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I’d like to celebrate the end of this series of cloud articles by summarising some of the issues we’ve covered previously, and by answering a few questions that are impossible to answer. Or at least, questions that fall into the “how long is a piece of string” category.

Given the nebulous perception most people have of the cloud, one common question is just how much kit do you need to get started?

If you outsource, of course, you don’t need infrastructure at all, which is a large part of the attraction of the cloud in the first place. Get rid of all that pesky hardware, and let your cloud provider worry about the nuts and bolts, the maintenance, replacement schedules, downtime, amortization and so on. You’ll still need end user devices, and the chances are you won’t be able abandon everything in your server room... but you’ll certainly be able to make an appreciable difference to the balance sheet in terms of infrastructure capex and running costs.

And if you’re building it yourself? That’s a string length question. It depends how big you build it, and to some extent on which platform you use. A typical ‘bare minimum’ cloud will usually have some kind of controller server; at least two hypervisors to host virtual machines (you could probably get away with one, but then you wouldn’t have the ability to failover, and wouldn’t really have a cloud); and of course, some storage and backup.

Storage is usually the single biggest hardware cost. High-end enterprise storage is eye-wateringly expensive. You can keep costs down by using commodity storage products, software SANs and the like, and there are a few cloud products on the horizon that promise to provide high performance cloud storage at low cost. Shop around!

Let’s assume you’re going down the outsourcing route. What sourcing options do you have, and how much does it cost? That also depends. We’ve already discussed the differences between building your own cloud, using the public cloud, or using a third party to provide you with your own private cloud. That should be governed by what you’re trying to do in the cloud and the associated benefit/risk assessment.

We have also considered some of the issues you should consider when choosing a cloud provider – their skills, knowledge of your business, SLAs, platform and application support, and so on. That just leaves the cost question. If you go with a third party provider, what can you expect to spend?

Back to the string, I’m afraid. There can be material differences between providers that explain why there are cloud services priced at $30 or $300 a month. These things can be determined by the power of the hardware, the speed of the storage and the quality of the datacenter, for example.

Overall, though, the trend (indeed the whole point) of something-as-a-service in the cloud is towards commoditisation of IT resources, especially at the infrastructure level. In the end, you’re just buying compute cycles and disk space, and that stuff is basically the same wherever you buy it.

What that means is the real differences between cloud providers are to be found in the value-added services they provide – the apps on offer, the support included, the response time for fixes and compensation for outages. Once you’re satisfied from a technology standpoint, these things should drive your decision-making process.

I suppose all this talk of string might feel like a cop-out, so as kind of compensation I’d like to finish with a string metaphor that may actually be of some use.

While there are people who still foam at the mouth at the prospect of being ‘in the cloud’, the reality for most businesses is, well, reality: IT costs and ROI. Uptime and maintenance. Ease of use and the customer experience.

So if the cloud really were a piece of string, you’d just want make sure it’s elastic enough to go round the app, process, department or company you want to cloud-enable. You’d make sure it’s the right kind of string for your end users – not too rough around the edges, or too inflexible for the things your IT department needs it to do. You’d make sure it’s the kind of string that fits with your budget, billing, compliance and security requirements.

Above all, you’d make sure it’s strong enough not to break, and that if it does break, your provider would be obliged to fix it PDQ. Good luck!

Andrew Burns, joint managing director at office design, fit-out and furnishing specialist TSK, discusses how well-designed workplaces can increase productivity and help win clients.

The role of any outsourcing business is, essentially, to take a process peripheral to its client’s operation and perform it to a higher standard and more cost-effectively than the customer could do in-house.

At the heart of this is attracting and retaining good employees, providing efficient systems and processes and the right level of support to create a sustainable culture of excellent performance.

Crucial to this is providing employees with a working environment that is designed for the tasks they are doing and supportive of a culture of teamwork between individuals and collaboration across the organisation.

Complex processes

The range of operations commonly delivered by outsourcers has diversified significantly in the past 10 or 15 years and it is no longer just routine business functions that are commonly managed by an external partner.

In many cases an organisation’s employees are transferred into the outsourced operation so it is essential that the new protocols deliver the efficiencies from day one.

The workplace plays an important role in enabling the change in culture to happen quickly and efficiently.

By creating a workplace that supports activity base working the cost per work output is reduced, employees are motivated and empowered and a high performance culture can be established.

Operations such as customer contact, IT support or HR services will never be performed as well as they could be if teams are treated like process-driven factory workers.

Employees need quiet spaces to take difficult or private calls, break-out spaces for team meetings and training sessions and comfortable areas to take a break from often very demanding working patterns.

Many outsourcing centres – particularly those working internationally – operate long hours, often outside the traditional 9-5 working day and it is therefore paramount that employees feel comfortable in their surroundings.

Even simple things like ensuring the right levels of light and temperature can have a significant positive effect on performance.

Teamwork and collaboration

The importance of break-out areas and communal spaces in any organisation cannot be underestimated.

Spaces where teams can get together away from distractions is essential in fostering teamwork, while providing communal facilities – be it a water cooler, a kitchen or a permanent cafe – brings together individuals from across an organisation creating a sense of community.

A focus on training is a critical element of staff retention, and this needs to be able to happen in an environment where participants are free from distractions and where it won’t disrupt others’ work.

Break-out spaces are also important from a motivation perspective, as they can help shift the overriding feeling of the workspace away from that of a high-pressure battery operation.

Delivering a flagship for Ceridian

A good example of the importance leading outsourcers attach to getting workplace design right is Ceridian’s new 50,000 sq ft flagship office in Glasgow, launched earlier in June 2011.

The purpose-built property accommodates 500 workers supporting some of the biggest and most well-known businesses in the country.

The two sides to the operation – HR and payroll services – each have different key attributes, and the design needed to reflect this.

On the HR side, wellness support and employee counselling for larger organisations is a key part of the service. This is a stressful and emotionally demanding role for employees, and it was important for their workspace to provide private spaces where highly personal subjects could be discussed over the phone. It also needed to be calming, with generous rest areas for taking breaks.

For payroll services, confidentiality and data security are the foremost considerations. This meant thinking carefully about the layout of secure areas within the building, to ensure that social areas could be accesses by all but that workstations containing sensitive information were behind controlled access doors.

Civic pride

A key strategy for maintaining the commitment and motivation was to ensure that the benefits being delivered to customers were always clear to every employee in order to demonstrate the big difference they make as a business and to instill a sense of pride in the operation.

The centre delivers impressive KPIs, servicing more than 1.5 million employees per month working for 110,000 different organizations across 50 countries world-wide. These performance figures, updating in real time, were incorporated into the design in key places where they would be seen by both employees and visitors.

Commercial advantages

Securing new outsourcing agreements often involves the transfer of workers from a client’s business.

The working environment that will be provided for these employees – both in terms of physical surroundings and working culture – plays a vital role in securing their buy-in and this can make the difference between winning or losing a contract.

This concern was also forefront in Ceridian’s mind when developing the brief for its Glasgow office as the management team knew it would send an important message to new business prospects.

The goal was that any potential new partners visiting the site would leave without any doubt that delivering HR and payroll services in-house was an inefficient approach.

Workplace design played a fundamental role in this by making it obvious that Ceridian’s people were supported by the best possible processes and the right technology right across the organisation.

High performance

Outsourcing has become a standard strategy for businesses of all sizes – from small SMEs to multinational organisations – and the range of services commonly outsourced has also become enormously diverse.

The outsourcing businesses that succeed in this new landscape will be those that recognise the critical importance of providing their employees with the tools and surroundings they need to deliver optimum performance.

It is nearly four years since the banking crisis precipitated the recession and the majority of global businesses have cut costs to the bone. But as these organisations face up to the fact that the era of austerity is set to stay for several years to come, it is clear that business models need to be reviewed.

Following systemic under investment, internal resources are simply no longer good enough. Consolidation is rife; companies are looking at international expansion and building global business networks. Research carried out by TPI* in the third quarter of this year shows that there are many different models of outsourcing used throughout businesses around the world. However, with times tough and business competitive, it is key that each organisation chooses the best model of outsourcing to work for their business.

As Joanna Sedley-Burke, Business Development Director, Sovereign explains, in tough times, companies across the globe need to do far more with less and become far more savvy about leveraging external outsourced expertise to derive additional value.

One size fit all?

As Gartner describes**, the offshore IT outsourcing market is “big, and there's no turning back. Everybody is either doing it, planning to do it, or should be doing it.” But with this comes various additional options of outsourcing choice, from staff augmentation, out-tasking, project based outsourcing, managed services or BOT (Build-Operate-Transfer). However, the right choice for each business can vary immensely based on a whole array of varying factors. There is far from a ‘one size fits all’ approach.

The right outsourcing choice must be assessed on the best model to fit each organisation and this will vary hugely around the globe. Different countries carry out business in so many different ways and can be at differing ends of the scale in terms of their development when it comes to infrastructure and economy. Even from business to business, the culture of an organisation must be fully understood by any external provider in order to ensure the correct IT choices are implemented to complement and support the organisation appropriately.

Skills and costs

The TPI research suggests there is a trend in global outsourcing from EMEA, down by 23%, to Asia Pacific, that experienced an all-round year on year increase. It is clear that the availability of highly talented and experienced workers in this region are able to carry out the same level of work as in EMEA but at a significantly lower cost.

With rising inflation and escalating fuel costs just two examples of how businesses are being hit, each year is bringing a new financial challenge for business. Over the past four years, these organisations have cut costs to the bone – not least across IT. But is this really a sustainable long term approach? Is the current internal skill set really capable of supporting the current business needs or any potential expansion into more buoyant global markets? Can it deliver the robust communications required to create international networks of collaboration or exploit innovative technologies to increase efficiency and the timeliness of service delivery?

Leverage Expertise

Successful organisations will know the value of external expertise when used appropriately. But continuing to rely on limited internal resources as they come under increasing pressure is increasing corporate risk and potentially constraining opportunities for business growth. Companies would do well to exploit the proven experience and skills of external providers and look globally when they do.

Turning to an outsource provider in any part of the world offers companies a real opportunity to drive down the risk associated with day to day operations; provides a chance to reduce costs and delivers access to the experience required to build a solid business case for on-going investment. The TPI research shows that BPO is strong and expected to increase further, with businesses having to consolidate and keep the chargeable heads whilst the back-office functions go elsewhere and thus reduce the overheads.

It is those organisations that accept the need for external professional services provided by a company with no vested interest in boosting CVs, and with the required depth of skills and experience, that will be best placed to adapt and respond to the continuing economic challenge.

Outsourcing Yearbook 2012— the UK’s definitive guide to best practice in outsourcing

Buffalo Communications, in partnership with the NOA and sourcingfocus.com present the Outsourcing Yearbook 2012, the most comprehensive review of the UK’s outsourcing industry.

The Outsourcing Yearbook 2012 will be published in January. With over 100 pages of outsourcing insight available online or in one hardback volume, our yearbook is the essential guide for everyone interested in outsourcing.

The Outsourcing Yearbook 2012 will feature:

Latest research

Controversial opinions

Emerging players and destinations

Showcase of NOA award winners

Comprehensive Suppliers Directory

Quarterly updates throughout 2012 (online)

Contact us now to pre-order your copy or discuss profile raising opportunities.

Capgemini has announced the launch of its IBX Spend Capture Cloud solution.

The new IBX Capture Spend Cloud streamlines the procurement process and allows organizations to capture the benefit of on-line spending, which is often wasted due to lack of compliance with procurement standards

According to Capgemini’s CPO Survey 2010, many businesses have not yet realized the full potential of on-line procurement ,with 67% claiming that less than a fifth of their spend is through eProcurement. But cloud services have the advantage of being quick, easy-to-use, ready for use, and not requiring any data integration or customer installation. Capgemini’s IBX Spend Capture Cloud can be up and running in 90 days offering cost benefits of up to 50% compared to an on-premise implementation. The solution integrates with all major eProcurement systems and has pre-built integration package for SAP SRM.

Wipro Technologies, the global Information Technology, Consulting and Outsourcing business of Wipro Limited, has been chosen by Premier Foods, the United Kingdom’s largest food producer, as a strategic technology partner. Premier Foods plc produces and markets over 40 iconic British brands.

As part of the five year strategic relationship, Wipro will be supporting both systems and processes to enhance efficiency of Premier Foods’ supply chain. This relationship will enable Premier Foods to realize quantifiable benefits for a known budgetary expenditure with minimal exposure to variable costs.

According to Mark Vickery, Group I.S. & Change Director, Premier Foods, “We would like to congratulate the Wipro team for their focus, commitment and the passion in the discussions leading to our decision. Wipro’s strong SAP capabilities along with their deep CPG domain expertise made Wipro a natural fit for Premier Foods."

Diligenta, a subsidiary of Tata Consultancy Services and a leading BPO provider in the U.K., will assume administration responsibility for 3.2 million policies for Friends Life, a provider of pensions, investments and insurance. The agreement, effective March 1, 2012, is worth $2.2 billion over a 15-year period.

The deal will increase the total number of policies administered by Diligenta to just under eight million. Outsourcing much of its customer service and IT functions for its U.K. heritage business will allow Friends Life to focus on its new proposition developments, including its new corporate platform, in its core markets of corporate benefits, protection and retirement income.

N. Chandrasekaran, CEO and MD, TCS, and Chairman, Diligenta, said, “Our domain-centric, platform-based solutions enable us to help companies transform their businesses. Our strong presence in the insurance segment, track record and the early investments in building products and platforms have contributed to this win. This deal is the second largest one signed by TCS after the $2.5 billion Citi deal some years ago.”

The National Outsourcing Association Awards (NOAAs) took place last night (10th November), at the Park Plaza Riverbank Hotel in London. Now in its 8th year, the NOAAs celebrate best practice in outsourcing projects, and reward end-users, suppliers, advisors and destinations.

The awards were presented by comedian, Imran Yusuf. After the presentations and speeches, the party continued well into the wee small hours.

The proud winners were:

BPO Contract of the Year

National Rail Communication Centre and National Rail Enquiries

This contract delivered very real benefits to the general public through improved information and continuous performance improvements throughout the year.

IT Outsourcing Project of the Year

Wipro Technologies and Diversey

The judges felt the project was a powerful example of continuous IT service improvement and demonstrated various improvement techniques working together to generate impressive benefits, whilst streamlining the budget spend on IT infrastructure and new application development.

Financial Services Outsourcing Project of the Year

Co-Operative Banking Group, Operational Partnerships Management, Implementation of alternative format provision

This project involved a developing a future-ready scalable solution for customers with dyslexia or learning difficulties. The bespoke service allows for documentation to be designed to meet the specific needs of the customer, including the use of MP3 and Wav technology, as well a secure pin process for the visually impaired.

Public Sector Outsourcing Project of the Year

Arvato and Chesterfield Borough Council

Judges were impressed with Arvato’s transparent approach to service delivery – flagging, discussing and resolving issues in ways that prioritise citizen satisfaction and value for money.

Telecommunications, Utilities and High-Tech Outsourcing Project of the Year

Efficio Consulting Ltd and Thames Water

The panel felt that this award reshaped the procurement outsourcing space, by moulding the best features of a classic consulting engagement and a traditional outsourcing model. The results gave compelling benefits, enabling Thames Water to exceed all of the original project objectives.

Offshoring Operation of the Year

RR Donnelley and Anglian Water

This offshore pilot has proved a resounding success – delivering an effective solution for processing the large amount of correspondence generated by Anglian Water’s customers. This operation was recognised for bringing together the best outsourcing operations with excellent workflow technology.

Outsourcing Professional of the Year

KPMG – Shamus Rae

The judges felt that Shamus showed deep domain expertise, extraordinary creativity and was a very strong candidate based upon his industry experience helping organisations with strategy, implementation and execution of change programmes focused on corporate services.

Outsourcing Service Provider of the Year

Luxoft

The judges felt that Luxoft’s submission showed excellent depth in all key areas of successful outsourcing, along with copious good examples of corporate social responsibility across all of its collaborations.

Outsourcing Contact Centre Provider of the Year

bss and Office for National Statistics and Northern Ireland Statistics and Research Agency

The 2011 Census contact centre handled nearly 1 million phone calls, in 10 weeks, without any downtime. This project won due to its complexity, while not getting in the way of delivering a solution to the massive benefit of the authorities and the public alike.

Outsourcing Advisory of the Year

Hogan Lovells International LLP

Over the last year, Hogan Lovells has advised on most of the key outsourcings in the asset management, insurance and life and pensions sectors. This was a closely fought award; however, the judges felt that Hogan Lovells consistently delivered a wide variety of innovative and high-profile solutions throughout the year.

Offshoring Destination of the Year

Luxoft - Poland

Poland is the sole European country to demonstrate positive economic growth throughout the crisis. The total value of British investment in Poland has now reached $3.54 billion. The judges felt that the entry from Luxoft was extremely strong and demonstrated that Poland has remained price competitive with the required labour skills. It is expected the Polish IT market will maintain its status as one of the CEE’s fastest growing IT markets over the 2010–2014 forecast period.

Outsourcing End-User of the Year

Thames Water and Efficio Consulting Ltd

Thames Water’s “fully integrated consultancy” delivery model has challenged the market norm, creating compelling benefits. This project has been rewarded for its strong focus on leadership and relationship management. This emphasis on an effective gain-share pricing model has resulted in cost savings far greater than set out in its internal business case.

Award for Innovation in Outsourcing

Serco and Barclays Cycle Hire

Serco delivered Boris Johnson’s vision of making London a genuinely cycle friendly city, whilst having to learn an entirely new business and multi-sourcing with 10 sub-contractors. With 5000 bikes, and 10,000 docking points, the system is highly complex, yet very easy to use, making a positive contribution to the lives of 1000s of environmentally conscious Londoners.

Award for Best Practice in Outsourcing

Co-Operative Banking Group, Operational Partnerships Management, Supplier Operating Model

CFS’s relationship management capability provides a disciplined consistent, approach to making CFS an intelligent customer. It powers effective collaboration between all business stakeholders within the sourcing lifecycle – nurturing a culture of common language and thinking across the full range Co-operative business units.

Award for Academic Achievement

HML – Anu Biswas

2011 NOA Pathway graduate Anu Biswas worked her way to the top of the class with a tailored outsourcing development plan for an actual project, and input these into the HML strategy. Her project focused on development of the right skills, knowledge and behaviours to be able to strategically lead an outsourcing organisation.

Award for Corporate Social Responsibility

Infosys BPO Ltd and Project Genesis

This successful project follows a “train the trainer” model and has reached out to over 85,000 students through 2888 academicians in 1527 educational institutions in India.

Judges agreed this innovative programme provides students with the relevant proficiencies to perform well in this dynamic industry. Additional acknowledgements were made on the range of the industry partnerships and use of technology in analysing skills and enhancing language skills.

Samsung is to start paying Microsoft royalties for every sale of its smartphone and tablet computers that run the rival Google Android platform.

Microsoft has long accused Android of violating its patents.

Google said its US rival Microsoft was "resorting to legal measures to extort profit from others' achievements and hinder the pace of innovation".

Accenture, the global management consulting, technology services and outsourcing company has closed a deal to acquire Zenta, a residential and commercial mortgage processing services firm, by this month-end.

Accenture has started rebadging the US-headquartered Zenta’s 3,700 employees in India.