Industry news

The European Commission is to establish the European Cloud Partnership, which aims to bring together public sector organisations and the IT industry to work on commons requirements for cloud procurement, said Neelie Kroes, the vice-president of the EC with responsibility for Europe's digital agenda.

Speaking at the European Cloud Partnership World Economic Forum in Davos, Switzerland, Kroes promised that the commission would invest an initial €10m in the partnership. It will be set up in 2012 and its first results are expected the following year.

buyingTeam, Europe’s leading provider of end-to-end procurement services, announces that it is to transition to a new brand and, from 20 February 2012, will be known as Proxima.

The move reflects the scope and range of services that the company now offers its portfolio of blue-chip, multi-national clients, driven by the growing importance that businesses place on procurement as a strategic corporate function in today’s challenging economic environment.

2012 also sees Proxima expanding its offering into the North American market. With some large outsourcing assignments already underway in the United States, Proxima has a platform from which to grow its presence in the market and translate its track record of delivery for clients on both sides of the Atlantic.

Matthew Eatough, CEO, Proxima, said: “Over the years we have evolved along with our clients to reach this market leading position and gain their trust as an advisor. Changing our name to Proxima reflects that progress and our ambitions for the future. Our growing portfolio of highly-respected clients is testament to the skills and experience of our people."

Worried over the adverse fallout of protectionism, Indian finance minister Pranab Mukherjee on Monday said if the US stops outsourcing jobs to India, profitability of both the economies will be hurt.

Mukherjee said: "If the US stops outsourcing jobs from India to some extent profitability of the economies will be affected."

The FTSE 100 security group G4S is set to replace its roster of corporate advisers and brokers this week as punishment for not buying the Danish cleaner ISS.

The chairman, Alf Duch-Pederson,has announced that he is to quit after the £5.2bn proposal, which would have made G4S the world's biggest cleaning and security group with 1.2 million employees, failed to get shareholder support in November. However, the G4S board believes that it can only regain credibility by also axing some of the advisers on that deal.

The Technology Strategy Board has announced that it will establish a Catapult centre for the connected UK digital economy.

The new Catapult is a technology and innovation centre which will accelerate innovation and stimulate growth in this important area of the economy. It will bring together technological expertise to help the UK’s world-leading digital businesses to develop, test and apply new technologies, reducing the risk associated with creating hugely profitable products and services in the future. The centre may focus on areas such as:

- How digital media and content are traded and used - in order to find sustainable ways to help businesses co-operate to create profitable services;

- The pervasiveness of digital services - addressing the impact of new technologies and systems such as cloud computing and identity management, as businesses and industries become more digital;

- The blending of digital and physical worlds - looking at how our devices, clothes, cars and other consumer goods become better connected to enhance our physical lives.

800 job cuts were yesterday as outsourcing giant Serco consolidated functions following a series of acquisitions and administrators of Thamesteel cut most of its workforce.

Serco, which delivers back-office support for a range of industries including banking, insurance, travel and healthcare, is merging its business processing operations into a single global division.

The move will be combined with an overhaul of its UK management structure.

In 1979 Joe Strummer sang about being lost in the supermarket of life. Today’s CIOs and IT procurement teams face similar challenges.

IT expenditure and value for money are coming under increasing levels of scrutiny. Unlike the heyday of the 1980’s, people do sometimes get sacked for making what appeared the safe and obvious choice.

The sourcing of external IT services is now a complex and potentially risky activity. I’d like to shed some light on the ever-changing world of IT sourcing strategies.

Continuing with the supermarket analogy, the choices appear somewhat aligned. CIOs can adopt the following strategies:

• The home delivery: take a traditional one-size-fits all approach to outsourcing, engage with a global outsourcer, taking the good with the bad for the sake of convenience

• The low-cost international supermarket: engage with a pure offshore provider who delivers volume, commoditised, services at lower cost

• The local supermarket: select your mix of branded and own-brand products satisfying the majority of your requirements, whilst also retaining the option of shopping elsewhere

• The corner shop: niche single-product providers where you need to pay for additional shoe leather to manage multiple providers in parallel.

I can’t claim this supermarket analogy as my own. About a year ago, we were delivering a managed service for a number of client Microsoft databases, and the client contacted us to ask if we would also be able to manage their Oracle ERP solution as well. The client had previously received their ERP services from a larger, more commoditised, provider and felt that the flexibility offered by a more ‘local supermarket’ approach better suited their needs. By delivering these seemingly disparate services within a standard service engagement framework, the client gained trust and confidence in the services delivered before committing further.

This selective outsourcing approach is becoming more common in today’s battle to balance cost against quality. CIOs and IT procurement teams are continually being challenged to show a tangible return on investment in the form of true business value from their external sourcing activities. Selective outsourcing means a move away from the all-or-nothing perception people have of outsourcing IT services. It allows you to keep key technology people in your business as the bridge between the technology and the business, whilst simultaneously providing commodity services or those that are too niche - or expensive to find and retain - under a framework that works.

Selective outsourcing also provides the ability for a CIO to blend internal skills that are key differentiators to their business with these ‘selected’ outsourced skills. There’s a common misconception that outsourcing means giving it all to someone else to run – who doesn’t understand what the business is trying to do, which is why many CIO’s shy away from it. Thanks to selective outsourcing, this is no longer an all-or –nothing choice.

What type of store are you looking for?

All too often the I.T. selection process by-passes the first step which is to ask: what type of provider do I want?

Take for example, an ERP solution. Many buyers would look for a provider who specialises in that particular ERP platform – the corner shop analogy. Surely they are the best people to manage that solution? But what happens when you end up with a multitude of specific providers all interfacing with each other through the IT fabric of your business? As the client, your energies are expended on managing this multi-sourced arrangement, and the entire business-case for external sourcing becomes more questionable. Without a robust Supplier Management function, and flexible yet clear contracts to underpin it, this approach can very quickly become a tangled-web of unclear responsibilities and conflicting supplier commitments.

At the other end of the scale, the buyer may elect to use their Home Delivery Company (maybe in the form of their outsourced infrastructure provider perhaps) to provide the ERP support? This gives them a single supplier to manage doesn’t it? Well, maybe not. The service providers are also under the same pressures as the IT department to maintain that cost vs. quality equilibrium and, unless it is one of their core service offerings, they will be: (a) taking a risk with your core business application by overextending their capabilities or; (b) sub-contracting the services to a niche provider. Either way, your business is more exposed than you might think.

And the low-cost international supermarket choice of global offshoring? This works extremely well when your Supplier Management team is a mature, established function with experience of working with such organisations. With the ever-changing global economic climate are you prepared – and contractually permitted – to move those services to lower cost markets when the supply moves elsewhere?

In part 2 of this article, I’ll discuss how to choose a selective sourcing shortlist and some of the key considerations before making a selection.

Social networks are changing the way that businesses innovate. The crux of innovation is to detect where, when and how trends are evolving, where the trends will lead, and also what these signal about future trends that are not yet obvious. Analytics are therefore key to a good innovation strategy, and by analysing what is being said on social networks, businesses can detect what the current trends are as well as helping them to predict and shape future trends. Predictive analytics should be about looking forward to make fact‐based decisions about what might happen versus looking backward to understand what has happened.

So how can businesses make use of social networks to predict and shape future trends? Step one is listening to what people are saying about you on social networks, as social is where they are talking about your company, your products, and your services. Traditional focus groups, surveys and market research studies won’t cut it in today’s connected world. Today, we need to be actively listening all the time to our customers, influencers, competitors and communities of people that can impact our businesses. Social media have established a constant flow of conversations, so if you want to have the very best analytics possible, then you first have to have the means to listen to the flood of chatter.

An example of a listening post is Dell’s Ground Control, which tracks on average more than 22,000 daily topic posts related to Dell, as well as mentions of Dell on Twitter. The information is sliced and diced based on topics and subjects of conversation, sentiment, share of voice, geography and trends. Knowledge is power and by understanding your customers needs and desires businesses can develop innovative products to quench demand. Such systems must also be on the lookout for third parties with alternate agendas as well as customers, as they could post trolls, using capabilities similar to those that can be found in Persona Management Systems, to raise negative points.

Persona Management Systems, more commonly known on the World Wide Web as sock puppets, trolls and drones, provide a single user with multiple online personas. This system creates all the online background that a “real person” would posses including, history, supporting details, and cyber presences that are technically, culturally and geographically consistent. This provides the persona with a disguise that users can put to use in creating the impression that there is major support, or discontent, for what an organisation is trying to achieve.

Using sock puppets, trolls and drones dives directly into deep waters of business ethics. By using these tools businesses actively mislead customers to believe statements that are not necessarily true. Using capabilities similar to those that can be found in Persona Management Systems, some businesses infiltrate social media to conduct psychological cyber warfare by creating the illusion of consensus. And consensus is a powerful persuader. What has more effect, one person saying the BP wasn’t at fault for the Gulf oil spill? Or 500 people or sock puppets saying it? For many people, the number can make all the difference.

Having a strong voice across social media platforms is important for innovation, as you can hear what your customers want, as well as guiding them towards a product that they could desire. If a business is thinking about launching a new product and they want to drive demand, then creating consensus or the illusion of consensus can help persuade potential customers to keep an eye out for your new release. The more excitement a business can raise around a product, the more people will eagerly anticipate buying the product.

Social networks are an important part of an innovation strategy, as businesses can use these networks for analytics and to influence demand for products/services. Social networks provide a cheaper alternative to focus groups, surveys and market research. Companies must listen to the chatter on social networks as this can help them to predict future trends, as well as see what their customers want. Businesses can also use social networks to guide their customers and create a buzz around new products and ideas.

The role of learning and development (L&D) managers encompasses a huge variety of activities and responsibilities. Indeed, the role continues to get ever more complex, encompassing such activities as nurturing talent by providing the bespoke learning interventions which meet the needs of the business, managing an L&D budget, supporting executives and the company vision with a leading edge, cost effective L&D strategy and supporting the development of the culture. The list goes on.

As a means for the L&D manager to avoid juggling multiple tasks, outsourcing various elements of an organisation’s L&D department is a an obvious choice in the current climate. As is often the case with outsourcing, it also has the added bonus of saving costs and protecting the bottom line. It frees up time for the training team to work on more strategically important tasks and projects, leaving the outsourced partner to deal with the non-core administration activities.

Heads of L&D need to approach their external providers with the intention of fostering a ‘business partnership’ where both parties are clear on the responsibilities. This can be achieved by, for example, allowing the provider to engage in internal communications, including them in management meetings or allowing them to add value by bringing new and innovative ideas for consideration and the latest thought leadership around L&D. One of the essential ingredients to ensure both parties are clear on their responsibilities is the use of a SLA and KPI’s. It’s vital that the provider understands the organisation’s business, culture, core processes and overall business objectives to ensure the best results from L&D and ultimately the most effective use of budget.

To ensure that the outsourcing business partnership actually works for the organisation it is absolutely vital to have a managed service level agreement (SLA) in place beforehand. Broadly defined, an SLA is a contract that specifies the external provider’s obligations, usually in quantifiable terms. Negotiating definite objectives and expectations with the training provider effectively lays down a blue print for the ultimate success of the project. By recording a common understanding about what the learning priorities are, the partnership can establish achievable metrics against which objectives can be assessed. The L&D supplier needs to define for itself what benchmarks are essential, which are favourable but not entirely necessary, and those which are not important.

One of the more challenging aspects to manage is ‘strategy’ – it could be argued that this responsibility lies totally with the Head of L&D and is purely communicated to the provider. On the other hand using the ‘experts’ i.e. the provider, to support the development of the L&D function divides the responsibility of strategic development between the two parties.

By forcing the training provider to translate performance into metrics, the SLA also ensures accountability and responsibility. SLAs provide a means to justify the long-term value and ultimately, the ROI of outsourcing.

A well-constructed SLA is the keystone to a true business partnership. The initial discussions to negotiate deliverables and desired outcomes lay the grounds for future dialogue and the exchange of ideas. In contrast, if the SLA does not create realistic expectations from the outset, it can potentially destroy the relationship with the training provider and may end up making the whole outsourcing project a costly mistake.

Informal Pre-procurement Conversations with the Government

26th January 2012

Due to misconceptions and over-interpretation of EU rules, sophisticated pre-procurement conversations were something that outsourcers only dreamed of. Now following Francis Maude’s statement: The Crown & Suppliers, a new way of working, those dreams are about to come true.

The NOA Masterclass, Informal Pre-procurement conversations with the Government, was hosted by Yvonne Williams and featured three key speakers who shared their insights on informal conversations with the Government.

Ian Cartledge is a senior Business Development Director at Teleperformance UK specialising in the Public Sector. He has over 20 years’ experience of working in the Business Process Outsourcing and contact centre industry.

Ian presented on how suppliers can be proactive with Government before the start of a formal procurement process, without it being seen as creating bias and unfairness in the process.

Ian said: “What should come before procurement is ‘Market Consultation’. The cost of public sector in France is £19,000 – and in the UK its £46,000. It typically costs four times as much to bid for a public sector contract than it does overseas. This can possibly be reduced through early talks.”

Ian emphasised that an open dialogue should be:

• Planned, transparent and universal

• That goes beyond the “usual suspects”, a range of views from a range of potential providers

• It is early enough in the process so that Government bodies can seek or accept advice that may be used in the preparation of the specifications

Technical dialogue sessions or supplier days are a great way to engage

• Gathering reliable information from the supply side to help build confidence in the viability of an effective procurement

• They are seen as vital in terms of obtaining market intelligence about what types of solutions may be out there

• Supports the design of a fit-for-purpose procurement, one that is lean (thus saving on process cost) and one that will deliver better outcomes

• Provides the foundation for a well thought out and researched PQQ and ITT providing the right information first time round for companies to respond to

• Allows companies to ask specific questions to perfect their bid rather than just trying to collate basic information to enable a response

• Helps build knowledge – having an understanding of what is being tendered, and when, helps companies to plan

Ian Hamerton, National Contact Centre Manager, NHS Blood & Transplant, has managed significant and lasting improvements in the service provided to donors.

Ian shared his experiences of purchasing processes and offered tips on how to get the best out of a pre-procurement meeting along with the process of retendering or putting together a new contract.

Pre-Procurement Meeting

• Acknowledge differences of interpretation with good grace

• Give everyone the same answer to the same question

• Ensure everyone at this stage knows what every question is

• Understand that most will not share their concerns in open court

• Try to anticipate issues and provide answers

Retendering or New Contract?

• If re-tendering be absolutely certain no routine contact with the incumbent delivers preferential knowledge or understanding

• Existing suppliers need to guard against complacency

• If a totally new project ensure everyone who applies receives the same information

• Potential suppliers must respond in the manner, format and with the information asked for – particularly important with the onset of computerised purchasing tools

Mike Ferguson is Head of Operational Procurement at Land Registry. Mike manages a team of procurement professionals primarily responsible for IT spend covering categories including hardware, complex software deals and professional services. Mike also leads all major IT procurements and has considerable experience of supporting major IT change management programmes and latest EU Public Procurement Regulations.

Mike shared his practical experience of pre-market engagement through ‘Concept Viability’.

Concept viability is facilitated by Intellect (trade association UK technology industry). Business needs are collated then circulated to a list of suppliers. Intellect facilitates a report based on findings which is fed back to the land registry.

Mike said: “Land Registry was the first organisation to use concept viability – a process which engages a whole market sector with ‘what is the broad approach of what we are trying to do.’ We see engagement with suppliers before the procurement process absolutely invaluable.” Benefits include:

• Market warmed up

• Senior management support

• Good way for suppliers to interact

• Market intelligence, market capability, market feedback

• Critical review of requirements

• Early visibility of risks

• Help design the procurement process

• Better outcome

The panel discussed various questions from the floor at the end of the session including:

• Do existing suppliers get preferential treatment?

• Has legal intervention increased during the procurement phase?

• Do long-term incumbents really lose a re-tender?

• How can international suppliers feed into the government?

• Can SME’s really win government contracts from the big players?