Industry news

eBay has announced the use of OpenStack, providers of an open source cloud operating system, for creating applications for eBay.

OpenStack is currently being implemented on a small scale, but with the provision for increased scale as the application project develops.

OpenStack proved to be attractive to eBay in developing its cloud offering, in part because of the software’s ability to integrate with Nicira Network Virtualization Platform. This integration allows for eBay to numbers deploy large numbers of virtual networks rapidly.

Jean-Christophe Martin, Cloud Architect for eBay, said: “The nice thing is that Nicira was out-of-the-box integrated with OpenStack. So when we looked at deploying our first environment with Nicira, it was easier for us to take OpenStack on top of our existing cloud."

Australian based bank Westpac has joined with MasterCard to trial mobile payment applications delivered through android devices.

The trial will see bank staff members provided with secure android devices combined with virtual debit MasterCards, allowing for the users to carry out contactless payments.

Axel Boye-Moller, Westpac's head of mortgages, cards and merchants, says: “The pilot enables simple mobile payments for purchases and reflects our approach towards progressive payment solutions for our customers. Mobile banking represents a significant change in the way customers and banks do business and Westpac customers will be instrumental in helping design the final application.”

Everis is an employee-owned multi-national consulting company offering business and strategy advisory, transformation programs, solutions integration, technological applications maintenance and outsourcing services.

Have you seen a market change in recent years in North America?

Absolutely, people are beginning to understand the attraction of offshoring but they are also times for the need for collaboration with much more of a near shore focus. It doesn’t matter about the location, what’s really important is the delivery model.

How do you feel the cloud will evolve sourcing models?

I think cloud is going to have a fundamental impact, at the same time we’re seeing a new complexity in sourcing models. The cloud allows for much more sophisticated forms of integration. To achieve savings and for the business to use the service to enhance its strategic direction, integration is going to become that more important and from a technology perspective more sophisticated.

How does everis ensure that it remains flexible in times of recession?

everis has seen dramatic growth since its conception in 1996 through to today, there’s really been only one year in the last 10 where we haven’t had double digit growth. Over the recession we’ve seen growth, we feel that our values with focus on entrepreneurship and focus on talent, with our willingness to invest in talent and education driving this. To remain flexible it all comes down to having the right attitude and people.

In terms of tackling misconceptions of the Outsourcing industry, what do you feel could be done?

Clearly there are misconceptions, but I do think part of it has to be proving the amount of jobs that outsourcing produces within the UK. This is not known and we need to do a much better job in showing this to the public.

What are some examples of best practice at everis?

One of our strongest examples is the transition phase. We have put together what we’re calling transition certification. It’s an internal group which is very metric focused, a best practice team which interacts as an advisory with every transition and interacts with the project manager to show milestones where they need to see innovation.

I think it’s really helping to focus consistency in transitions. What we’re trying to with this transition certification is to codify best practices and use this advisory board to ensure that these best practices are being followed.

Outsourced Applications Management SIG

Throughout 2012 companies are continuing to place more focus on ensuring software products deliver real impact to business needs and also growth to the business. This NOA Special Interest Group focused on outsourced applications management - key topics including:

 Ensuring Best Practise in Outsourced Applications Maintenance

 Reducing costs of Applications Management

 Leveraging offshore models in development

 Enhancing speed to market through applications development

 What can the UK do to be more competitive in this area?

Saptarshi Routh, Gartner, presented first on ‘Outsourcing Application Services: Key Things You Need to Consider’ and commented that old models will take time to decline, and outsourcing application services will continue to rise under pressure to reduce costs.

Outsourcing Application Services: Five Things You Need to Consider

1. Strategy: Always start by analyzing your application portfolio and defining your application services strategy.

2. External analysis: Understand external markets, including trends and patterns of applications software as well as application services market. Keep a pulse on what is happening.

3. Internal competencies and capabilities: Understand the strengths and weaknesses of your organization's ability to execute. This involves evaluating your internal competencies across the whole application services life cycle as well as management commitment for investments.

4. Measurement based performance management: Performance management is critical to ensuring execution and governance. Determine your scorecard — this includes all key measures and SLAs for application services outsourcing.

5. Manage and govern: Set up a demand-oriented governance model and manage your internal delivery as well as your external service providers accordingly.

Clearly retirement of any application should happen when it costs more to maintain than the value it's providing. New application and demand trends drive efficiency, value and consumer experience. Saptarshi mentioned that some of the key application trends are Software as a Service (SaaS), user experience, mobile applications, social networking, gamification, analytics and application overhaul. The presentation concluded with suggested ‘next steps’:

Monday morning

• Self-assess whether you are getting the desired results from your use of internal and external resources to stay current in the dynamic world of applications delivery to enable the business.

• Revisit the five things you need to consider in application services sourcing to determine where your focus needs to be directed.

Next 90 Days:

• Ensure you have current application "inventory" and understanding of your "service portfolio”.

• Ensure your service portfolio can be expressed as a modern Service Catalogue linking applications through IT Services to Business Services

• Analyze and explore opportunities for adjusting your applications services portfolios

Next 12 Months:

• Focus on execution of application services and timely updates to your application-sourcing strategy.

Juan Crosby, Partner, CMS, followed with a presentation on the importance of due diligence for applications maintenance services based on transparency, transition and performance and relationships.

Transparency of Scope

– Customers & Suppliers invest time and money in outsourcing AM Services- transparency in relation to what is being outsourced is essential.

– DD assessment can help establish AM parameters

• Application characteristics – size, complexity, volatility, interfaces, AD backlog

• Service Characteristics – help desk, problem mgt, release & change mgt, support locations, SLA metrics, current & historic service history

• Organisation Characteristics – structure, staffing, business nature, security & controls, governance needs, reporting/comms, escalation

– Proper DD report can assist properly identifying and addressing issues scope definition, assessment of current application state, service metrics and KPIs, problem areas and offshore suitability

– Helps clarify expectations & protect against the risk of surprises:

• Can involve workshops with suppliers to understand what is expected.

• Helps protect against provider under offering or over promising

• Given reliance for on outsourced services & service provider

• Proper DD can help the service provider understand the needs of the customer which is crucial to the success of the outsourcing

– Also gives something tangible against which the service provider's offering can be measured and whether the provider has the expertise to meet the customer’s needs and continue to do so as the business grows and changes.

Transition Risks

– Reduction of transition periods.

• Being properly informed can help to establish an appropriate transition period and reduce transition risk exposure.

• Assists with effective migration of services.

• Assists with a more realistic and detailed transition plan developed before agreement is signed.

• Informs service level considerations: separate transition period service levels / whether a service credit holiday is appropriate

• Aids consistent service level during transition from previous service provider to new service provider

– Aids flushing out the extent to which assistance will and won’t be given by incumbent provider.

– More informed transition can reduce disruptions to services which can cause serious damage to the business.

– Can help identify knowledge gaps and help plan steps for appropriate protection for disruption events and responsibilities

Establishing Good Continuance Relationships

– Platform for an informed relationship

– Assists in parties knowing expectations and in agreeing acceptable (and achievable) service level agreements and key performance indicators.

– Establish what services are included / excluded from service costs.

– Both parties to an arrangement are aware of their own strengths and weaknesses and this allows them to provide for the management of the relationship and deal with any disagreement during the life of the service

– Allows both parties to set expectations and establish track and measure service levels and distinguish potential priority situations on an informed basis

Juan concluded by stating that due diligence on a potential service provider can help you choose the right service provider, protect against surprises during transition and the life of the agreement and final it can build on informed, lasting and effective relationships during negotiations and thereafter.

Questions included innovative measurement techniques, application definitions, varying maturity models and formulating a sourcing strategy. Please visit www.noa.co.uk for the complete set of presentation slides.

Pat Geary, Chief Marketing Officer is interviewed by the editor of sourcingfocus.com Paul Corrall during the NOA2th conference, discussing the rise of the virtual workforce.

Blue Prism specialises in automating customer service processes in financial services. Blue Prism software enables business operations to automate manual back office processes and reduce cost and waste whilst improving customer satisfaction through creating a "virtual workforce".

Your group has improvised a virtual workforce through software. Do you expect this to become the norm in coming months?

It’s an interesting idea that we’re promoting. There is a lot of manual repetitive work in the back office. A lot of what outsourcing has been built on is taking that work and doing it for a lower cost. What we’ve seen is a lot of that work moved offshore. Many millions of people in various countries are doing this manual repetitive work, the idea is that if you can automate this work then you can add value, with the potential to re-shore the work where you have highly trained workers who manage a virtual robotic workforce.

One of the examples we have is that one of our clients took a process that had 55 people offshore and they brought it back to the UK, with 10 people supporting 20 robots, which did the work of 55 offshore workers.

We see virtualisation of the workforce as the next big trend, which can be deployed from the cloud and is already being used by a UK bank for PPI claims processing, an classic example where you need a lot of people to work with a lot of cases, most of which are rule based decisions. Robots can be trained to do those processes while specialists can be used to train (the virtual workforce) and deal with exceptions.

The idea is to bring jobs back to the UK which can be made to be affordable through a mixture of human and virtual workforce. It’s a decent offering because robots make fewer mistakes. The car industry is already at the forefront of the virtual workforce, an industry which still employs many millions of workers, but the manual work has been replaced and improved which has seen the quality improve. The cars become cheaper and last longer. We are looking at applying this to the service industry which is largely un-automated.

You have already mentioned the trend of in-shoring, with the growing costs of offshoring do you see in-shoring as an increasing trend?

The problem with in-shoring is that the reason it went abroad in the first place was because we couldn’t afford to carry out the work efficiently in the UK. Technology costs in terms of provision of technology and infrastructure of technology have become very cheap, but the actual work using that technology still requires people, and without automation those people will remain as cost ineffective as before.

Here at the NOA 25th conference we’re celebrating best practice within the industry, can you give us some more examples of best practice at Blue Prism?

The virtual workforce is quite a new idea at Blue Prism and we’ve only started to work with BPO’s however within an enterprise space, there are quite a few banks in the UK and utilities who have used the same system. We provide the technology platform and we train the trainer to use the technology to the best of his ability.

We heard this morning about the NOA’s flagship campaign Outsourcing Works, challenging the misconceptions of outsourcing. What do you feel are the misconceptions of outsourcing and how do you think they can be tackled?

I think the main ones include the outsourcing of jobs out of the UK and placing them offshore. The rush to offshore call centres had a very negative impact as it was directly experienced by customers who used the service. If back office outsourcing isn’t done correctly it increases frustration which becomes tied to outsourcing. Automation can deliver value to the customer. Virtual workforces allow more staff to be employed in call centres because they’ve saved costs in the back office where they’ve improved efficiency.

Cognizant has reported share price growth of 13 percent to $65.48 after quarterly reports, and has stuck to its yearly growth prediction of 20 percent despite pressure facing outsourcing markets.

The expectations of growth go against reports of troubles in India’s outsourcing sector, where Cognizant maintains the majority of its workforce.

Cognizant added six new strategic customers during the quarter including electronics giant Philips. Chief Financial Officer Karen McLoughlin said: “The majority of our growth for the remainder of 2012 will come from the ramp-up of clients that we won over the past months and years, including recent transformational engagements such as ING US, Philips and others".

Torbay Care Trust has been issued a fine of £175,000 by the Information Commissioner’s Office (ICO), for a data leak.

The NHS Trust had published a spreadsheet on its website containing, date of births, National Insurance numbers and further details of 1,373 staff members.

The data had been originally published in April but the error was only revealed after 19 weeks. The ICO commented: “Not only were they giving sensitive information out about their employees but they were also leaving them exposed to the threat of identity fraud”.

Steve Wozniak was reported in the Australian Daily Telegraph, as saying that the Cloud is “going to be horrendous. I think there are going to be a lot of horrible problems in the next five years."

Wozniak said how he viewed the service as problematic as users of the cloud are handing control of their data to a third party, with basic contracts removing legal rights to information uploaded.

Wozniak said, “the more we transfer everything onto the web, onto the cloud, the less we're going to have control over it".

Energy giant GSH has received an extension of its energy and technical services contract with the National Australia Group (NAG). The contract is worth over £100 million and will see contract services provided until 2020.

GSH will continue to provide services to such GSH brand as Yorkshire Bank and Clydesdale Bank, including 450 High Street branches.

Dan Moore, head of property at NAG, commented: “Over the past five years we have worked closely with GSH and they have played a vital role in helping us to achieve our targets. This, and their excellent service delivery record on M&E, are the main reasons that we are happy to commit for the long term to 2020.”

The New York Stock Exchange (NYSE) has migrated trading away from Knight Capital to rival company GETCO, after an IT failure affected trading software.

Knight Capital revealed that I had experienced a glitch on the 1st of August that had resulted in multiple orders within the markets.

The transfer of trading has been assigned temporarily, according to the exchange, with Larry Liebowitz, chief operation officer at NYSE Euronext, saying: “Our first priority is to ensure market integrity and an orderly trading environment in which investors and all market participants have confidence.”