Industry news

Three Hampshire local authorities have created a new partnership, sharing IT systems to help make local service delivery more flexible and efficient amid unprecedented challenges to public sector finances.

Following twelve months of joint planning, the collaboration has now been approved, and the agreement means that Hampshire County Council, East Hampshire District Council and Havant Borough Council will now form a true 'partnership' with joint management arrangements, sharing risk, investment, strategy and benefits around IT.

European and US businesses are expected to outsource around 750,000 jobs to overseas destinations over the next four years. However offshoring could see a sharp reduction during this decade according to research from The Hackett Group.

The research suggests that while jobs in IT, finance, human resources and procurement will be outsourced in large numbers to locations such as India, this level is expected to level off or decline by after 2014.

Michel Janssen, chief research officer at The Hackett Group, said that he expected that the economic advantages offered by offshoring would begin to dry up, “a decade from now the landscape will have fundamentally changed, and the flow of business services jobs to India and other low-cost countries will have ceased."

US financial services company Cowen International is to construct a technology centre in Belfast, which will create up to 50 high paying jobs.

Financial services and ICT sectors have been identified by development agencies as being important drivers for economic growth.

Arlene Foster, Northern Ireland's enterprise minister, said: “Subject to satisfactory growth and development, the project could create up to 50 jobs, which will pay salaries more than double the private sector average and will contribute more than £2m a year to the economy”.

Government agencies are faced with tight IT budgets over the next 12 months as the US federal budget faces reductions.

February saw the creation of a federal IT budget for 2013 that reduced spending by 0.7 percent, with priorities focused on cyber security and increased progress on interaction between agencies and businesses.

Bill Loomis, managing director of IT focused investment banking firm Stifel Nicolaus, said that despite short term reductions, he expected increased IT spending by the government in the coming years, as IT analytics and mobile device capabilities were expanded upon.

The Department of Transport have announced 13 firms that are in the bidding process as the next operators of Great Western, Thameslink and Essex Thameside rail franchises.

FirstGroup has been announced as a bidder for all three rail franchises, Stagecoach and National Express for two and Go-Ahead as a bidder for one. New operators are required to provide improved services and greater accessibility in tickets purchasing.

Theresa Villiers, Rail Minister, said: "The Government is engaged in the biggest programme of refranchising since the privatisation of the railways."

A new deal has been finalised between the Cabinet Office and Oracle which is expected to save the government a minimum £75 million by 2015.

The government currently spends over £200 million on software licensing deals with Oracle. The new agreement will see departments purchasing through the Government Procurement Service, who will then purchase software directly from Oracle.

Francis Maude, Cabinet Office minister, said: "The days of the government paying different prices for the same goods or services are over. We will no longer sign inflexible contracts that tie the taxpayer into unfavourable terms.

A new purchasing framework has been launched by the Government Procurement Service and the Department for Education which will allow schools and colleges to purchase their own ICT.

The framework is expected to be worth up to £575 million and is designed to meet ICT educational needs and provide flexibility and value for money.

Marie-Helene Durif, Head of ICT Sourcing & Category Management at GPS, said: "The Information Management and Learning Services framework is an important offering to our education customers which will deliver significant savings”.

Today’s challenging economic environment has led organisations to look at ways they can streamline processes, improve efficiencies and reduce overheads. With Business Process Outsourcing contract counts at an all-time high and multi-process and industry-specific functions leading the way, outsourcing is fast proving itself as a compelling option for firms looking to unlock new levels of operational efficiency. For payroll specifically the raft of changes to the UK PAYE regime has led many small and mid market businesses to outsource their payroll function, in a bid to free them up to focus on their core competencies, which differentiates their business and will ultimately drive profitability.

Outsourcing minimises the administration burden within a personnel team by removing time-intensive processes and enabling employees to focus their resources on those business activities that will directly impact the firm’s bottom line. Having a dedicated outsource provider can also increase the skills set of an organisation by giving them access to experts that not only have an intimate understanding of the process, but who can also help the business navigate any legislative changes to the payroll system. With tens of legislative changes to UK payroll system every year, and with automatic enrolment into pension schemes on the horizon, it’s more important than ever that SME’s have the peace of mind that their payroll function is in a safe pair of hands and that they are fully compliant with HMRC legislation.

Yet businesses that use payroll outsourcing to simply produce payslips each month are missing out on significant benefits. Decision makers need to identify business needs and what level of support they require to get the best possible return on investment, whether it be through a fully managed outsourced service, part managed or bureau service. It’s this relationship between a service provider and the customer that is paramount to the success of the service, ultimately dictating whether outsourcing payroll is the right option for supporting a firm’s business.

At Sage, we work closely with prospective customers to really understand their payroll needs, whether they be software or an outsourced service. One of our customers, Roundhouse, needed an outsource service to manage their permanent staff, casual workers and volunteers. By taking the time to really understand their business needs and pressure points and through adopting a close partnership approach, we were able to develop a bespoke service that minimised the administrative burden on the Roundhouse personnel team by removing time-intensive processes associated with running payroll. But that solution may not necessarily translate to all of our customers, so it’s critical that we understand their pain points and how a payroll solution can alleviate them.

While the current economic situation will continue to force businesses to focus on driving efficiencies, the importance of developing a relationship built on understanding and trust with your outsource partner cannot be underestimated. It is only by finding a true partner that organisations will be able to realise the 30% cost savings on payroll that are possible compared to running payroll in-house. However, it is this significant level of savings that means payroll outsourcing is a trend that is set to increase.

“He was really saying something,” goes the Motown classic, sung the Velvelettes back in 1964 and covered by Bananarama in 1982.

That chorus refrain is something that runs through my mind nearly every time I try and jack a news story, or craft an opinion piece or a blog.

Coz if you want to cut through the noise and get noticed, that’s exactly what you’ve got to do…be really saying SOMETHING. It doesn’t matter what particularly, just as long as no-one else has said that. If no one else is saying it – that’s thought leadership.

Business-to-business PR relies upon thought leadership. You cannot specifically push the brand, you have to push ‘the man.’ And that means making yourself a thought leader to be revered.

Of course, a lot depends on the characteristics and personalities of the leaders of your business, and the nature of the business you are in. Not everyone can go round effing and jeffing like Ryanair supremo Michael O’Leary! But if you’ve got someone as opinionated as yer man off Ryanair – and you have a highly attractive sales proposition where you can risk being offensive – then why not let rip? Saying something no-one else is, even when it’s confrontational and vulgar, is ‘really saying something.’

This is a strategy that has served Ryanair well – they get bucketloads of free PR, because O’Leary is soundbite central. Pithy, controversial, adversarial. He knows what he’s doing. It’s a very measured approach, employing shock value and comedy to devastating effect.

But for the rest of you, who need to mind your Ps and Qs a bit more, then you need to take another approach. You need to join in the conversation intelligently, expertly, like the urbane business sophisticate that you are. But how do you know what the conversation is? Or where it’s taking place?

You need someone like me, who spends huge swathes of his week analysing the news – looking for gaps in the conversation, keeping ‘em peeled for the stuff that’s not being said, assessing the scope for juxtaposition, reading between the lines for opportunities for you to push your agenda - helping you find your media voice.

For business leaders, just a few lines of well-placed, interesting insights can be the route to getting quoted as a market commentator in a big story, and getting your company name out there, or getting commissioned to do a longer piece…( and I could help with that too).

It’s crucial that you say something no-one else is saying, or else say it better - more succinctly and demonstrating deeper knowledge - than your competitors. But the safest bet is to know the story, weigh in with some fresh insight, and watch the coverage pile up.

Then you’ll be “Really Saying Something.” Bop bop soo be do wa.

Last week’s Budget was more of a damp squid than a firecracker. Intrinsically the Chancellor’s message was more of the same. Perhaps unsurprising when there has been little change in the economic outlook and so no reason to revise the Government’s deficit reduction strategy.

So for public sector organisations and employees there were no surprises. Just more belt tightening, more pay restraint, further cuts to services that are considered to be low priority and increased pressure to improve productivity; in order to make what available monies there are, go further.

For local authorities the situation is particularly acute. The long-term spending projections in the Treasury’s Red Book show that the financial pressures on local services will stretch well into the next parliament, with projections suggesting that total managed expenditure – the best definition of public spending – is set to fall from 45.7 per cent of GDP in 2011-12 to 39 per cent in 2016-17.

But it’s an ill wind that blows no good and while it is undeniable that many Britons will face individual hardships in the coming months and years, the current economic climate also offers a period of great opportunity for the outsourcing sector, as organisations are forced to reassess the status quo in order to maintain services.

Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations summed up the possibilities when he said: “Adversity always drives opportunity. The sector’s big opportunity is to push through better delivery, which is cheaper to the public purse.”

Traditionally the public sector has shied away from outsourcing service delivery – languishing in the wake of its private counterparts. Fears regarding the loss of personal interaction, expertise and the integrity of the service have all been voiced and the arguments are well rehearsed.

These entrenched attitudes are why I see the current recessionary times as an opportunity as well as a challenge for the sector. I hope it will force organisations to reassess they way in which services are delivered and to look with afresh at the benefits that carefully managed outsourced solutions can offer.

In fact some forward thinking public sector bodies are already stepping up their efforts to find creative ways to reduce costs, while maintaining or even improving the quality of core services. One recent example is that of the Prison Service, which has entered into a partnership with the MITIE Group to bid for a series of prison management contracts. While two police forces – Surrey and West Midlands – are looking at how they could outsource a range of services including, some frontline operations.

Within the digital arena the fact that cost savings are available to Government through the adoption of digital technologies is now widely recognised. And making sure services can be accessed online has been a priority for the Government for some time. The Chancellor added further commitment to this approach in his statement, setting out a plan to make all transactional Government services digital by default by 2015. Ease of use is obviously a priority, the Budget document states: “The Government will transform the quality of digital public services by committing that from 2014 new online services will only go live if the responsible minister can demonstrate that they themselves can use the service successfully!”

In my view, this is a hugely positive step. Effective online services can enable public sector organisations to maintain if not grow service levels at a lower cost, giving service users more choice about how to access and receive information. It also allows organisations to target the high cost services at those who really need them.

Tameside Council calculated that there is a powerful ratio at play. It found that the cost of face-to-face interaction is 7-15 times that of a telephone contact centre interaction and 60 times that of an online one. This is a ratio that is borne out across my own social enterprise’s client-base. It also parallels the way that the public typically chooses to engage with support services. For every person who would walk into a public building, there will be another 10-20 who will pick up the phone. A further 100 would rather go online. While some of these might need personal assistance, if the option of the preferred channel doesn’t exist, many will go without the help that they need.

In the Government’s Open Public Services white paper, which was published last year, its commitment to opening up public sector monopolies to competition was clearly stated. This month’s Budget looks set to speed up the demand for competition and diversification.