Industry news

The Global Outsourcing 100 is designed to help companies compare and select service providers using an objective methodology that mirrors the evaluation process a buyer would use to select a provider. Providers are ranked on quality following a rigorously judged application process that examines 18 criteria. The final rankings are based on a weighted average of the judges’ scores on demonstrated competencies, size, growth, management capabilities and customer references.

“Achieving the number one ranking for four consecutive years is certainly an accomplishment by Accenture, considering the high quality of the applicants and increased competition from around the world each year to hold on to the top spot,” said IAOP Chairman Michael Corbett, who led the judges panel. “The leading outsourcing firms make ranking high on the Global Outsourcing 100 a strategic objective and going through the rigorous application process benefits all applicants as well as helps buyers make better purchasing decisions.”

Mike Salvino, group chief executive of business process outsourcing at Accenture, said, “For the fourth consecutive year, Accenture is honored to be recognized by the IAOP as the best outsourcing provider in the world. This award demonstrates we have a winning team in outsourcing which includes thousands of talented and extraordinary Accenture people across the globe and hundreds of clients from a wide range of industries who are using outsourcing deeper in their organizations to gain better business insight, deliver better business outcomes and create greater value.”

Accenture provides application, infrastructure and business processing outsourcing services to more than 650 private- and public-sector clients across more than 30 industries. For a perspective on the advantages of applying analytics to a business process outsourcing relationship, read the Analytics Advantage.

JD Wetherspoon has selected SAP ERP to improve business processes and provide a platform for future growth. Founded as a single pub in 1979 by Tim Martin, the company now owns over 800 pubs across the UK.

JD Wetherspoon has been on a route of fast growth since it first began in 1979, and it has ambitious plans to continue growing; the pub chain aims to double its number of pubs to 1,600 in the coming years. In order to achieve this growth, the management team realised it would have to look at the underlying technology and business processes that existed and change them to ensure that the technology supported the growth of the business.

Kirk Davis, Finance Director & Company Secretary at JD Wetherspoon commented; "With up to 70 guest beers and ciders on tap at a time, an ingenious range of spirits, and a menu that changes twice a year and has to reflect both very good value and excitement, JD Wetherspoon has a business that must be agile. Procurement is key to this – everything from bar products to contract cleaners goes through these systems – usually not from the same suppliers, so we must ensure processes are as efficient as possible, whilst integrating into the financial system."

The City and County of San Francisco today announced that it will upgrade and consolidate its multiple citywide email systems used by more than 23,000 employees as part of its ongoing efforts to improve the quality and efficiency of its services and reduce IT management costs.

“A key part of serving a community as diverse and vibrant as ours starts with making the right investments in information technology,” San Francisco Mayor Edwin M. Lee said. “It is our responsibility to make decisions that are fiscally responsible, forward-looking, and improve the services that city and county employees provide to our constituents.”

Migration to the new cloud email system has already begun and will continue over the next 12 months. Employees across 60 departments and agencies are scheduled to move to Microsoft Exchange Online, a cloud-based enterprise messaging solution that offers improved communications and collaboration tools, including email, calendar coordination, and hosted archiving.

“The City and County of San Francisco has always been forward-thinking in leveraging technology to improve the services it provides,” said Gail Thomas Flynn, vice president of U.S. State and Local Government at Microsoft Corp. “We are excited at the opportunity to equip and support the employees of San Francisco with the tools they need to better serve the people of San Francisco.”

Several competing solutions were examined based on criteria that included price, security, functionality, flexibility, SLA-backed service, proven record for support, and integration with existing infrastructure and tools.

“By moving to the Microsoft platform, we not only get immediate improvements to our system, but we gain a disaster-resilient system that provides the most modern information tools, with solid support provisions that can scale with the needs of our constituents,” San Francisco Chief Information Officer Jon Walton said.

Government spending watchdog the National Audit Office (NAO) has called for spending on the NHS’s controversial £12bn IT upgrade programme to be stopped before more money is wasted.

In a damning report, the NAO said the services it had received to date – some £6.4bn worth as of 31 March 2011 – represented poor value for money and it had “no confidence” that finishing the project would turn things around.

“The original vision for the National Programme for IT (NPfIT) in the NHS will not be realised. The NHS is now getting far fewer systems than planned despite the department paying contractors almost the same amount of money [as was originally planned],” said Amyas Morse, head of the NAO.

ClickSoftware Technologies Ltd., the leading provider of automated workforce management and optimization solutions for the service industry, has announced that the UK's largest water and wastewater services company, Thames Water, has selected the ClickSoftware ServiceOptimisation Suite.

Thames Water identified ClickSoftware’s workforce management and mobility platform as the key technologies to ensure significant improvements in the efficient use of its workforce, its assets and the quality of service that it provides to its customers through optimized scheduling of its 2,000-strong field force and contractors.

Thames Water is under significant, industry-wide pressure from the Water Services Regulation Authority (OFWAT) to deliver value for its 13.8 million customers’ money during the current five-year Asset Management Planning (AMP) period. The most effective way to comply with OFWAT whilst improving customer service levels is by optimizing the activities of its 2,000 field-based staff.

“Workforce management technology will give us the edge in maximizing the performance of our field operations and, at the same time, help to reduce our back office costs and meet our regulatory commitments,” said Andrew Bilecki, Chief Information Officer at Thames Water.

“Following a rigorous European tender process, we selected ClickSoftware as it is the best fit for our functional and technical requirements. Given the rapid mobility advancements over the last couple of years, we wanted to ensure we had the best mobile solution in order to mobilize SAP processes into the field and support our workforce with the right data at the right time,” Bilecki added.

BMC Software, Eucalyptus Systems, HP, IBM, Intel, Red Hat, Inc. and SUSE have announced the formation of the Open Virtualization Alliance, a consortium committed to fostering the adoption of open virtualization technologies including Kernel-based Virtual Machine (KVM). The consortium will promote examples of customer successes, encourage interoperability and accelerate the expansion of the ecosystem of third party solutions around KVM, providing businesses improved choice, performance and price for virtualization.

The Open Virtualization Alliance will provide education, best practices and technical advice to help businesses understand and evaluate their virtualization options. The consortium complements the existing open source communities managing the development of the KVM hypervisor and associated management capabilities, which are rapidly driving technology innovations for customers virtualizing both Linux and Windows® applications.

KVM virtualization provides compelling performance, scalability and security for today's applications, smoothing the path from single system deployments to large-scale cloud computing. As a core component in the Linux kernel, KVM leverages hardware virtualization support built into Intel and AMD processors, providing a robust, efficient environment for hosting Linux and Windows virtual machines. KVM naturally leverages the rapid innovation of the Linux kernel (to virtualize both Linux and Windows guests), automatically benefiting from scheduler, memory management, power management, device driver and other features being produced by the thousands of developers in the Linux community.

Members of the Open Virtualization Alliance have a common interest in supporting open virtualization, and are involved in the development, distribution, support, use, or other business interest in KVM or offerings which use it. By providing an open virtualization alternative, they are offering their clients choice and enabling them to select the ideal virtualization products for their business needs.

The European Commission wants to gather views on how to exploit cloud computing in business

The European Commission is seeking to gather views on the cloud to help it build its own cloud computing strategy.

Interested parties are invited to contribute to the EC’s online public consultation, and have until 31 August 2011 to provide their input.

The EU executive believes that cloud computing could generate 35 billion euros (£30 billion) in revenue in Europe by 2014. It also feels that the right regulations could help business and governments make considerable savings on their costs by using the technology.

IPsoft research provides insight on how automation technologies can help IT departments become more proactive and aligned to business objectives

IPsoft, a provider of autonomic IT management services, today reveals that over a quarter (26%) of IT decision makers (ITDMs) spend the equivalent of two days a week on mundane IT management. This could be wasting British businesses up to £18.9 billion in lost hours, based on the average IT manager salary*.

The research of over 200 senior ITDMs also uncovers that 54% believe automation saves money and frees-up time for more proactive activity, critically important with more than half admitting that they spend less than two days a week on innovation.

Terry Walby, UK Managing Director, IPsoft comments: “Having skilled IT staff spend, an excessive amount of time on basic maintenance tasks is potentially demoralising. It not only creates poor productivity and wastes money, but it can also impact retention. A firm with its best people spending days each week on routine work will eventually either lose the momentum for proactive projects, lose the people, or perhaps lose both. By redeploying IT staff in a more creative direction, firms can re-focus their energy on the most important corporate goals.”

Additional findings from the survey include:

IT Operations Drain Resources

More than half of respondents state that they would be able to embark on new strategic projects if their IT operations were automated, highlighting that innovation is a big priority for ITDMs. As well as time for strategic projects, 43% recognise that they would have greater time for planning and defining the organisation’s strategy, ensuring better alignment with the business as a whole.

Error Resolution Top Priority

Interestingly, whilst the debugging and fixing of systems is often cited as an area of enjoyment for IT personnel, the results seem to suggest otherwise. The detection, diagnosis and fixing of errors are ranked as the biggest priority for automation (32% ranked it as top, 49% ranked it in top three), however, just detection and diagnosis scored much lower (6% ranked it as top, 31% ranked it in top three), demonstrating that ITDMs are looking for technology to self-heal and fix problems, not just detect them.

Automation Confuses Corporates

Respondents clearly understand how automation can benefit the organisation; but there is a lack of knowledge of what is already possible. 1 in 10 believe that it isn’t possible for technology to repair itself without human intervention, however, 66% agree that technology can learn and adapt to user needs over time. In addition, over a third (35%) seem concerned about the idea of artificial intelligence and self-learning systems, with a quarter refusing to accept that it’s not pure science fiction!

Terry Walby, Managing Director at IPsoft concludes, “Whilst there is still some confusion in the market as to what automation can already achieve for businesses, the IT departments that choose to adopt the technology will be able to deliver significant benefits back to the business. Automation has moved on from just being complicated scripts on a local network to a sophisticated self-learning and self-healing system delivered through expert computing systems.

Now that we are emerging from the economic down turn, corporations are shifting emphasis from maintaining position to focussing on achieving sustainable profitable growth and seeking ways to scale and replicate successful business processes globally. Process benchmarking is one of the effective ways of identifying the best processes to replicate or highlighting those which need improvement.

Benchmarking provides an organisation with a comparative view of their own business processes against the best in class standard, allowing them to manage processes optimisation.

Benchmarking can only add value if the right metrics are chosen, these should be the parameters which truly impact overall business outcomes. Looking at a business process end to end from the perspective of these metrics, across functions will enable discovery of the right levers to achieve the strategic goals.

For example, the key business outcome measures for any source to pay processes are total cost of ownership (TCO), working capital optimisation and material availability. These can be directly linked to more fine grained Level 2 and Level 3 key performance measures and drivers such as spend through preferred suppliers, requisition to PO cycle time, cost of PO Processing, percentage of electronic POS and days payable outstanding. If a business unit is monitoring the right Level 2 and Level 3 metrics, it will be able to quickly identify gaps in process performance, the consequences of these gaps and be able to take steps to fix the processes and hence influence the key business outcome.

Once appropriate metrics are identified, finding the right benchmark data for intra and cross industry comparison is vital to help fix improvement targets. Non profit or academic organisations like AQPC and companies involved in managing large scale global business processes across verticals can be a good source of benchmark data. Many organisations have myopic view, choosing only to use industry specific benchmarks. This is usually an error, as it can prevent them from identifying and leveraging applicable process best practices from outside their sector.

This is where developing an enterprise process view could be helpful, for example over 60% of indirect procurement categories remain the same for most organisations, and hence their source to pay processes remain similar, so using best in class measurement irrespective of industry vertical is a rational way of using available benchmark data.

Knowing where your process ranks and where you need to be is the important part of benchmarking, the rest of the journey becomes tactical. Whether a company is leader, laggard or median on a benchmark scale, setting a realistic target for process change is critical to drive improvements and optimally utilise the resources available.

A regular process benchmarking programme can be an effective way to improve the overall process ecosystem, linking and breaking silos between business units, regions, countries and service providers to help make the business’ processes scalable and nimble in response to external change.

When it comes to managing your company’s IT systems, it’s vital to consider the legacy technologies you have in house as part of the IT strategy and management plan. ‘Legacy technologies’ can refer to any systems or applications that have been in existence for some time, and are either becoming hard to support due to dwindling skills or discontinued support from the vendor, or are no longer core to the company’s operation but do still need to be retained.

Legacy systems pose potential risks to your IT operation and business continuity for a number of reasons. First, it creates extra burden to your day-to-day IT operation. As a result, resources can’t be freed up to focus on more strategic, value-added initiatives. Second, the need to maintain and work with these legacy systems will lead to an increasing dependency on the limited number of staff with these skills. It increases risk at the operational level due to the reduced talent pool and support.

Imagine a scenario where a bespoke yet business-critical application for Company X was developed in RPG on the IBM AS/400 platform in the 1990s. As time moves on, there is only one person in the IT department – who is just about to retire –that is capable of maintaining and updating that system. While the application still meets a particular business need, the evolution of technology means that the external and internal resources available to maintain this system have decreased. Failing to address this situation is a risk to the business.

Therefore, actions MUST be taken with regard to your legacy technology. Don’t let it become a stumbling block to your ability to address business priorities.

There are three common options for managing legacy systems/applications:

1. You can migrate to an entirely new technology (i.e. a new package)

2. You can continue to develop your existing technology (i.e. modifying the code) using external providers if the in-house resource is not available

3. You can outsource the management of your legacy technology (which can include the ongoing development of the application by the outsourcer)

Each option has different advantages and disadvantages that you need to consider. Let’s start examining these options one by one.

First, if you decide to migrate to an entirely new system or application, you could expect the main benefits to include access to new (and possiblymore widely used) technology with greater functionality. This option can possibly give you the opportunity to update your key business processes accordingly with the roll-out. However, the amount of work involved when moving a new package can be quite large and complex and it does involve some financial, operational and resourcing risks.

Moreover, you’ll also need to make sure that the new technology ‘fits’ well with the rest of the business, especially if you’re planning to implement a packaged solution, and if it address your specific requirement. If you think that you’d rather build a brand new customised solution, you still need to be aware that there are risks here too, as your new bespoke system/application could very quickly become outdated and a legacy itself, and therefore spark a costly(and endless) cycle of product development and obsolescence.

As such, many companies may prefer to continue develop their existing technologies instead of replacing them completely. The second option can be achieved by updating the necessary computing code and/or by developing a web-based wrapper that that can be used to enhance areas such as the user interface.

Unlike a full-scale replacement, this approach is appealing in that it is incremental, and therefore reduces the initial time and financial commitment required. At the same time, it will help to prolong the life of your legacy system whilst also reducing many of the risks and problems associated it. However, in order to achieve these benefits, you will need to plan the project very carefully and make sure that you have all the skills and resources needed to manage such a complex project.

In many cases, the third option – outsourcing the management of the legacy systems– can provide the most immediate and straight forward answer to the challenge. Remember that a well-qualified outsourcing provider operates with a rich pool of resources to give you the full support that you need and without the constraint you have in house (such as staff going on leave or deployed to other projects). Outsourcing the management of the legacy systems/applications will free up your IT department to focus on more strategic initiatives while ensuring that you have the consistent and reliable service you expect.

Most important of all, if your longer term solution is inevitably to migrate to a new technology or to continue develop it, outsourcing gives you the time to evaluate these options carefully while mitigating the risk elements associated with the legacy systems/applications.

Whatever your decision is, you will need to consider very carefully whether the solution you choose is going to address the business requirement (at both a strategic and functional level) effectively, as well as other important factors, such as cost, timescale, service continuity, and the skills and resources that would require for the change.

When weighing up all these factors, you may find that the decision to outsource the management of your legacy systems and applications will tick all of the most important boxes, especially as you’ll be gaining access to a rich pool of support and skills instead of relying on a limited number of staff to deliver continuous services. Plus, an outsourcing environment will give you the resources (and the breathing space) that you need to reduce your operating risk, so that you can evaluate the business case for your other options more thoroughly. There can’t be an easier solution to managing legacy technologies than outsourcing!