Industry news

Stora Enso, a leading forest products company, has entered into a multi-year transformational BPO agreement with Capgemini Outsourcing Services to provide global financial and accounting processing services.

Under the agreement, beginning in 2009, Capgemini BPO teams will provide financial and accounting services, such as vendor invoice handling, from Capgemini ‘Rightshore’ BPO delivery centers located in India, Poland and Brazil. In addition, Capgemini will support Stora Enso to establish its centralized shared service centre in Kotka, Finland, leaving only few finance functions remaining in the main operating countries.

Markus Rauramo, Chief Financial Officer of Stora Enso, stated: “This decision is consistent with Stora Enso's strategy to seek efficiencies in its ways of working by reducing complexity and leveraging the scale and best practices of outsourcing providers. Transferring our accounting activities to Capgemini will enable us to streamline our administration in line with its more focused business. Capgemini has a proven track record in accounting BPO services”.

Welwyn Hatfield Borough Council, responsible for a population of approximately 106,500 constituents in central Hertfordshire, has signed a £31 million deal with Steria to provide ICT, council tax, benefits, customer contact centre, reception and switchboard services. The partnership, which will go live in January 2009, aims to improve efficiencies at the council, provide better services for Welwyn Hatfield's citizens and ensure a projected saving of £500,000 per annum.

Working from a ‘centre of excellence’ in Welwyn Hatfield, Steria aims tol improve the quality and efficiency of the council's service delivery, helping to free up staff and resources for investment into frontline services. By employing Steria to implement new business processes and software, the Council hopes to provide customers with more choice, greater accessibility and quicker response times.

The partnership is an industry first for Steria, establishing its first revenues and benefits BPO contract in local Government. A total of 68 staff in the customer contact centre, ICT, revenues and benefits departments will transfer to Steria to deliver the programme. Steria intends to use the Welwyn Hatfield Council centre of excellence as a hub for a future shared service involving other local authorities in Hertfordshire and beyond.

"The council's key aim is to deliver high quality, value for money services", commented Bob Jewell, chief resources officer at Welwyn Hatfield Council. "Steria has a wealth of experience in the sector and really understands the specific needs of a borough council. We're glad to be working with them to ensure we continue to provide excellent quality of services for our citizens."

Wipro has set up a BPO centre at Curitiba in Brazil to provide shared services to AmBev, the largest brewery in Latin America. The company will provide BPO for finance and accounting, order management, customer care and HR human resource activity spanning AmBevs operations across Latin America.

Ashutosh Vaidya, Wipro’s Head of BPO, commented: “We have expertise in delivering process specific solutions in finance and accounting, procurement, HR services, loyalty services and knowledge services. Our capability to transform processes, implement SAP and provide world class service delivery is a strength unmatched by competition.”

AmBev is the biggest brewery serving South America with leading brands like Brahma, Becks, Stella and Antarctica.

Redcats Group, a leader in home shopping for fashion and home furnishings, has extended its ITO contract with Atos Origin for another three years.

According to Atos Origin, the decision reflects “the two partners’ shared commitment to further leveraging their industrial-scale data processing capabilities to optimize the multi-channel home shopping experience.”

As part of the continued contract Atos will provide back-office services via its service centers across Europe. Also, all orders made with Redcats, whether taken online, via telephone or by mail, will also transit through systems operated by Atos Origin.

Patrick Terrier, VP Corporate Operations for Redcats Group, commented: “During the latest phase in our outsourcing agreement. Atos Origin successfully consolidated our IT resources and led a transformation plan aligned with the challenges that our businesses must address in terms of flexibility, cost-savings and quality. It is this ability that we’ve recognized by renewing our agreement.”

In the US, where I am for a few days, business and financial stories have been shunted out of the limelight as senators McCain and Obama vie for the popular vote. Channel after channel devotes almost twenty-four hours of coverage to every grandstanding speech, broken only by adverts – mainly from the candidates, but occasionally for headache pills – and, on the West Coast where I am, by competing messages about local policy amendments.

On the one hand, it's inspiring that American politics speaks so directly to American people and seeks to engage and motivate them about every policy nuance, but as the presidential campaign nears its conclusion, the two hopefuls' messages have merged into one: “American companies, American jobs, American people”. The rest of the world... who are they?

One candidate (I forget which) even went so far as to say that outsourcing was part of the impetus for the Wall Street collapse – neglecting to mention that both candidates have outsourced their campaigns for voter registration. Each candidate, of course, has wasted no time accusing the other's outsourcing partner of corruption.

The insularity of the US is something to behold at first hand: I was in the US a month ago, in the eye of the Wall Street storm, and even then the election was the only show in town, as the Down Jones tanked 800 points one day, and 500 on another.

Perhaps the side effects of a decade of living on credit are simply accepted in America: like those painkiller TV ads I mentioned, which, by law, have to list all of the possible side effects of swallowing one: may induce nausea, dizzy spells, dementia, memory loss and liver damage. Just like buying a house, or a shopping spree on your store card.

In the UK, the financial crisis has been a bigger story than in the US where it originated, while government is usually in the spotlight only to demonstrate its incompetence.

Yes, another day, another memory stick lost: this time outsourcing provider Atos Origin is being blamed by the Department of Work and Pensions after a memory stick containing passwords and security details for the Gateway website was found in a pub car park. As I write, the website is down for security testing, so people are unable to submit tax information online.

The Prime Minister has finally admitted the obvious – the Government cannot guarantee data security – but still has trouble with the underlying message: it's not about technology, it's about policy and good management.

Also in the UK there is further unease in the services sector, as BT announces that its Global Services division is underperforming and dragging down the group's overall profits.

This is a worry: unlike the US, whose economy relies on Main Street shoppers, the post-Thatcherite UK is built on services: that sector the Government is so keen to blame for its own ills.

In the US, if you can inspire the people you can rebuild the economy. In the UK, if we talk down the services sector we are talking ourselves into a slump.

But we'll be right back after this break....

Despite the fact that organisations worldwide are deferring capital expenditures, outsourcing continues to be the number one tool chosen to drive organisational change, according to EquaTerra’s 3rd Quarter Pulse.

The report also showed a positive growth in outsourcing, with 40 percent of market sectors citing increased demand levels. Interestingly, the results show that the focus in outsourcing is shifting from longer-term initiatives, aimed at improving end-to-end business processes, toward efforts that deliver quick return on investment (ROI) and/or facilitate short-term business objectives.

A summary of the report can be found at: http://www.equaterra.com/EquaTerraRelease10_28_08.htm

The results of the 5th annual National Outsourcing Association (NOA) Awards (NOAAs) were announced this week at a special ceremony in central London.

Over the last five years, the “NOAAs” have become a landmark in the acceptance of outsourcing as a legitimate business practice and recognise the efforts of companies or people who have shown excellence in the field of outsourcing.

Martyn Hart, chairman of the NOA commented: “The downturn in the economy has made it a very challenging and interesting year for all industries. Despite this, outsourcing has still retained steady growth and has seen significant positive performance. With outsourcing being such a fundamental part of the business landscape we feel it’s critical to raise awareness of how important best practice in all aspects of outsourcing is and these awards have become an essential part of that.”

The 16 categories, which encompass every area of outsourcing, attracted hundreds of applications and were judged by a panel of outsourcing experts. The winners of this year’s NOAAs are as follows:

• BPO Project of the Year sponsored by Steria

WINNER: The Co-operative Financial Services & Capita

• IT Outsourcing Project of the Year sponsored by Financial Sector Technology magazine

WINNER: Lloyds TSB

• Financial Services Outsourcing Project of the Year Sponsored by Homeloan Management Ltd

WINNER: CSC & Zurich Financial Services

• Public Sector Outsourcing Project of the Year sponsored by NelsonHall

WINNER: Capgemini UK & Welsh Assembly Government

• Utilities, High Tech and Telecommunications Outsourcing Project of the Year, sponsored by sourcingfocus.com

WINNER: Luxoft & Aepona

• Offshoring Operation of the Year sponsored by Buffalo Communications

WINNER: Exigent Group Ltd

• Outsourcing Professional of the Year sponsored by Outsource magazine

WINNER: Barry Matthews, Head of ITO, Alsbridge plc

• Outsourcing Service Provider of the Year sponsored by Invest Northern Ireland

WINNER: bss

• Outsourcing Contact Centre of the Year, sponsored by Invest Northern Ireland

WINNER: bss

• Outsourcing Advisor of the Year sponsored by Capita HR & Payroll Services

WINNER: Eversheds Ltd

• Offshoring Destination of the Year sponsored by Cognizant

WINNER: Egypt (ITIDA)

• Outsourcing End User of the Year, sponsored by The OUT group

WINNER: The Co-operative Financial Services & Capita

• Award for Innovation in Outsourcing sponsored by Capgemini

WINNER: VocaLink & The BankGiroCentralen

• Award for Best Practice in Outsourcing, sponsored by ITIDA

WINNER: OPAL & HBOS

• Best Academic Achievement, sponsored by NOA Qualification Pathway

WINNER: Matthew McNeil

• Lifetime Achievement Award, an NOA award

WIINNER: Roger Barber, Senior Consultant, Equaterra

• Special award for consistent excellence for outsourcing practice across all disciplines, an NOA award

WINNER: Infosys

Deloitte, the business advisory organisation, has appointed two UK member firm partners to the leadership team of its life sciences and health care industry group.

Dean Arnold has been appointed health care sector leader and David Jones takes up the role of financial advisory services leader for life sciences & health care.

Bob Go, managing director of the life sciences and health care industry group at Deloitte, said, “With new opportunities regularly presenting themselves within the organisation, I’m delighted that Dean and David have agreed to share their broad industry knowledge and take on these pivotal roles.”

The NOA Awards last week (not attended by yours truly, owing to a bout of lurgy) were by all accounts a glittering success, Congratulations to all of the winners (such as destination of the year Egypt), and also to the nominees. There is clearly a great deal of innovation and good work out there, and that is indeed cause for celebration.

The big question, though, is how will we look back on 2009 at next year's event?

As 2008 draws to a downbeat close, with the UK economy in Q1 of a likely recession, we're facing a year to 18 months of rising unemployment, falling property prices, scarce credit, and business collapses – especially among smaller enterprises and manufacturers.

Some economists believe the worst is yet to come, and few would bet against further banking collapses. At least one international bank, which owns some UK finance names, has been quietly selling off its assets.

It's sometimes said that a recession is an opportunity for the outsourcing industry, in that companies looking to slash costs or source external, non-core expertise will turn to outsourced service providers. But I'd argue that's a challenge, not a cause for backslapping and glee.

Of course, there is good news... on the face of it. Despite the fact organisations worldwide are deferring capital expenditures, outsourcing continues to be the number one tool chosen to drive organisational change, according to EquaTerra’s quarterly Advisor and BPO/ITO Service Provider Pulse Survey.

The findings of the Q3 2008 edition show that demand for outsourcing is outpacing business investments in areas such as hardware, software and other types of more discretionary service.

Growth in outsourcing was positive in Q3, it said, with the focus shifting away from “longer-term initiatives and towards efforts that deliver a quick return on investment (RoI)... help align operating costs to reduced circumstances, and minimise short-term capital outlays”. In other words, projects that slash costs.

Despite this, the economy's losses are not our gains, and we must guard against celebrating.

Face it: most people still see outsourcing as about job losses, not expertise or innovation. In a recession – perhaps even a slump – that means storing up a huge amount of negative equity, if you like, in terms of people's attitude to our industry and we should take a careful step back from celebrating an apparent upturn in our fortunes. Otherwise we will be seen as part of the problem, and not as a long-term solution.

Celebrate innovation, as the NOA Awards did, and not an opportunity to trouser cash as unemployment soars, people default on payments, and businesses can't find the credit they need to survive.

The international healthcare organisation, AstraZeneca, have appointed Cognizant to provide application maintenance over the next five years.

Cognizant will work with AstraZeneca’s global shared services organisation and implement end–to-end application maintenance services.

Richard Williams, global CIO at AstraZeneca, commented, “Our strategic partnerships will enable us to streamline operations efficiency, raise standards and deliver world-class services. The selection of Cognizant will allow us to leverage their global operations to meet the needs of our business.”

Francisco D’Souza, president and CEO of Cognizant, said, “We are pleased to have been selected by AstraZeneca’s global shared services organisation to provide application-related services.”

No financial details have been released.