Industry news

  • 26 Aug 2008 12:00 AM | Anonymous
    Instead of my usual diatribes and digs this week, I offer you more of an extended 'think piece'.

    One obvious trend of the past few years has been how societal changes have impacted on business expectations, while another has been how Web 2.0 technologies have transformed customer expectations, and how people interact with each other.

    The end result is that information – and therefore change – moves at Internet speed, while technology gives people unprecedented means to talk about things and to organise themselves into groups or information-sharing communities.

    Ultimately, these twin strands of change meet and challenge the enterprise, especially as the downturn deepens and news travels ever faster in our always-on, wireless world.

    What this means for the enterprise and for public sector organisations is that, yes, you can communicate faster and across multiple channels with your customers – if you are canny enough to recognise those channels, deploy them, and integrate them with other channels – but, equally, customers can talk about you and how you are getting it wrong.

    The fact they want to do so readily, swiftly, and in vast numbers is why Bebo, Facebook, Google, Yahoo, YouTube, MySpace, LinkedIn and the like are each worth billions dollars. And yet many companies beieve this has nothing to do with them.

    It was ten years ago that I interviewed several music industry CEOs about the threat to their business from the Internet: none saw it coming; all saw it as a marginal influence.

    I think I was the first journalist to recognise that the Internet was not a technology issue for them, but a problem of intellectual property on the one hand, and a means to share and interact directly with consumers on the other.

    The music industry is founded on intellectual property, not sales, and yet none of them had even considered the problem. Meanwhile, just outside their doors, a tidal wave of change and chatter was about to engulf them.

    In a short space of time, all that apparently irrelevant chatter online can build into a seriously loud noise: witness how data and hardware losses across several government departments have swiftly discredited the Home Office (and its head), the Ministry of Defence, HM Revenue & Customs, the DVLA, and also those organisations' private sector outsourcing partners.

    The most recent of those has been PA Consulting, whose professional reputation has been sullied all too publicly by one person mislaying a USB datastick of criminals' details.

    Today, millions of people are discussing the failures of a company that, just a week ago, most had never heard of. Add to that another (often overlooked) factor: yesterday's news is no longer wrapping today's fish and chips. It's stored on a chip and a searchable archive. Bad news travels fast, but today it lasts forever.

    In effect, whoever last held that memory stick – smaller than a cigarette lighter – was holding a company's and a government's reputation (perhaps even a nation's security) in his or her hand, together with the means to ignite it.

    The bigger problem for government now is how that same chatter is building into a negative campaign against ID cards, for example. A few isolated incidents have come together to create a huge strategic problem for Whitehall.

    And yet it was all so predictable, and obvious to even the most casual observer. In the background, mass data storage had become a commodity anyone could buy for a few pennies on the high street, and carry around on a key fob. Why did no one in government even consider the implications?

    It's no surprise, then, that many companies are realising that it is no use reacting to change long after the event; it is far better to predict it, or to be in the vanguard of it (rather than jogging along breathlessly behind, complaining about the disruption).

    Any ten-year-old could have told your enterprise that MySpace, YouTube, Bebo, Facebook and the like would have a massive impact on your business, for the simple reason they have changed our expectations of a/ how we communicate with each other and b/ how technology ought to be easy and intuitive – indeed, almost invisible – to use.

    Why then have so many companies sought to immure themselves behind vast, unwieldly, cumbersome onsite enterprise applications even as the rest of the world has become faster, leaner, more nimble, and more online?

    The good news is that Gartner, among others, has identified the problem too. As IT-based devices and technologies become more personal in scope and application, social issues will become increasingly important to product success, says the analyst giant.

    To identify and react to major societal shifts and trends, Gartner predicts that by the end of 2010, 15 percent of US and European businesses will have formalised societal trendwatching as a corporate discipline.

    “A connected enterprise must understand the connected society in which it resides,” says Scott Nelson, managing VP at Gartner.

    “Most firms wait until societal trends have overwhelmed them before they try to react. Slowness to respond can cost firms incredibly large sums of money and may drive them out of business all together.

    “Businesses will require anthropological and psychological input into system development to ensure that entire systems consisting of technology and people are viable, and to help evaluate how changes in employees’ and customers’ lifestyles will affect business,” he concluded.

    This is analyst-speak for anything that millions of people are using and discussing today probably affected you yesterday, and is certainly something you should listen to today.

    Of course, the danger that many organisations run into is trying to determine which trends to watch, says Gartner. The lessons of the past decade suggest it is often the apparently innocuous ones as much as it is the headline-grabbers: multi-gigabyte data storage on a stick (that least sexy of technologies) has undermined several pillars of central government.

    Gartner says it recommends giving responsibility to a group to watch societal trends and to focus on the following points to maximise short-term and strategic decisions while positioning the business for the future:

    • Social factors will become increasingly important in business and commercial systems. Adopt a human-centric design perspective. Watch these factors on an ongoing basis.

    • Appoint staff to review systems and working practices to identify legal, ethical and social risks.

    • Conduct an opportunity/threat analysis to identify product and service opportunities enabled by the connected society.

    • Understand and exploit network effects in products and services.

    • Explore the opportunities to use network effects and the connected society to solve business and government problems in new ways.

    • Privacy is a way of life and a business strategy decision, not a technical issue. Appoint a privacy officer.

    Now, this is all very well and hardly rocket science, you'd think, but analysts make a good living selling the obvious to the cash-rich.

    So I have one piece of advice for free: it's not the technology, it's the people. Put them first, think about them first, and the rest follows much more easily.

    Many companies in the 1990s employed so-called 'futurologists' to devine a gilded future for their employers. The reality is that most were glorified marketing people who existed to place their employer's brands in the vanguard of sexy, technology-assisted change. And yet almost none of them identified the bleeding obvious at the bleeding edge, and none of them saw the kind of issues that have undone so many organisations, markets, and businesses in recent years.

    So get real, people: that piece of kit in your hand... who uses, how, and why? What are the implications of this? Why do people enjoy using Google and Facebook, but hate using your bespoke enterprise system?

    See, it's not difficult, is it?

  • 22 Aug 2008 12:00 AM | Anonymous
    As I explored in a recent blog, the Philippines has an enviable track record in the offshore call centre industry, where the workforce's English skills have long given it a competitive advantage.

    However, the Philippines has ambitions beyond its niche in voice services, with a planned expansion into other lucrative BPO areas – legal services would be a logical option if they are not already on the list.

    The aim is achieving annual BPO revenues of $12-13 billion by 2010, consolidating the Philippines as the world's third most popular BPO destination.

    This comes as the Philippine Software Industry Association (PSIA) predicts that the US – where PSIA has been conducting coast-to-coast roadshows – will outsource as many as 60,000 jobs to the country over the next two years.

    The challenge, then is clear: contact centre seats are not highly skilled roles, and analysts predict that the Philippines will need to find 420,000 additional workers to become the BPO destination it aspires to be.

    Indeed, Ovum analyst David Mitchell says that more specialist skills will be difficult to produce without significant government support and investment in education.

    That support could come from the proposed Department on Information and Communication Technology (DICT) in the Philippines, and if the focus is shifted to premium skills charged at premium rates.

    One area where the Philippines has been hothousing skills beyond voice services (and within its burgeoning number of technology parks) is the emerging field of software as a service (SaaS). This has been typified to date by US customer service and CRM SaaS companies such as RightNow, NetSuite and Salesforce.com. The Philippines, then, has identified a significant market opportunity over the next decade.

    Even so, the challenge remains a difficult one, with even the most optimistic estimates saying that 70% of BPO revenues will still come from the call and contact centre industry.

    That means significant problems stored up for the future and a growing tension within the local economy. As India has discovered, being a centre of excellence means wage inflation, and so while 30% of the Philippines' BPO revenues may come from highly skilled, premium rate services, the majority will still be tied up in a service industry where low cost is one of the main advantages.

  • 22 Aug 2008 12:00 AM | Anonymous

    Comcast Corporation has announced it has signed a new BPO contract with Convergys Corporation.

    Under terms of the newcontract Convergys will continue to provide contact center technical support services, order management, and customer care support to the communications giant. 

    As part of the agreement Convergys will also provide services support to include back office processing and access to its new relationship management solutions by Convergys.

    Jim Boyce president of Convergys, North America, commented, "This is a great opportunity to continue serving Comcast and its subscribers”.

  • 22 Aug 2008 12:00 AM | Anonymous

    Russian retail chain, Lenta, and IBM have signed a three-year IT services contract estimated at approximately US$1 million.

    Under the terms of the agreement, IBM will provide support and recovery services for Lenta’s entire IT infrastructure.

    Sergey Cherniy, CIO at Lenta, commented, "We selected IBM because it has a service centre and a stock of spare parts and components in St. Petersburg”.

  • 20 Aug 2008 12:00 AM | Anonymous

    A new IBM consulting offering aims to help clients lower their environmental impact, increase efficiency and reduce costs.

    Dave Lubowe, global leader of IBM’s operations strategy consulting practice, commented, “There’s a fundamental truth to understanding and improving any aspect of a company’s performance – if you can’t measure it, you can’t manage it. This applies as much to a company’s energy and water consumption as it does to anything else, and our new offering can help clients apply this principle to make their businesses greener.”

    Business leaders acknowledge the advantages that come from proactively addressing corporate social responsibility (CSR), such as green issues. An IBM global CSR survey of more than 250 executives showed that 68 percent of them are already focusing on CSR activities to create new revenue streams and 54 percent believe CSR gives them a competitive advantage.

  • 20 Aug 2008 12:00 AM | Anonymous

    East Midlands based Payroll and Business Solutions UK (PBS) is extending its service into Asia for the first time.

    PBS is to provide a complete payroll service for Aastra Telecom and Laing Infrastructure Management, both of which are extending their workforce in India. Laing is working in developing countries to expand local infrastructure services. Aastra is expanding its sales team across the world.

    Pam Pindar, managing director of PBS, said, “International outsourcing is a rapidly growing area as businesses look to cut their back office costs whilst maintaining consistency for their employees."

  • 19 Aug 2008 12:00 AM | Anonymous

    Cincinnati Bell Inc. has renewed its contract with Convergys for five years, extending the relationship for more than 10 years.  The new contract, which runs until 2013, also contains two one-year renewal options.

    As part of the contract renewal, Convergys will continue to provide relationship management services and will also provide hard wired and wireless application development and maintenance services.

    Brian Ross, chief operating officer of Cincinnati Bell commented, “Cincinnati Bell is pleased to extend its long-standing relationship with Convergys, we will continue to advance customer relationships while achieving important cost reductions in our business.”

  • 19 Aug 2008 12:00 AM | Anonymous

    Genpact Limited today announced that it acquired a delivery center in Guatemala City from GE Money, a division of the General Electric Company, on August 15, 2008.

    The facility is Genpact’s first in Guatemala and will provide services to GE Money from the facility.

    Juan F. Ferrara, Genpact’s business leader for the Americas, commented, “We are excited about our newly expanded presence in the region. Our new facility enables us now to offer services to our global clients from both Guatemala and Mexico."

    Charlie Crabtree, senior vice-president & COO for GE Money, said, "GE Money is delighted to introduce our global servicing partner, Genpact, to the Guatemala market place.”

  • 19 Aug 2008 12:00 AM | Anonymous

    Despite current economic concerns, worldwide IT spending will exceed $3.4 trillion in 2008, an increase of 8 percent from 2007 spending, according to Gartner. Analysts said much of this growth is based on the decline in the U.S. dollar.

    Jim Tully, vice president and distinguished analyst at Gartner, commented, “The U.S.-led economic downturn shows no sign of causing a recession in IT spending. In subsequent years we will see reduced growth, but the fundamentals remain strong. Emerging regions, replacement of obsolete systems and some technology shifts are driving growth.”

    Gartner analysts said there are important strategic issues facing the IT industry and that, “Organisations are switching from company-owned hardware and software assets to per-use service-based models. This will impact the industry in various ways. The projected shift to cloud computing, for example, will result in dramatic growth in IT products in some areas and in significant reductions in other areas."

  • 18 Aug 2008 12:00 AM | Anonymous

    The BBC’s outsourcing deal with Capita is producing significant savings according to a BBC spokesperson.

    Despite some initial difficulties, the BBC is confident that the outsourcing of the majority of its HR processes, in the £100 million contract with Capita, will produce significant savings and streamline its HR services.

    The spokesperson also added that, ‘as in any deal there are some teething issues, however we are confident that these will be smoothed out and we will continue to see significant savings’.

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