Industry news

In the governments quest to improve the efficiency of the National Health Service and improve cost-savings in a time of recent recession and cuts, the privatisation and outsourcing of services has become a popular fix-all. However recent reports and major case examples are demonstrating that the NHS is failing in carrying out effective procurement.

In the latest report published by global professional services organisations Ernst and Young, a trend showing a divergence in supplier prices being paid by different hospitals was discovered, with millions of pounds being wasted by the failure of NHS trusts to effectively communicate and negotiate strong and effective contracts.

The failure of contract negation and project governance has been seen before in the failure of the Lorenzo digital record contract with CSC. While CSC carried out numerous account errors, the failure of the project was compounded by the NHS’ failure to employ effective governance and the inclusion of damaging targets weakened service levels.

Nigel Clifford, CEO at Procserve, commented on the report saying: “Ernst and Young’s recent report has highlighted the fragmentation and lack of sharing in NHS procurement, leading to some hospitals in England paying more than they need to for medical supplies. This is bad news when funding pressures are being felt in the health sector.”

While the report identified weaknesses in how the NHS carried out procurement, the development of the National Police Procurement Hub (NPPH) was identified as a good example of driving value for money and ensuring that individual forces receive value for money from one main procurement system driving highly negotiated contracts.

As the NHS moves to outsource greater numbers of services with one in five NHS patients now treated by private firms, the risk of ineffective handling of contracts becomes more prevalent. It is clear that the public sector is well placed to drive strong procurement contracts and outsource key services as demonstrated by the work of other departments but it is clear that best practice has not yet been employed within all areas.

HR is rarely a priority for a business start-up. As an entrepreneur, the focus is getting your great idea off the ground and then building the company. While you may be a manageable two-man band today, your HR requirements will be small and occasional, but as you grow and recruit more people there will come a point when you need to bring in some more regular HR expertise to manage this growth effectively.

The administration associated with employing even just three or four people is increasingly burdensome, especially given the need to comply with more and more legal requirements. And as your ranks expand, the people-related policies and procedures that need to be in place increase proportionately. Pressure on cashflow in the early days means it is difficult for a start-up to afford full-time HR staff so the best option for many will be an outsourced HR solution. But with such an integral business function, and one that improves with the familiarity of working with you for a long period of time, the outsourced HR needs to be able to start small and grow with you as you realise your ambitions of becoming a major company, rather than being swapped out and replaced as you reach each milestone.

In order to choose the right HR supplier that can therefore grow with you, Sharon Crooks, HR Services Director, plusHR, highlights 10 key due diligence questions to ask all potential suppliers when looking for the right outsourcing partner for your business:

1. Can it flex to your business needs? Does the supplier have the capability to scale up its service as the HR demands of the business increase and is it prepared to reduce its offering if times get tough? In order for your business to have all of its HR needs met throughout its lifecycle, it is important to realise that as your workforce grows, this growth brings with it a variety of new HR areas that must be accommodated – therefore it is important for outsourcing suppliers to have sufficient breadth of services and the necessary resources to grow alongside you and work as an extension of your business.

2. What system does it use? A web-based approach will be the most flexible option for a start-up. How user-friendly are the user interfaces? Will it help to streamline HR tasks? If taking a self-service HR route, what provision do they have for those employees that work in the field or who don’t have internet access?

3. How much will it cost? As well as the ongoing charge for its services, find out upfront whether there is an implementation fee. The monthly fee for some outsourcing arrangements can appear cheap but drilling down into the detail can reveal a high implementation fee and additional ‘extras’ which can be hidden within the initial costings.

4. Can it help with business planning? A good HR outsourcer will ask to see your business plan and assess not only what services you need today but project what you will need in the future as the business grows and how much it will cost you. It is key to remember that a good outsourcing partner will work as an extension of your business, and not as a lone arm.

5. What are the terms of the contract? Find out how long you will be tied in to the contract and when the break clauses are if things don’t work out.

6. How good is the outsourcer’s data security? You will be entrusting this company with your employee’s personal data so ask them where the data will reside and how secure it will be. What back-up and disaster recovery strategy does it have in place?

7. Will you have dedicated people working on your account? Find out who your employees will speak to when they have a query. Some organisations route these to a large call centre which can make for an impersonal experience for the employee.

8. Will the service be customised to your needs? Some outsourcing providers force you to follow their processes while others will be prepared to deliver a more tailored service.

9. Who are their other clients? Ask for at least two client references and if possible make site visits. Gaining direct feedback from other clients and appreciating their experiences is likely to aid the decision-making process.

10. Will the supplier fit with your culture? The culture of a media company will be very different from that of a financial services firm, so make sure any HR supplier will assign people who can fit in with the working style and values of your organisation

Conclusion

Partnering with the right HR outsourcing provider can bring enormous benefits to organisations. It enables them to keep control of the budget while enabling them to drive the business forward. The key to choosing an outsourcing partner is to find one who can fit with the business culture and work closely with you, as an extension of the team, at all stages of your business growth.

The construction of a new independent datacentre valued at £43 million has been approved by Leeds City Council.

The site, which will be the largest datacentre outside of London, will be focused on advancing network infrastructure and improving internet connectivity within the region and will be constructed in early 2013.

The independent nature of the site will allow multiple internet service providers to be involved with the datacentre.

Adam Beaumont, chief executive of aql, who are constructing the site, said: “This project will put Leeds, and Yorkshire as a whole, in a very strong position to fulfill their superfast broadband promise,”

The testing of new ‘hyper-fast’ broadband has been trialled by BT, the service has been rolled out to Cornish-based engineering firm Arcol.

The service is being delivered through a direct link with BT’s Turo exchange and provides speeds that are so fast that computer and networking speeds are unable to match the speeds that can be delivered.

Technical director at Arcol, Alun Morgan, said: “We are still only just discovering the sorts of things we can do with these speeds, such as taking advantage of services like videoconferencing and using a cloud-based ERP system so we can access this information elsewhere, and it has enabled us to be much more efficient and aggressive”.

European based Claranet who provide managed services have acquired cloud-computing firm Star for £55 million.

The acquisition comes as Clarnet looks to increase its service offering including remote desktop services and advanced security services with the addition of Star, while Star customers will have access to Claranet’s IaaS offerings.

In a statement, Charles Nasser, chief executive of the Claranet Group, said: “From a market and customer perspective, this is a great opportunity to bring together experience and resources to deliver a broader service portfolio”.

Capita has been revealed to be Barnet Council’s preferred bidder for the delivery of back-office services as part of the One Barnet outsourcing project.

The outsourced 10 year back-office contract, estimated to be worth £32 million a year including HR services, IT and payroll, would see the transferal of council staff to the service providers.

The One Barnet plan has stirred controversy and opposition from council members over the failure to deliver savings during the three year running.

Mersey Care NHS Trust has signed a five-year contract with SCC to provide cloud hosting infrastructure in a deal worth £3 million.

The Mersey NHS will transfer ICT infrastructure and data to SCC’s OptimiseCloud platform. The deal is expected to reduce the work hours needed to run the service and generate £1.5 million in savings.

Neil Smith, director of finance at Mersey Care Trust, said: “The move will provide a more flexible infrastructure capable of responding to the organisation’s changing IT needs, freeing up the technical services IT resource to work on application developments and other service delivery projects,"

Cloud provider Rackspace offer £12,000 worth of cloud computing resources to emerging start-ups.

The scheme called the Rackspace Startup Programme is expected to be offered from 2013 and will be aimed at companies that have been identified as having the potential to receive great benefit from cloud funding.

The cloud funding program has already been rolled out within the US and Australia, with Rackspace noting that London now represented a strong market for upcoming start-ups.

Rackspace company chairman Graham Weston said: "Whenever I come to London I feel tremendously energised and excited by the amazing start-up scene here".

Network Rail has seen its debt rise by nearly £1 billion within 6 months, raising the railway giant’s total debt to over £28 billion.

Borrowing for the company increased from a £2.06 billion station and line investment programme including the modernisation of Reading station.

Network Rail's finance director, Patrick Butcher, said that such debt levels were fairly typical for a utility company of such size: “Providing our asset values keep going up – and they are, because they are driven by growing income streams from more passengers – then high debt levels are perfectly acceptable."

IBM has announced plans to build a new software testing centre situated at the University of Ballarat in Australia.

The announcement comes as part of IBM’s move to increase development and market share in the Asia Pacific region.

The centre will specialise in areas including software application development, application support, application management and consultation.