Industry news

Bank of America has announced plans to cut 150 jobs at MBNA in Chester but create up to 1,000 new posts in a global technology and operations centre.

Another 100 jobs will be lost from the MBNA base in Ireland. In October, Bank of America Europe Card Services, which operates the MBNA brand, started a collective consultation process in Chester, where it has 3,200 staff. Around 400 job losses were forecast at the European credit card division.

Capita’s library division announces it is to support the UK’s first fully integrated university and public library.

The Hive project, a library and history centre bringing together Worcestershire County Council and the University of Worcester, has selected Capita’s library management system (LMS) to manage a range of library services. This will benefit over half a million citizens and over 9,000 students who will have access to more varied and numerous resources than ever before, including books and journals as well as local historic collections.

The LMS will allow the project to provide improved library facilities for users, with intuitive services such as a fully integrated catalogue and extensive self service features including payment of charges via kiosks. The single catalogue will allow citizens and students to join the service online, request items online and receive notifications via email and potentially SMS.

It will also enable efficiency savings to be realised by automating some of the back office processes such as managing interloan requests or enabling individuals to join the library.

Salesforce.com, the enterprise cloud computing company has announced it has entered into a definitive agreement to acquire Model Metrics, a mobile and social cloud consulting services company.

Model Metrics has more than 500 customers, including Blue Shield of California, Heidrick & Struggles, and Standard Register. With its focus on disruptive mobile technology, Model Metrics has completed more than 1,000 Salesforce deployments for companies of all sizes, including some of the Fortune 100.

George Hu, COO, salesforce.com, said: “We are thrilled with the incredible response from customers and partners to the social enterprise vision. The addition of Model Metrics’ mobile and social expertise will accelerate salesforce.com’s ability to lead the shift to the social enterprise and empower partners to develop their social enterprise practice."

UK’s largest LTE trial network launches to explore the technology before national introduction

O2 today will switch on the first 4G (or LTE - Long Term Evolution) network in the capital, offering a unique glimpse into the future of superfast mobile broadband. The trial, which will run for the next nine months, will see O2 equip hundreds of consumers, businesses and venue owners with the latest 4G technology and give exclusive access to the first and largest urban 4G network in the UK.

Over 25 4G sites will go live across London this month, covering a combined area of 40 square kilometres, between now and summer 2012.The network will stretch from Hyde Park to The O2 in Greenwich and has been carefully designed to cover key areas of the capital, including Canary Wharf, Soho, Westminster, South Bank and Kings Cross.

Intel Corporation and MasterCard Incorporated has announced a multi-year strategic collaboration to further enhance the security and consumer payment experience for online shopping.

The collaboration will combine MasterCard’s expertise in payment processing and commerce with Intel’s strengths in silicon innovation and chip-based security. It is designed to provide more options for a safer and simpler checkout process for online merchants and consumers using Ultrabook™ devices and future generations of Intel-based PCs.

“Our goal is to enable users of Ultrabook devices and future generations of Intel-based PCs to enjoy the convenience of e-commerce while making online payments safer from malware and hackers with the advanced security capabilities of Intel Identity Protection Technology,” said George Thangadurai, general manager of PC Client Services Division, Intel Corporation. “Online commerce is a key focus area for Intel, and through this partnership with MasterCard, we intend to deliver an innovative, personalized and safer e-commerce experience to consumers.”

Sunderland City Council and IBM has announced that they will provide a city-wide Cloud computing platform that will not only meet the Council's own needs, but that will stimulate economic growth for the benefit of the whole city by reducing the technological investment barriers experienced by start-ups and local companies wishing to expand operations..

Sunderland's Cloud is expected to reduce its own operational costs by £1.4m annually over the next five years, in the delivery of IT services through a reduction in hardware, software, maintenance and improved IT management. The Cloud will also provide a low cost, accessible and secure platform for use across Sunderland.

IBM will provide the planning, design, provision and implementation of the Cloud for server and end-user computing. The Cloud has been designed to incorporate existing hardware and software in order to be as cost-effective as possible, whilst at the same time providing the council's requirements in terms of: facilitating an agile workforce, improving the experience of 4,000 end-users, simplifying systems management and reducing carbon emissions.

Councillor Paul Watson, Leader of Sunderland City Council, said: “'The Cloud is a cornerstone of our Economic Masterplan. The new Cloud infrastructure will lay the foundations of an even Smarter Sunderland, one that ensures the city is internationally recognised as a model for its operations and a prime location for inward investment.”

The Prime Minister has used a key address to highlight a major new digital innovation project based at Greenwich Council’s Digital Enterprise Greenwich.

The council-run centre is playing host to a first UK ‘hub’ of Cisco Systems new “National Virtual Incubator” aimed at driving innovation and helping new businesses flourish.

It means Cisco – one of the world’s leading technology firms - is heavily investing in technology and IT at a number of ‘hubs’ or ‘nodes’ to make it easier for start-up businesses to communicate electronically and share data with each other.

Cisco officially launched the NVI this week along with Greenwich Council and other founding partners Ravensbourne, JANET (UK) and Birmingham Science Park Aston, home to the other first ‘hub’ alongside Digital Enterprise Greenwich.

In economic uncertainty, organisations do everything in their power to keep hold of their top talent. With that said, it is still important to ensure that the needs of the wider workforce, which may contain the top talent of tomorrow, are engaged.

A skilled and involved workforce is a critical differentiator for organisations in today's challenging business environment and requires a strong level of commitment from an organisation. Learning & Development (L&D) supports employee engagement by nurturing talent and assisting employees to develop. Outsourcing an organisation’s L&D needs can be a great way to continue that investment and also experience strategic benefits such as economies of scale around brokerage and supplier purchasing power.

Often there is a misconception that SMB’s L&D budgets are too small to take advantage of these benefits; however, this is not the case. We recently conducted a study at the World of Learning conferece and exhibition which found that medium-sized businesses are leading the way in providing a proactive L&D strategy; it is actually the larger enterprises that are lagging behind. They are missing a trick by not having a measurement strategy in place for L&D interventions. In a time of economic pressure it’s more important than ever to be able to demonstrate a return on your investment (ROI).

A well-planned and well-executed L&D programme can go a long way towards organisations improving their overall productivity, competitiveness and ultimately their profitability. Training can often be regarded by organisations as little more than a ‘nice to have’, a programme that has immediate impact on the performance of employees but not an immediate impact on the bottom line. On the opposite side of the coin, many businesses see L&D as a strategic investment and outsource L&D because external providers can often deliver more expert and varied training than can be offered in-house. There are many good reasons for an organisation to outsource their L&D needs and it is not just about making efficiency savings, the majority of companies who outsource do so because they feel they can ‘buy in’ better training expertise from outside the organisation.

Indeed, buying in better skills seems likely to increase in 2012. Our study showed that around 36% of small businesses forecast an increase in spending on outsourcing of L&D, citing changes in budgets or the business structure for their change in strategy. At the enterprise level, 8% expected an increase in L&D outsourcing as opposed to the 25% of respondents who intend to reduce spending in this area, all of whom said that budget changes were the major reason for their decision. For mid-sized businesses the picture was more balanced, with equal proportions expecting increases or decreases.

Large enterprises may need to rethink their strategy when it comes to their training. In an unpredictable economic climate, those organisations who do outsource their L&D activities are taking advantage of a whole host of benefits. This will fast become the preferred approach by organisations looking to focus on their core competencies as well as reduce risk, decrease costs and improve the efficiency and effectiveness of all training activities.

Many companies focus of course on price when measuring training spend, but they often fail to recognise that the majority of their training cost is swallowed up by the management, co-ordination and administration involved in delivering L&D activities which is where outsourcing training becomes important and cost effective. Learning Management Systems are one of many examples of ancillary costs that often have a negative impact on training budgets and training schedules. Inefficient training and management processes are a sure-fire recipe for wasting money. Outsourcing L&D not only secures a more engaged workforce, it takes the administration costs out of internal HR procedures and demonstrates a beneficial ROI to the business as a whole.

Outsourcing business IT operations to the cloud is a hot topic for companies at present. Many voices are extolling its virtues, with key benefits from cost reduction and increased business flexibility highlighted alongside the improved technological reliability associated with virtualised environments.

Michel Robert, managing director, Claranet, states: “There is also, however, a current of concern coursing through IT departments, as questions are raised about the service levels, security and increased reliance on networks that an outsourced IT infrastructure will necessitate. So what practical steps should you take if you are considering outsourcing parts of your IT infrastructure from in-house physical servers to a remote, cloud environment? There are five key steps that a business should consider when putting together a business plan for moving to an outsourced cloud.”

Step 1: Discover what your IT infrastructure consists of, and what it’s doing:

Michel continued: “The first step in determining if outsourcing your IT infrastructure is right for your business is to conduct a thorough assessment of your existing infrastructure and applications. As with all stages of this five-step process, this procedure is most effective when conducted with the help of a qualified service provider. It is crucial that they have proven expertise in identifying what IT components and functions are suited to cloud provision and which are not, and that they can execute a successful migration strategy.”

The fact is that some applications - such as network file sharing and phone switches - are not always ideally suited to a cloud or virtualised environment because they require either very high bandwidth or very low latency, or both. Compliance issues can also complicate, or negate the possibility, of moving some parts of a business’s IT infrastructure to an outsourced cloud environment. For example, the customer database of a financial institution, or an online retailer’s credit card transaction processing, are subject to regulations from the FSA and the credit card industry’s PCI-DSS rules, and as such the method of outsourcing these types of applications or functions needs careful consideration.

Step 2: Weigh up current costs vs. future benefits

“The next step is to compare the current state of your IT resources with what you would need to support the business’s plans, reduce maintenance costs, improve business process efficiency, and so on. We’ve found that, in almost all cases of outsourcing to the cloud, businesses that reduce their IT estate and centralise servers in a third-party data centre still have ample processing power and storage to realise these kinds of ambitions,” continued Michel.

“You then need to determine what your current spend on IT is. This is essential to building a business case for outsourcing your migration to the cloud. Unfortunately this is not always a straightforward process; it requires a comprehensive picture of your IT infrastructure, which takes into account costs for managing the entire IT estate. This should include costs for power consumption by servers, time spent on maintenance, hardware upkeep and refreshes, hardware disposal in accordance with WEEE and multiple data protection regulations, plus the additional expenditure of licensing operating systems,” he added.

It often takes people by surprise when they learn that the total power cost for fifteen servers, for example, can be around £6,000-£7,000 per year - largely because this spend is usually hidden in the facilities budget. This means that your project team will need to work closely with finance and facilities, as well as other areas of the business, to get an accurate picture of current costs.

Step 3: Look beyond the numbers

“It’s important to note here that the benefits of cloud are not limited to cost reduction alone. There may also be an opportunity to improve your business’s continuity strategy and disaster recovery plan. For instance, an added benefit of a managed cloud environment is that it can also make your IT services remotely accessible. Additionally, internal servers may not be housed in areas with appropriate cooling and power redundancy. Such qualitative benefits should also be considered in the project’s business case for migration.”

Step 4: Optimise your network for cloud

Michel added: “It goes without saying that without a network there is no cloud service, and yet the network is often an afterthought in outsourcing projects. If the network isn’t optimised for cloud services, then application performance will be marred and in some cases organisations may have to contend with disruptive downtime,”

“In general, network optimisation and moving to the cloud will almost always involve increasing bandwidth and introducing Quality of Service, which will necessitate an increase in a business’s spend on connectivity. This usually isn’t a deal-breaker thanks to huge reductions in the price of connectivity and improvement to service quality. Overall, the importance of the network to the outsourced cloud means that a cloud service provider with equal expertise in networking can help keep costs down and can offer added value to a project.

Step 5: Know your provider

If after consideration of the above steps you are committed to outsourcing to a cloud service, you must choose your provider carefully.

“There are several methods of identifying the right partner. Firstly, check out their references: what calibre of clients do they service, and have these cloud deployments proved successful? Speak to their references and find out first-hand if the vendor is living up to its promises,”

“Secondly, check the certifications: Microsoft Partner – Gold Hosting and a VM Enterprise or Premier Status are key; these are the highest industry accolades and are indicative of theknowledge, skills and commitment levels a vendor offers to help you implement technology solutions. It is also advisable to go in and see the vendor’s data centre in action. Not only will this enable you to assess the professionalism and security of the environment, but crucially it gives you a chance to talk to the engineers who would be running your platform, and establish whether you can foster a trusting relationship with the vendor who can, if suitable, assist your business’s move to the cloud,” continued Michel.

Lastly, pay special attention to the provider’s service level agreement(s) (SLA). It should guarantee things that are meaningful to overall business objectives, not just technical requirements. The cloud has huge potential, but there are varying levels of service. Outsourcing to a managed cloud isn’t a panacea for all IT ills; it is simply a means to help businesses get more of what they need from their IT function.

“Ultimately, by selecting an experienced vendor able to manage your IT infrastructure effectively, you will be able to focus clearly on your business whilst the service provider manages, supports and monitors your virtualised infrastructure to ensure system availability and efficiency. And, as stated, a cloud provider that has networking expertise as well, will help to ensure the network element of the cloud service is optimised,” concluded Michel.

An insight into history of loyalty

In the early eighties, loyalty programmes underwent a gradual metamorphosis to emerge in its more sophisticated form. Compared to its pre-historic coupon & cut-out avatars, the new models perhaps presented possibilities like never before. Adoption of these programmes by large airlines like American Airlines gave them legitimacy and made them practically fashionable. There is no denying that the ‘novelty’ of accumulating and redeeming points might have given a momentum to its journey.

Even during its teething period, loyalty programmes had to be a deliberate, objective-driven initiative that ensured adequate ROI to the company. The investments weren’t low and thus organisations that could afford and leverage the scope that a loyalty program presented were few. Perhaps it was this scarcity that made such programs novel and attractive. There seems to have been a paradigm shift in this very characteristic with the effects of globalisation slowly creeping-in with resultant hyper-competition shaking even established organisations by their roots.

Though the pickings were lucrative, there were too many pluckers for the swelling customer base. One of the easiest ways for aggressive new comers in the business world to advance their revenues was to poach customers from dominant, more established players. In their desperate efforts to retain their ‘valuable’ customers, organisations found refuge in loyalty programmes. Contemporary times are marked by ubiquity of loyalty programmes - they are almost everywhere. Most customers are members of many loyalty programmes thereby resulting in a paradox.

A shift in Loyalty

The worldwide glut of loyalty programmes has thrown a challenge to loyalty marketers. They have the tough task of reinvigorating the market with new strategies & tactics backed by imagination, innovation, data & of course advancing technology. Be it smart cards, RFID technology, real time point-of-sale (POS) terminals, wireless, the worldwide web or new generation of loyalty ‘rules engines’, technology has been in the forefront; producing new program designs that enable creative and imaginative ways of reaching out and engaging valuable customers.

Today the fundamental loyalty processes like enrolment, accrual, redemption, recognition, promotion can be executed with relative ease as well as larger reach. Contemporary smart technologies enable an organisation to capture member transactional data, filtering the data via a ‘rules engine’ which assigns both points and interventions, and the storage, reporting, retrieval of all member and program information from a centralised database. Ironically, sophisticated technologies have removed the cloak of anonymity from customers and brought them to the centre stage. Perhaps the bartering of privacy for rewards-tangible or intangibles like popularity and profligacy seems to be the emerging trend of the times.

Mid-Tier companies and Loyalty

In every business, a small number of customers contribute disproportionately to the bottom line. Identifying and focussing on them presents obvious economic advantages. The omnipresence and proven utility of powerful loyalty programs have tempted even mid-size companies to seek loyalty nirvana. It is again technology that is playing the role of a hero in this quest and in overcoming economic disadvantages of such companies via outsourcing that has repeatedly created business value. Outsourcing technology & program functions has proven to be convenient and cost-efficient strategy.

Loyalty programs today can bring around benefits such as a low capital expenditure, with no set up cost as well as being able to use a staggered payment for services used. Due to an initial cost fixture, there are likely to be no budget over runs. Companies can benefit from scalability on fluctuations, less lead time, tax savings, free updates and the opportunity to use tested and deployed technology. Many of these advantages are why loyalty programs are now so accessible for mid-tier companies and why these companies are able to look at the opportunities that loyalty programs bring aggressively.

Taking advantage of loyalty solutions in everyday business

The potential offered by new technology has to be exploited with practical imagination tied to diligent financial planning, sound program strategy and a return-on-investment analysis. Sophisticated, creative application of loyalty processes will result in successful program design; the technology platform will support it. Bottom line, technology enables, but loyalty hands-on knowledge wins.

The role of technology becomes critical with the good old coalition model proving to be a norm rather than an exception among loyalty programmes today. Multi-partner loyalty coalition offers strong economic reasons to program sponsors and higher accrual velocity for program members. The classic model characterises shared loyalty processes, branding, operational, marketing costs as also ownership of a common currency as well as a database. While the success of a coalition model is a given, its practical administration on a daily basis presents an operational nightmare. Even here, it is technology that enables the easing of such complexities. The success of technology in enabling large coalitions has resulted in the programs themselves turning into profit rather than cost centres. Organisations like Groupe Aeroplan (rebranded as AIMIA recently) that have been spun-off as separate loyalty companies stand testimony to the power of today’s technology.

Outsourcing is changing the loyalty program landscape due to its obvious cost advantages. The loyalty battlefield is expanding with more players in the fray-all fighting for the attention of valuable customers. I personally believe that technology will remain the game changer by unleashing more miracles especially in the loyalty program domain!