Industry news

As outsourcing has developed and matured over the past couple of decades, it is essential for the UK to stay ahead of the European market and ensure it has the skills and talent required to cope with the changing industry.

Even in a mature market, many organisations do not recognise the change in the skill set requirements from a pre-outsourcing “business as usual” role to a post-outsourcing supplier relationship role. This change often requires a need to re-train the retained work-force or hire new talent to successfully manage the programme.

The nuances of managing outsourcing partners means there is a strong need for specialist knowledge around procurement processes, relationship and vendor management, due diligence procedures, risk analysis (security, data-protection, intellectual property, and political and economic) business re-engineering, change management, governance and crisis management.

Many organisations are producing their own training programmes, mentoring opportunities and apprenticeship schemes in order to ups-kill their staff to meet the demands of the fast moving outsourcing industry.

Everyone needs training, virtually.

Ganesh Pai, Senior Vice President & Head, Insurance, Mphasis, said: “Training programmes and a strong talent management framework are some of the key dimensions of a successful outsourcing partnership. In order to achieve this, outsourcers need to set up talent programmes to plan, acquire, develop and retain talent aligned to sourcing needs.

“This can be done with a strong HR programme, promoting the advantages and opportunities to learn from cross-cultural experiences and teams. An efficient way to encourage this is the development of a global, virtual workforce through the deployment of unified communication technology and enterprise knowledge management repositories.”

Sitel’s Newcastle Centre was awarded the ‘Best Training Programme’ at the Contact Centre Awards in November 2011. Sitel provides learning opportunities to enable employees to perform in their jobs effectively, and to assist in career management. To support this company goal, ‘Track-Training’ was developed to provide a training, career-development and succession-planning programme.

Andrew McCobb, Site Director Newcastle, Sitel, said: “Track-Training supports the development of internal talent, utilising a combination of role-focused training activities, experiential learning, coaching and mentoring.

“Progress through role-specific and individual learning plans is supported via our internal Learning Management System (LMS), called Sitel University, which enables the integration of on-demand e-learning materials and virtual-classroom training from our Global Learning Team and providing automated and bespoke reporting to be able to track completion and quantify the success of training activities.”

School’s In: Back to the Classroom

As the practice of supplier relationship management develops, it is clear that there is a skill set emerging within the field of outsource supplier relationship management and a sense that there needs to be a career path for SRMs. More and more people in an SRM role are looking for qualifications that will acknowledge their transferable skills in what is a skilled and highly complex role that adds considerable value to an organisation. Chris Halward, programme director the National Outsourcing Association Pathway, says:

“A typical approach is for a ‘contract management’ approach to be adopted. As the name suggests this focuses on the contract terms and can be characterised by an inflexible approach where the supplier manager is intent on ensuring that the supplier delivers to the terms laid out in the contract – period.

“A true relationship management approach by SRMs requires considerable skill and experience, but will bring far greater value to the relationship. It is characterised by a focus on how the relationship as a whole can work best, for the benefit of all the parties. The SRM recognises the importance of managing both the supplier’s needs and that of in-house stakeholders, and invests time in being clear what those needs are and how they can best be satisfied. Those who manage at relationship level are commercially aware and are continually exploring risk and opportunity to add value into the arrangement. “

Change Behaviours, Boost Your Bottom Line

But this is not instinctive, and goes against the grain of how many organisations operate. Only by devolving robust talent management strategies – be they in house, or as taught by a trade association - and developing your people to fit your organisational needs, can you break the cycle.

By encouraging behaviours that will maximise the potential of your business services relationships, you will not only retain your best people, but their effectiveness to your bottom line will proliferate.

This week, the Cabinet Office has announced that the government’s G-Cloud online appstore, CloudStore, is now open. The CloudStore is an online database of over 1,700 information and communications services available to the UK public sector, representing a seismic shift in the way that the public sector purchases IT.

This initiative is part of the Government’s aim to increase transparency and encourage competition in the cloud marketplace, as well as increasing the efficiency of the procurement process, equating to the significant opening up of a previously limited pool of suppliers, which should ensure greater value for both the public sector and the suppliers.

IMGROUP, Microsoft’s Worldwide Partner of the Year in Business Intelligence and Data Management for four consecutive years, is one of the companies that has been awarded a Framework Agreement for the provision of G-Cloud Services, meaning it is now part of the G-Cloud supplier community.

IMGROUP has a broad customer base, including many public sector accounts and therefore are familiar with the business issues that such organisations can face; forced to achieve more with limited budgets. Previously, engaging with the Public Sector has always been constrained by the buying framework which was in place, allowing only a small number of companies to work with these bodies. The G-Cloud initiative levels the playing field by allowing IMGROUP to capitalise on its experience in this sector, and approach and be contacted by the Public Sector directly.

Cloud computing brings a range of benefits to many organisations in the present economic climate, providing all the vital business communication and collaboration tools required, without the up-front cost. The flexibility afforded by cloud computing gives organisations a crucial opportunity to outsource essential but non-core requirements to market, liberating the balance sheet and giving the business the opportunity to focus capital on core areas of focus, rather than IT services. A more open marketplace will mean that these benefits, which are routinely accessible and enjoyed by the commercial sector, will be more readily available to the public sector.

This is a huge opportunity for IT managers within public sector organisations, who are struggling with the “alchemy of how to do more with less”, giving them a chance to be seen as agents of innovation and change, rather than a cost centre. Many public sector IT budgets are eaten up with maintaining existing systems – cloud computing is an opportunity to redress these numbers, allowing investment in areas which will bring greater results.

IMGROUP is thrilled to have been selected as an approved G-Cloud supplier. This initiative has the potential to be a real game changer for both the Government procurement process and the suppliers themselves, and we are excited to watch how this development affects the cloud and online services industry.

Organisations know the value of Business Intelligence (BI) in monitoring sales performance, analysing the quality of manufacturing processes or customer service and tracking financial indicators. How many, however, are leveraging this technology to assess the corporate risk associated with the tough capital investment decisions now required across an organisation’s asset estate?

With the economic outlook becoming more pessimistic by the moment, senior managers can be prone to rewriting investment strategies and business plans whilst under pressure to make rapid changes.

There are, of course, huge risks associated with such decisions – from escalating maintenance costs to business damaging equipment downtime. Irrespective of financial conditions, organisations cannot risk making hasty changes to capital investment strategies; as Karen Conneely, Group Commercial Manager at Real Asset Management, explains, it is the use of BI to pull together information from fixed asset registers, maintenance systems and finance that will deliver the trusted, real time information required to identify opportunities for asset savings and, critically, predict the risk/reward associated with reining in investment today.

Changing Investment Strategy

The speed with which the economic outlook for UK businesses is changing is unprecedented. Carefully crafted growth plans and expansion strategies from 2011 are hastily being rewritten as organisations look, once again, at how to withstand a volatile economic climate. The implications for every part of the business are significant; but one area that is really bearing the brunt is capital investment across the asset estate. Given that many companies have extended the asset lifetime already in recent years, such decisions are critical: but how can they assess the implications of changes to capital replacement programmes and maintenance budgets on operational performance and business risk?

Asset Discovery

Having the ability to access the information required to maximise the value of the existing assets whose records are located in a range of databases will prove invaluable in providing answers to these difficult questions. To assess the implications and costs associated with changing asset strategies, organisations need to combine information about the existing asset base, concerning what is due to be replaced and the true cost of replacement. This information has to be weighed up against the expense of on-going maintenance and the risk of escalating the downtime of aging equipment. Whilst in the past organisations have laboriously opted to pull data manually from diverse sources, including systems for fixed asset management, maintenance and finance, and have used spreadsheets to support investment decisions, today’s rapid pace of strategic decision making demands far more accurate and timely asset discovery insight that in turn meets the PAS 55 standard.

Organisations need to leverage business intelligence (BI) to pull together information from all of these systems. This holistic approach will enable them to understand asset importance and to identify opportunities for investment reviews, tying in directly with specific objectives for asset replacement, capital investment and maintenance.

Real Time View

This asset discovery process is critical to minimising the risk associated with investment decisions. But, in the current market, undertaking the process on an incremental basis may not be enough. Once the BI tool is in place, organisations can utilise this intelligence to build dashboards that provide real time views of Key Performance Indicators (KPI) to deliver strategic, management level insight.

KPIs would typically include the current net value of an asset, the replacement cost of an asset and its current maintenance cost. Using such an approach, it is possible to set up a simple traffic light system so that organisations can see at a glance performance by asset, category, cost centre or site.

A consolidated source of fixed asset, maintenance and finance information, allows senior managers to assess the implications of different investment strategies – a crucial requirement with today’s fast changing economic outlook.

Conclusion

Maximising the value of the asset base is critical and correct timing is key.

With business strategies increasingly having to be rewritten under pressure of time and lack of information, it is clear that asset investment decisions can no longer be taken incrementally: organisations need to understand the operating position on a daily or near daily basis. BI tools that can be deployed across multiple systems in a matter of days can transform information transparency. By providing the real time asset discovery required to deliver confidence in asset investment strategies, organisations are able to address the business risks associated with minimising both capital investment and running costs.

In order to keep up with market forces and changing consumer trends, companies must improve their innovation quotient by drawing on both internal and external knowledge. The external element can be provided by an outsourcing partner, but it must go beyond the technical domain to demonstrate the vendor’s ability to transform business processes across the value chain as well as introduce management innovations that offer flexibility and agility to the client firm.

Innovation is indeed a buzzword at the moment with Chief Innovation Officers considered key hires in an increasingly challenging market and with an ever more conspicuous discourse around innovation. In view of the volatility driven by the economy, new disruptive technologies, increasing government regulations, and continued globalisation of markets, driving innovation and building agility into businesses have become the key attributes of success.

The importance of innovation through outsourcing is underscored by recent research carried out by Cognizant in association with Warwick Business School. The study looked at the impact of innovation on businesses and highlighted the key dimensions of re-structuring innovative processes, to measure their impact on the business as a whole. Available at www.valueofinnovation.com, it revealed 70% of European C-level executives believe that innovation achieved through outsourcing contributes to their organisations’ financial performance. However, businesses are not currently getting the most of outsourcers’ innovation capabilities, with only 35% quantifying the financial value of innovation. Businesses are struggling to prove the financial worth of innovation through outsourcing and make the case for future investment, due to the inability to measure the benefits outsourcing provides.

With this in mind, and in conjunction with Warwick Business School, we have designed a six-step framework, ‘The Innovation Ladder’, to assist companies in measuring and employing the correct strategies through innovation. The ladder is designed to capture the objectives of the outsourcing project as well as align the outsourcing lifecycle and the business objectives of the client firm.

Step One: Strategise innovation, in which executives need to consider what type of innovation is expected (incremental or radical) and what the expected impact of this innovation is at the operational and strategic level;

Step Two: Design measurement instruments, in which executives are required to develop the instruments based on which the improvements achieved through either incremental or radical innovation will be assessed;

Step Three: Assess vendor’s innovative capability, in which executives are required to develop a methodology that guides them to consider the innovativeness of the vendor as part of the other vendor selection criteria;

Step Four: Design a contract for innovation, in which the contract should be crafted to include performance targets and compensations for incremental innovation and a clear roadmap to form partnership in order to achieve radical innovation;

Step Five: Build relationships, in which the client firm and the vendor invest in mechanisms that support the ongoing development and renewal of their relationships as a complementary element to the contractual approach;

Step Six: Measure innovation, in which the client firm monitors and verifies meeting performance targets in incremental innovation and the health and performance of the radical innovation network.

By following these six steps, businesses can not only benefit from innovation in their own right, but also determine the monetary value that innovation (including that delivered by your partners) brings to the business.

In the same way that innovation is all encompassing, yet hard to truly pin down, the current outsourcing trends and future predictions are truly demonstrating just how business is akin to innovation in many ways. As businesses and enterprises become increasingly comfortable using a global delivery model to execute large and complex transformational engagements, they must harness innovation effectively to enable the future of work and unlock enterprise value by leveraging and realigning people, process and technology. In turning volatility into an opportunity to create competitive advantage, businesses will help drive the economy as well.

Innovation has no barriers, whether geographical or financial. It’s about tapping into it, wherever and however it is generated. And measuring it. That’s the key to continued innovation.

Schools should be run for a profit, and teachers given shares, says the conservative Policy Exchange.

The report advocates pilot schemes social enterprise schools in some of the most deprived parts of the UK. Schools would be permitted to distribute 50% of any surplus as a dividend to shareholders. The remaining 50% would be required to be reinvested in the school.

Head of education at Policy Exchange, James Groves, said: "Given the huge challenges which our education system faces in the coming years, the government should continue to push the boundaries of the status quo. This report challenges the idea that there is simply a choice between for-profit and not-for profit schools. A John Lewis model of school where private companies, including teachers and school staff are encouraged to personally invest offers one such innovative alternative."

Suffolk County Council has shelved plans to focus wholly on outsourcing. Yet Suffolk’s central government funding has been cut by 28% and needs to save around 50m over the next two years, in addition to the 43m cuts already made.

It was planning to on closing two-thirds of its libraries, but the Industrial and Provident Society (IPS) plans to save 44 of them. The council-formed social enterprise aims to have lower overheads, and its charitable status will allow it tax breaks and potentially grant funding.

Suffolk County Council will retain statutory responsibility for library services and will remain accountable for the county wide network.

IBM is helping businesses ramp up security by enhancing its Q Radar Security Intelligence Platform. QRadar now includes a link to IBM X-Force, a security service that monitors 13 billion security events per day.

"The new integrations can detect when multiple failed logins to a database server are followed by a successful login and accessing of credit card tables, the followed by an upload to a questionable site," said an official statement.

"By applying analytics and knowledge of the latest threats and helping integrate key security elements, IBM plans to deliver predictive insight and broader protection," said Brendan Hannigan, IBM security systems, General Manager.

Online charging and policy management services provider MATRIXX Software and Capgemini have partnered to take their clients to the next level of mobility.

The partnership will deliver a new app that offers visibility and control of data services across mobile networks.

Communications Services Providers with "Mobile data is the main driver for growth in the Telco industry for the years to come. Capgemini is anticipating these future needs and, with MATRIXX, we now have the technology to deploy smart charging and policy on a commercial scale," said Dee Burger, of Capgemini’s telecom, media and entertainment practice sector.

Atos has introduced the MyCity, which will allow the people of Barcelona to interact with their city via ther mobile phones. The app is developed by Atos and hosted on its servers.

Services are set to include: FixThis for reporting geo-located photo incidences with smartphones, Next2Me to look up nearby services, City Transport and iBiking, City Agenda for leisure and culture events based in geo-location search, City Traffic, M-Parking, and City Beaches.

Barcelona City Council CIO Manel Sanromà said he has received positive feedback from citizens that “clearly demonstrates that we have filled a need, a need of more connectivity and facilitate access to municipal services for the citizen at any time and from anywhere," Sanromà said.

A new venture led by Verne Global, a British company, will create the world’s first data centre powered exclusively by hydro-electric and geothermal energy.

Under-sea cables have been laid to combat Iceland’s previous lack of connectivity, and Iceland hopes to reposition itself as the green data centre capital of the world.

Cold air is pumped from outside to cool the equipment – this use of natural resources not only makes not only it green, but cheap. The centre is neighboured by a geothermal power station that creates energy from the ultra-hot volcanic ground beneath.

Iceland’s Foreign Minister Ossur Skarpheoinsson said: “This is the beginning of a new chapter of the industrial life of Iceland. When something is new, you need someone to go first. Verne is a pioneer. It is an icebreaker.”