Industry news

mplsystems, the contact centre technology company based in Warwick, UK, has announced that it has been chosen by Smart Risk Wealth Management, one of the leading insurance brokers in South Africa, to provide a cloud based contact centre facility for its operations in Johannesburg.

The financial services provider will use the MPL intelligentcontact platform and campaign management to drive outbound marketing activity. The solution will provide contact handling, campaign applications and web services for their existing CRM solution and will be delivered through MPL Aurora, the cloud delivery model, providing Smart Risk with a facility on which to grow their contact solution.

The Aurora on-demand model gives customers a cost effective solution from day one which can be scaled as business and technology requirements grow. mplsystems won the contract against competition from Presence and Dimension Data, working with partner, iCorp, to negotiate the deal which will see iCorp also managing first line support requirements in South Africa for the Smart Risk Wealth Management facility.

“We were very impressed with the ease of use and flexibility of intelligentcontact and the ability to set up our own campaigns and administer the software. It was this ease of use that lead us to work with mplsystems along with their expertise in rapidly implementing campaign based projects”, commented Graham Craig, Director of Smart Risk.

Peter Haydn-Davies, Partner Manager for mplsystems, said: “We were delighted to be involved at this innovative time in Smart Risk’s development and as the insurance and finance industry heats up in South Africa. By promoting the enthusiasm of the Smart Risk agents, and using intelligentContact to present the right information to them at the right time every time, Smart Risk is now experiencing exciting growth in all their business departments.”

ChildLine’s call centre in Swansea will shut later this month.

There had been opposition to close the site and move operations to the Welsh capital, Cardiff. Earlier this week, a 12,000-signature petition was handed to the NSPCC.

However, the NSPCC confirmed the Swansea centre will close.

Peter Liver, ChildLine director said: “We will be relocating the service in Swansea to the NSPCC Cymru/Wales national centre in Cardiff, where we will offer online counselling only. We will also increase the number of ChildLine volunteers in our remaining centres over the next five years. Their roles will be expanded so by 2016 we will be delivering significantly more counselling hours in the most cost-effective way.

What would you rather use at work – the corporate, standard-issue hardware provided by your employer, or the stylish cutting-edge smartphones and tablets that you use at home?

It’s a question that public sector organisations are beginning to ask. Not just employees, who would enjoy using their gadgets of choice, but also their employers, who recognise they could make huge cost savings by giving them that choice, providing they can maintain control of the application, the infrastructure delivering it, and of course the data.

Benefits of ‘bring your own device’

More and more of the enquiries we receive about ‘bring your own device’ (BYOD) initiatives come from public sector organisations tasked with cutting their costs, realising better utilisation of their estates, and reducing the size of their workforces and the number of desks they occupy.

The obvious benefit of a ‘bring your own device’ initiative is that every computer a staff member pays for is one that the organisation doesn’t have to pay for itself, although some employers run schemes which provide contributions or allowances. An organisation offering a BYOD initiative can save a huge amount in terms of capital expenditure: if you currently need computers for 1,000 people, for instance, but know that you will have to reduce your full time workforce to 800 people, it wouldn’t make economic sense for you to order 1,000 computers. Doing so would leave you with 200 computers that nobody uses but that you can’t return to the manufacturer. BYOD initiatives give employers a more flexible and cost-effective IT solution that copes with variable staffing levels.

They also enable more staff to work from home, so as well as spending less on technology, you can spend less on the desk space your organisation needs. You can also cut training costs, because staff don’t need training to install and use the common platforms, applications and technology that they already use at home. And you can reduce the cost of ongoing maintenance: people tend to look after their own devices better than they would employer-provided devices.

Of course, there is also the received wisdom that satisfied staff are productive staff. BYOD initiatives are the key to giving staff the satisfaction of choosing both where they work (at home, in the office, in a café) and what device they work on. The introduction of the iPad has seen a huge wave of people dropping their existing platforms and infrastructures for the sake of what they regard as an enhanced user experience.

Things to consider

One common reason for resisting BYOD is the myth that staff can’t use their own devices on the organisation’s network. But the truth is that they can, as long as they have the right technology in place. IT managers’ fears partly stem from the security issues involved in people using their own hardware on a corporate network. How, for example, can they tell if someone’s laptop has up-to-date virus protection? How can they monitor what software the employee has installed?

They need not worry. Technology from vendors such as Microsoft, VMware and Citrix enables organisations to deliver applications, data and indeed desktops to any device, whether PC, thin client, laptop or tablet. This approach allows data to be displayed, and interacted with, on the device in question, while keeping the data itself secure in your datacentre. When the user disconnects, no data is left on the end device. While technologies like this have been around since NT 4 Terminal Services, the fact that we have been able, for the last three years or so, to deliver a full desktop experience rather than a terminal services session has seen rapid take-up recently in organisations who want the dual benefits of device-independent computing alongside secure data access.

While the underlying technology is of course important, public sector organisations should look for good service providers that can handle everything needed to set up and support a BYOD initiative, including connectivity, security and ongoing management. If an ‘off premise’ hosted solution is required, the service provider should have the right infrastructure to satisfy these needs and be capable of delivering a good virtual experience with no latency.

Of course, keeping track of hundreds of devices is no mean feat, so it is important to have policies and processes that keep data secure and devices visible and in the organisation’s control, and that safeguard employees’ privacy at the same time. Some organisations install software on staff devices that lets them erase data remotely if the device is lost or stolen – staff that want to use BYOD must first agree to have this installed.

Taking the plunge

The rise of BYOD in the public sector owes much to the fact that a lot of the people who want to use their own devices at work are senior councillors, clinicians or professors. Now that secure, dependable technology is available, they can demonstrate the savings to their finance managers and quickly build support for BYOD, although many still choose to pilot the idea, or restrict the applications that staff can access on their own devices, before making the switch completely.

It’s no surprise that savvy international organisations are heavily investing in India’s booming outsourced software testing sector, which is poised for rapid growth at a CAGR of 56% over the next few years.

Industry analysts Gartner reported that the worldwide software testing market turns over $13 billion each year and the global market for outsourced testing services is now approximately $6.1 billion.

Indeed, India is expected to corner a 70% share, or $4.2 billion, of this market and SQS, the largest independent software testing and quality assurance provider,

is at the hub of this growth, having secured several major contracts, opening its Test Automation FaQtory™ and expanding its niche games practice. This growth has resulted in the opening of a 43,000 square feet test centre in India’s fast-growing IT hub of Pune on 22nd June 2011.

The additional facility will seat 350 software testing team members and is the first phase of a 120,000 square feet expansion over a complex of three new buildings, which will create space for 1,800 quality assurance engineers.

SQS’s expansion mirrors the growth in offshored software testing to India, where the average deal size of projects is also rising. A few years ago, average contract value of an outsourced testing project was approximately fifty to sixty thousand dollars and required only a few testers. That has now grown to between two million and four million dollars per project, which in turn means that India’s testing market required approximately 18,000 professionals annually between 2008 and 2011 to meet the increasing demand1. Software consulting firm Ovum reports that testing services will grow at a compound annual growth rate of 9.5% until 2013, which is faster than most other technology services.

Traditionally, Indian software testing providers have serviced English-speaking companies and countries. However, there is a growing shift to conquer other territories. While some Indian IT services providers are moving to Latin America and South East Asia, others, such as SQS, are also building teams in India to overcome language and cultural barriers with non-English speaking countries.

An example of this development is SQS’ base in Pune, a Tier 1 outsourcing city, which offers good infrastructure, direct flights to Europe, high availability of graduates, pleasant climate and a number of high-profile IT companies, but without the disadvantages (e.g. high costs, traffic congestion and limited room for growth).

Whereas German, Swiss and Austrian companies may have turned to Eastern Europe for outsourced IT, there is now a growing trend for these countries to outsource to Indian providers as client demand for cost-effective testing and other IT services continues to increase.

Pune already has an infrastructure for non-English speaking resources, such as the Goethe Institute and over 300 further education institutions offering between 50 and 400 seats in beginner to advanced German classes. The city is becoming more active in providing language tuition to support the German-headquartered companies that have large operations in India, including: Volkswagen, Mercedes-Benz, Demag, Kone cranes and Knorr-Bremse. Indeed, Pune is India's largest base for German business, with over 197 German companies with subsidiaries and/or JVs together with a large number of German-Indian business alliances.

SQS India has recruited Indian German-speaking resources to support offshoring from its German, Austrian and Swiss offices. This recruitment drive will add software testers to its already strong English speaking teams who work in tandem with their onshore counterparts on a daily basis.

Whether demand for services comes from Europe or the US, there is plenty of room for further growth in the Indian testing market. The growth of Managed Services in the sector is spearheading that opportunity for SQS. By combining Managed Services, a Test Automation FaQtory™ and offshoring, SQS is able to control the costs of repeatedly testing software throughout its entire life cycle. This enables customers, such as Specsavers and Sunrise, to deliver more reliable IT applications, systems and software to their users cost effectively and faster than through traditional testing methods.

The Test Automation FaQtory™, launched in May 2010 in Pune’s Special Economic Zone, is receiving significant interest from clients in Europe and the US, including Siemens PLM, a company that benefits from only paying for what is tested, access to a global delivery team and working with a pure-play independent testing consultancy.

The growth of the Indian testing market also supports the creation of specialist teams. While SQS employs 2,000 staff in total, its games testing team is 150 strong. Major clients include: THQ, Warner Brothers, AGCC and Pocket Gems. Games testing takes place from a state-of-the-art studio with all the latest equipment, and other systems required for effective defect reporting (recording setup).

SQS also has security measures in place in its labs that allow customers to send sensitive IP-related information across to SQS without any concern. In addition, the team benefits from the latest hardware in 3D HDTV, and other accessories required to test all types of games. Games testing requires some of the largest download capabilities and SQS’ infrastructure matches if not sometime exceeds that of its customers.

Finally, the SQS India team is a critical part of SQS’ global delivery model, where offshored teams work in Europe for short or medium durations to increase their exposure to cultural variations and improve their experience and skills. This helps create a single team across the whole organisation with strong personal and professional bonds. The company’s move to develop multi-lingual testing teams will underpin its growth and help it to appeal to a larger international client base.

1 The Indian Economic Times (2009)

2 Physorg.com

I have already used these pages to spell out the advantages and disadvantages of multi-sourcing in light of changes to the way contracts were being sourced, following the decline in ‘mega-deals’ and the government’s £100 million contract cap.

It seems that the piece I wrote last August was, if I do say so myself, eerily prescient, as in the time that’s passed since then we’ve seen significant changes to the way many organisations have approached outsourcing contracts, with multi-sourcing one of the key drivers.

In that time, we’ve seen suppliers making significant strides towards jumping onto the multi-sourcing bandwagon. But how prepared are the end-users?

Multi-sourcing is, of course, the process of outsourcing to multiple service providers instead of one, and there seems little doubt that suppliers have looked to prepare themselves for what many forecast as a significant drive towards this model.

Perhaps one of the key factors behind this has been the government’s decision to open up the procurement process and move their focus away from larger, more established (and expensive) providers.

Clearly, the public sector feels, as do those in the private sector, that by using a number of suppliers instead of A larger contract with one supplier they can benefit from the niche, specialised services on offer and gain cost efficiencies.

I don’t think it’s any coincidence that we’re seeing a significant number of aggressive acquisitions from larger organisations which are keen to expand their offerings and global footprint in a number of different markets.

In recent times we’ve seen acquisitions from Capita (which purchased Bristol-based Call Centre Technology), Serco (which has acquired Indian Global Services provider Intelenet) and CSC (which has agreed to acquire iSOFT), each of which seems aimed at increasing the client base of the respective organisations, and also allowing them to diversify their offerings.

However, if the recent spate of acquisitions really is going to result in a new wave of multi-sourced contracts to replace mega-deals, then perhaps it’s worth asking whether or not end-users are armed with the right level of knowledge to make sure these deals are successful?

After all, managing a number of smaller, niche suppliers can be a very different undertaking to managing one. Indeed, it can be a real juggling act to ensure that each of your suppliers is meeting your expectations, and requires entirely different management skills.

Deciding to use a system of multi-sourcing is one thing - but do end users have the right skill set to achieve the right results?

In the last week, we’ve seen outsourcing hitting the headlines again, as the Public and Commercial Services (PCS) union refused to rule out strike action over Hewlett-Packard’s (HP) plans to offshore 200jobs to India.

The jobs in question are largely responsible for providing IT support to the Department for Work and Pensions, with talks over offshoring evidently at an ‘advanced’ stage. So what does this tell us? Can we expect a deluge of offshored public sector contracts? If so, is the general scepticism around offshoring justified?

Of course, the DWP is not the only place we’ve seen the question of public sector offshoring raised in recent weeks. We’ve also seen Birmingham City Council announce that up to 100 council ICT jobs are scheduled to be transferred to India through Capita, while the £600m BPO deal at the Personal Accounts Delivery Authority to outsource the administration of the National Employee Savings Trust (NEST) scheme may see as much as 60% of the work going abroad.

I suppose the first thing to say is that offshoring is nothing new, and we’ve seen plenty of examples of public sector and local government authorities offshoring successfully in the past.

Last July, the Prime Minister even visited India with a firm promise that: "In terms of being open to [offshoring]... you will find Britain one of the most open and progressive countries.” So why has news of several recent public sector offshoring deals caused such a stir?

Clearly, there’s a fear that British jobs will be lost - despite the fact that HP has already given assurances that affected employees who are based at sites in Newcastle, Lytham St Annes and Sheffield will be relocated to other positions within the organisation.

It seems that for many, the greatest worry is that in the race to make savings, we could see the burden of increased unemployment passed onto the taxpayer, as more and more low-paid jobs are sent abroad for the sake of making savings.

In my view, however, offshoring has a role to play - although it’s clear that it must be part of a bigger overall strategy. It’s no use relocating services to India or Sri Lanka on a short-term basis just to make a quick saving on costs.

Organisations must examine their own core competencies and understand where they have a skills gap, and decide whether or not an offshore provider has both the right level of competency and the correct cultural fit to make a contract work in the long term. This is something that organisations might want to review even if they have offshored, because markets change both here and overseas.

I know this is a common refrain from me on these pages, but any contract entered into on the basis of cost alone is far less likely to succeed than one which has been carefully structured, and fits in as part of a broader, overall strategy.

This is something that the unions who are protesting against these moves could try to understand - because if it benefits the way services are provided in the long run, then perhaps offshoring isn’t the great evil it’s being made out to be?

If you’d like to hear more about offshoring, the NOA will be running an Offshoring Day in September.

HR and Talent Management Steering Committee

Wednesday 29th June 2011

This event, chaired by Yvonne Williams, NOA Board Member, discussed best practice in HRO and paved the way for a NOA best practice guide for HRO.

Yvonne introduced the event and commented: “Ideally the role of this steering committee is to produce a best practice guide for HRO. HRO has changed a lot over the last few years and the market has matured tremendously.

“HRO is a very people focussed practice. Getting it right is extremely important as bad news travels a lot quicker than good news. Getting it wrong can be disastrous for many organisations.”

Paul O’Hare, Partner, Kemp Little, presented on the legal aspects of outsourcing HR and discussed current trends in the sector among with variations in contracts.

Paul said: “Most of the trends in this presentation are not unique to HRO, such as multi-sourcing, but they are definitely prevalent in the area. However in HRO there seems to be push towards quality and service rather than cost which is usually the primary driver in other outsourcing agreements.”

Outcome based pricing models linked to objectives are becoming more common throughout HRO and many other areas of outsourcing

Current Trends in HRO Contracts

- Shorter deal terms

- More diversified sourcing strategies (driven by multi-sourcing and distinction between transactional and consultative HR functions) and delivery models

- Drive towards standardisations (adoption of SaaS and cloud-based solutions)

- Changes to pricing models / pricing terms

- Increase in number of terminations and exits

Jim Brannan, CEO, Bcerta, said: “Someone managing many outsourcing agreements should not have to manage completely differing and inconsistent strategic practices. There has to be some level of consistency throughout and element of standardisation.”

Strategic workforce planning and analysis should come before recruitment, assessment and selection however in practice it is often the other way around. There is often a drive towards organisations looking ahead at their exit strategies.

David Williams, Partner, Kemp Little, said: “People are beginning to try and change exit agreements, they want to know where they will stand. It is something that can be negotiated and we have seen many positive examples of this renegotiation.”

Paul Hare agreed and said: “It is extremely important to plan your exit strategy in advance and understand the charges for getting out of a contract earlier. Many organisations do not realise the charges that can be accumulated for getting out of a contract earlier.”

Termination and exit

90% of retenders awarded to incumbent (TPI Report Q1 2010)

Key Points

- Inadequate termination rights

1. Especially for repeated service level failures

2. Importance of clear termination for convenience rights (with any exit changes pre-agreed)

3. Realistic exit periods – with ability to extend

- Poor exit planning

1. Robust contract terms – but often a failure to observe them

2. Contract incentives re testing and updating

- No agreed parameters on exit costs

- Dangers of ‘black box’ outsourcing

Paul discussed the evolution of HRO Contracts and the drive towards standardisation and adoption of SaaS / cloud-based HR solutions

Key Points

- Especially common for transactional HR services

1. Payroll / benefits administration, employee records etc

- Typified by increased adoption of SaaS and cloud-based solutions in HR sourcing contracts

- Drivers / Facilitators

1. Reduction in costs and lower (implementation) risk)

2. Increased prevalence / reliance of technology and improved internet / networking capability

- Implications for HRO contracts

1. Confidentiality, integrity and availability of HR data – risk allocation implications

2. Understanding – and documenting – ‘target operating model’

HR contracts: Pricing trends

Key Points

- Financing of deals (transition costs etc)

1. Impact on deal term, termination fees, ability to benchmark

- More flexible price bands – to deal with major reductions in the workforce

- Impact of ‘change control’ on customer business case

- COLA and ForEx risk – Offshore / rightshore deals

- Trend towards more ‘accountable’ pricing models

1. Move from input-based models towards output – and outcome- based pricing models

Yvonne concluded the seminar and said: “The global aspects of HRO are a big challenge. The foreign exchange risk is high as you are dealing with a variety of people and communication and service levels are of great importance. A HRO best practice guide would be invaluable for the sector and address many of the challenges that can arise.”

Steering Committee Actions:

• Paul O’Hare to share the slides to be shared to everyone and suggestions for guidelines to be email to Stephanie. HRO Specific

• July Session 1: Two end-user organisations to provide insight (BP and Lloyds) good experiences and bad experiences

• August Session 2: Two supplier firms to provide insight

• September Session 3: Advisory / Legal to provide insight (care studies)

• October: Production of the HRO best practice guide

• November: Launch at the NOA Summit and Awards

Best Practice Framework

- Look at what can be outsourced

- Look at the risk assessment for the services

- Bad experiences / good experiences

- Delivery of risk assessment

1. Methods of delivery (offshoring, multisourcing)

- Executive summary of HRO

- Title to be decided.

Attendees:

Yvonne Williams - NOA

Emily James – BP

Pau O’Hare – Kemp Little

Mike Gibbs – KPMG

Kathryn Dooks – Kemp Little

Richard Monaghan– Lloyds banking

Vijai Balachandra - Infosys BPO

David Williams – Kemp Little

Jim Brannan – Bcerta

Paul Corrall – sourcingfocus.com

North Bristol NHS Trust is upgrading their telecoms infrastructure using Alcatel-Lucent products. The move comes as part of a project to build a new £500m hospital at Southmead.

North Bristol is the 5th largest healthcare trust in England - 9,000 staff, 1,300 beds and an annual turnover of in the region of £450m.

"When I started at North Bristol NHS Trust about six years ago, there had been years of underinvestment," said Martin Bell, director of assurance, information and technology at the trust. "We now have time to make this hospital a technology-led, information-led facility," he added.

1.8 billion could be saved by social landlords if they outsource housing service and maintenance, says a new piece of research by Credo.

Only 60% of councils, ALMOs and housing association currently outsource housing maintenance and service management.

It is estimated that these organisations currently save 1.1 billion per year through outsourcing.

The research shows that if outsourcing uptake was increased to 95%, there is potential for the savings outsourcing brings about to £ 2.9 billion.

CA Technologies is set to acquire Interactive TKO (ITKO), a privately-held provider of service simulation offerings for developing applications in cloud environments, for $330m.

All of ITKOs staff are expected to join CA technologies, following the completion of the acquisition.

CA Technologies exectutive VP of Customer Solutions Group David Dobson said: "ITKO's technology allows customers to anticipate how their applications will perform in alternate environments, significantly reducing risk, and accelerating their time to value."