Industry news

Yesterday a news story did the media rounds concerning a high-paid US software developer outsourcing undisclosed work to China. This example represents one of the most resourceful and innovative uses of outsourcing available and should be commended, if not for the violation of multiple company practices.

The story was that the software developer had outsourced his own workload to a contractor based in Shenyang, China. The cost of this undisclosed sub-contractor for the software developer was less than one fifth of his own wage, leaving the developer with a free day, spent apparently in this case on viewing cat videos. This action was discovered after an audit surrounding fears of a security breach following the discovery anomalous activity on the company’s network.

An analysis of the employees computer revealed his day-to-day activities while he outsourced his work-load:

9:00 a.m. --Surf Reddit, watch cat videos

11:30 a.m. -- Lunch

1:00 p.m. -- Ebay

2:00 p.m -- Facebook and LinkedIn

4:30 p.m. -- Send end-of-day e-mail update to management

5:00 p.m. -- Go home

The reaction to the discovery by the company saw the termination of the developer’s employment, this is clearly a missed opportunity; the correct response to this discovery would be to give the developer a seat on the board and a raise.

The practice of the worker should be taken on board with the company moving to outsource all work of this type to the Chinese contractor. Based on this one example, the company at worse could expect to make cost savings of 80 percent through outsourcing work carried out by the developer, other developers carrying out the same work, and similar job positions, with greater savings presumably available from economies of scale. The amounts to be saved are not inconsiderable with the developer earning a six-figure salary.

Just as the developer increased his available free time, so to would the employer increase savings (although the developer’s use of his savings made invested in cat clips might be best avoided).

You might ask yourself was the work carried out poor in quality, ineffective or inferior? No, in fact the work carried out by the Chinese developer was viewed to be of a high standard, with the employee viewed as being a talented individual. The developer’s performance reviews including descriptions of the coding as being “clean, well-written”, he had even been described as "the best developer in the building", despite the actual 'best developer' not even being in the same continent. Rather than delivering a poor quality service, the Chinese contractor delivered a high end service.

Copying the practice of the unnamed developer does pose difficulties. The original outsourced action was brought to light because of security concerns and these issues would still exist. While issues common in outsourced services including security would exist, other common obstacles including control and transparency hardly seemed to be present in the delivery of the original ‘in-house’ service anyway given the employees ability to outsource his entire job, and issues of a reduced quality in service would seem to be a non-issue given the reviews of the work provided.

The developer found an effective third-party to which he outsourced his work to, he delivered the service that he was paid for as an employee. It is a failure of the company to carry out a wide reaching procurement that should be focused on. This example should be leaped upon and paraded to demonstrate the efficiencies of outsourcing.

The World Bank has lowered global economic forecasts despite calmer markets.

In the Global Economic Prospects report, the World Bank revised expected growth down from 3 percent to 2.4 percent.

Uncertainty regarding the US budget has lowered the forecast. The bank stated in the report that: “What we are seeing is a recovery we anticipated in June being pushed a little further back in time, beginning closer to the end of the first quarter and into the second quarter of 2013, rather than beginning a little earlier".

Health Secretary Jeremy Hunt is supporting a drive to make the NHS paperless by 2018, a practice which would generate billions in savings.

The ability for patients to access their health records by 2015 will be the first step in a series to become paperless.

£4.4 billion in potential savings have been identified by the PwC through technological innovation.

Past attempts to promote savings through efficiencies have been met by obstacles including the failure of the Lorenzo project in digitalising patient records.

Direct Line has awarded Capgemini a five year contract valued at £100 million to provide new IT infrastructure to the insurance provider.

The contract comes after Direct Line diverged from RBS and will include support, design and delivery of infrastructure.

Agility is a key requirement from the contract, with Patrick Nicolet, Global CEO of Capgemini Infrastructure Services, commenting: “Many companies are striving to be more agile and flexible and Direct Line Group, with its far-sighted transformation plan, is no exception".

Ocado, which delivers groceries to Waitrose, has seen sales rise to £91 million after a strong Christmas sales period.

The supplier saw sales grow by 14.2 percent over six weeks leading to January 6th, marking a 12.4 percent growth in its fourth quarter.

Duncan Tatton-Brown, Ocado's finance director, dismissed the position of Waitrose as a serious competitor despite also posting strong sales, “"Waitrose is growing and growing strongly but it is still a relatively modest business in terms of its size.”

Residents of Islip, a small Oxfordshire village, have personally invested £11,000 to roll-out high speed broadband.

The village was left out of roll-outs by major ISPs as it was not viewed as a commercially viable prospect due to size.

While the coming BDUK project would have included Islip within its reach, the invest means that the village will not have to wait for the super-fast rollout.

Alison Mitchell, chair of Islip Parish Council said: “High speed broadband is of critical importance for many residents, and especially people who run businesses in, or work regularly from, the village, so we decided to take action.”

The Information Commissioner is to investigate reports of the incorrect sending of hundreds of SMS messages accusing individuals of being illegal immigrants and asking them to leave.

The SMS messages have reportedly been sent in many cases to legitimate UK citizens, with many received over the Christmas period.

Individuals who have contacted the UKBA to report cases where they have received the incorrect messages, have continued to receive messages in error.

An ICO spokesman has revealed that an investigating operation will be carried out, “It’s important that organisations make sure they are taking reasonable steps to ensure they comply with the Data Protection Act, including ensuring the personal information they hold is adequate”.

HMV is to appoint accountancy firm Deloitte as its administrator after the company failed to secure additional funding to restructure its business.

HMV stores will continue to trade while owners seek a buyer for the business.

The high-street chain has suffered as customers move online, the move to administration comes shortly after the removal of well known brands Jessops and Comet from the high street.

Schools in Wales are to receive a grant of £39 million to increase the uptake of faster broadband infrastructure and services.

Primary schools will receive amounts of £10,000 while secondary schools will receive £20,000 from local authorities to improve ICT.

Welsh First Minister Carwyn Jones said: “This investment will ensure that, by 2014, primary and secondary schools in Wales will have access to safe and secure world-class broadband services needed to deliver a world-class digital education”.

The funding follows a new digital learning platform based around cloud services, designed to promote remote accessibility.

The third version of the G-Cloud has been announced adding four new supplier categories and a greater procurement limit.

The new categories will include identity services, service integration, business process management and software support.

The procurement for the G-Cloud limit will increase from £100 million to £200 million, while the application process has been revised in a focus on standardisation.

G-Cloud iii has been put forward as a advancement of the success of its predecessors, aimed at increasing the services scope in procurement.