Industry news

Cloud computing with Harbour IT Cloud Solutions aims to be more flexible and secure due to the firm's new partnership with CommVault.

Customers are able to have greater control to coordinate their own backups when needed.

"Our partnership with CommVault is a natural fit. Just like us, CommVault is committed to providing the highest level of cloud security available. Plus, our customers can benefit from the added flexibility and cloud computing options CommVault offers," says Adam Simpson, National Cloud Services Representative from Harbour IT Cloud Solutions

The government has confirmed that transition to the G-Cloud will be compulsory for departments.

Chris Chan, head of the software as a service (Saas) initiative, told the Business Cloud Summit in London that he estimated 60 percent of government decision-makers were not sure whether to take up the initiative, and 20 percent were “ready to go”.

“There’s still 20 percent that aren’t interested, however,” he said. “We know some will have to be dragged kicking and screaming, and they probably will.”

Outsourcing business functions has long been commonplace. Most large-scale manufacturers are now surrounded by clusters of firms that supply them with components. More recently, the outsourcing trend has spread to knowledge-led industries where businesses have embraced the concept, enthusiastically outsourcing IT, back-office, accounting, HR and many other functions. As outsourcing became more sophisticated, the idea of offshoring took hold. Advances in communication links combined with the rise in highly educated, cheap labour allowed firms to delegate large sections of their business to offshore companies for considerably reduced costs.

The success of offshoring has had some interesting implications. Intense competition from offshore resources with in-demand sector/product expertise has caused wage inflation in certain regions, such as India. Some financial institutions are now relocating their outsourcing and offering additional benefits to their employees in an attempt to retain and grow the workforce, pointing to an overheating of demand vs. supply in certain countries. In addition, the increase in wealth and growth of the middle class means more of the population is spending more time in education with the view to work in white-collar industries, potentially outside of their home country.

As a result, we are seeing ‘reshoring’ become more and more common. In the U.S. it has been reported that a rising number of firms are repatriating their manufacturing capabilities. There are many reasons for this, but two key factors are the increasing efficiency of onshore production and that large elements of the difference in cost between the U.S and, say, China has disappeared.

This trend has yet to fully take hold, but the dimensions have changed and it is easy to see this growing over the next few years.

The question for us is: will this trend in the manufacturing sector also hold true of the knowledge industries? Technological improvements now allow a more disparate workforce to work from home, which reduces overall costs and increases flexibility to a larger resource pool. In addition, the customer satisfaction of having a call centre based in a company’s home country is not to be underestimated. Whether this will develop into a major trend remains to be seen. The situation will be guided by a number of factors:

• Niche or commodity – some retail banks are already reshoring their call centres, showing that a local presence can be seen as a strong marketing tool. This will only continue to become more attractive with advances in technology and rising international costs and will spread from niche activities to more generic ones.

• It remains to be seen if the US and EU have the capability or desire to continue to outsource large swathes of their knowledge economies. As the recession bites and unemployment grows, it is likely that governments will provide tax breaks to dissuade offshoring in order to help with education, motivation and subsidy

• As China and India continue to grow, offshore costs will continue to rise. Add this to the growth of domestic wealth in emerging nations, which will increase demand from within and, therefore, reduce the opportunity for external companies. There are however, other new offshore countries on the rise, such as Vietnam and Brazil, and Africa is seen as a long-term potential growth area.

So the offshore winds that the UK and other countries have been experiencing may be changing direction. The picture is, of course, more complex than this and countries and organisations will try and adapt to counter this change in climate. We think that the sourcing mix will continue to change and develop with multiple financial, regulatory, client and political factors deciding outcomes. Reshoring is just one area to be considered in this debate and we are watching it with interest.

After the invention of the plane, a couple of decades were all it took for airlines to be transformed into a full-fledged & thriving industry. Global growth in business transformed flying from novelty to necessity prompting the entry of many players. Enhanced safety & popularity of flying generated ‘statistical noise’ in demand-supply forcing airlines to continuously realign themselves to market shifts. The entry of low cost carriers (LCCs) further desecrated the airline business landscape. These nouveau players have also nibbled on the traditional pie of network carriers including intercontinental travel.

Increasing commoditization of flying resulted in airlines discovering the power of loyalty programs. Today, airlines are concocting a potent cocktail of loyalty programs & rich, personalized customer experiences in order to retain as well as lure customers from competitors. Despite their ubiquity, frequent flyer programs (FFPs) backed by advancing and robust CRM/Loyalty technologies have continued to be popular. FFPs are adapting fast to disruptive times and continue to aid airlines in their battle for retention.

Particularly vulnerable to political and economic fluctuations, increasing input costs like rising fuel costs, airport tariffs, taxes and price sensitive customers, the travel industry has been a victim of intense competition as well. Seeking new economies of scale, capturing customer mindshare and cultivating loyalty is critical to its existence. The most potent enemy of the industry is perhaps ‘CUSTOMER CHURN’ as it carries a hefty price tag. Significant amounts have to be spent to identify and secure new passengers who have left. The quantification of costs and benefits of customer retention is now an accepted concept.

In order to survive in a volatile environment, there is a scramble to adapt business models. This includes streamlining & enhancing operational efficiencies by higher levels of automation, introduction of new distribution channels & other cost reduction measures without compromising on service quality. And one of the significant measures to increase operational efficiency has been the adoption of outsourcing. Outsourcing is not new to the travel domain as travel companies, especially airlines were its early adopters. They were pioneers in automating and outsourcing inventory, data & revenue management systems, fares related services, contact centres etc. Outsourcing partnerships in the airline sector has seen considerable evolution in the last decade. As per McKinsey, the global BPO market is worth around $122 - $154 billion out of which 7-8% is travel BPO services. The realisation that outsourcing enables staggered spending thereby reducing risks and ensuring better ROI in an unforgiving economic environment has fuelled its popularity.

While loyalty implementation services were outsourced, Business process outsourcing (BPO) at process and platform level gained popularity relatively recently. Travel industry is discovering the benefits of embracing emerging technologies and specialized IT services to not only improve operational efficiency but also create business differentiators. Technology specialists in outsourcing companies design the architecture of a platform to support airline’s business applications. The system landscape is optimized for trouble-free scalability and enables reconfiguring during scheduled maintenance periods without lengthy downtimes. The platform includes database servers, web servers, data storage and backup subsystems, as well as operating software, clustering, testing and backup programs.

Benefits of outsourcing include substantial reduction in cost structures, making costs variable, maintain focus & retaining customers despite shrinking operating budgets, planning & managing inventory, benefiting from shared services costs & continue to deliver improved services, transform legacy processes for streamlined and increased efficiency & effectiveness. Outsourcing solutions for airlines are extremely technology oriented compared to other industries. The industry has its own complexities arising from, changes in business model, product and service offering dynamics .like multiple fare models, IRROPS, baggage handling processes, interline & code share agreements.

It is important that the outsourcing company understand the nuances of the industry including that of Frequent Flyer Programs. What airlines seeking is a strategic relationship with technology partners with in depth knowledge of their business. Busy adapting to changing circumstances, airlines are seeking a technological jump start that will help in re-engineering existing business models infused with agility and flexibility. They want to adjust their IT internally and free internal IT teams from peripheral tasks in order to focus on technological strategy, innovation and core business-facing issues. The outsourcers have realised that they have to bring valuable experience of having worked with multiple airlines to be able to make credible improvements. The organisations providing specialised outsourcing services have made introduction and administration of feature rich FFP/loyalty programs a reality. The choice of technologies serving to build customer loyalty and retaining the most valuable ones is widening. Trends are suggesting that airlines are increasingly exploring the outsourcing of CRM/Loyalty activities not only to reduce costs, but also to generate new customer relationships and grow them apart from accessing world class technology and domain capabilities.

With airlines seeking to build and establish strategic partnerships with outsourcing companies, they have lived up to expectations by investing in innovation, new services, extending product and support provision into taking on the fulfilment and providing software and technology as a service. There are many players in the outsourcing industry who provide integrated IT & outsourcing services across the entire spectrum of the airline domain. Automation & technology have a vital role in optimising all business processes including frequent flyer programs. For decades, airlines have relied on technology for provision of enterprise wide services. Rapid changes in business models are further leading to large scale transformations in IT and BPO operations.

The benefits of outsourcing go beyond enabling a more intense focus on core competency. Today, it can also create real competitive differentiation. A strategic outsourcing partnership can give start-ups and network carriers a technological jump start as well as provide business transformation consultancy.

Cloud computing offers a range of benefits to SMEs. But there are many different options with cloud, both in terms of what it can offer you and how you can access it – and this can be confusing for the business owner.

IT as a Service now comes in so many shapes and sizes. There is Platform as a Service (Paas), Software as a Service (SaaS) and Infrastructure as a Service (IaaS) to name but a few. Indeed, just about every kind of IT resource you can think of is available as a service these days. This sounds great – but company directors still need to remember the essentials of purchasing IT.

If you’re considering a move to the cloud, youneed to remember two key points. As we have seen, it is perfectly possible to outsource the provision of some or all of your IT – whether infrastructure or applications - but ‘service’ and ‘management’ of these IT provisions remains your responsibility, and you will need to allocate resources to make sure your IT function is still performing as it should do.

Furthermore, there is no need to simply replicate your old IT model in the cloud. Indeed, the cloud enables you to think bigger. Cloud computing has democratised technologies which used to be the preserve of large enterprises, and made them more accessible for SMEs. Think about how you might take advantage of that.

In order to gain the greatest benefits from the cloud model, IT services need to be at the centre of any cloud computing strategy. With the right approach, you’ll be able to transform simple IT ‘provision’ into an agile service that frees you from legacy in-house IT constraints.

For example, let’s say that you want to launch a new product. Using a tradition IT procurement model, you’ll first need to decide on the system that you want, then obtain quotes, calculate the capital expenses required, buy the equipment, and then wait for it to be delivered and installed. Even using conservative estimates, this whole process can take between three and six months, and will often tie you into a long-term service contract as well.

By comparison, a vendor that offers managed services via the cloud will typically have all of the equipment and functionality that you need ready and available, which means that the same project can be up and running in a fraction of the time. As a result, you’ll never to need to be hampered by a lack of resource. You can take the product to market much more quickly and easily.

Akey point to remember, however, is that buying a cloud solution doesn’t necessarily mean that you’ll be getting good service along with it. To give a very simple example, you might decide to buy a cloud-based version of Microsoft Exchange for your company’s email, and then think ‘perfect, that’s email sorted, we’re done.’

Unfortunately, it’s not that simple. With something like email, you’re bound to be adding new users with reasonable frequency, and also setting up distribution lists, creating new mail folders, disabling accounts and so on. At the moment, many SMEs are being led to believe that their cloud vendor will help with all these tasks, but that’s not always the case.

By making sure that professional IT services form a key part of your cloud strategy, SMEs can benefit from extraordinary agility and flexibility and at the same time be assured of the service quality and day-to-day support. In fact, by combining cloud computing with managed services in this way, IT resources can simply be scaled up – and then scaled down again – as and when needed, both quickly and affordably.

For all of these reasons, even if you choose to implement what seems like a ‘straightforward’cloud solution, you’ll still need to think carefully about the role ofIT services. This critical ingredient will play a key role your cloud computing success, sinceyour IT systems will still need to be integrated and managed properly in order to derive the greatest value from your cloud computing investment.

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Using social media to drive sales is not just about having an online presence on Facebook or Twitter, but instead, using new platforms and technologies to change the traditional purchasing process and subsequent customer relationship.

More often than not, traditional ways of engaging with customers are being superseded by social strategies which allow customers to listen and respond to individuals on a one-to-one basis, using tools that can gather real time data allowing brands to act in ways and at speeds that were never before possible.

Is ‘going digital’ the key to driving sales?

‘Going digital’ really means 'going interactive' with additional channels to reach customers, both current and new. Take luxury brand Burberry which is using ‘Tweetwalk’, to launch its new fashion collection on Twitter, allowing the company to not only connect with its customers but to also drive footfall online to research the brand before buying in store or over the internet.

Through more flexible social engagement strategies companies are able to support and nurture the customer through the purchase funnel – from visibility, through enquiry and ultimately to sale. Technologies exist today which allow you to track the customer journey, map influential online communities and can be used to shape marketing and product strategies in real time.

Ultimately digital channels have to be convenient, entertaining or preferably a combination of the two. Fortunately overlaying your social strategy with richer content has become more affordable as the technology proliferates. More and more companies, today, are using video blogging for example, showing a real human element to online communication whether via ‘pushed’ video guides highlighting say, installation instructions or via ‘community contributions’ helping share learnings across all customers. These all provide rich content for customers when researching a purchase.

But digital activity must go further than the cash register because what follows the purchase has a profound effect on future sales given the greater ‘collective memory’ of the masses.

Understanding customers’ needs

Thankfully there’s now a real opportunity to actively engage with customers post sale – whether that is by simple surveying or by tracking negative comments on sites such as Facebook and Twitter. This can demonstrate the company’s commitment to fully understand and resolve customer concerns or demands as well as providing a way to prevent complaints from escalating on highly visible sites.

Of course, there’s no magic formula to driving sales through social media, it’s a combination of having a good product in the first place – using social media effectively and being able to track and respond effectively.

To do this you must analyse data across all channels – for example, evaluating how much traffic can be redirected from your customer advisors to online resources allowing them the time to provide greater service when they do speak with their customers. Or being attuned to positive or negative mentions in social media – taking a decision to intervene or stand by as your reputation is discussed in social forums.

Your customers are better connected than ever. You can’t afford to ignore them.

An innovative public-private partnership is set to improve transactional services for Slough Borough Council, delivering £26.5m savings over the next ten years and bringing new business into the town.

The partnership with global business process outsourcing group arvato will see £3.8m being invested into transforming services such as revenues and benefits, payroll, finance services, HR and logistics services. The partnership will go live on 2nd April 2012.

arvato has also guaranteed the creation of 100 apprentice positions, who will be trained to NVQ Level 2 in contact centres.

Rainer Majcen, managing director, public sector, arvato UK & Ireland said, “Our approach to enhancing services and achieving cost savings is based on investment - in infrastructure, technology and people – and a fundamental belief in collaboration.

HP has announced a 7 year services deal with Swiss-based global agribusiness Syngenta Crop Protection. The agreement will see Syngenta moving parts of its technology infrastructure to a private cloud environment using HP Cloud Computing Solutions, giving the company real-time data access and thereby allowing it to adjust quickly to changing business conditions.

“Syngenta has embarked on a new era of productivity and innovation to help growers around the world,” said Martin Walker, head of Business Services, Syngenta. “HP complements our global reach and we value HP’s expertise in the latest technology innovation as a trusted infrastructure services supplier.”

A group of NHS trusts in London are planning to outsource the buying of medical accessories to a private hospital group to cut costs.

The trusts are discussing a 10–year deal with BMI Healthcare, which operates 70 private hospitals in the UK, to buy medical consumables such as wound dressings.

The four trusts are Guy’s and St Thomas’ NHS Foundation Trust, King’s College Hospital NHS Foundation Trust, South London Healthcare NHS Trust and Barking, Havering and Redbridge University Hospitals NHS Trust. The goal is to combine the buying power of the private group with the public sector.

The government has not in general measured the benefits delivered by its two central internet services Directgov and Business.gov, and the infrastructure service Government Gateway, which together cost some £90 million a year, according to a report today by the National Audit Office.

Government departments and other public bodies use Directgov, Business.gov and Gateway to provide information to the public and to support a range of government online services.

It is crucial that the Government Digital Service (GDS), established in March 2011 to implement a new strategy to deliver all government information services digitally, builds in the right mechanisms to achieve value for money as it plans the future of digital shared infrastructure and services.

Amyas Morse, head of the National Audit Office, said today: "It is a good thing that people visited the two main government websites some 200 million times last year. However, it’s still unclear what benefits have been achieved and at what cost. We cannot conclude, therefore, that the taxpayer is securing value for money."