Industry news

John Lewis has reported pre-tax growth of 59.8 percent, with a half year revenue report of £3.9billion.

The profits were driven by a 40 percent increase in online sales, with e-commerce now accounting for 24 percent of all John Lewis sales.

In an interim report statement, John Lewis said: “Our multi-channel operation continues to go from strength-to-strength, with customers appreciating the ease of shopping across a variety of channels from smartphones to in-store internet kiosks.”

At the opening of Amazon’s Digital Media Development Centre in London, the company announced that 100 new technology positions would be created from the development.

Boris Johnson, Mayor of London, said of the new center and job creation, “Boosting London’s tech and media workforce is key to driving the capital’s economy and helping to create jobs and growth.”

The digital center will develop multiple digital projects including services for a range of devices including mobiles, PC’s, TV’s and consoles.

The announcement of a £29.8 billion merger between BAE and EADS has raised concerns regarding potential job cuts.

Both trade unions and business analysts have raised concerns that a merger between defence giant BAE Systems and Aerobus manufacturer EADS, could result in job cuts.

Britain’s largest union, Unite, have already said that it will seek a urgent meeting with business secretary Vince Cable, in order to prevent job cuts.

Mike Clancy, the general secretary designate of Prospect said: "Whether the news of this merger brings reassurance or not for the workers depends on whatever plans for consolidation or growth the merged company will provide.

In my last Blog – Finding value in the Big Data Mine, I spoke about putting big data analytics to work, the power of embracing technology and the data explosion to identify and extract maximum value from the vast amounts of information, particularly where it is unstructured.

Now, I want to look at some of the risks associated with Big Data and ways in which to ameliorate them.

Many companies are now looking to understand what is on their file servers, so that they can assess the risks and opportunities that may lurk within that data. Unmanaged file servers can pose legal and compliance risks and may cause vast disruption if a company is asked to produce documents to a court or for an internal enquiry and this is an essential starting point.

Unmanaged information represents a risk because it makes it hard to find information – particularly when much of that information is unstructured. When litigation occurs, if information cannot be found, organisations may ultimately face court sanctions.. In situations where an organisation does not have a company-wide litigation readiness strategy that involves properly indexed information, the risk is that they may have to settle cases they could otherwise win and do so on punitive terms. Alternatively, the organisation risks losing cases because they cannot find the evidence that they are otherwise certain exists.

Another form of risk which ultimately develops from unmanaged information is compliance risk. For example, sensitive client information that may reside on servers that are not managed may be misused, lost or even destroyed.

So, what about the risk inherent in having to produce documents during a discovery process? In the early days of eDiscovery a few years ago, organisations mainly took a reactive approach to the process of identifying relevant. As companies started to see the impact of this approach, in terms of cost, disruption and legal risk of not being able to easily recall information they began to move towards a more proactive approach. Such an approach involves insuring that information is properly indexed and either retained in the right place or destroyed. This involves what we call an index-once, use-many approach; the idea that if you have a single index of all corporate information it makes finding information considerably easier and it can be used for many reasons, beyond legal ones. That is because not only are all the key repositories connected to the index but also the users can use a single query to find what they are actually looking for, so they don’t have to learn the quirks of numerous search engines.

In my days as an analyst I saw numerous end user customers – mainly financial services companies, as they tend to be the ones leading the charge – that didn’t think it was cost-effective to proactively manage information in this way. Now many of these same companies are realising that such an approach represented a false economy and it creates too many risks to not have such information policies in place. They are now looking to implement technology that enables them to quickly identify what information resides where, what it is and therefore whether it needed to be retained or destroyed. The latter approach is seen as controversial by some, but organisations are embracing the idea that information deletion is a legally-sound policy as long the deletion is defensible; if it can be shown that information was deleted defensibly, there’s nothing to fear from such a policy. It’s a case of having both the right technology and the right policies in place

The rewards of analysing Big Data can be great and the risks of retaining what you need and getting rid of what you don’t are manageable. Welcome to the new reality of information management.

Welcome to the first in a series of Sourcing Specialist blog posts – where Alun Morris, Sourcing Consultant at Wax Digital, outlines the nuances and idiosyncrasies of the major indirect spend categories that are common to most organisations but often overlooked in terms of driving best value.

IT Consumables is often considered best bundled into office supplies as a category. But my view is that for best value to be achieved by any spender of note it is best approached as a category on its own. The market has many individual traits that can only really be leveraged when dealt with in isolation. The big one of these is the amount of continual price fluctuation that takes place on these global commodities, a result of constantly changing demand, manufacturing capacity and input prices.

Seemingly endless choices and options in the category means organisations must take care in boiling down to a tight shortlist and carefully vetted suppliers. I focus particularly on eSourcing tools, for example eAuctions, which helps to simplify this refining process across many variables to be explored. These include thing like the effect of splitting core and non-core items, as well as comparison of taking a single and multiple supplier approach across different product sets.

The level of variance in the category can be illustrated using printer consumables as an example. This sub-category alone offers options of OEM, compatible or remanufactured products. Beyond this the impact of how well different ink or toner products will work alongside selected IT hardware options is an important but difficult equation to determine total price per page and the value that different solutions offer.

Alongside the consumables market there is scope within most organisations to standardise their printer hardware at the same time. It can be highly effective to review these two categories side by side to consolidate budgets and drive the most desirable combined result from both. This cause and effect consideration is also important when evaluating remanufactured products – what does the recycling value of spent cartridges add to the picture?

Contrasting approaches must be considered for other IT consumables sub categories. Memory devices and storage media for example lend themselves to careful use of a range of tactics, such as standardising to a limited range, tendering bulk orders, ensuring demand management and considering grouping linked products.

In terms of frequency and regularity of review, the turbulence of price fluctuation in these markets means that regular careful review should be under way. What is a good deal one day might not be the next. Always keep a keen eye on market forces and use this knowledge as an ongoing negotiation tool.

Next week – IT hardware

Although putting critical spend categories under the microscope to ensure best value sourcing is commonplace in organisations, the sheer breadth of spend categories to cover is likely to mean attention is restricted to the highest value direct commodities that are critical to the business operation. This is a sound strategy in dealing the main body of sourcing efficiency. However it does leave an extremely long and inefficient tail of smaller spending, on myriad indirect categories where potential savings generally remain untapped.

For this reason, organisations are increasingly choosing to outsource part or all of sourcing itself. Beyond the traditional popularity of expensive management consultants brought in to reengineer how major products and services are sourced, the tactical skills of specialist sourcing consultants have become highly sought. These experts have the luxury of running dozens of events annually across the top 20 or so indirect spend categories common to every organisation. Thus their well honed approaches have gained traction as an outsourced service.

Repeated exposure to the same contract types and supplier communities gives sourcing consultants the edge in terms of being able to answer all the fundamental questions needed to drive savings. This knowledge can range from choosing the right categories for strong savings opportunities, to selection of the tactics required for the best outcome. Knowing the best frequency for sourcing activity per category and scope for bargaining are also critical.

One such active Sourcing Consultant is Alun Morris of Wax Digital. Alun spends his time helping clients through the process of well constructed eTenders and eAuctions designed to find cost savings in every corner of spend. Over the next few weeks Sourcing Focus will feature blogs from Alun, each providing insights into specific indirect spend categories where certain nuances must be applied for the best possible results. Watch this space for the first in the series focusing on IT Consumables.

The latest paper from Gartner has branded cloud computing on a potential path to ‘disillusionment’. Certainly, uptake of the cloud hasn’t been quick, but I wonder if it’s simply that the value proposition of the cloud hasn’t been clearly communicated enough in simple terms to the layman.

Fundamentally the Cloud is a utility, packaged so that services, infrastructure and resource costs can be exploited in addition to traditional managed hosting, leased infrastructure and private facilities.

Knowledge is power

Francis Bacon said that knowledge is power. The same statement has never been truer than it is today. Data is at the core of everything we do. But how do you extract real value from it? To date there has been four widely accepted V’s of data: Velocity, Veracity, Volume and Variety (or the what and the how!). One V - Value (or the why!) - is missing. Big data only works when you can turn it into actionable data. You only have that when you have the right data, in the right person’s hand, at the right place, at the right time. After all, knowledge and tools are useless in themselves without context.

The challenge is that now, everyone is everywhere. We travel a lot. We want data everywhere. When I’m on my way into work, in the office and when I’m overseas. On my desktop, laptop, tablet and mobile. And I want it now. The cloud offers utility, access and services on top. Big data offers timely, responsive actionable intelligence. The missing link in this is data distribution on demand. Services and intelligence are useless if there are barriers to basic real time communication.

Data on the move

That’s where the problems start to crop up. Big data must have a real-time element. Big static data is useless. The cloud is great at supporting mobile, and we’re seeing no shortage of apps being built and driven from the cloud. But how do you get the demand for big data out to a mobile workforce? This is the real challenge.

Unknown, not disillusioned

The cloud is not on the path to disillusionment and neither is big data. Sure, there are still performance hang-ups and security hang-ups but the cloud is maturing every day as more technology vendors enter the market and offer a richer service. Technologies such as our data on demand product DiffusionTM can facilitate data transfer over secure internet ports, and is one way to utilise the cloud whilst reducing the security risk.

The cloud approach is new. This brings new challenges and requires new technologies and a new approach to moving data that is not the traditional ‘message bus’ approach.

Remember that we are coming out of a recession. Businesses are nervous in taking risks, especially when it comes to the security of one of their most valuable assets and make no mistake, that’s what data is. The cloud has automatically lent itself better to certain industries such as utilities and ‘controlling your home on the move’, transportation and supply chain management. With more innovation and investment in better and richer technologies the cloud will become more main-stream - facilitating true innovation based upon core values and clear contexts (the why!); then we will see the bigger share of the market and faster-paced organisations start to adopt.

BAE Systems and EADS who own the Airbus manufacturer group have announced a joint merger to create a £30 billion pan European aerospace company.

The merger would offer increased competition to global defence systems manufactures including American defence giant Boeing.

The merger would see EADS own 60 percent of the business with BAE owning the remaining 40 percent. EADS would also be able to use key BAE connections to new markets including the company’s links to the Pentagon.

The announcement of the merger saw BAE shares rise by 11 percent. In a statement BAE said: "BAE Systems and EADS believe that the potential combination … offers the prospect of significant benefits for customers and shareholders of both companies. These benefits include cost savings, such as from procurement and sourcing efficiencies available to the enlarged group, and substantial new business opportunities."

Zurich Insurance Group has signed a seven year IT services contract extension with outsourcing giant CSC.

The new contract, which allows for a further extension of three years, will begin at the start of 2013. The announcement of the extension comes shortly after the end of CSC’s failed Lorenzo project with the NHS.

Ray August, president of CSC’s Financial Services Group, said: ““Zurich’s selection of CSC underscores our wealth of experience in the insurance industry and the success of our global service delivery team”.

G-Cloud user and UK start-up Huddle has entered into a key software contract with the US Government.

The firm has secured a technology contract, for an undisclosed amount, with the Department of Homeland Security and the National Geospatial-Intelligence Agency.

Huddle will provide innovative and collaborative solutions to both the Agency and Department as part of its first US government service delivery, with Huddle chief executive Alastair Mitchell, saying: “"Once you work with these guys, you get accredited by the rest of government."