Industry news

42 per cent of participants in the 2012 Survey of IT Professionals – Outsourcing claimed that their IT outsourcing agreements have cost them more or significantly more than originally planned. Moreover, 64 per cent suspected that outsourcers have made up more work to earn extra money from their organisation.

These shocking results are a strong wake-up call for the industry: service providers who are taking advantage of their position of trust are ruining the market for all IT outsourcers. Sadly, it is often the larger service providers that rely on their big name to get business which are overcharging for their services, rather than concentrating on delivering an excellent service and making their customers happy.

These outsourcers usually offer set packages where all additions have an extra cost. For instance, they will support only a certain number of calls for their fixed monthly fee; if these calls increase (often due to factors outside of client control, such as system failures or sudden increase in business) then they will be billed for all the extra volume. If the client’s structure and strategy changes and they need to adapt the IT service to cater for their new needs, even when it is a small change, this will also come at a cost. It is easy, then, to run up a bill of way more than expected.

Not all providers are sharks, though: many offer transparent and flexible solutions, where they do not charge for every little change or add-on increasing their monthly fee by far more than the initially agreed price. These are normally smaller, niche providers that have calved themselves a position within the market based on the delivery of effective and efficient Services which are fit for purpose, scalable and enable their customers Service to flex without substantial investment. These suppliers compete through their consistent quality of delivery and customer feedback. They are trusted partners and therefore they behave in a trustworthy way – simple as that.

Apart from the cost of an IT outsourcing service, there is little doubt with regards to the value of this practice. The survey, in fact, revealed that 67 per cent of respondents trust the quality of the work performed by their IT outsourcers to be about the same or more than work carried out by in-house staff.

Over the course of this blog series we have looked at how EDI and digital signatures have fared against one another within commonly contested categories, including tax compliance and other regulation within Europe. The European Commission is making strides towards promoting e-Invoicing adoption and in the advent of this changing environment it is important to know which platform is best for your company.

In this final blog, we will look at how EDI and digital signatures compare when it comes to building communities between trading partners. A community of integrated trading partners is an important aspect of e-Invoicing so that all companies can connect and collaborate with each other.

If we start with digital signatures, it is hard to define the format’s ability to create a trading partner community. This is essentially because digital signatures are used for evidential purposes only. Pure-play e-Invoicing providers that leverage digital signatures often rely heavily on web portals as a means of connecting trading partners, and it is these portals which can build a sense of community as multiple buyers and suppliers are empowered to connect and communicate with one another.

Web portals tend to not be popular with suppliers. As web portals do not offer integrated solutions, from one ERP to another, the ability to send/receive invoices is limited. This creates extra workload for the supplier’s AR team having to re-key data. For companies issuing significant volumes of invoices this is not a practical solution and perhaps only suits micro-suppliers. As larger companies use e-Invoicing more and more, suppliers are forced to use multiple portals to work with their different large buyers. This splits the workload across different entry systems and increases maintenance and complexity, so it is understandable to see why this would be inconvenient.

Contrast this with EDI and it is evident that community is inherent to end-to-end EDI processes. EDI requires trading partners to set up networks between one another to facilitate secure document exchange. However, despite its integration pedigree, EDI can be slower in building these connections between trading partners due to the more technical nature of the network. EDI’s biggest strength – reliability and security in VANs – can also be a weakness when trying to connect diverse communities very quickly.

e-Invoicing providers have made extensive use of internet technology and portals to facilitate flows between smaller companies and their larger buyers, particularly in the goods not for resale (indirect materials) space. In response, B2B integration (EDI) companies have also developed similar innovative and cost-effective internet-based community solutions, and combined with SME enablement tools are pushing B2B integration into the cloud to connect both direct and indirect material supplier communities. In the indirect materials market, where no specific business model has achieved critical mass, the door is still wide open.

When building communities, neither digital signatures or EDI has a significant advantage over the other. So when deciding what solution is best for you company the truth is that either solution, or both in parallel, can work for your different business needs. Be sure that the service provider you work with has a comprehensive trading partner enrolment program, to connect your trading partners with the integration solution that suits them and in the shortest possible time.

At GXS we have years of experience working with companies around the world and recognise this diversity by offering both EDI and digital signature solutions. I hope that the insight provided over this series has helped to inform and educate those wanting to learn more.

As more companies begin to dip their toe into the water that is the use of cloud - or those who were early adopters begin to ramp up the scale and breadth of their use of cloud services - one thing is becoming apparent. If a cloud service is one based, according to common definition on “internet-based computing, whereby shared resources, software, and information are provided on demand”, then ultimately that disaggregation of supply from the method of delivery should mean that infinite resources are available to a user.

The reality, of course, is that when organisations adopt cloud computing, they typically do so by subscribing to a service from a cloud provider. In doing so, they are anchoring the services they consume to the capability of that provider – their systems, assets, locations, and delivery methods. Which of course provides its own boundaries and limitations.

Taking that to one side for a moment, another current trend and increasingly common term is that of crowd sourcing – the concept of taking a requirement and outsourcing it to a community who can all contribute to the delivery of that task. This is being used for a variety of activities, including things like software development – and is arguably the foundation of the approach to the ongoing iteration of open-source software code.

So, what if we could combine these two concepts? Imagine being able to crowd source cloud services....to effectively take our computing requirements and rather than tether them to a single provider, distribute them across a broad community of cloud service providers. This would not only spread the load, and decrease any limitations in the supplier, but would also create a dynamic, competitive market where more of the volume could migrate to the supplier with the lowest price and best value service.

Such approaches are increasingly possible. By relying on automated systems to provide cloud governance which can aggregate supply of services, validate pricing, dynamically provision environments across multiple providers, distribute workloads appropriately, and monitor the quality of the services being provided. Indeed, if we are going to truly exploit cloud services, surely the only way to truly complete disaggregation of requirements from the assets delivering against those requirements, is to do exactly that – to crowd source the cloud.

The Government has released details and guidance on end-user devices which it believes can 'deliver best value and technological approaches suitable to government needs along with, scalability for government.'

The strategy states that The End User Device (EUD) Programme – Conceptual Framework is a deliverable of the EUD Programme and presents a multi-tier reference architecture and Solution Framework for End User Devices. The framework is introduced and the four levels of the framework are described:

Level 1: Overview - is the top level of the framework into which components at lower framework levels fit, presenting a device-centric and centralised infrastructure view of EUD.

Level 2: Conceptual - provides an additional level of detail describing the specific components that describe the scope of the EUD. This is the reference architecture for EUD, with each component defined, and an associated RACI matrix illustrating the team responsible for the component definition and solution guidelines from the overall ICT programme.

Level 3: Solution Guidelines - provides EUD Solution Guidelines for suppliers and government departments to refer to at all phases of a transformation programme. Good practice guidelines and examples of EUD strategy compliant products and solutions are provided along with reference to industry analyst views of the products maturity, strengths and weaknesses.

Level 4: Specific Implementation Guidelines – Level 4 details how the framework may be used to describe a specific technology implementation detailing the technology used and choices made for each component.

US software giant Oracle has allocated an extra $10bn (£6.4bn) to buy back shares, as fourth quarter results came in ahead of expectations.

Net income for the three months to the end of May was $3.45bn, up 8% on the $3.2bn the company made a year earlier. Total revenues were $10.9bn.

HP Lands Multiyear Agreement to Enable P&G's "Always On" Operating Environment

HP Enterprise Services has announced that Procter & Gamble (P&G) has signed a multiyear agreement for HP (HPQ) to help provide an "Always On" operating environment that enables the consumer-goods leader to keep products moving on time, from production all the way to shoppers' carts in the retail store.

Under the terms of the agreement, HP will be accountable for the comprehensive systems reliability of critical P&G processes, such as manufacturing, procure-to-pay, order-to-cash, physical distribution and financial close.

Prime Minister David Cameron is leading a high level delegation of over 25 companies this week to Mexico.

Prime Minister David Cameron is leading a high-level business delegation this week to Mexico, which is hosting the G20 and B20 summits in Los Cabos.

He is accompanied by Chancellor George Osborne, Trade & Investment Minister Lord Green and over 25 UK companies, institutions and universities including Diageo, Rolls Royce, Virgin Atlantic and the Confederation of British Industry (CBI). Also travelling are Business Ambassador Tamara Mellon and pottery designer Emma Bridgewater.

Lord Green said: “Almost two hundred years ago, the UK was the number one European exporter to Latin America. British expertise helped to build Mexico’s railways and canals, but UK firms currently account for less than one per cent of Mexico’s imports. We need to turn this performance around in one of the world’s most promising markets.”

Pillsbury Global Sourcing today announced the launch of its iPhone app, Sourcing Deal Tool Kit, now available for free in the App Store. Sourcing Deal Tool Kit helps deal makers calculate performance metrics and costs in IT and business process outsourcing contracts, right from their iPhone, during crucial contract negotiations and routine service management.

The app’s key features include tools for measuring whether downtime levels in a contract could substantially harm a business, comparing providers’ performance against promised service levels and monitoring cost of living changes in different countries where service providers have operations.

“We designed Sourcing Deal Tool Kit as a fast, reliable way to crunch performance and cost numbers at the negotiating table with service providers,” said Joseph E. Nash, a Washington, DC consulting principal with Pillsbury Global Sourcing, who led development of the app and shared it for beta testing with Pillsbury clients and leading service providers.

“Translating contract terms into business and performance metrics historically requires a lot of offline legwork, but now customers and providers can quickly turn to their iPhones for reliable calculations instead, which can save time and further empower decision makers by keeping them well informed.”

Motorola Solutions, Inc. and Psion Plc. have recently announced that they have agreed on the terms of a recommended offer by Motorola Solutions for all Psion shares for 88 pence (US $1.36) in cash per Psion share. It is intended that the acquisition will be effected by way of a recommended cash offer.

Psion has been a pioneer in ruggedized mobile computing products and their application in industrial segments around the world. With headquarters in London and a major operational presence near Toronto, Canada, Psion has been a leader in mobile computing solutions since 1980. Psion has approximately 830 employees, customers in more than 50 countries and delivered 2011 revenues of £176 million (approximately US $273 million).

Greg Brown, chairman and CEO of Motorola Solutions, said: “Psion is a compelling opportunity to strengthen our industry-leading, mobile-computing portfolio with ruggedized handheld products and vehicle-mount terminals that will deepen our presence in the global markets in which we compete.”

John Hawkins, chairman of Psion, said: "The Psion directors are pleased to unanimously recommend this offer by Motorola Solutions at a price which offers a significant cash premium to both the current and recent market prices. Psion continues to successfully deliver on its strategy of introducing exciting new products while strictly managing the cost base. The offer by Motorola Solutions provides Psion's shareholders with certainty in an environment where certainty is in short supply."

Google said: "Last year we released a paper on the energy savings from using Gmail instead of locally hosted email. Here, we expand on that analysis to include the cloud-based office applications of Google Apps. Our estimates, which we’ve supported with a case study from a Google Apps client, show that migrating basic IT applications to Google Apps significantly reduces energy consumption and carbon emissions. Based on our analysis, a typical company or organization that migrates to the cloud could:

• save an estimated 68–87% in energy for its office computing

• reduce similar amounts of carbon emissions

These findings are consistent with a case study presented in a paper of the actual savings achieved by the U.S. General Services Administration (GSA), a Google Apps client with approximately 17,000 users. By switching to Google Apps, GSA reduced server energy consumption by nearly 90% and carbon emissions by 85%."