Industry news

Adrian Quayle, board member, the National Outsourcing Association (NOA) has responded to the critical report by the NAO regarding the current use of ICT in the government.

Adrian commented: “The National Outsourcing Association welcomes the proposed approach by the National Audit Office for its Landscape Review of ICT in government. We would also welcome an early dialogue with the National Audit Office Study leader, Dr Sally Howes.

"We would strongly recommend that the NAO review tracks and learns from long term relationships that have genuinely delivered value for money and those that have not."

As part of the NOA's activities in helping business organisations create solid and profitable relationships, Adrian has been working with other industry associations in collaboration with the British Standards Institute (BSI) to publish the first-ever standard on Collaborative Business Relationships – BS 11000.

“We believe that the NAO should seek evidence of the benefits arising from genuinely collaborative business relationships. We would hope that this study would identify how many Senior Responsible Owners in government are trained in, and working to, the industry best practices of collaborative business relationships set out for example, in the new British Standard BS11000.“

Logica, partnering with FleetCor Technologies Inc, a leading independent global provider of specialised payment products and services, has announced that they have won a 10-year, €300 million contract to support Shell’s Commercial Fleet fuel cards programme in Europe and Asia.

Business-to-business fuel cards offer firms that operate fleets of commercial vehicles a convenient, cost-effective and secure way to pay and account for fuel and other on-road services.

Logica has teamed up with FleetCor to deliver the service to Shell. Logica, as the prime contractor to Shell, will join FleetCor to provide the technology platform and underlying business processes to run Shell’s fuel card portfolio. FleetCor’s Global FleetNet (GFN) card processing platform will be used to develop Shell’s customer offering.

Logica will run Shell’s existing system and replace it with a new system built around GFN. The first pilot is due to be completed by April 2012 with the full roll-out completed by end of 2013.

Andy Green, CEO Logica, said, “Winning this contract reinforces our ability to handle complex projects across countries with our clients. Logica’s deep understanding of the oil and gas industry, coupled with its experience in payments and fuel cards in particular, gave us the edge in developing a compelling proposition for Shell.”

The National Audit Office has published a critical report into the government's approach to ICT.

The NAO report outlines five areas of discussion including a lack of business intelligence and the poor quality of cross-department ICT initiatives.

The report has been released as the NAO commented that the government will face challenges after its “radical and rapid changes” made to it's approach to ICT.

Sureyya Cansoy, director of public sector at Intellect, the trade association for the UK’s technology sector said:

“The report is a very useful snapshot of the current landscape and the challenges ahead. We welcome the NAO’s recognition of the important roles that information and technology play in delivering better and more efficient public services, increasing social mobility and driving economic growth.

"Public service reform should be focused on value, not just on lowest cost. The NAO’s approach supports this and we look forward to working with them to collectively address the challenges they have set out.”

Some GP pathfinders under the Government's rollout of its NHS reforms are planning to outsource almost every area of commissioning support to the private and voluntary sectors, a Medical News survey reveals.

25 GP pathfinders were asked about their upcoming approaches to spearheading the Government's health reforms, and the management support they are recruiting.

Some are following an NHS-only policy in recruiting commissioning support, while others plan to use external support for most areas.Some pathfinders are even setting themselves up as private companies until the formal handover from PCTs.

ADA Technology Services has been awarded an IT managed services contract that will see the Sussex-based specialist run Marlin Financial Services’ entire IT operations over the next four years. The £1.4m contract will support Marlin’s ambitious growth plans and will initially cover 125 users, rising to 200 over the term of the agreement.

Marlin will receive complete IT service support for every employee and benefit from outsourced management of all its IT systems and applications. The move will allow Marlin to focus on operational delivery and achieving targets laid out in its long-term growth strategy.

Key services will include the delivery of a newly hosted infrastructure, which is supported by a remote service desk and supplemented by regular onsite support engineers. ADA will also provide VIP support for the executive team, technical account management services for advanced problem resolution and reporting, and a virtual CIO to define Marlin’s IT strategy. A comprehensive disaster recovery service including a 25-desk emergency suite will cater for relocation if required.

ADA's Managed Services Director, Ash Patel, says: "This is a great project for ADA and one that plays to our strengths. As a mature IT outsourced services specialist that caters specifically for the mid-market, we have developed a thorough understanding of what our clients need from an IT perspective in order to help them grow. As a consequence of Marlin’s decision to outsource its IT function to ADA, we are able to plan and manage their IT costs as the business expands. Marlin now has a pre-allocated price per user that will provide complete control of its IT expenditure over the next four years”.

Diminishing UK public sector contracts contributed to the mixed year-end results announced today by IT services giant Atos Origin.

The group's overall operating margin of €337m was up to 6.7 per cent of revenue in 2010, compared with 5.7 per cent in 2009. But that was on revenues of €5,021m, a decline of 3.5 per cent on last year.

As part of the year-end results announcement, Atos also laid out its plans for integrating SIS.

Business owners urged to help themselves – and each other – by taking part

A new campaign aimed at transforming the fortunes of smaller firms across the UK was launched today by a leading business group.

Get Britain Trading, the brainchild of the Forum of Private Business, aims to raise awareness of the huge contribution small and medium-sized enterprises (SMEs) make to the UK economy.

It also aims to make that contribution even bigger – and help push forward economic recovery – by vastly improving the conditions smaller businesses are forced to operate under.

In order for the campaign to work, the Forum is calling on as many SMEs as possible to get behind it by visiting a specially-created website – www.getbritaintrading.co.uk.

On the site, business owners are invited to sign up to the ‘Get Britain Trading pledge’, which is an expression of support for the campaign and its aims. By taking a few moments to input an email address, business owners will receive a free practical guide filled with expert advice on common small business issues such as bank lending, late payment and cost reduction.

Get Britain Trading calls for number of radical changes to be made in order to allow smaller businesses in the UK to thrive, which in turn will boost employment and prosperity at a time of widespread economic uncertainty.

The Forum is arguing that if action is taken to tackle problems such as excessively complex tax laws, stifling workplace regulations and crippling fuel and utility costs, SMEs will be much more willing to create new jobs and spend money on products and services from other businesses.

Setting in motion this ‘ripple effect’ of increased business confidence and investment is at the centre the new campaign.

Forum of Private Business Chief Executive Phil Orford said: “We want business owners across the UK to help to us help them by backing Get Britain Trading.

“We really believe this campaign can transform the small business landscape in the UK and free SMEs from the shackles of excessive red tape, mind-bogglingly complex tax laws and all the other things which can make running your own business a constant uphill struggle.

NHS SBS Commercial Procurement Solutions, a new business service, is hoped to drive efficiencies of more than £1 billion in NHS procurement over the next five years.

Commercial Procurement Solutions was launched following the merger of North West Collaborative Commercial Agency (NWCCA) with NHS SBS. This merger will offer all new and existing NHS clients a full, end-to-end procurement solution.

Speaking about the new service, Health Minister Lord Howe said: "Getting the best value for money for the NHS and the taxpayer is vital. I am pleased that this service will help NHS Trusts to manage their procurement in the most cost efficient way possible."

John Neilson, Chief Executive of NHS Shared Business Services, added: "The Government's efficiency drive means that NHS Trusts will be expected to deliver even greater savings over the next five years. By working with NHS SBS Commercial Procurement Solutions, NHS Trusts will have access to a wide range of agreements that take advantage of economies of scale and established relationships with suppliers."

He continued: "NHS SBS Commercial Procurement Solutions aims to rapidly develop health purchasing procurement skills, raise overall standards, consistency and quality of commercial capability for the NHS, and build on previous best practice."

The new service will continue to be managed by Peter Akid expanding both its service offering and geographical coverage to help NHS Trusts achieve savings of more than £160 million. It is anticipated that this new model will deliver substantial savings to the NHS whilst at the same time improving quality, patient safety and provision of services.

Five years from now the UK Pensions and Investment industry will have transformed. The primary reason is the changing dynamics in investor behaviour that are influencing the way they interact across multi-channels to make more informed investment decisions. In particular, the over fifties segment, referred to as grey-power, whose ranks are being joined by millions of baby boomers are demanding greater say over their future destiny. Their demand for more transparency and control over their financial destiny is a powerful force that could stimulate deep rooted and dramatic change that goes beyond the investment industry.

Companies from other sectors, in particular retailers, have amassed considerable lifestyle data and have been pioneering more sophisticated self-service experiences and insights; inevitably this includes the grey-power sector. The combination of this shift towards empowering the customer and the increasingly crowded competitive marketplace is likely to lead to a significant change and more intense focus around winning a greater share of the ‘investor’s wallet’.

Insightful lessons can be taken from other market sectors that have recently been transformed by customer behaviour, where those organisations that set new market standards for delivering service experiences are favoured above the competition (Apple, for example). The speed of these changes happened far faster than many expected, especially the conservative incumbents who have now been displaced as market leaders.

The combination of these market shifting changes, when considered from a wider and deeper perspective, do demand attention sooner rather than later. This creates the impetus for a number of initiatives:

 Proactively targeting the grey-power market segment as a sustainable growth opportunity

 Redesigning and retooling the retail distribution channel including the associated processes and services

 Developing competitive advantage from improved and enriched interactions and experiences

 Increasing the volume of customer self-service using insights and knowledge as competitive differentiators

 Building a product innovation and development process that starts with the customer not the manufacturer

 Establishing a services platform for delivering superior multi-channel, consistent and transparent experiences.

Customers are changing the way they research and buy products from the UK Pensions and Investment industry. Corporations must learn to influence the behaviours of both the mass affluent and mass market by managing the customer’s experience around their need for knowledge, insights and tacit interactions at key, and appropriate, stages of their decision-making process. Leadership of this en masse transition will trigger a customer-centric paradigm shift that will profoundly change the UK Pensions and Investment industry.

After bursting upon the legal scene in mid-2009, legal services outsourcing (LSO) has gone from strength to strength. So much so, that 2010 will go down as the year in which this innovative new approach to the delivery of legal services achieved mainstream acceptance - and signalled that it was definitely here to stay. That’s no small feat considering how conservative and resistant to change the legal industry has traditionally been.

Outsourcing lower-level legal work, such as document and contract review, transaction support, and legal research, was a hot topic for debate among legal professionals, in the media, and at industry conferences during 2010. Most tellingly, senior in-house counsel became increasingly open in discussing how partnering with an outsourcing provider could help reduce legal spend, increase efficiency and get their own lawyers back to practising law. With mounting pressure from their corporate clients to change the legal orthodoxy, many law firms who were previously sceptical about LSO were forced to look at how they would build outsourcing into their service delivery models. As a result, the concept of a three-way working relationship between corporate clients, law firms and legal services outsourcing providers has flourished and become a true symbol of change in the industry.

Changed perceptions

Perceptions of LSO and its place in the legal market also shifted dramatically in 2010. As little as two years ago, the concept of outsourcing legal work was met with scepticism across much of the legal industry. However, research that CPA Global undertook in conjunction with the Financial Times Innovative Lawyers Awards during August 2010 revealed that more than 43% of companies and 73% of law firms are now outsourcing or considering outsourcing legal work.

The type of work outsourced has changed too, with document review and transaction support (including mergers and acquisitions) identified in research as the biggest areas for outsourcing in 2010 – more so than intellectual property management, which has tended to dominate the legal outsourcing scene in the past. While cost savings are still the main driver for outsourcing legal work, market recognition of other benefits became more apparent during the year. In a CPA Global poll of UK-based in-house counsel at the Legal Week Corporate Counsel Forum in September, 25% of respondents identified making better use of their existing resources as the most important reason for outsourcing, while 17% highlighted scalability for large, unpredicted projects.

Attracting investment and talent

LSO has also caught the attention of outside investors, looking for companies with high growth prospects in the post recessionary period. In January 2010, Intermediate Capital Group (ICG), a leading independent investor and fund manager, acquired a significant minority stake in CPA Global, underlining the growing confidence in LSO amongst the financial community. For CPA Global’s part, the investment has ensured that we are even better positioned to take advantage of the significant market opportunities ahead.

As LSO has become more established and accepted in the legal mainstream, so has its credibility and prestige increased. This, in turn, has attracted more top legal talent to the sector - both onshore in the UK and US, as well as in offshore delivery centres – with LSO being seen as a viable alternative career for legal professionals. At CPA Global, for example, over the past year, we have recruited senior lawyers from leading corporations such as Virgin Media and Home Depot, as well as top law firms, including Baker & McKenzie, Allen & Overy and SJ Berwin. Our growing teams in the UK, US and India are working with some of the world’s best known corporations in the financial services, technology, telecommunications, pharmaceutical, healthcare, and FMCG industries.

2011: a year of growth for quality providers

Looking to 2011, we see LSO becoming more deeply embedded in the legal services industry as an increasing number of corporations and law firms see for themselves the benefits to be gained from the highly cost-efficient, three-way collaboration model that LSO is able to deliver. Law firms will increasingly recognise that LSO providers are not aiming to replace them – we never will, as we don’t practise law. On the contrary, by ensuring better use of resources and proper segmentation of work, we can ensure that law firms and in-house legal teams are able to spend much more of their time practising law, which is what they do best.

Already, there are many different types of company offering outsourced legal services of various descriptions; and, as LSO continues its rapid growth, more players can be expected to enter the market, perhaps leading to greater price competition for some of the more commoditised services.

However, as customers become more familiar with LSO and more discerning about the service they require, quality will increasingly be the key differentiator when selecting an outsourcing partner. In the Corporate Counsel Forum poll in September, 66% of respondents identified quality as the greatest concern when considering outsourcing. This is a challenge that LSO providers have to deal with head-on by proving that quality can be maintained and even improved through outsourcing. Only well resourced, established players in the market who recruit and train the best talent will be able to do this.

This focus on quality is likely to define the industry over the next 12 months. Providers who can deliver the high standards and performance demanded by leading corporations and law firms will enjoy significant growth; while those who compete on price alone will struggle to sustain their business in the longer term. This, in turn, could lead to greater consolidation in the industry, with just a few strong, well resourced and well run providers leading the market.