Industry news

Stoke based eGaming operator bet365 has announced the launch of its latest In-Play betting system using the latest cloud technology.

In-Play betting enables users to bet on the outcome of specific events that take place while a sport is in progress, e.g. the next point in a tennis match or the next goal in a football game. As such it requires the delivery of a continuous stream of real-time information, whilst simultaneously receiving and processing a huge amount of incoming customer data.

“We could not achieve the scale we have without our Systems teams,” said Martin Davies, Chief Technology Officer, bet365. They have enabled us to take the pressure off of our databases and storage systems and increase the scale and flexibility of our systems through the creation of our own personal cloud.”

Capgemini and the Finnish Customs have signed a four-year contract for infrastructure services related to Customs’ information technology environment. The contract is worth €14 million, covering a wide range of server hosting and workstation services, plus related network and data security services.

The contract between Finnish Customs and Capgemini will deliver a versatile solution for Finnish Customs’ requirements, helped in particular by Capgemini’s Security Services portfolio which is continuously developing. The year-long transition project, from the incumbent IT service provider, will start in March. Capgemini’s services will be provided entirely from Finland.

“Finnish Customs has a significant role in the Finnish foreign trade logistics chain, collecting a great amount of tax income. The majority of our offerings are delivered through e-services, which is why real time operations must be secure. Finnish Customs also has a role in inland security, which sets special requirements for the IT service provider. Capgemini’s offering fulfilled our most strict standards. Finnish Customs’ IT based services have developed and the trend is still growing. We expect our partner to deliver stable IT services and the ability to carry out development initiatives with a quick response,” says Arja Palo, Finnish Customs Chief Information Officer.

Amazon Web Services has announced several updates to its Virtual Private Cloud service including a wizard for easier VPC creation, improved access controls and the ability to access VPC resources without a VPN connection.

"You can now create a network topology in the AWS cloud that closely resembles the one in your physical datacentre including public, private, and DMZ subnets. Instead of dealing with cables, routers, and switches you can design and instantiate your network programmatically," Amazon Web Services' Jeff Barr said in a blog post. "This means that you could store your entire network layout in abstract form, and then realise it on demand."

The VPC Wizard feature allows a VPC to be configured with four network architectures, ranging from a VPC purely accessed by virtual private network (VPN) to a VPC with a single public subnet.

The public discussion about the banking industry has been so dominated by bonuses, regulation, the LIBOR rate and the current status of cash reserves that it's been easy to forget that banks have also been restructuring operations that have nothing to do with pay scales or nationalisation. Indeed, a quiet outsourcing revolution has been taking place behind the scenes in the world of banking, driven by the need for cost saving and the desire to take advantage of the changing market.

Increasingly, banks have been looking to outsource a wider range of functions as a response to the challenges of the global market. It's therefore no surprise that according to the World Retail Banking Report, 77 percent of retail banks now outsource at least one part of their business. Common industry estimates show that outsourcing provides banks with a saving of 20-40 percent, depending on whether processes are located locally or abroad.

High street banks have long embraced outsourcing in order to focus on their core business strategies. But now, the independent expertise of an outsourcer has become even more valuable as the established banks face opposition from new competitors such as Metro - the first new high street bank to be set up for a hundred years – as well as the likes of Tesco and Virgin, who have grown by using their reputation in other areas to enter the financial services market.

Another cause for concern is that over one in ten customers aged between 25 and 34 moved their bank accounts within the last year, according to a YouGov survey on banking behaviour. Gone are the days when customers could be relied upon to stay with a bank for life. Improving the consumer experience is now vital to retaining longstanding customers.

In this highly competitive market, where financial services businesses are fighting it out to secure market share and keep hold of their customers, new and innovative products are now a constant requirement for banks – and outsourcers can help to get these products to market more quickly.

Even for an established bank, the cost of developing and launching a completely new product and/or distribution channel can be very high. It is also a sizable medium to long-term commitment, as staff and premises will often need to be employed for up to five years, even if the initial campaign might only last for one or two years.

By outsourcing this function, however, banks are now able to launch new products within 30-60 days. In addition, by using an outsourcer for third party administration, banks can now delegate the responsibility customer communications, product distribution, complaint handling, customer communications and more by partnering with a skilled outsourcer that is able to embed itself in the heart of the bank's operations.

Outsourcing important areas like these can radically speed the time to market for news products, and also help to increase customer satisfaction in an environment where consumers are shopping around for financial products more than ever before – and are also willing to leave if the service isn’t up to scratch.

The future success of banking lies in the ability to improve business agility and to alter working practices. Though much in banking is uncertain, one thing seems highly likely: strategic partnerships with outsourcers will soon become the standard practice across the industry.

It’s that time of year again, as pens are sharpened, teeth are grated and everyone wonders if and how they will be affected by the budget announcement.

Of course, we’ve already seen a significant amount of belt-tightening as a result of the government’s Spending Review last year, but how do we expect to see the outsourcing industry affected by the Chancellor’s ‘pro-growth’ budget on 23 March?

Perhaps one of the areas where we could see an increase in funding is training. The government has made a big noise in recent weeks about encouraging smaller businesses to bid for public sector contracts, with the launch of a new website for procurement contractors looking to win public sector contracts with a value in excess of £10,000.

Perhaps the most likely consequence of this is that we’ll see a rise in multi-sourcing in the public sector, with a number of smaller suppliers providing a range of different services, instead of just one larger supplier.

But how well equipped in the public sector to manage multi-sourcing contracts? Very few workers in the public sector will have any experience of how to manage a number of different suppliers effectively, so perhaps it would be a good move for the government to set aside some budget towards training public sector workers in this respect?

They might even feel that it would a good idea to expand this investment in training so that it includes smaller enterprises, who have no real experience in dealing with contracts?

In the last week, we’ve seen the Prime Minister attacking what he calls the ‘enemies of enterprise’ and pledging to support British entrepreneurs as part of his plan to back small firms.

Perhaps, however, the best way he could demonstrate this commitment to enterprise is to introduce incentives to smaller organisations looking to bid, perhaps by making the bidding process itself tax deductible?

There’s no doubt that the sometimes protracted procurement process itself also needs to be streamlined in order to make it fairer for all. But what’s the best way of ensuring that this happens?

Perhaps the government could invest in a means of measuring the performance of outsourcing suppliers, to ensure that the best providers are used, rather than just those capable of providing every service as part of a big, fat contract?

The government could use the budget to announce a new initiative aimed at kitemarking the performance of suppliers, with the best performing suppliers receiving a green kitemark.

Of course, poor performance in an outsourcing contract is not necessarily the suppliers fault - perhaps we need to kitemark procurement organisations as well to ensure fair ratings for all!

It’s clear that there’s a lot the government can do in the forthcoming budget announcement to encourage small and medium sized organisations looking to get involved in the public sector - what do you think the government will do?

In recession-hit times, with large cut backs taking its toll on the public sector, related departments are ensuring operations are running smoothly and efficiently.

The 2010 election and subsequent adjustments in economic policy have caused big changes in the outsourcing industry. Doing more with less is a problem that the public sector has been familiar with for many years; but never more acutely than through the recent recession.

In fact, the downturn has forced businesses from every sector to rethink every element of their operations and take unprecedented steps such as organisational restructuring, process standardisation & centralisation and increased globalisation to manage their financial health. Subsequently outsourcing has become a key word for ‘cost savings’ and a strategy to survive the recession.

Bindi Bhullar, Director at HCL commented: “With public sector CIOs now looking at alternative IT models to improve operations and reduce costs, outsourcing can deliver a valuable and significant saving to the bottom line. Alternate providers can bring a fresh management approach, new engagement and delivery models, outcome-based servicing, delivering accountability to taxpayers.”

According to TPI, Public Sector spend within the UK has accounted for 77% of all Total Contract Value (TCV) signed in 2010. This was a substantial increase on the 57% of the market averaged through 2005-2009. Suppliers to the UK public sector outsourcing market are also diversifying. This increase had much to do with the award of a £6B contract by Buying Solutions (which is part of the Efficiency & Reform Group within the Cabinet Office) to Pitney Bowes for the provision of hybrid mail services. Hybrid mail is the term used to describe the process of moving the production of office mail from the desktop to a centralised production environment for rapid print, sortation and despatch – thus supporting the Government drive for aggregation and shared services.

TPI found the providers represented in 2010 include a mixture of European-based providers, specialist niche providers, some of the multi-national companies and – for the first time – an India-based service provider.

Ferenc Szelenyi, vice president EMEA public sector services at Dell Services, said: "The current UK government expenditure now stands at around £680 billion a year, of which only around £80 billion worth of activity is outsourced. Currently, much of that spending is at a local level, but it is my view that the new coalition should eventually spread this across national government sectors. With every sector currently looking to reduce their operating costs, it is apparent that IT outsourcing has crucial part to play. This is because currently, organisations in the public sector are looking to maintain services as best they can while recognising that there will be less money. Personally speaking, the con/lib coalition should be more concerned with commissioning the right outsourcing services rather than taking tasks on themselves.

“Therefore, managers in the public sector should turn to IT outsourcing at a time when improving efficiency and cutting costs is imperative. A successful outsourcing strategy provides a medium to long-term solution, which can not only deliver the necessary cost savings to ease the burden of the current deficit, but also provide improved operational efficiency and access to specialist skills and technology. This allows any new or existing government to focus on core (in-house) activities.

"Healthcare is a prime example of a sector that is always being asked to fulfil the escalating needs of the patient, not to mention having to comply with the ever-changing government rules and regulations. This coalition could potentially increase these headaches, as potential indecision in policy making is unlikely to make changes required to stamp authority early on."

The backbone of any strong, successful business relationship is the ability to work together toward a common goal. With this is mind there are a number of fundamental considerations when selecting an outsourcing partner.

Rainer Majcen, Managing Director, Public Sector, arvato UK, said: “The obvious things to consider when selecting an outsourcing are whether they have the right credentials and a track record of successful delivery of similar projects, backed up by references. Thorough checks also need to be made on financial stability, technical competence, infrastructure and working practices.”

“But it’s just as important, that there is a good cultural fit between the two organisations. The management teams will be working together on a daily basis and employees may be transferred to the partner organisation as part of the contract so it’s vital the values and culture are aligned. The only way to judge this is to spend time with the team and determine whether the chemistry will work. Speaking directly to managers at organisations already working with the partner is another way of getting a feel for their real working culture.

“The process of transforming service delivery allows fundamental improvements to be made, resulting in long-term increases in efficiency and service standards. For example, since we started working with Sefton Metropolitan Borough Council, customer satisfaction levels have climbed to 90 per cent – the highest they have ever been.

“A dedicated partner will have the management expertise and capacity to maintain a constant focus on innovating and improving service standards and the additional flexibility of an outsourced relationship makes it easier to respond to changing market demands. Importantly, the right outsourcing agreement will also protect employees, ensuring that all terms and conditions are maintained and that the best possible support is given to maximise their contribution.”

Public sector outsourcing will be a buoyant space in the future. After the upcoming budget announcement, there will be more Cloud and shared services models will continue to be huge. Procurement will become easier and open to more suppliers including SMEs who have been encouraged to vie for bids following recent government proposals.

The NOA are developing a range of consultation documents on how the outsourcing industry can engage successfully with the public sector, taking the form of “White” discussion papers and then formal public meetings to validate/ratify them. Keep up-to-date on the NOA website – www.noa.co.uk.

The Department for Work and Pensions (DWP) has terminated a contract with Fujitsu to manage its desktop computers and replace its PCs with thin clients.

The six-year deal, agreed in 2010, was for Fujitsu to manage 140,000 desktops for DWP's entire workforce and develop a thin-client system.

Under the deal, Fujitsu was to provide the DWP with thin-client machines to replace its desktop PCs, a move Fujitsu said would generate tens of millions of pounds in savings on energy costs.

A spokesman for Fujitsu confirmed the company was still developing the thin-client system when the deal had been cancelled, and that none of the hardware had been delivered.

Capgemini, has been awarded a seven-year €15m contract extension by Danfoss, the leading global manufacturer of valves and fluid handling components for HVAC (Heating, Ventilating, and Air Conditioning) and industrial applications, based in Denmark.

Capgemini has already been delivering BPO Finance & Accounting services to Danfoss in 29 EAME countries (Europe, Africa and the Middle East) including South Africa for the last five years. During this time it has consolidated processes at the Capgemini Poland Krakow site, transformed systems from a country-based to process-based structure, and has collaborated closely with Danfoss to achieve process standardization.

Through this new contract extension, Capgemini will now deliver Danfoss’ Finance & Accounting services through a dual model of service delivery split between Krakow in Poland and Kolkata in India. Through the new scope, countries from NAM and APAC will also be transitioned from Danfoss to Capgemini (including the US, Canada, India, Australia, New Zealand, Singapore, Malaysia, Philippines, Thailand, Korea and Taiwan).

Over 130 BPO professionals will deliver Finance and Accounting services covering Accounts Payable, Accounts Receivable and General Ledger. Capgemini will give Danfoss the ability to scale up and down its services according to business needs and will drive process alignment increasing process optimization through its Global Process Model.

Christopher Stancombe, Head of Global BPO Finance & Accounting Service Line, said: “This is an exciting development of our collaboration with Danfoss. It extends our partnership into much wider territory, increases our service scope and allows us to deliver significant value and quality improvements for our client by working together to produce a Danfoss Global Process Model.”

Hewlett-Packard Co. plans to launch a public cloud service, company CEO Leo Apotheker said on Monday at the company's annual analyst meeting.

The cloud, connectivity and software are integral to HP's strategy, Apotheker told analysts at the HP Summit 2011 event held in San Francisco. It was the first public appearance by Apotheker since he became CEO more than four months ago.

Observers have eagerly awaited Apotheker's remarks. Since taking over the top spot at HP after the abrupt departure of former CEO Mark Hurd, Apotheker has avoided public statements regarding the company's future strategy. Indeed, as expected, Apotheker's key message focused on his desire for HP to march forward into the cloud.

"We intend to be the platform for cloud and connectivity," Apotheker told analysts. "The opportunities in the cloud are extraordinary and we are positioned to lead with our portfolio and to lead with our customers who need a trusted partner to help navigate the journey ahead."

Serco Group has announced that it has acquired The Listening Company, a UK based provider of outsourced customer contact centre services to both private and public sector organisations, for an initial cash consideration of £42.1m which includes the repayment of £16.4m of debt. In addition, contingent payments of up to £13.8m are payable, conditional on the financial performance in the two year period from 1 March 2011 to the end of February 2013.

The Listening Company specialises in bespoke solutions for managing customer interaction ranging from customer acquisition to retention, renewal and growth and including advice and service. It operates across multiple communication channels including email, telephone and internet.

The Listening Company's revenue for the year to 31 October 2010 is expected to be £82m with underlying operating profit of £4.4m before one-off investment. Following full integration into Serco's Local Government & Commercial division, The Listening Company operating margin is expected to be at least in line with Serco.

Christopher Hyman, Chief Executive of Serco Group plc, said: "This acquisition takes us to a new level of contact centre operation, expanding the services we offer to both the private and public sector as they seek to improve the effectiveness and efficiency of their contact centre operations. It will not only enhance our offering in bids for local authority transformation programmes, an important part of their solution to the challenges in the UK, but also strengthen our private sector capability."