Industry news

Undeniably the UK has one of the most complex payroll systems in the world. However, over the next 18 months, we will see some of the most fundamental changes to the reporting regime behind PAYE since its inception in 1944. Real Time Information (RTI) is being introduced by HMRC to provide more accurate and up-to-date information on employees and pensioners, in a move that will shift the PAYE reporting requirement from annual to monthly updates.

Not only will this support the introduction of Universal Credits, it will serve to fundamentally improve the overall operation of PAYE. By increasing the regularity of reporting, it enables HMRC to respond more efficiently to errors that lead to the under- or over-payment of tax.

With such a shake-up to the industry however, it comes as no surprise that there are some question marks about what RTI will actually mean for employers, and what needs to be done in preparation for the new process. All businesses, regardless of size or sector, will be affected by the introduction of RTI and HMRC is encouraging employers to ensure their payroll data is accurate before the change is implemented. This involves exercising due diligence to ensure details such as DOB, National Insurance numbers & names held on the company database are correct.

At Sage we recently conducted a survey among our customers to find out whether employers were aware of RTI and discovered that 63% of companies were aware of the change, an improvement on only 26% that knew last year. Although there has been an evident shift in the right direction, there is still quite a way to go before Britain is ready for RTI. This move represents a significant change to firms’ reporting regime and, to adjust to it, businesses will need to take the time to work with their payroll provider to validate their data, in order to ensure a smooth transition. The advantages of RTI, such as efficiency, savings, improved accuracy and elimination of fraud, will far outweigh the initial work to make your data more accurate.

If you’re confused about what RTI means for you and how you can best prepare for it, our advice is to contact your payroll provider and ask how RTI will impact your business, and what to do to ensure the data you submit is correct. Sage is working closely with HMRC to support its customers through this transition into the RTI world, by being involved in the pilot scheme that begins in April 2012. We are encouraging all our customers to get ready for RTI early, and a significant number of our customers – from SMEs with no payroll department through to large employers – are participating in the pilots to ensure the transition runs even more smoothly.

The task of simplifying the PAYE system is unquestionably a vast one, and whilst most software providers and payroll bureaux are ready for the changes, as an employer, you must start reviewing your current HR and payroll processes so that you will have all of the information to make your FPS (Full Payment Submission) each month.

The results of a study carried out by Microsoft, in conjunction with IDC, show that a potential 14 million jobs worldwide could be created by 2015 as a direct result of spending on public and private cloud IT services. This is in addition to a saving of $1.1 trillion a year.

According to Microsoft, the new jobs will be shared between SMEs of 500 employees or fewer and larger businesses, with the SMEs narrowly taking the majority. The report states that just under half (6.75 million) of the 14 million new jobs are expected to be held in China and India, as companies in this region will not suffer from “legacy drag” and because of the extensive workforce available. John Gantz, senior vice president at IDC supported the claims of the report by saying: "we tend to think of China and India as emerging markets, but they're actually early adopters of the cloud. They're not bound to existing systems. They've skipped that step, so there's less holding them back."

IDC calculated the number of cloud-generated jobs by weighing several factors, including available country workforce, unemployment rates, GDP, IT spend by industry and company size, industry mix by country and city, technology infrastructure by country and city, regulatory environment, and other factors.

The impact of this study could prove to be instrumental in transforming customers’ attitude towards cloud computing for their businesses, and cementing it as not only a viable option but a necessary element to fuel growth for businesses.

Following the results of a BPO research study in conjunction with Everest Group and LSE’s Outsourcing Unit, Accenture is encouraging BPOs to modernise their mindset towards industry demands, in order to reap greater business value from their relationships.

The research showed that the most successful BPOs demonstrated 8 key practices of management: a holistic approach to relationship management, a cooperative approach to governance, change management a priority, placing emphasis on benefits beyond cost reduction, targeting strategic business outcomes, domain expertise and analytics, aligning the organisation with the outsourced processes and taking full advantage of technology as an enabler.

Mike Salvino, Group Chief Executive, BPO, at Accenture said “this study clearly shows that the industry mindset needs to change for organisations to capture the full business value of BPO, where engagements are measured by business outcomes and improving clients’ business performance rather than just cost reduction (…) by adopting the behaviours and practices associated with high performance BPO, organisations can capture significantly greater business value and build new competitive strengths, ranging from accelerated speed to market, enhanced innovation and stronger customer loyalty to savvier talent management, and top-line growth.”

CSC has announced that it has signed a non-binding Letter of Intent with the UK Department of Health, which lays out CSC’s path in delivering services and solutions to meet the NHS reform agenda, services will be focused primarily in the Midlands, North and East England.

The signing reflects the focus of the NHS’ reform agenda to deliver more localised projects while implementing budgetary controls and greater devolution in decision processes and at the same time meeting high quality standards and improving overall patient care.

The Letter of Intent is intended to establish the broad principles of an agreement between the CSC and the Department of Health, with the agreement set to be completed by the 31st of March 2012.

New technology has allowed JP Morgan Chase to increase the use of low cost sites by 14 percent. Mike Cavanagh, CEO of Treasury & Securities Services at JP Morgan Chase, has said that an IT overhaul has allowed the bank to “optimise the location strategy” of staff, increasing the use of low cost sites from 26 to 40 percent.

The financial giant has been working to upgrade key technology which has seen many legacy systems removed, increases in automation and better virtualisation. These upgrades come as part of JP Morgan’s commitment to an IT overhaul looking to improve business processes, product development and cut trading costs following a new commitment to global trading and cross asset servicing platforms.

With nearly a third of all 25,000 employees working in IT, JP Morgan is set to experience huge savings.

The Ministry of Justice (MoJ) is hoping to save over £100 million through a new shared services system, according to Justice Secretary Kenneth Clarke.

The news comes following previous criticism of the MoJ’s £14 million per annum spend on implementing enterprise resource planning (ERP) systems, a huge figure compared to the Department of Health (DH), that declared a spend of only £1.4 million per year on ERP.

The MoJ’s comparatively high spend is borne out of having three separate ERP systems from the prison, probation and court agencies. The three systems are set to be replaced in 2013 by a single shared service and the move is expected to save £102 million over ten years in costs.

However, the introduction of the new system is also expected to make huge ‘real’ savings in efficiencies. Clarke said “The new solution will deliver significant savings of £40m per annum through increased efficiency, reduced systems maintenance and support and improved management information. These benefits are quoted excluding any sharing of our platform by other departments and will increase should this occur.”

Global business outsourcing partner arvato, has expanded its Supply Chain Solutions leadership team with the appointment of Joe Fogg as UK Business Development Director.

Joe Fogg has over twenty years’ experience in the supply chain sector, gained during business development and management positions at DHL, TNT Express Worldwide, and most recently at Norbert Dentressangle. During that time, Fogg developed large turnkey and end to end solutions for leading international brands.

Based in the UK, Fogg will focus on developing arvato’s existing supply chain relationships and generating new business in core growth markets such as technology, telecommunications and healthcare/beauty as well as e-commerce fulfilment. The company has recently won new contracts for clients including Bosch Power Tools UK, and has expanded several of its client relationships, including Sony Music UK and Universal Music UK to roll out e-commerce fulfilment solutions.

Markus Schmücker, Managing Director, Supply Chain Solutions at arvato, said: “Joe’s appointment strongly supports our business development strategy. He has an extremely impressive track record in the industry – his insight and expertise complement our strong heritage and will enable us to accelerate our growth in the supply chain market. I look forward to working closely with Joe to develop our business.”

The government has pledged £100,000 to the Council of Europe's Global Project on Cybercrime.

The funding was announced by foreign secretary William Hague and forms part of the nation's commitment to help tackle cyber crime.

William Hague said: "At the London Conference on Cyberspace I made clear that the rapid rise of cyber crime is a growing threat to people across the world and the need for co-ordinated response to improve security, enhance co-operation between states and ensure a collective undertaking to address this threat."

"I am therefore delighted the UK will be supporting the Council of Europe Global Project on Cybercrime. This will bring real benefits - including by working together with entrepreneurs and companies whose innovation is as crucial to the future as it has been to our past."

Senior police officers have strongly defended the radical extension of the role of private companies in policing, saying they should be involved in protecting the public and bringing offenders to justice.

The comments from the Association of Chief Police Officers follow the disclosure by the Guardian that the West Midlands and Surrey police authorities have invited private security companies to bid for a wide range of services, including criminal investigations, patrolling neighbourhoods and detaining suspects.

ZTE Corporation, a leading global provider of telecommunications equipment and network solutions, has announced the company will deliver the next stage of the LTE infrastructure network rollout for operator Hi3G in Sweden as it builds out the industry’s first LTE TDD/FDD dual-mode network.

ZTE has delivered and installed the first stage of the network since it was first announced in March, 2011. This was the world's first commercial network of green dual-mode LTE base stations.

For the contract extension, ZTE will deliver the SDR-based infrastructure equipment to upgrade the operator's 3G network in Sweden.