framework which will be present in every home by 2020.

A DECC spokesman said the department will, “make a statement once contract signature is secured which we expect to be achieved in September”.

Bidders submit offers for UK smart meter rollout

HM Treasury has placed a pre-tender notice for a ITO 2015 programme to deliver a new replacement for its current ITO services, which are up for renewal at the end of January 2015.

The new procurement processes are expected to see the awarding of six contracts with a focus on SME suppliers, based on the government’s desire to stimulate SME’s involvement with the public sector.

The expectations of multiple contracts is a departure from the single provider ITO arrangement that the HM Treasury currently uses, with six contracts allowing for small and mid-sized companies to provide individual services rather than an over reaching service.

Requirements for the contract renewal include a focus on flexible working and remote accessibility, with the pre-tender notice specifying that: “all future services should be fully scalable as it is possible that other government delivery organisations could be on-boarded over time and the size of the Treasury will change'.

SME initiative reaches £100 million contract milestone

Barnet council is set to move forward with its landmark outsourcing programme known as One Barnet, after the rejection of an appeal by residents.

Front and backline council services will now be operated by Capita over the 10 year programme, which represents the largest outsourcing programme carried out by a local authority.

The contract is valued at £350 million and will cover services over a wide spectrum, including: HR, IT services, procurement, finance and support services.

The 10 year programme is expected to deliver £165 million in savings. The programme is expected to be the first of many as local authorities look to make increasing savings in order to meet tight budgets.

Barnet Council Outsourcing: Judge confirms council should have consulted public more

An energy industry report has warned that the UK governments’ attempts to stimulate the UK’s fledgling fracking industry are unsustainable.

The report from energy consultants Oilandgaspeople.com revealed that the development of UK fracking is likely to be hindered by a shortage of rigs and specialised staff and equipment.

The report suggests that the government’s financial incentives are unlikely to succeed in developing the UK’s fracking industry. Shortages will also be compounded by a lack of resources in the energy sector, with businesses starched by a global oil and gas boom in multiple locations besides the UK.

Centrica enters into talks for UK fracking stake

New research published this week by SecureData, an independent IT security service provider entitled: Are you being served? How can Security as a Service serve you? highlights that 78% of IT managers in UK companies claim that a lack of trust in security is the biggest barrier to the adoption of cloud technologies. For managers in large businesses, (more than 3,000 employees) this figure rises to 82%.

Trust and security are understandably big considerations for any company moving their IT into the cloud. Outsourcing confidential data to a third party is big step particularly when it has always been managed in house and only accessible to employees.

However, cloud computing can be completely secure if businesses opt for a private and managed cloud computing service and are careful when choosing their provider. Here is my short guide on ensuring the cloud is sound.

So how can companies dispel security issues?

• Work with an accredited and trusted cloud computing service provider with a good reputation amongst its customers.

• Opt for a privately managed cloud computing service, such as a Desktop as a Service (DaaS), where all data is professionally managed and stored in a secure UK datacentre behind corporate grade firewalls. Popular cloud based services such as Gmail,

icloud and dropbox are free, but there are risks involved as people who use them won’t know where their data is held. If it is held for instance in the USA, the data may come may come under the jurisdiction of US authorities.

Earlier this year the Information Commissioner’s Office issued clear guidelines to businesses stating that they are responsible for their data wherever it is held. Organisations must know where their data is located and take responsibility for its security – consumer cloud services are therefore not suitable.

• Check your provider has relevant accreditations such as ISO 9001 and ISO 27001 and is happy to provide references that you can follow up with their clients. Accreditations are important as it shows the provider understands and can demonstrate the highest levels of security.

• Fully understand how cloud computing works and the value it could bring to your business so you can weigh up the benefits versus the costs. Some of the benefits could include reduced IT costs, eradicating the need for in-house servers and an IT department, and greater workforce flexibility – allowing employees to log onto office systems wherever they are.

Once a company has adopted cloud computing they are typically operating in an environment which is more secure than the previous local server set-up. It is the provider’s responsibility to ensure they have the latest security software and firewalls and they are much more likely to keep everything up to date than an internal IT department.

In the past year or so, the growing trend of employees bringing different gadgets into the workplace has made it more challenging for companies to manage how employees access company data and move between their personal and corporate devices without compromising data security. However, if a company adopts a hosted desktop service based on cloud computing these issues are solved as data isn’t stored on any devices so people can access corporate data from any device and even if their device is lost or stolen it wouldn’t matter as the data would be held securely in the cloud and not accessible to a stranger.

Businesses should remember too that security threats are not always external and make sure they have audit trails in place in case of employees’ breaching confidence.

Some offices are also at risk from physical threats such as burglary or flooding. With a reliable DaaS provider, the physical location will be in a resilient and top security environment with constant backups and a disaster recovery solution to ensure data is always protected and it can be business as usual at all times.

By following these guidelines and choosing the right provider, justified security fears should actually be a catalyst for joining the cloud.

By David Sturges, Chief Operating Officer, WorkPlaceLive www.workplacelive

Outsourcing security: don’t just leave it to the experts

CSC and AT&T have signed an agreement to create a global shared agreement.

The alliance will see the two groups share each other expertise in cloud, network and application services to target a global cloud consumer base.

As part of the agreement, CSC will provide application expertise to AT&T and its customers. Working with AT&T, CSC will enhance and migrate applications to enable AT&T’s customers to benefit from a secure cloud environment.

“This agreement advances our cloud market leadership position by layering our leading cloud platform on to AT&T’s worldwide network and infrastructure architecture, capitalizing on quickly evolving technology solutions and enabling AT&T and its clients to modernize their applications to take advantage of these solutions,” said CSC President and CEO Mike Lawrie. “Additionally, this agreement enhances our ability to compete globally with AT&T’s expertise and scale to better meet customer demands.”

Infochimps founded in 2009, will be merged into CSC’s bid data and analytics unit, and will provide real-time correlation and analytic services.

Infochimps will also continue to offer standalone service at the same time, with the backing of CSC resources and support, including the infrastructure of the multi-national outsourcer, marketing teams, sales teams and software developers.

The acquisition of Infochimps follows the purchase of 42Six Solutions, another provider of big data and analytics services in October of last year, as CSC seeks to compete against competitors who have sought to capitalise on the efficiency and costs savings available from analytics.

Banks move to enhance analytic capabilities

Thames Water moves to £4 million real-time analytics system

G4S has cancelled its bid for the renewal of a contract for the electronic tagging of criminals in England and Wales.

The move to pull out of the bidding process comes after controversy surrounding accusations of overcharging over multiple years by G4S and Serco, which resulted in losses in the many millions.

The controversy surrounding the accusations that the public sector had been repeatedly overcharged saw bidder Serco pull out of the tendering process, however G4S continued to pursue the contract renewal until this week.

G4S released a statement saying it was, “committed to resolving the contractual issues raised by the Ministry of Justice in connection with historical billing on the electronic monitoring contracts”.

The decision to pull out seems to have come after the outsourcing giant realised there was next to no chance of the bid succeeding, with Justice Secretary Chris Grayling demanding for their pull-out.

G4S probed for overcharging

Civil proceedings launched against G4S as government outsourcing questioned