Industry news

Dell is set to acquire Make Technologies. The purchase will help IT departments to reduce the volume of code and operational costs.

Make Technologies specialises in helping businesses replace outdated IT systems and modernise traditional applications for modern, cloud-based systems.

The deal is Dell's third acquisition this week as part of its diversification strategy to increase margin storage, software and services as it looks to invest in higher-profit business services.

Following the acquisition, approximately 100 employees from Make Technologies will join the Dell Services team.

Dell Services president Steve Schuckenbrock said, "The addition of Make Technologies and Clerity Solutions to Dell Services positions us to lead in the fast-growing applications modernization space. We have the capabilities to help customers with all their modernization needs -- from re-hosting and re-platforming to code re-engineering. These offerings will enable Dell to support the thousands of commercial and public sector customers looking to migrate business-critical applications to open, standards-based architectures, including the cloud."

SSON Talks is a collection of outsourcing professionals sharing their remarkable stories and inspiring journeys. Listen, view and read before the flagship 2012 SSON Week in Amsterdam 14 - 16th May.

Jacek Levernes talks on global business services. Jacke's most improved metric in an SSO was a 45% cost reduction from standardisation and process improvement (efficiency).

Patrik Forsstrom talks on verticalisation: "I'm very happy for us that we were able to establish our captive center in Estonia moving Accounts Payable, Accounts Receivable and Payments maintaining high top management and customer satisfaction within a short timeframe. 1Q2012 new processes to be transitioned from Finland to our center in Estonia."

Eric Simonson talks on shared services impact on global markets. Eric's industry prediction is an increasing drive for industry-centric global services strategies and solutions. Much of the growth in global services has come by leveraging lessons that apply across most industries. With the rapid maturation of the market, an increasing openness to consider more “core” activities

Juan Manuel Garcia Moreno talks on collections optimisation: on time & ahead of target.

For more information please visit the SSON Website

Whilst recruitment process outsourcing (RPO) normally conjures up a solution that is associated with simply reducing cost to hire, RPO actually has a positive impact on a business both operationally and strategically, so it is not just an outsourcing solution that should be thought of during harder times.

Resourcing talent should be a fast and cost effective process, whilst still delivering a quality service for the candidate and efficiencies for the hiring manager. The process should reflect the employer brand and, above all, ensure the best candidate is sought for the position required. For large organisations that don’t have specialist recruitment teams, the procedure for filling a position can be a long drawn out process and one that incurs a number of internal challenges and hurdles.

Effective recruitment processes

Maverick recruitment processes are often prevalent within organisations that do not have a central recruitment function, resulting in increased costs and increased time to hire whilst diminishing the candidate experience and employer brand. Well-defined processes need to be designed and introduced to enable effective coordination of the complete recruitment cycle and to match the company’s strategic goals.

An RPO provider will take a holistic approach to provide the right solution and quite often will be able to introduce simple yet effective processes that haven’t been possible for an overstretched HR team, such as Competency Based Interview tools for hiring managers or candidate management contact schedules to retain candidates through the difficult counter offer / notice period.

Once best practice is identified, tested and implemented, compliance to those processes is vital for the organisation to realise the full benefits. An RPO partner understands that ongoing internal PR and communication is crucial - morale is affected positively if the right messages about recruitment activity are socialised across an organisation.

There is also a good chance that valuable talent already exists within a business and, in these inauspicious times, retaining talent is fundamental not just from a cost basis but from a business intelligence perspective as well.

But how does a hiring manager or HR business partner get access to this information?

RPO account teams devise reporting mechanisms that help retain talent within a business through redeployment and mobility programmes. What RPO account teams have is the resource, expertise and information platforms available to them that HR or hiring managers often do not.

The same can therefore be said if a business needs to look externally. Time and money are of the essence, so fast effective processes need to be in place that bring the right skill sets into the organisation. As recruitment is not always a core activity for HR functions, through outsourcing specialist knowledge is actually being brought into the business to make sure this happens.

RPO account teams are experts in their fields when looking to source talent. They have access to market information on where to find the best candidates and this is extremely crucial in a market where the gap between top talent supply and demand is increasing. As a result, better people are recruited into the organisation and retention is improved.

Partnering with an RPO provider brings other specialists into an organisation including compliance experts, employment law specialists, employer brand champions, recruitment technology business analysts, assessment and screening designers and supply chain management strategists. These people are essential to an RPO business, but are only needed on an on-call basis for clients, and are therefore unlikely to sit in-house.

Increasing legislation

With the recruitment market evolving fast over the past decade, the pace of legislation has increased. In the EU a minimal legal framework has been introduced – the Agency Work Directive (AWD), which had to be implemented across EU member states before 2012 – that on the one hand ensures that all unjustified restrictions are lifted, and on the other that temporary workers are protected via the equal treatment principle.

Reliance on a contingent workforce has become paramount for organisations over the past few years - the flexibility of contingent labour provides organisations with a workable solution for resourcing talent in this unpredictable market.

So what does this increase in legislation mean for organisations?

This has proved to be a huge additional administrative burden for HR departments that are already feeling the strain due to streamlined teams. An RPO solution therefore provides the additional resources and processes required to gather all the relevant data for existing temporary staff within a business and also provides a framework for managing the information going forward to ensure a company is compliant.

It should come as no surprise that, with all of these additional benefits, growth has been realised within the RPO sector. Employers have recognised that the cost benefits associated with an RPO are not just about the cost to hire but encompass back office support and efficiencies, as well as the supplementary services that an employer gains with an outsourced recruitment provider.

From the perspective of an employer, an RPO brings four key business benefits: improving quality of the hiring process, reducing risk, aiding retention, and feeding into the employer’s talent management strategy which subsequently gives the business a competitive edge.

A near thing

Close is good. Close is a trusted friend, a much-loved relative, a colleague-turned-confidante. It’s a favourite restaurant you walk to every week, a next-door neighbour who feeds your cat.

So why when it comes to business do so many organisations see distance as a goal? Why do they look to the far corners of the world when the answers may be much closer to home? Why do we offshore when we could near shore?

It’s usually a question of economy. Traditionally, moving large-scale IT projects offshore has been seen as the most cost-effective way of outsourcing operations. But this can be a short-sighted approach that can often result in higher costs and lower productivity.

It’s highly unlikely that you’ll outsource your project and then want no further involvement. You’ll want meetings, phone calls and regular updates. And with flights to India, for example, taking up to 14 hours, with five hour time differences, it can be no mean feat simply trying to set up a meeting or a phone call. Don’t even mention the Visa restrictions, lead and preparation time for flights and an average visit of two weeks just to make each trip worthwhile. Compare this with an average two hour flight to Barcelona, and a one hour time difference and you can already see where I’m coming from.

Flexibility is another huge advantage to near shoring. Often an offshore project will demand a completed plan to be followed to the letter, with big specifications and up-front demands. Take it near shore, and you can develop a fluid, flexible project that can incorporate up-to-the-minute thinking and technology.

There’s often a big (and misguided) focus on the unit price for each individual worker. By only taking this one factor into consideration, many businesses are often led down the offshoring route. But consider that by near shoring in Barcelona, you’ll be working within an EU country that’s culturally similar to the UK, with great transport and communication infrastructures, including a wealth of diverse, rich talent.

As a direct comparison, wages are obviously cheaper in places like India compared to Europe, but unit costs often throw up hidden costs too. A team of five becomes a team of ten. A simple problem becomes a long flight. A minor glitch becomes a major headache. The focus needs to be on the cost of the completed project – not the often broken upfront promises of a cheaper price. Consider this, large complex and evolving projects are typically implemented in 1/3 of the time and half the cost in a near shore environment.

So let’s get over our offshore obsession and our determination to get the cheapest unit price at any cost. Let’s focus on the logical, flexible solutions that near shoring can offer. Close is a good thing…

Electronic data interchange (EDI) has been the mainstay of e-Invoicing, followed more recently by digital signatures, providing the means to exchange compliant electronic invoices. It can be difficult for companies to decide which of the two is best for their company. In this series of blogs I will examine the pros and cons of each method of e-Invoicing within commonly contested categories.

Compliance and auditability

Within the EU, the European Commission VAT Directive states that the authenticity of the origin, the integrity of the content and the legibility of an invoice - whether on paper or in an electronic format - should be ensured from the point of issue until the end of the period for storage of the invoice. Both EDI and digital signatures must remain compliant to their own respective legislation that guarantees the authenticity of the origin and integrity of their contents. EDI must adhere to 1994/820/EC that states that the data must be transferred within a secure network and that any messages are identical at the points at which they are sent and received. This may also need to be supported by a summary list and sometimes by a trading partner list. At the same time, digital signatures must conform to 1999/93/EC that guarantees the authenticity of the data through third party ‘certification authorities’. Solutions that adhere to these remain legal within overarching EU regulations.

Audits are frequently conducted by government authorities to ensure compliance with all the necessary regulations. Accordingly, both EDI and digital signatures must provide a detailed and transparent payment history upon request. While these audits can be very time-consuming and resource intensive, e-Invoicing solutions can easily provide auditors with all the legal information they require without the need to put resources into unnecessary activity. Well managed EDI systems will store the different evidence components, such as the interchange agreement and security control conformity, which are required to prove to the auditor that the archived invoices are authentic and unchanged since the date of issue. Digital signatures can quickly show information regarding authenticity and integrity just by the click of a mouse.

While both solutions remain compliant to EU legislation and can easily provide relevant information to auditors, different countries have different requirements for guaranteeing the authenticity and integrity of an e-Invoice. Germany and Spain require an EDI invoice that is also electronically signed while France and Denmark are less stringent and authorise either EDI or digital signatures. The UK and Netherlands allow any type of secured e-Invoicing method meaning that EDI or digital signatures aren’t required 100% of the time. As both EDI and digital signatures equally comply and conform to the surrounding EU legislation, to get the most out of e-Invoicing, you need to make sure that your solution takes into account relevant country specific requirements, be it EDI, digital signatures, or both.

My next blog will cover the differing levels of complexity when setting us and using EDI and digital signatures.

The growth of IT SMEs

Small and medium sized businesses within the software and technology industry are growing in London as the government begins a campaign of measures designed to open up department contracts. At the same time the growth of Silicon Roundabout reflects the economic potential of SMEs and their contribution to the GDP.

In the past weeks Whitehall has focused on SMEs as an area ripe for expansion. A range of measures have been introduced including advice to government departments designed to provide SMEs with an increased chance of winning government contacts.

The IT industries including SMEs are set to benefit from the redevelopment of the IT GCSE, replacing an outdated model which had contributed to the UK IT skills gap and shortages of software developers. Tech City software developers have also been supported by tax breaks and low-interest loans from the National Loan Guarantee Scheme to promote growth.

SMEs account for 60% of new job creation in the UK and the new guidelines for government departments reflect the importance placed on SMEs in the current economic climate. This week Silicon Roundabout announced that 800 IT positions will be on offer in the coming months. The Roundabout has been a success story for the IT industry and the UK economy as a growing collection of new and innovative companies situated around Shoreditch and Old Street.

The success of SMEs within the IT sector has seen the introduction of government initiatives seeking to ride on industry growth. Public sector guidance has been used promote SME IT companies for medium seized contracts capped at £100 million. The uses of IT SMEs are promoted to increase efficiency and reduce risks of project failure.

The growth of Silicon Roundabout developers has prompted Canary Wharf to move in order to attract up and coming IT companies as they aim to emulate Shoreditch’s based Silicon Roundabout success.

George Osbourne, said in regard to IT SMEs during the release of 2012’s budget: "We shouldn't be shy about identifying our successful industries and reinforcing them”. This certainly seems a sentiment which will continue in the upcoming months.

105 developing businesses including Moo.com, Last.fm and Twitter will be opening up developer and design positions at a talent fair this May with over 800 jobs on offer.

The last job fair in October saw the attendance of 1,500 job hunters with 168 achieving job placements. Where previous events had focused on software engineering, the new event will focus on user interaction design, visual design and analytics,

Ian Hogarth, Songkick co-founder, said: “Because all the start-ups are working together on this, we're able to present a career category to people”.

A study by The Centre for Economic and Business Research (CEBR)and SAS shows that big data analytics could add £216 billion to the UK economy and create over 58,000 new jobs within the next five years.

The report showed that big data bolstered the UK economy in 2011 by £25 billion with a forecasted increase of £40.7 billion by 2017.

Charles Randall, analytics product manager at SAS, said: "There is a need for skilled workers and that's why SAS are investing in the grass roots level of students at school to support them with their education in subjects like maths, science and engineering".

Yahoo has announced in a statement that it is set to carry out cuts and ‘phased transitions’. The company expects to make savings of £236 billion from the layoffs.

The layoffs come as part of a major business restructuring as Yahoo moves to redeploy resources to protect the core business.

Scott Thompson, CEO of Yahoo, said in the statement: "Today's actions are an important next step toward a bold, new Yahoo - smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require."

Transport for London will extend its 2007 contract outsourcing IT support to CSC for an additional 27 months in a deal worth $33 million.

The contract will see CSC continue to provide IT services including service and desktop support as well as providing real-time customer information to a number underground stations.

The extension of the contract comes as Tfl begins the first stage of a three stage programme of redesign its IT infrastructure, with focus being placed on improving the quality of commodity services.