Industry news

A report by the National Audit Office (NAO) reveals shared services are failing to failing to deliver value for money.

The NAO examined five shared services: the centres used by the Department for Work and Pensions (DWP), Ministry of Justice, Department for Transport (DfT), Research Councils UK and the Department for Environment, Food and Rural Affairs.

It found the cost of building and operating the centres ran £0.5bn over the allocated £1.4bn budget, while the £159m of savings that the centres were expected to generate by the end of 2010-11 didn't materialise. Only one of the centres broke even, while the two remaining centres generated a cost of £255m.

John Lewis has highlighted the importance of 'Innovation in a Changing Market' in its annual report.

John Lewis Partnership, which has more than 75,000 staff in Britain, said in a statement that it would pay all workers an additional 14 percent of their salary from a bonus pot of £165.2 million ($260 million, 198 million euros). Charlie Mayfield, Chairman of John Lewis Partnership, commented: "We have achieved a good sales performance in a tough year for the economy. Profits are lower than last year, but better than expected and I'm delighted to announce that all 81,000 Partners will be receiving a bonus equivalent to over 7 weeks' pay."

Profound changes are taking place in the retail sector and importantly this was a year when we upped the pace of innovation and investment. That came at the price of some short-term profit but leaves us in a good place at the start of this year."

Citigroup has announced it has entered into an agreement with IBM to explore possible uses for IBM Watson. Under the agreement, Citi will examine the use of deep content analysis and evidence based learning capabilities found in IBM Watson to help advance customer interactions, and improve and simplify the banking experience.

Citi is working to be the leading digital bank, providing customers with the latest technology to enhance and facilitate service. Citi will evaluate ways that IBM Watson technologies can help analyze customer needs and process vast amounts of up-to-the-minute financial, economic, product and client data.

"At Citi, we are constantly developing new, innovative ways to better serve our customers' financial needs," said Don Callahan, Citi's Chief Administrative Officer and Chief Operations & Technology Officer. "We are working to rethink and redesign the various ways in which our customers and clients interact with money. We will collaborate with IBM to explore how we can use the Watson technology to provide our customers with new, secure services designed around their increasingly digital and mobile lives."

HCL Technologies Ltd (HCL) has signed a five-year outsourcing agreement for IT infrastructure services with Helsinki-based UPM.

As part of this agreement, HCL will provide data centre, end-user support, network services and professional IT services to UPM. HCL will also set up a data centre in Finland and strengthen its existing Espoo Delivery Center to provide the services.

The deal value is estimated to be $300 million, according to information given by the company to the BSE.

Yahoo is planning a major reorganization that could result in “thousands” of layoffs.

New CEO Scott Thompson, who joined the company following the departure of Carol Bartz last fall, has embarked on a mission to get Yahoo’s house in order. As part of that effort, he has brought in Boston Consulting Group to help identify the company’s strengths and best position it for the road ahead.

BT will manage Standard Life’s comms infrastructure, including a BT Connect LAN and WAN as well as IP Telephony and contact centres. We will also manage the transition of the infrastructure to BT’s IP Connect network.

The arrangement supports Standard Life’s need for an integrated voice and data platform across its international operations, providing network services to its 16 UK and 10 offshore offices, including Chennai, Hong Kong, Hyderabad Aida, Pune and Sydney.

Headquartered in Edinburgh, Standard Life has assets of more than £190 billion and 6 million customers worldwide.

Paul Chong, Standard Life’s Group IT and Commercial Director, said:“BT understands our infrastructure and has vast experience in delivering complex domestic and international networking and outsourcing services. This network transformation will enable us to provide the highest standards of service to our customers, delivering on our commitment to provide them with a seamless global service.”

The Maritime and Coastguard Agency (MCA) makes first purchase from the government's recently launched G-Cloud Store.

The organisation used it to buy Agile educational software that is designed to reduce waste and avoid project failures. The MCA confirmed it will use this to help run its Future Coastguard Programme.

HSBC will sell its general insurance businesses to French insurer AXA Group and Australia's QBE Insurance Group for $914 million in cash, as Europe's biggest bank moves ahead with its plan to divest non-core assets.

HSBC's decision to exit the business could be a precursor to similar deals as lenders globally consider selling capital-intensive businesses as reserve requirements become more strict.

Somerset county council is to bring a number of services currently provided by the Southwest One joint venture, including accounting, business development and pensions, back in-house.

Southwest One was set up in 2007 as a joint venture company between the council, Taunton Deane borough council, Avon and Somerset police and IBM to modernise the local authorities' business processes.

Ken Maddock, leader of Somerset council, said: "We have bent over backwards to try to make this partnership work. But we have to state clearly that our primary duty in looking after the public's hard earned money is to make sure we get the best possible deals, that we get the best possible value for the public's money."

Chris O’Malley, CEO, Nimsoft outlines the considerations that should be made when considering a move to the Cloud.

Formalise communications, roles, service definitions and processes. The saying “Good fences make good neighbours” is very applicable to relationships with Cloud service providers.

Clear demarcation of services, roles and responsibilities is vital to these relationships. The more that’s left to subjective opinion, conjecture and guesswork, the more likely it is that misunderstandings, mistakes and missed opportunities will result.

Good “fences” for the Cloud are built by asking the right questions: Which services are ‘core’ and which are ‘chore’? Which will be off-loaded to a Cloud partner and which will remain in-house? What has front-line responsibility in the event of a problem? Who is the next contact in line if that person isn’t available?

Detailed process documentation, well-defined roles and clear accountability are all essential for managing an increasingly disparate IT infrastructure; one that includes partnerships with Cloud services providers.

This, by the way, is one factor that differentiates today’s high-value Cloud engagements from the less successful outsourcing engagement of the past. With the Cloud, IT can tightly focus what it off-loads and what its service-levels expectations are. So it can actually gain control, rather than losing it.

Start with concrete IT service requirements and definitions

Service level agreements cannot be standardised. Performance that is acceptable for one service will not be for another. And there cannot be grey areas. Everyone must understand the performance target.

This is why it is so important to have watertight service contracts in place―ones that detail deliverables and potential penalties―thus ensuring there can be no questions or misunderstandings in the event of service disruption. It is essential to detail what constitutes acceptable up-time. And if an outage is reported, it must be clear how quickly it is to be addressed.

One good way to set thresholds for Cloud service providers is to use benchmarks based on service levels historically achieved by the internal IT organisation.

Other considerations when creating SLAs include:

1. Penalties - What service credits or compensation will be honoured if SLAs are missed?

2. Realism - Can 99.999% reliability actually be guaranteed by the service provider? Does the business really need to bear the cost of premium reliability for every service?

3. Accountability – Service Providers’ claims about service levels should be validated against reports of problems from end-users.

4. Alignment with business requirements - Different departments, for example may require different service levels.

Stipulate on-demand service status updates

Irrespective of the SLAs, or any other service agreements that are in place, it is vital that the business has 24 by 7 visibility into the performance status of its Cloud services. The sooner the business is aware of an issue, the better it will be able to mitigate its impact on end-users and customers.

Many established Cloud service providers offer their clients online portals that provide access to real-time data on the performance and status of their managed infrastructure and services. Some also provide automated reporting and alerts. This transparency gives customers a higher level of confidence that business needs and SLAs are being met.

How should an organisation manage its Cloud services?

The use of Cloud service providers does not eliminate the need for businesses to monitor the performance and availability of critical services. On the contrary, it is still important to identify problems and hold service providers accountable.

So rather than relying exclusively on the monitoring and reporting offered by each Cloud service provider, it is advisable to implement a comprehensive solution for monitoring any and all externally provided services. Such a solution will help ensure the success of Cloud computing initiatives by measuring all key services and applications in real-time.

Ideally, this monitoring solution should unify the entire operational IT infrastructure, bringing both internally and externally provisioned services under the umbrella of a single IT monitoring and management process. This unified approach is the most cost-effective way to ensure that all IT services are meeting the needs of the business in terms of performance and availability.