Industry news

Swisscom, Switzerland's mobile and fixed operator, has entered into a five- year contract with Ericsson for mobile-network modernization and upgrade to LTE.

As per the agreement, Ericsson will modernize 6,000 mobile sites with its RBS 6000 multi-standard radio base stations and optimize all of Swisscom's networks.

The operator's mobile-data users will benefit from faster speeds as a result.

Mozilla announces new negotiation with Google to make their search site the default for firefox for a further 3 years. This new agreement extends thier long term search relationship with Google for at least three additional years.

“Under this multi-year agreement, Google Search will continue to be the default search provider for hundreds of millions of Firefox users around the world,” said Gary Kovacs, CEO, Mozilla.

“Mozilla has been a valuable partner to Google over the years and we look forward to continuing this great partnership in the years to come,” said Alan Eustace, Senior Vice President of Search, Google.

The specific terms of this commercial agreement are subject to traditional confidentiality requirements.

Procurement professionals face many problems in these difficult economic times as they strive to maintain supplies and drive hard bargains to preserve pressured profit margins, but one thing they can no longer afford to ignore is how their own company’s financial health is viewed by the credit managers at their key suppliers.

A sudden cut in your credit limit can interrupt supplies; in extreme cases it can bring down your company. Much of the carnage in the UK retail sector in the run up to Christmas 2008 was caused by credit insurers pulling cover and suppliers walking away. Woolworths was one of the most high profile victims of this scenario.

So buyers need to work closely with their finance departments and senior management to do all they can to present their company in the best possible credit light. Credit risk management is now high on the agenda of their suppliers.

Many of the solutions come down to nothing more than good housekeeping, like making sure your accounts have been filed on time. Over 80% of all UK companies that go into Administration or Liquidation had filed their last accounts late or not at all. It’s a big red flag for credit managers.

Lots of companies have old redundant charges still registered against their assets on their Companies House file, such as mortgages over properties for loans long repaid. Getting rid of these by filing a memorandum of satisfaction improves your credit profile, although you may need to be patient with the bureaucracy at the original lender, especially if the debt was repaid a long time ago.

Surprising numbers of companies have inaccurate descriptions of their business activities in their accounts, which can push them into a higher risk category, especially in this era of tick-box automated credit scoring models. Correcting this is straightforward.

One major change in the credit management industry in recent years has been the move to assessing risk on a group basis, rather than by individual trading subsidiaries. Crippling debt is often hidden away in a holding company or some opaque offshore subsidiary. The collapse of Oddbins in March 2011 was a perfect example, where the operating company looked perfectly healthy but the group was rotten to its financial core. If your company is part of a group, find out what the bigger picture is and neutralise suspicion by explaining the group structure and where possible, simplifying it.

No credit manager or their trade insurer can ignore a negative equity position in your balance sheet. Prima facie, your company fails one of the solvency tests set by the Insolvency Act. So do what you can to correct this, either by introducing more equity or by converting debt into equity, perhaps by agreement with your bank. Of course this can be tricky, but it may be an option if the move recognises the reality that the debt cannot be repaid. There may be management loans in the balance sheet. Much as it may hurt to lock these up as equity, it might be the answer to your adverse credit rating.

Excessive dependence on short term, on-demand debt such overdrafts is seen as a weakness in most credit scoring models. Think about turning all or part of this into a longer term loan, which will move it into a safer place in the balance sheet and improve your credit score. Better still, replace it with equity, but that may not be so easy.

Remember too that the information in the public domain about your company may be seriously out of date. Your 2010 accounts may not have been filed until the end of September 2011, so they are already nine months old and may reflect a much worse trading profile than shown by your current management accounts. Be prepared to share management information with suppliers to change their perception of where you are financially, including forecasts and any supporting data, plus news of positive developments in the pipeline

There’s also no need to lie down and just accept a cut in your credit limit. Get into a dialogue with your suppliers and where necessary their credit insurers as well. You may be able to do this yourself, or your insurance brokers may be able to help you broker better terms if there has been a misunderstanding, or if there has been a genuine improvement in your financial position. They may have a good working relationship with the credit insurer rating your company, which can assist in the negotiations.

At the end of the day, no supplier wants to lose your business in these tough times, but they also need to be convinced that you can pay them. Anything you can do to help them go on trading with you is in everybody’s best interests.

BNP Paribas and IBM has announced a six year agreement for management, support and maintenance services of BNP Paribas infrastructure through their joint venture BNP Paribas Partners for Innovation (BP2I) created in 2004.

BNP Paribas Partners for Innovation (BP2I) is a joint venture equally owned by BNP Paribas and IBM for managing IT infrastructures.

"Through this new agreement, IBM will continue to support the growth of the BNP Paribas thanks to the excellence of its services and to the high performance of its technologies," stated Jean-Laurent Bonnafe, CEO of BNP Paribas.

The Department of Health (DH) has appointed IT and business outsourcing firm Vangent to run the new Calculating Quality Reporting Service (CQRS), formerly known as the GP Payments Calculation Service (GPPCS).

The website for NHS Connecting for Health says the company was made preferred bidder at the beginning of the month, but a spokeswoman told GGC the contract has been signed and the new service is scheduled to go live in April 2012.

The CQRS is to replace the Quality Management Analysis System (QMAS) in calculating payments due to GPs. It is designed to support the transition to clinical commissioning groups commissioning healthcare services.

The hotel group’s new e-business platform will optimise customer experience.

Global IT and Product Engineering Services Company MindTree is pleased to announce that it has been selected as strategic IT partner for Millennium & Copthorne Hotels Plc’s latest e-business initiative.

The hotel group has selected MindTree to conceptualise, design, build and manage a new global e-commerce site that will transform the company’s customer service experience and increase its revenues through e-channels.

Traditionally relying on offline booking Millenium Copthorne is aiming to catch-up in a sector where online booking is becoming the most important channel. Its existing online booking system, which was built in-house, is becoming outdated and the new system uses Adobe content management and integrates with third party applications such as Twitter and Google Maps.

“We aim to transform the experience of our customers when they deal with us directly online,” said Clive Harrington, the hotel group’s Senior Vice President for Europe. “This is a vital part of our Group’s ambitious growth strategy for the next five years. Having thoroughly reviewed the market, we selected MindTree, who we are confident will deliver an efficient and effective service in taking our e-commerce offering to a new, higher level.”

Sage has launched One Payroll, the first addition to its highly anticipated family of software as a service tools, offering small business owners a simple, secure, low cost way to manage their payroll. Designed to help entrepreneurs who have no specialist payroll knowledge or IT skills to effectively and efficiently run their payroll, the software automatically takes care of all legislative updates and calculates statutory payments and deductions, giving business owners confidence that their payroll is accurate and peace of mind that that they are always compliant.

Sage One Payroll has been created to help firms with 15 or less employees to pay staff quickly and accurately. It contains a number of features that save entrepreneurs valuable time, including:

• Automatic recording and updating of P11 records;

• Retrospective correction facility that means if a mistake has been made with pay earlier in the year it is easy to correct and ensures employees are compensated in the current pay run;

• Ability to export data for payroll year-end reports directly to HMRC website, eliminating the need to re-enter data.

Chris Stonehouse, Head of Sage Online, commented: “Working over Christmas can prove quite challenging if you hit a problem but have no one to turn to because the support team are tucking into turkey. That’s why Sage One Payroll comes with 24/7 telephone support 365 days a year, giving business owners access to an unrivalled infrastructure of payroll expertise and software support whenever they need it.”

Jim Stikeleather, Chief Innovation Officer at Dell Services, discusses the three core types of innovation and how they impact on organisations.

Much has been written on the topic of innovation and people have categorised the types of innovation in various ways over the years. In Dell’s view, there are simply three core types of innovation: sustaining innovation, breakthrough innovation and disruptive innovation.

Sustaining Innovation

Sustaining innovation refers to the continual improvements in existing goods, services, and processes. This type of innovation focuses on incremental performance and productivity enhancements of existing products and services that come from improved or “innovative” materials, technologies, sources of capital, streamlined process flows, better employee training, improved supply chains, and many other ways. This type of innovation is generally, consumer driven. Six sigma methods, theory of constraints analysis, process re-engineering are all approaches that result in sustaining innovation which can generally be predicted in terms of costs to create, time to manifest and resulting value generated. As a consequence, the market generally expects and anticipates this form of innovation and factors it into its decision criteria and purchasing patterns.

Breakthrough Innovation

Breakthrough innovation is the introduction of new usage patterns and applications of existing technology, products and services in novel combinations of existing off-the-shelf components, applied cleverly to create a new value proposition within an existing business process or model. They can also be totally new business models or processes based upon existing technology, products and services. Breakthrough innovation could be considered a discontinuous form of a sustaining innovation because they create a new usage pattern that is unexpected, but are more predictable than a disruptive innovation as they can be somewhat anticipated.

It is important to note, that regardless of the type of innovation under consideration, the degree with which the innovation changes the way things are done, impacts on manageability, value and business continuity. At some point innovations move from being simply pragmatic (better, faster, cheaper ways of doing what we always have done) to being transformative, as a result of changing the entire way things are done.

Disruptive Innovation

Disruptive innovation is the introduction of new, radically different inventions, products, processes, or services into the market, which deeply impact on people’s lifestyles and purchasing patterns, to the extent of creating an entirely new segment of consumers.

This type of innovation can cause significant leaps in value delivered to customers, although historically, disruptive innovation has required longer adoption periods because it generally required societies to change their current behaviour into something very new and very different. Disruptive innovation is usually design‐driven and may result in the cannibalisation of our existing sales, as current products and services become substitutes for the new innovative product or service.

Often a disruptive innovation is the result of combining multiple breakthrough innovations. For example, the iPod was a breakthrough innovation on MP3 players due to factors such as its form and ease of use. Alongside this, the service iTunes was a breakthrough business model for the delivery of content. The two combined to create a content consumption disruptive innovation with technology, process and business model implications.

Disruptive innovation does not mean the elimination of previous technology, processes or business models, but does force them to change. Disruptive innovation can also bring with it unintended consequences. For example, the rapid movement to internet telephony has caused the loss of sustained operation with power failures.

S‐Curves and Innovation

Once innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process, the life cycle of innovations, can be described using the “s‐curve” or diffusion curve.

The s‐curve maps growth of revenue or productivity, against time. In the early stages of a particular innovation, growth is relatively slow because the new product needs to establish itself. At some point, customers begin to demand the new product and consequently, product growth increases more rapidly. Sustaining innovations, new incremental innovations or changes to the product, allow and encourage growth to continue. However, towards the end of its life cycle, the rate of growth begins to slow down and may even begin to decline. In the later stages, no amount of new investment in that product will yield a normal rate of return.

The s‐curve derives from an assumption that new products are likely to have “product Life,” i.e., a start‐up phase, a rapid increase in revenue and eventual decline. In fact, the great majority of innovations never get off the bottom of the curve, and never produce healthy returns.

Innovative companies will typically be working on new innovations that will eventually replace older ones. Successive s‐curves will come along to replace older ones and continue to drive growth upwards and potentially yield even greater growth than the previous innovations. In particular, successful disruptive innovations that have the power to create new divisions of consumers, will completely wipe out previous s-curves.

A typical disruptive innovation will induce at first, a slow growing s-curve that will (once consumers have adapted to the innovation) become sharp and steep, whereas a sustaining innovation will generate a more stable, gradual and longer s-curve. On the other hand, an s-curve reflective of a breakthrough innovation tends to sit somewhere in between the disruptive and sustaining s-curves: it is stable yet unpredictable.

Choosing your Innovation

When a company is preparing for innovation, it must measure what exactly its business needs now. If a company is looking for a major re-vamp of personality within its offerings then as long as finances can afford the possible slump of interest in existing products and services, alongside adjustment time, disruptive innovation is their best bet. Alternatively, if budget can’t fully accommodate such a change or full blown disruptive innovation is too big a step, then working on a break through innovation is a more suitable option.

This option not only offers excitement but incorporates reassurance into the package too. However, sustaining innovation, although driving smaller effects, should not be dismissed. Implementing sustaining innovation is crucial if an organisation wants to keep ahead of the game and meet the expectations of the demanding consumers, grown out of our fast paced, highly technological era. As Steve Jobs correctly pointed out, “you can’t just ask customers what they want…by the time you get it built, they’ll want something new.”

British telecoms firm BT has launched legal action against Google in the United States over patent infringement in a number of key areas for the technology group such as mobile map services.

BT, Britain's dominant fixed-line telecoms group, said in a statement on Monday that it had filed a claim with the U.S. District Court of Delaware for patent infringement.

The BT claim relates to six patents which BT says are infringed by such services as Google's highly successful mobile platform Android, Google Maps, Google Music, advertising services, gmail and other products.

The London borough of Hillingdon has announced plans to begin using Google Apps for Business early in the new year. It said it believes it will become the first local authority in the UK to take this step, which represents a significant move into cloud computing.

It has approved a plan to shift its 3,500 staff to using the web-based applications, which will include email, calender, documents, word processing, instant messaging and voice and videoconferencing.