Industry news

TPI, an Information Services Group company and the leading independent sourcing data and advisory firm in the world, has announced it has been chosen to help promote discussion and adoption of corporate social responsibility (CSR) by a leading industry organization.

The International Association of Outsourcing Professionals® (IAOP®), the global, standard-setting organization and advocate for the outsourcing profession, has named TPI to its CSR Subcommittee. A TPI executive will join the group, serving alongside representatives of other leading business, academic and philanthropic organizations.

"We are pleased to help lead the discussion and adoption of corporate practices that respect individual diversity, promote the highest ethical business standards and support global sustainability," said Michael P. Connors, Chairman & CEO, ISG and TPI. "Joining the CSR Subcommittee brings us together with other thought leaders to raise the profile of these issues throughout the rapidly changing global sourcing marketplace."

ExlService Holdings has said that the outsourcing services company and certain key investors will sell up to 4.6 million shares.

The deal is worth about $114.5 million, given the company's closing price of $24.89 per share on Monday.

Its shares tumbled $2.36, or 9.5 percent, to $22.53 in morning trading Tuesday.

CSC has announced it has acquired AppLabs Technologies Private Limited, the world’s largest pure-play software testing and quality management service provider.

AppLabs brings a strong portfolio of emerging technologies and proprietary methodologies and tools, and a specialized sales force to CSC which significantly enhances CSC’s capabilities in application testing services as well as shortening time-to-market. AppLabs complements CSC’s expertise in Financial Services, Healthcare, Manufacturing, Chemical, Energy and Natural Resources and Technology and Consumer verticals. Financial terms of the deal were not disclosed.

“Application Services continue to play an increasingly important role as companies adopt new technologies and cloud based services to improve the quality and performance and reduce the total cost of ownership of IT services,” said Michael W. Laphen, chairman, president and chief executive officer, CSC. “Acquiring AppLabs represents CSC’s continued commitment to our intense focus on growing the company’s applications development and management business as well as extending superior testing services to our clients and prospects.”

A complaint about an outsourcing deal between Avon and Somerset Police and Somerset County Council is being investigated by the Audit Commission.

The force paid £2.8m to the council in order to join SouthWest One - a company set up to handle public bodies' administrative services.

The Commission has received a complaint that the move illegally subsidised people living outside of Somerset.

IAR Systems has acquired Signum Systems Corp., a California-based vendor of hardware and software development tools for embedded systems.

With the acquisition, IAR Systems complements its product offering with a broad series of high quality JTAG emulators, in-circuit emulators and debuggers. As a result, IAR Systems will have one of the market´s broadest offerings of development tools for the embedded industry.

The U.K. government is “way behind” the U.S. in the adoption of public cloud services, according to Marc Benioff, chief executive officer of Salesforce.com Inc.

Benioff, who met with U.K. Cabinet Office Minister Francis Maude, said the government was too focused on building its own Internet-based computing and storage services, rather than using publicly available cloud systems.

“The government should stop hiding behind the private cloud” in this way, the CEO said.

Asia’s first “Cloud Readiness Index” shows mixed picture of regional potential for harnessing the power and economic benefits of cloud computing

Asia's first "Cloud Readiness Index," prepared and published by the Asia Cloud Computing Association, shows a mixed picture in terms of harnessing the power and economic benefits of cloud computing. The league table, which analyses 10 key attributes critical to the successful deployment and use of cloud computing technology in 14 countries across the region, shows that Japan is in the lead, with Hong Kong second and South Korea and Singapore following close behind in joint third place.

China, and the fellow economic giant, India are in 8th and 9th place respectively – reflecting the challenges these economies must overcome in order to speed adoption and enjoy a brighter, more prosperous digital future.

"Technology has always been a great enabler of opportunity for business, communities and citizens. Cloud technologies offer the potential for lowering technology costs and creating time to market advantages. Additionally, cloud technologies promise to securely democratize data access – and in doing so, creating a myriad of value-add possibilities across Asia," said Bernie Trudel, Chairman of the Asia Cloud Computing Association and Cloud CTO at Cisco APAC.

Fulham Football Club has implemented a new physical security system based on cloud infrastructure technologies.

EMC has introduced a wireless IP Closed Circuit Television (CCTV) system on EMC unified storage, working with video management software provider Genetec: the solution is accessible on mobile devices, such as Apple iPads, allowing Fulham's security team to more effectively monitor crowd safety and improve stadium security.

Fulham F.C. previously used a network of six VHS recorders and 27 cameras to observe the many thousands of visitors to the famous Craven Cottage ground. Based on a stand-alone storage infrastructure, this system was costly and difficult to manage and maintain, each camera required maintenance before every match and video tapes would have to be manually scanned in the event of a security incident.

The role of technology in BPO

As IT and BPO converge to shape the future of outsourcing, businesses must make the best use of technology tools to run their multichannel service organisations. The surge in technology enablement has significantly improved business processes, when outsourced. It helps solve business problems and enables efficient outsourcing. It also delivers real benefits to customers, including:

• Cost benefits and efficiencies

• Customers are clearer on expectations from BPO, making outsourcing benefits less elusive

• Global footprint expansion to provide cost flexibility and meet regional language needs

• Data-driven, smart analytics-based decision making, replacing traditional dashboards

Customers now demand business transformation and are confident of receiving it from their service providers.

Technology routes

With customers becoming savvier, service providers need to meet their specific needs – not just to prevent customer churn, but also to help maintain their bottom line. Customers are keen to know what the next big thing is and service providers need to stay on their toes to continually deliver new offerings to accelerate value delivery in a more sustained manner. The stress is on new innovations that create more standardised process models to improve efficiencies, reduce costs, and leverage best practices.

Technology has proved to be the lynchpin, with the ability to create that ‘wow’ factor to addresses needs of both the customer and provider through benefits such as:

• Economies of scale and improved accuracy through automation

• Labour arbitrage

• Ability to connect and monitor remote location workflows

• Integrate buyers and service providers processes and technology systems

• Improved communication and collaboration

• Reduction in human error through automation

While it’s clear that technology is fundamental to the process, customer success from outsourcing is dependent on opting for technology that complements their existing set-up. The most popular technology strategies are tie-and-run, core functional technology replacement, platform services, best-of-breed solutions and technology augmentation

Let’s take a closer look at each of the choices:

1. In tie-and-run, technology has a limited role where the service provider plugs into the buyer’s existing systems to deliver services.

2. With core functional technology replacement method, the IT infrastructure and core functional application (F&A, HR, etc.) implementation is bundled with domain services (FAO, HRO, etc.) and technology ownership resides with buyer.

3. In the case of platform services, the customer has to adopt pre-integrated applications and pre-built processes that are owned by the service provider and where pricing is built into the domain contract. With this strategy, customers may feel a loss-of-control, while security measures bring a ‘doubt factor’ with F&A processes in particular. For example, imagine two banks sharing the same platform for similar processes – the risk is high and the price of failure can be massive.

4. Best-of-breed solutions have deep functionality, multiple features and address specific customer pain points. The options are many, but each solution is incomplete on its own as it fails to meet the breadth of customer requirements in a BPO set-up. This depth provided by best-of-breed solutions is not completely exploited as BPO requirements generally stay at the surface level and customers do not gain effective ROI on these higher cost solutions. In addition, integrating multiple point solutions has another set of challenges.

5. In technology augmentation, the service provider implements tools that serve as ‘add-ons’ around the periphery of the existing systems to address specific gaps. Here, the customer has the ability to capitalise on their existing technology investments, while also improving their planning, reporting, and decision making processes. Implementing a technology-augmentation strategy is one of the leanest and quickest methods to reaping the benefits of outsourcing.

The customer wish-list

• Maximise return on technology investment: With an economy that demands a much tighter control on spend, it is natural for customers to want to minimise capital expenditures. There is undoubtedly a growing desire to add to the technology infrastructure, but only after completely sweating the current technology assets.

• Minimal change management: The transformation is welcome, but only with minimal upheaval and when the overall implementation ‘experience’ is quick, efficient, smooth, and without any radical impact to employees’ every day responsibilities.

• Outcome-based business model: Business models are undergoing changes and haven’t yet reached a definitive point. However, the shift is certainly moving away from the traditional pricing models that were FTE and transaction-based. Customers now wish to outsource business processes for measurable and significant business outcomes instead.

• One-stop-shop model: Customers are increasingly looking for combined benefits from technology and BPO investment, with a single point of governance. They take process efficiency for granted in almost every BPO deal today – governance and effectiveness matter most, and the BPO provider landscape is changing dramatically in order to meet these evolving needs.

• Increased governance and control: Customers are not ready to move all of their business processes in their entirety to be managed by the service provider, despite being assured of big benefits during the initial stage of the relationship. They are more in tune with the benefits of having absolute control over their outsourced processes at every step, irrespective of the new destination of the processes.

• Intuitive business analytics: Customers are demanding speed and scale, as executives have a daunting task of ensuring overall organisational success, rather than merely focusing on their own business divisions. The number of performance indicators impacting the success or failure of business objectives is complex and calls for real intelligence to aid in decision making. Traditional reporting tools and dashboards for problem solving are passé and not sufficient for today’s business demands.

Technology-augmentation scores

Technology plays a major role in paving the future for BPO but the road is not totally clear. These challenges can lie in the technology features that customers are coming to demand as ‘must haves’ for a complete BPO offering, including:

• Keep customisation to a minimum

• Cater to a factory model of process execution, while accommodating operations’ floor-level variations

• Automate completely but have manual intervention for deviations

• Transition and ramp-up operations when rapidly evolving to a high-productivity model

• Aid management in decision making with deep drill down on operational details

• Move to outcome-based pricing

• Have a single point of contact for all BPO-related technology requirements

One thing that is certain is that business drives technology and not the other way around. Companies implement technology to enable outsourcing and solve business problems. Technology solutions that increase process effectiveness provide governance and control, and increase efficiency are welcome, but only if it does not junk their existing technology systems and applications, ERP systems, and supporting infrastructure. These are heavy investments with complex dependencies that customers can’t easily ‘rip and replace’.

The ideal investment is in a breadth of technology that seamlessly integrates with the customer’s core systems, provides business outcomes, combines operational best practices, is standardised but configurable and customisable for specific nuances, protects investments and runs operations end-to-end – all implemented and hosted by one provider.

Wipro BPO customers clearly connect with the technology-augmentation strategy. They see it as one of the leanest methods of empowering their existing ERP systems and overall technology infrastructure by using the required add-ons with minimal resources to deliver maximum benefits.

Wipro BPO’s proprietary offering Base)))™ is a technology-enabled process-layer tailored for organisations that are not looking at disruptive changes to their existing technology landscape, but are keen to find solutions for specific business problems by leveraging existing technology with absolute visibility into their outsourced processes The technology-augmentation route provides business impact by unlocking hidden values, provides strategic impact by going beyond mere sustenance of operations, productises best practices, all of this with minimal CAPEX. It helps move a step beyond to fully meet the strategic needs of customers today.

Every important new information technology follows a similar path on the journey from promising new innovation to mainstream business productivity tool.

There’s the “overhyped next-big-thing” phase, which is usually followed by an “emperor has no clothes” backlash. You can expect technology vendors to pass through a “hey, maybe I can sell more of that old solution with this new name” period, and business technology consumers to have their “if they’re using it, why aren’t we?” panic.

Eventually, the “measurable evidence of value” moment arrives which paves the way for companies to transition to the all-important “aligning implementation to business strategy” stage.

Cloud computing is moving along this path at remarkable speed, and with good reason.

As recently as 18 months ago, “the cloud” was just another bit of confusing techno-jargon for most people. Today, however, there’s little doubt that cloud computing is transforming the way people create, access and use information and computing capabilities. And it’s quickly becoming obvious that cloud-based solutions can help companies cut costs, respond to changing business conditions with greater flexibility, and speed time to market.

So, on the journey from breathless hype to strategic implementation, where is cloud computing right now?

Think of it as the “double-edged sword” stage. This is the moment when companies discover that along with the expected benefits, an innovative new technology sometimes introduces unanticipated risks. During this stage, it is often unclear what steps a company should take to strike the right balance between the two.

What is clear right now is that with evidence of the value of cloud computing coming into sharper relief, cloud-based technology has emerged as the number one IT focus for many businesses.

A new Avanade survey of 576 C-level executives, IT decision makers and business unit leaders at top companies in 18 countries shows just how important cloud computing has become to enterprises around the world. When asked to name their top three IT priorities for the coming year, more executives said cloud computing (60 percent) than any other IT issue, including security (58 percent) and IT consolidation (31 percent).

According to the survey, companies are looking to take advantage of cloud capabilities by increasing IT spending with an emphasis on solutions that help workers share information, streamline operations and understand customers. Companies are also taking steps to strengthen organizational expertise about cloud computing by expanding investments in employee training.

But while business leaders are hoping to embrace the benefits that cloud services promise, they are also anxious about the potential challenges. Chief among their concerns is the uncontrolled proliferation of public cloud services – a problem we call “cloud sprawl.”

According to the survey, 60 percent of executives are worried about the impact of unmanaged cloud services on their information infrastructure. One in five executives believes that it’s already impossible to manage the public cloud services that have crept into their organization.

The difficulty, of course, is that the very nature of public cloud services means there are few barriers to stop employees from simply using a credit card to self-provision a useful new capability. This has created a situation at some companies where entire departments have provisioned cloud services that fall outside the reach of IT governance, creating huge potential risks to the security of company and customer information. In some industries, unmanaged public cloud services also raise the specter of serious regulatory violations.

While nearly two-thirds of the companies surveyed have policies in place that prohibit employees from using unmanaged cloud services, the vast majority of respondents indicate there are no real ramifications for utilizing cloud services without going through proper IT channels. In fact, 20 percent of business leaders said they had purchased a cloud service themselves without approval from IT.

In any case, companies that rely on blanket prohibitions to cut off access will miss out on important employee-driven initiatives that innovative cloud services make possible. In the process they may lose important opportunities to more nimble competitors. Ultimately, this poses an even greater long-term danger than the current short-term risks that cloud sprawl presents.

Fortunately, there are steps that companies can take to manage cloud sprawl without sacrificing the opportunities that public cloud services can deliver.

The key is to begin by defining an employee-centric cloud strategy that recognizes the value that Web services can provide and that maps IT policies to business objectives. This will demonstrate to business users that IT is committed to unlocking the potential of cloud technology inside the enterprise and it will open the door to clear communication between the IT department and business leaders across the organization.

From there, it is important to conduct a comprehensive cloud audit to see how services are being used within the company and to identify not only potential vulnerabilities but also areas where cloud services are having a positive impact. This audit will provide the foundation for a migration roadmap for moving from cloud sprawl to alignment between business objectives and service deployment.

Next, it is critical to communicate company cloud policies and strategies clearly and concisely, with an emphasis on the positive benefits that cloud services bring to the organization.

Companies that follow these steps will give their IT department the flexibility to respond to employee needs and the tools to bring cloud sprawl under control. In the process, they will move their company from the stage where the cloud feels like a double-edged sword to something much more valuable –where a transformational technology begins to unlock dramatic improvements in productivity and opens the door to new ways of innovating and creating competitive advantage in a fast-changing marketplace.