Industry news

We are now in the midst of the final inexorable slide towards the implementation of the Retail Distribution Review (RDR). Despite the slow initial reaction the fact is that from 2013 the sales-driven commission model will no longer exist and all eyes are on the industry, with watchers curious to see exactly what financial advisers and product providers are going to offer in terms of services and charging structures. The issue of migrating to an RDR-compliant service is now a pressing priority for advisers as the replacement of commission with service charges shaping up to be a seismic change for business models. However, despite the initial scepticism about implementation, the industry is coming to terms with the changes and the RDR should actually be regarded as an opportunity for firms seeking to gain a competitive edge in the market. However, this begs the question just how can providers differentiate and incentivise product offerings with the removal of commission and encourage advisers to continue engaging with them?

In many ways the RDR will signal a dramatic change of course for many financial services firms. Advisers will need to make it their top priority to develop closer and longer term relationships with their HNW customers. These IFAs will also be making different demands on product providers with many selections based purely on the suitability of the product and the level and quality of service offered by product providers in administering and running that product. Transparency is the watchword and is going to be increasingly vital to success in the advice industry. Providers will therefore, need to up their game and increase the focus on helping IFAs to meet the new demands placed upon them by delivering a more efficient, cost-effective and convenient service. In short, service will become the main differentiator - and effectively the new commission - in the financial advice world. Advisers will have their work cut out, with the need to focus on delivering a new client-centric service on top of keeping up with the constant changes to qualifications, rules and regulation.

So how can product providers tailor offerings to take advantage of this in the most cost-effective ways especially as time is now against them? Outsourcing the technology and product innovation areas of the business is one way as this allows providers to take full advantage of specialist expertise third parties can offer as well as driving down overall costs and improving efficiency. Crucially, by delegating the majority of the development process involved in creating new products and propositions, financial services firms can concentrate on the fundamentals of delivering the best possible service and focus on building stronger relationships with their customers.

The benefits of outsourcing are not strictly restricted to the product areas of business; tapping into bespoke technologies can also reap great rewards on the service front. It will be vital for providers to ensure the quality of service matches that of their products and advances in technologies offered by third parties make it quick and cost-effective to carry out tasks ranging from marketing, client communications and product distribution. However, time is of the essence with just months remaining until the RDR deadline. The sooner financial advisers realise the advantages to be gained from outsourcing for service and efficiency, the bigger their head start will be when the post-RDR race commences in January 2013.

7 things you should know about Managed IT Services:

With more and more companies looking at outsourcing solutions for all or part of their IT, it is important to highlight the main features of a Managed Service, especially as an alternative to full outsourcing or off-shoring. Here are 7 things organisations should know about Managed IT Services:

1) It’s not all or nothing

A common misconception is that you have to outsource your entire IT function in order to obtain the cost-efficiencies you are seeking. This leads to the ‘fear factor’ of loss of control/influence of back office Services, and therefore a reluctance to explore the breadth of options available.

The approach more and more firms are adopting is one of precaution whereby they test the theory by outsourcing specific functions to suppliers. It is becoming more commonplace for organisations to outsource their 1st & 2nd line support, an area which is typically not bespoke and more easily replicable by a supplier.

However, the key to success of any outsource venture is the selection of vendors. A plethora of suppliers exist within the market, but it is critical that the supplier of choice is one which is aligned to the specific requirements of the business and does not dictate the provision of Service through a ‘one size fits all’ approach.

You could choose a service provider for out-of-hours support, so that you don’t have to rely on an internal rota system where staff are paid 1.5 or 2 times their hourly rate to provide support from their beds.

Or you could even just get a few extra resources to cover for holidays and/or to provide additional capacity during peak times which compliments and supports your existing solution.

2) It can give you more control over your IT

Whilst an in-house service seems like the best way to be in control of your IT, it is common for difficulties to arise in terms of reaching your target service levels and delivering the high levels of customer service demanded by business users. These limitations are often related to the existing skills, resources and budget that are available internally; there are also elements of staff management that can affect the final results, such as sickness, holiday cover, staff turnover and so on.

Opting for a ‘partial’ outsource means the only thing you need to do is set the appropriate SLAs and then it’s up to the supplier to meet them – using whatever tools and techniques are available, be it up-skilling staff, Continuous Service Improvement (which should be a fundamental delivery item of any managed service) or implementing new processes. In this way, you have more control over the most important thing – the service levels your organisation needs.

You should be looking for someone who wants to build a long term partnership with you and whom you believe will be seen as an extension of your existing IT function, and not ‘that 3rd party lot that sit in the corner!’

3) It’s safer than other types of outsourcing

The additional attraction of ‘partial’ outsourcing is that you retain ownership and control of your systems/data and how they are stored and managed. This is something which has become even more critical given the requirements of data protection and client confidentiality, something which ISO27001 is seeking to address.

This means, for instance, that there will be less issues concerning security of your data than if you used an offshore service desk, where the infrastructure upon which your data is stored and processed is owned by another company based in a country thousands of miles away and where there might be different regulations and laws concerning information security. It is also safer than a fully outsourced solution where all operations are run at another site and using another company’s infrastructure.

4) You will not lose your staff

Some companies which have an internal support function are worried about losing their trusted IT people who have been working for them for years to another company, and not being able to get them back if they decided to do a U-turn after a failed outsourcing contract.

Your employees rights are protected under TUPE, the Transfer of Undertakings (Protection of Employment) Regulations, which ensure the terms & conditions at transfer are protected.

This means they are not lost forever – if things don’t turn out well and you want to bring the service back in-house, you can TUPE them back quite easily or onto another supplier.

5) It opens you to new opportunities

The strong benefits to outsourcing are not only the increased levels of Service but the increases in efficiencies and therefore the reduction in cost, something which is clearly a driver for all organisations in the current climate.

With an in-house Service this is often impossible to deliver i.e.

Reduced costs = Reduced Efficiencies = Reduced Service

Outsourcing opens up the possibilities to the adoption of new models which are affordable thanks to the various options available. For instance, a shared out-of-hours service that supports a number of organisations which are similar with regards to type, sector and requirements, with which to share the costs and ability to access high skills; or a dedicated peak-times service in addition to your own in-house desk to help during periods of increased demand, such as a particular event or a busy season.

6) The costs can be shared

If your organisation needs highly efficient support with specific expertise, but does not have the budget for this, a shared service can be an ideal solution. It provides access to the high skills that might be otherwise unaffordable for your organisation but at a much lower price, as the costs are shared between different organisations. Best results are obtained if the participant organisations are of similar type and with similar needs, and if the number of clients sharing is kept to a minimum.

7) It can create a strategic advantage

An efficient, reliable and fast IT Support where all you have to do is set SLAs and expect them to be met can be an asset for certain types of organisations, such as those in the financial sector, especially banks. With so many financial services relying on fast and efficient technology and 24/7/365 uninterrupted accessibility, the less downtime and inefficiencies you have, the more probability you have to gain ground in the market and beat your competitors that have a weaker IT service.

sourcingfocus.com speaks to Nick Parnaby, Vice President of Extended Enterprise Solutions at GXS about the implementation of cloud-based solutions and his predictions for the evolution of cloud-based technology.

Nick has spent over 16 years helping businesses to improve their supply chain, procurement and B2B processes. In 2005 he co-founded RollStream™, the first cloud-based technology platform specifically designed to manage trading partner communities, inspired by Web 2.0 user experience and usability seen in consumer-oriented social software. Nick has implemented cloud-based solutions in B2B for managing process and information management at some of the world’s largest corporations and brands, and is regarded by industry analysts as a subject matter expert in supply base management, B2B community management, sourcing and procurement and supply chain optimisation.

Can you tell us more about some of the GXS partnerships and collaborations that you have been involved in?

Certainly - Our second customer at GXS was Tesco in the UK and they came to us because they had an issue wherein they had thousands of suppliers that they needed to reach for rolling out a new Oracle system in 2006. Their challenge was they had about 12,800 suppliers on their Goods not for Resale catalog which was not as optimised as their Goods for Resale side of the business, and there were maybe four or five thousand active suppliers placing purchase orders at any given time, but they just didn’t have the visibility of information on the site.

Tesco UK approached us, having already spoken to Oracle and Microsoft who had quoted around £1.5 million just to get it started, and wanted to know about more cost-effective and Software-as-a-Service options. We completely revamped their supplier registration process, automated it from the point where a buyer makes the decision to work with a supplier onwards and streamlined the entire work flow. We created a profile in the cloud, like LinkedIn if you will, just for the Goods not for resale side – so they got a complete overview of the process in the cloud, and visibility of not only the master data, but everything from documentation, the legal and regulatory stuff, corporate social responsibility risk checks.

It was great for them because it cut their process down by about 60%. We also worked with a multi-national pharmaceutical company. They had a big issue with supply chain risk, and they had a huge programme called Responsible Procurement. They were looking a 450 procurement people across the business, 48,000 suppliers – it’s a giant community. We came in as a community management tool for their Biologics Division, and could deliver very measured, surgical communications, and make a risk assessment of the supply chain using simple secure survey tools or financial health relatedinformation collected from suppliers, and from that they could come up with and execute a strategy of mitigation based on the level of risk. We were probably the first to market using community management for supply chain.

From your experience of SaaS, how do you envisage cloud evolving?

I think there are all sorts of things happening. Number one – a lot of companies have embraced it. At GXS I find myself working a lot with banks and financial institutions and they look at it differently. They’re still very concerned with security, so I see a lot of hybrid solutions emerging in the cloud, where the data is behind a firewall. Every time we deal with customers who are concerned about the sensitive nature of their data they are very worried about the safety of the cloud. There are a lot of potential customers who shy away from the cloud, almost once bitten twice shy, because in the past we haven’t been able to offer what they need, and there are some businesses who I suspect will never be ready for the cloud but I do see a hybrid approach emerging over time.

Following on from cloud, what do you see as the top three topics or outsourcing trends at the moment?

I think one of them is the space that GXS sits squarely in the middle of, which is managed services for Business Process Outsourcing around B2B. We’ve seen a huge shift in our revenue moving away from traditional tools. I’ve also seen some Salesforce automation that has been outsourced, some customer service operations, the States are outsourcing lead generation and the front end of the sales process. I’ve also seen classic BPO for purchasing re-emerge where organisations on the indirect end of the business outsource almost their entire spend.

Can you give me some examples of best practice of GXS in B2B collaboration?

We spend a lot of time obsessing about community management, and technology is just one side of the equation. We sell it as Software-as-a-Service-as-a-Service because you can’t just leave a piece of technology in somebody’s hand and expect them to adopt it and get mass adoption across the board. Recently we did a big roll out with a big supermarket chain. They came to us and said “we really want to do this but we’re worried about how to create this massive community of 5,700+ suppliers and be able to reach people systematically.”

We advised that it is imperative to use best practice and call every single one of them. An analysis of the contact information shows that contact numbers are often fax numbers, incomplete emails, generic mailboxes, and we found that about a fifth of the contact information is irrelevant. You have to put services up front and contact the initial point of contact and establish a relationship with them. It sounds so basic, but if you don’t do it, you won’t reach the people you need to. The other thing we’ve found is that in sourcing procurement when you’re rolling out legal and regulatory compliance it’s not like marketing when you’re happy with a 45% response, you want 100% or near enough. We find you need four or five reminders to get around a 70% response rate. We spend a lot of time coaching the procurement professionals and the support teams underneath them to go the distance. For GXS best practice is really managed services on B2B.

What does the future hold for GXS, what do you have in the pipeline?

I also see a move towards buying more SaaS applications on top of the network, for example a lot of people are using tools which afford them visibility into all their transactions in order to provide better customer service, or for better compliance because they want to grow their business into multiple countries. A lot of people come to GXS because they want to grow but struggle to get over the invoices going back and forth and dealing with different compliance regulations between the countries. We’re going to ramp up our services side with all of the tools in a managed services package. We’re already global but there is opportunity for us to make inroads into China.

The volume and complexity of information coming into organisations has increased dramatically in recent years, but without the right tools in place to deal with this influx, it can become more of a hindrance than a help.

Companies demand advanced BI and analytical solutions to enable and, in many cases, automate their decision-making, but in order to do so they must first make sure their staff are trained and able to handle BI and analytics tools to cope with an increased volume of data.

For example, organisations must train their staff in the databases and technologies required to manage the volume of information. Employees must ensure that data is accessible in a timely way, facilitating the use of automated algorithms and innovative ways to improve decision-making.

Technology initiatives must be innovative and scalable enough to support this data. To enhance processes, organisations should consider horizontal subdividing, which segments data in a way that prioritises the information required for analysis.

We aim to help companies understand how to make information an asset and equip them with the tools needed to improve decision-making that can boost sales, improve customer service and, ultimately, increase market share.

For example, when a global pharmaceutical giant needed to gain better value from its marketing investments, we helped the company in the following way:

• by segmenting its audience based on buying behaviour

• creating promotion response models that predicted incremental sales for every additional dollar spent on promotions

• allocating marketing budgets across 12 channels to maximise return on investment.

As a result, sales of its top-selling brand increased by 15%, with no additional spend on promotions.

Companies need the right tools and the right support to get the most out of their business and their data, and to make the right decisions. The amount of information companies have to contend with is growing at a vast rate and the sooner they can implement the right tools to help deal with it, the better-placed they will be to harness it to their best advantage.

Today we live in a technology dependent world with a global annual spend on IT and communications reaching a massive £1.9 trillion. IT systems are relied on heavily to carry out a range of tasks from the rudimentary to the most critical, and glitches in the system can result in a company operations coming to a standstill. The time needed to invest in managing a company’s IT system is vast and as a result over the past couple of decades we have seen a trend for companies to move their IT function overseas in order to help solve their IT woes in a cost effective and efficient manner. Even though outsourcing is recognised as the traditional solution to this generational problem autonomics is fast becoming a viable and attractive alternative to the norm.

Conceptually autonomics works in a very similar way to the human immune system. It regulates and facilitates an organisations’ IT functions with the ability to recover, self heal from a malfunction and build immunity against the same attack in the future. The system observes and replicates processes which would usually be carried out by humans and identifies replicates and fixes problems without the need for human intervention.

The main benefit of autonomics is that the IT department changes from being just a service department into a potential revenue generator. This is because it reduces the in-house man hours originally required to oversee the routine parts of the job and frees up time to allocate to innovating and improving. IT systems. Autonomics’ real-time response to any IT related issues also allows staff to organise their time more efficiently as they will no longer have to spend time waiting for staff to resolve IT problems.

Outsourcing may still be considered the traditional approach to ensuring a functioning IT system but environmental and economic shifts are slowly tarnishing its reputation for being cost effective and reliable. Countries which were once known for their cheap labour have fallen victim to wage inflation and sourcing a skilled work force has become increasingly difficult in the recent years due to competition for talent intensifying. Autonomics offers organisations an alternative to overcoming these shifting paradigms, reducing dependency on a human workforce to maintain complex systems and in turn reducing overall costs for organisations.

Even though IT outsourcing continues to grow, the future for autonomics is looking bright as businesses are recognising the benefits it can offer in terms of flexibility, speed and reliability. Whilst autonomics won’t replace outsourcing all together it will be interesting to see exactly how the two will coexist and enhance a business’s processes and procedures.

In recent years the importance of streamlining businesses, uncovering hidden revenue and growing a company has become ever more apparent. The ways in which businesses tackle these issues has therefore evolved and adapted to what is needed from the data available; which could crudely be summarised as ‘minimum input, maximum output’.

EXISTING BUSINESS INTELLIGENCE AND ANALYTICS

Business intelligence and analytics play a huge role today in many business, be it retail, corporate or even the NHS. An infinite amount is available, yet remains wholly redundant until sense can be made of it and information extracted using business intelligence and analytics. As David Parcell of Verint highlights: “with technology now available to consolidate and analyse large disparate datasets, the contact centre can become the organisation’s front line in the fight to turn data into actionable insight.”

Gary Angel, President of Semphonic, points out that the issue experienced by many using early business intelligence and analytics that use only a small set of key metrics (such as Site Conversion Rate, Total Visits Trend etc.) is that the reports deliver neither understanding nor actionability. The data set of the report spans the entire site and is essentially useful for looking at the population of the site at any given time, as opposed to specific parts of the site and the reasons behind how long the visitor stays, or why they leave, therefore offering very little in terms of how organisations can maximise their output.

WHY BUSINESS INTELLIGENCE AND ANALYTICS?

Convergys, a Cincinnati based organisation dealing with smart revenue solutions, use analytics extensively for customer solutions. John Georgesen, Senior Director of Analytics, Convergys Corporation highlights the need for analytics: “In today’s world of customer demands, companies are facing increasing pressure to enable more holistic yet simplified interaction channels; in this environment, business analytics really takes centre stage. By integrating and analysing all data available, businesses are better able to provide services that customer’s want, in the way they want them.”

CASE STUDIES

Business intelligence and analytics play a particularly useful role for retail companies, as the well-known saying goes ‘the customer always knows best’. Information derived from data can give organisations a better understanding of how they are perceived by the end customer as well as what to do to improve performance.

Among the many retail companies already profiting from the correct use of business intelligence and analytics is JD Williams, a £719 million internet and catalogue home shopping company. In recent years they have seen internet sales grow to 46% of annual turnover, thus creating new and exciting opportunities to transform the customer experience. Neil McGowan, CIO of JD Williams, explains, “The online channel offers the chance to capture not only what the customer has purchased online, but what they have looked at, which products they have put in the basket and then failed to purchase, or items they have searched for that are out of stock. With this level of insight, JD Williams can transform the relevance of customer offer to transform the buying experience.”

JD Williams found the solution for capturing online customer level insight in 2009 with Celebrus Technologies. The software could capture clickstream information and incorporate that data within the Teradata TCRM system creating a customer data hub to support ongoing marketing campaigns. Since the pilot roll out of Celebrus Technologies, JD Williams has rolled it out across all of its online brands.

Business intelligence and analytics have also found their place throughout many trusts and projects within the NHS. Scarborough Acute NHS Trust required a tool to process data from different systems into far more manageable information for its clinicians, managers and consultants to make reports to aid day-to-day decision making, improve clinical care and ultimately lower mortality rates. They already had an established relationship with Trustmarque, who were approached to help them find solution. The answer came in Qlikview. They proved the perfect solution for the Scarborough Acute NHS Trust due to the flexible pricing options according to the budget available, the customisable demo of the software, the induction and training courses provided to ensure best practice, and the adaptability of the software with its capability to create multiple bespoke dashboards.

FUTURE OF BUSINESS INTELLIGENCE AND ANALYTICS

The need for business intelligence and analytics is evident, however, the bar is constantly being raised and the markets and spaces are ever-changing. How will business intelligence and analytics remain relevant?

Stewart Hill, Director of Product Marketing ClickSoftware predicts that business intelligence is heading towards real-time, and not just in the contact centre or dispatch centre. The use of tablet PCs and smartphones is making real-time dashboards available out in the field –thus driving immediate efficiency improvements as the data can be reacted to there and then.

Subhash Gaitonde, Programme Director from MindTree’s Data & Analytics Solutions (DAS) practice, sees the next generation of business intelligence and analytics as being as real-time as possible and as accessible as possible via mobile, whilst drawing in the new-generation channels like social media and exploring their relevance to business and spheres of influences, and incorporating new data types (such as geo-spatial, machine data, location data, RFIDs, sentiment, social, streaming etc).

With the rise of ‘big data’ organisations are striving to become far more dynamic, innovative and profitable. The marriage of big data to business intelligence and analytics will lead to a marked change in corporate culture and produce numerous next generation models to help businesses harness the power hiding within their data.

The Superyacht Group is looking to expand into three new market segments with the help of Netsuite Cloud services.

The Superyacht Group has employed Netsuite Cloud’s services for the company’s sales, marketing and financial operations. The streamlining and consolidation afforded by the cloud will result in accurate, real-time financial and customer information, thereby increasing The Superyacht Group’s efficiency and productivity.

The Superyacht Group Strategy director Pedro Müller highlighted the benefits of using cloud services such as being able to spot trends and measure performance, "[…] in addition, we now get invoices out in minutes, compared to weeks, and we cut our receivables backlog by 70 percent thanks to improvements to our financial processes. The productivity of our sales representatives has increased by as much as 80 percent due to NetSuite."

Capita has raised £290m of funds in preparation for an acquisition period to try and win government contracts.

The company is currently in numerous talks which it hopes to close in the coming months. Capita has already this year shelled out £91m on acquisitions and will potentially spend just as much before the end of this year, with a particular focus on SME acquisitions.

Capita is looking to win contracts worth between £300m and £5bn which would deal with benefit systems and a nationwide contract with the emergency services.

Capita has won £900m of work so far this year, compared with £2bn for the whole of 2011, and was confident of hitting full-year organic revenue growth expectations of about 3 per cent. “We just happen to be going through a period where there is a lot going on and rather than letting the debt increase further we’d rather raise equity,” said Paul Pindar chief executive of Capita.

Infor has partnered with Amazon Web Services to deliver the Infor10 Business Services Cloud to companies across the globe.

Infor will use the infrastructure-as-a-service capabilities of Amazon to provide its CRM, EAM and ERP services to customers via the cloud.

Jim Plourde, VP cloud operations at Infor said “One of the beauties of having these environments in the cloud is that they can be deployed in minutes, used for a temporary purpose, and taken down very quickly.”

The partnership will free up Infor from its geographical locations and allow the company to establish itself across the continents.

The Guardian has reported today that Cabinet Office minister Francis Maude is expected to announce plans to increase the ability of government departments to share private citizen data.

Blair’s 2007 proposal to amend the Data Protection Act in the name of efficiency was met with strong opposition from privacy and civil liberties campaigners. Francis Maude’s latest proposal plans to increase the ability for departments to share data, in order to make it easier for government and public-sector organisations to share confidential information supplied by the public.

The proposal has encouraged the Information Commissioner's Office to produce a Data Sharing Code of Practice, explaining that personal data can only be shared between organisations if it is used for "the prevention or detection of crime; the apprehension or prosecution of offenders; the assessment or collection of tax or duty".