Industry news

David Taylor-Smith, chief operating officer, and Ian Horseman-Sewell, director for G4S Global Events have resigned over G4S’ failure to deliver security services for the London 2012 Olympics.

The announcement of the resignations comes after an investigation by PricewaterhouseCoopers, with G4S announcing the findings, saying that: “The company has management and other structures and processes that have proved highly effective in delivering the company's regular business over many years but it did not recognise these structures and processes needed augmenting for the Olympic contract.”

Chief executive Nick Buckles, who faced criticism in front of the home affairs committee, has kept his job.

NOA Alternative Sourcing Strategies Event was hosted by Paul O’Hare, head of the outsourcing practice, at Kemp Little, and NOA Board Member, who introduced the topic.

Gareth Thomas of Hudson & Yorke detailed how businesses could achieve a competitive edge through innovative sourcing models, including the current trends driving sourcing models, and future predictions.

Gareth focused on the decline of TCV (Total contract value) in recent years, with average contract sizes falling below $100 million since 2000, from the single monolithic mega deals of the 80’s and 90’s.

The fall in large contacts comes as businesses and economies require greater flexibility in sourcing models in order to ensure effectiveness. Such requirements of flexibility and adaptable sourcing have given rise to the precedence of the multisourcing model.

Gareth examined the variety of sourcing models that can be adopted: Global outsourcing, insourcing, multi-sourcing, IT service management automation and managed services. He described that the deployment of a model depends on the business objectives to be met.

Case studies detailing alternative sourcing strategies included; a global energy company which consolidated over 500 contacts through a transition to a ‘lead integrator’, a major utility company exiting a mega deal, moving to a multiple managed services sourcing model, and a major UK retail bank desiring to take back control of business critical sites from a mega-deal, while avoiding the logistical issues of multi-sourcing. An in-sourcing strategy was employed, to bring business critical services back under direct control, while retail and legacy services were continued to be outsourced.

Predictions for future emerging trends included:

• Gareth discussed how Hudson & Yorke expected an increased focus by IT executives in taking more of a strategic role

• Cost savings will still be a key element of sourcing strategies, but flexibility will become more important

• Outsourcing contracts will continue to reduce in scale, moving away from early monolithic sourcing models to smaller flexible service models

• Integrators will become increasingly critical for joining specialised services contracts together and ensuring end-to-end delivery of service levels, with the use of risk reward models to promote integrators

Professor Ilan Oshri, Director of Loughborough Research Centre for Global Sourcing and Services then presented Captive Centres: Trends and strategic manoeuvres.

Captive centres are a wholly owned branch office or subsidiary for back office support. These services are normally carried out in an onshore, near-shore or offshore location, and are provided only to the parent firm. SSON figures show that around a total of 4000 captive centres exist around the globe, employing more than 440,000 professionals.

Captive centres are becoming increasingly engaged in various strategic manoeuvres and for businesses looking at alternative sourcing strategies.

Ilan detailed sveral case studies that showed the effective deployment of captive centres:

• A global software followed a hybrid captive model. The company acquired an Indian firm which it employed as a captive center for testing, then moving to expand the centre in size over a period of years to specialise in software development. The company then insourced staff to carry out testing, allowing for a greater focus on high value activities.

• A IT consulting firm carried out a shared captive model. A consolidation process was undertaken which saw 300 locations become 9 regional centers and later 3 shared services centres. The increasing size of the centres led to the employment of a shared model by attracting external clients.

• A global airline followed a divested captive model. The organisation set up a basic captive center in India, providing revenue accounting services, by 60 staff members. The captive center increased its services to outside clients within the same industry and later outside of the airline industry. The captive center with $35 million in revenue sought investment at this point, the airline however divested the captive firm to a private equity firm. Eight years later the captive firm reported £400 million in revenue.

Ilan concluded on the future of captive centres by pointing to research from Loughborough Research Centre, demonstrating that most companies set up basic captives, with a rising trend of captive centres in India migrating to Eastern Europe.

Pat Geary of Blue Prism and Richard Jones of the Proxima Group presented Robotic Automation - Is there a new alternative to BPO and off-shoring?

The employment if a ‘virtual workforce’ or virtual robotic FTE can have a significant impact on back office service delivery, including significant cost reduction in comparison to current approaches. The speed of transformation in robotic automation can be significant, with the ability to robotise back office functions within days or weeks compared to lengthy transitional phases of other sourcing strategies.

Robotic automation allows for an element of flexibility as robots are trained in consultation with the users, ensuring that the services are correct and allowing for easy scalability alongside the more obvious cost savings provided by low workforce costs. The model is also competitive in providing right first time processing and the ability to deploy clear workforce analytics.

John Michalski, head of strategic sourcing at the Department for Work and Pensions, discussed the DWP unified work program, designed to help benefit claimants back into work.

The work program, initiated at the start of June, is delivered by private and third sector providers, with a focus on supporting the long term unemployed.

The DWP carried out a comprehensive assessment process, assessing the ability of the external supply market to meet the programs requirements, including stability, risks, speed of service delivery and return on investment.

In order to encourage development and increasing improvement of service delivery, payment is provided on a results based scale. This provides incentive for third parties to create sustained job outcomes. Further incentives included ensuring that at least two competing providers existed in every area and bonuses rewards for the best performers.

The providers were free to follow their own specification in designing the programme, allowing room for innovation, as long as results were deliverable and long term, with payment based on a unemployed individual entering into work for over 6 months.

The event concluded with an in-depth roundtable discussion focusing on the future of sourcing strategies and participant predictions, as well as obstacles to innovation and effects of automation in business culture.

For view the full set of slides from this event, please log into the members’ area at www.noa.co.uk

I began this series by looking at the importance of understanding generational differences and individual user requirements before SMEs embark upon a BYOD policy. My last post then looked into the costs of allowing employees to bring their own personal devices into the workplace. Here, I take one step further and examine how the BYOD trend is accelerating the rise of the Personal Cloud.

BYOD driving consumers' appetite to Bring Your Own Cloud (BYOC)

The BYOD trend has become a clear indicator of something broader happening in the market – the advent of the personal cloud, where smart mobile devices and their associated apps are becoming more and more part of the enterprise communications space.

The first reaction people have when they have a task is often to ask 'is there an app for that?' Think about your own personal cloud on your device of choice – it may include iTunes music storage, DropBox file sharing, WebEx conferencing...the list goes on!

Consumers are increasingly synchronising using cloud-based services, building their own ‘Personal Cloud’. It is in this way that the personal cloud can provide users with a new level of flexibility with the devices they use for professional and private activities, ultimately enabling new levels of user satisfaction and productivity.

Three strategies to make the shift

There are three distinct strategies which enterprises can implement in order to support a shift to the personal cloud:

• Rethink Services – It's not enough to deliver specific communications services and apps for specific devices – every app should be available for every device. People switch between devices, locations and tasks, and they need flexibility and control over the services and apps they use to continue working seamlessly and efficiently.

• Evolve Networks – Supporting the personal cloud requires an intelligent network. SMEs should look to implement an Application Fluent Network (AFN) that can recognise different traffic types from different users and devices, and accordingly prioritise and monitor traffic.

• Adopt the Cloud – To support mobility and self-service consumption models, SMEs need a cloud-ready architecture to allow access to applications, services and other resources antyime, anywhere.

What does this mean for SMEs?

The advent of the cloud means that users can make their own choices about applications, services and content, encouraging a culture of self-service which users now expect in all aspects of their digital lives.

Cloud technology also offers significant cost benefits – unlike with traditional IT set ups, SMEs no longer need to spend time and money on running rooms full of energy hungry servers. It also means they can cut down on the amount they need to splash out on IT workers.

With the right approach to communications services, applications and network infrastructure, SMEs can strengthen and build on the initiative their employees have already taken to extend and augment their work capabilities, providing greater flexibility and mobility across the company.

This is the last of three blogs on the topic of BYOD from Manish. To view the previous entries please click here and here.

This is the last blog in our series about implementing and managing collaborative relationships. We have talked about the reasons to collaborate, the key role of the Relationship Manager, partner selection and working successfully together. We now conclude with the phase where the actors disappear into the sunset.

Every successful business relationship will eventually come to an end, this is a natural progression. For example, where the market for the product or service declines or ceases to exist or at an agreed time limit as in the case of a completed project or, change in regulatory or other external conditions. Alternatively, one side or the other can trigger a breakup of the relationship. For example, culture mismatch could become serious enough to make an exit necessary as could a failure of effective enterprise relationship management or under performance. Break up would also occur where one or other of the partners ceases trading, is taken over or cannot fulfil its contractual obligations.

Just as in other aspects of relationship management the exit phase needs to be carefully planned from the beginning of the relationship and its execution managed, usually by the Relationship Managers (RMs).

Significant intellectual property rights will often be involved as well as those investments that have been made and used by the partners such as skills, materials and infrastructure. The impact on the up-stream and down-stream members of the supply chain should not be forgotten.

Much of this will have been recorded in the commercial section of the Enterprise Relationship Management Plan (ERMP) when the collaboration was first set up and will have been kept updated during the life of the relationship. It will also be useful to list in the ERMP the actions and resources that will be needed to achieve a tidy exit. Because of their knowledge and operational experience the RMs will have an important role to play in managing the exit process.

Here is a checklist of actions that should be used to manage the exit phase:

• RMs need to appoint teams with the requisite skills and experience

• Create exit project plan

• Agree how the Intellectual Property Rights and assets will be allocated

• Agree business continuity actions with supply chain members and stakeholders

• Ensure that all contractual terms are complied with or, if necessary variations are agreed

• Jointly review and record the lessons learned at the time of closing the ERMP. These need to be fed back into the respective organisations so that benefits can be realised in future projects.

A planned exit will ensure that a satisfactory outcome for all stakeholders will be achieved including the retention of goodwill and therefore the opportunity to do business in the future. A key benefit is learning from experience and improving relationship management capability.

Good relationship management has the capability to give you startling results. Do as little or as much as you need to do and the increase in business performance will repay your investment many times over.

About the Authors

Andrew Humphries and Linda McComie are acknowledged experts in the field of business relationship management. Their company, SCCI Ltd, specialises in transforming business relationships and alliances around the world into more effective and efficient revenue generating operations.

Implementing and Managing Collaborative Relationships – A Simple Guide

Special Price £10.00 + p&p

Available from: www.sccindex.com

The proposed £30 billion merger between BAE systems and Airbus owner EADS has been met with opposition from politicians within Germany.

Germany's Deputy Economy Minister, Hans-Joachim Otto warned EADS CEO Tom Enders, that it was not certain if the deal would get approved, adding the deal was, “a very complicated plan that throws up advantages and disadvantages, risks and chances".

Mr Enders has called for a relaxation in government oversight and said that they were “many examples to prove that companies in this sector and of this size should not necessarily be subject to state involvement".

HMRC has employed the G-Cloud to host data in a move to centralised storage and represents the first major department to employ data storage within the cloud.

The movement from office storage to cloud hosting is expected to be completed by the spring of 2013.

The transition to cloud data storage is expected to save the department over £1million in cost savings, and according to Phil Pavitt, CIO of HMRC, “will increase reliability and security of HMRC’s internal IT services”, and “is a major step for HMRC in moving away from traditional ways of working with large service providers.”

Broadcast retailer Bid Shopping has extended a contract with Getronics, to provide migration and data centre services for a further five years, in a deal worth around £10 million.

The contract will see Getronics supply transition services for core business services to an off-site location along with the continuation of IT system services that the company has provided over an eight year period.

Bid Shopping head of information services Paul Janse van Vuuren said: “The new agreement provides an uplift in IT availability which ultimately leads to an uplift in sales.”

Ybrant Digital has failed to acquire three Experian owned sites after it failed to make payments in time.

The deal would have seen Ybrant acquire PriceGrabber, LowerMyBills and ClassesUSA.co but was unable to pay $100 million with a further $75 million in deferred payment within the timeframe.

The Indian digital marketing company said: “The proposed deal to buy the Experian properties could not be completed within the committed timeline. The company is working toward the same and shall notify the Exchange as soon as some concrete developments occur."

Hitachi have developed a new water and heat resistant glass storage medium, the technology which is able to store data over hundreds of millions of years, could come to the market by 2015.

The technology involves the etching of digital patterns into quartz class via laser on different layers.

The expense of the technology means that it would be primarily marketed to companies rather than individuals or for storing, "historically important items such as cultural artifacts and public documents, as well as data that individuals want to leave for posterity."

Research from classified job ads company Adzuna, have shown that 2,700 jobs are available within technology start-ups, with 1,100 outside of the capital.

Adzuna said, “there’s a fever of entrepreneurial activity spreading throughout the country", with expanding start-ups in East Anglia and south east England.

Details from the research showed that of the 2,700 jobs available, 33 percent are for developers, 25 percent are in marketing and 9 percent are for intern placements.