Industry news

  • 17 Jul 2008 12:00 AM | Anonymous

    As recently as 2006, a Datamonitor survey found that while companies outsourced for a variety of reasons, including the need to expand hours, better handle off-peak traffic, improve staffing flexibility and achieve higher productivity, saving on costs was the lead factor.

    But attitudes can change quickly. In the face of tough competition, a challenging economy and changing customer expectations, companies are beginning to use outsourcing not only to create a lean enterprise, but also to ensure a positive customer experience that contributes to growth. Driving this broader vision of outsourcing is a new approach called relationship management, which makes customers happier, more loyal and more profitable.

    Relationship management optimises the value of customers to the enterprise by implementing a strategy that strives to perfect their experience in doing business with the company. This works well in an outsourced environment as relationship management builds on the traditional cost benefits companies have come to expect, while delivering the enhanced revenue that derives from providing a positive experience.

    Among the most exciting new developments is a trio of options that can directly impact a company's relationships with customers:

    • Performance-based learning (PBL);

    • Automated voice assist technologies

    • Real-time predictive analytics

    Companies that outsource may not feel it's their job to worry about their contact centre provider's training programs – but they and their customers will certainly feel the impact if an outsource vendor's agent training is not up to par. Improving the customer experience begins with the agent, whose effectiveness, commitment and longevity directly correlates to training.

    Relationship management experts champion a new approach to training called Performance-Based Learning (PBL), which combines instructor-led training, hands-on activities and role plays - transforming learning to make it more useful to agents, thus boosting work quality, job satisfaction, commitment and productivity. The idea behind PBL is to teach agents specifically what they need to know to serve customers. The confidence that comes with PBL improves morale, contributing to ever-improving agent performance and longevity on the job.

    More importantly from the standpoint of the company that uses an outsourced solution, agents that have experienced PBL "hit the ground running," and are able to quickly achieve higher levels of first call resolution and shorter average handling times.

    The need for tailored training is even more important now, given intense competition has prompted an explosion of new products, services, options and pricing plans for many companies. Accompanying this boom are huge volumes of information that the agent must access and understand in order to quickly resolve customer issues.

    New 'agent assist' technologies available from some outsource providers use voice recognition to pick up on key phrases during a customer interaction and instantly retrieve essential data needed to handle an enquiry or problem. Such voice assists automate common repeated activities on the desktop, adding relevant data or jumping to just the right screen, to speed the interaction and ensure an accurate response. For customers, it's a vast improvement over waiting while an agent scrolls through screen after screen of data looking for the right information.

    Automated agent assist is emerging as an important tool for delivering a stellar customer experience to today's Internet-raised generation, for whom real-time is the only time that matters. By reducing manual navigation, page clicks and data entry, automated agent assist shaves vital seconds off average handling times. By harvesting data from existing applications, the technology eliminates the errors that can plague manual re-typing or 'cut and paste' actions. Where speed is of the essence, these features significantly enhance customer satisfaction, while at the same time reducing costs to the enterprise.

    Given the vast amount of data generated, equally exciting for the future is the ability of 'agent assist' to trawl customer data during an interaction and prompt the agent on offers most likely to be of interest to the customer. In so doing, agent assist crosses the line from data look-up into data mining and real-time predictive analytics - an area that transforms the agent from a problem solver to an enterprise revenue generator.

    Companies have long recognized that they have massive amounts of customer data. But how best to use it? Real-time predictive analytics allows companies to be proactive rather than reactive and gives the ability to leverage the data to drive maximum value from and to each customer - scalable to millions of customers simultaneously. Used primarily by the communications and financial sectors, real-time predictive analytics is rapidly gaining momentum and may ultimately span multiple industries.

    Real-time predictive analytics continuously polls a company's diverse databases to create a detailed 360 degree view of each customer. The ability to pull up real-time profiles of customers is a powerful tool supporting service and marketing objectives.

    Thus armed, companies can:

    * preemptively detect and correct problems before the customer is even aware of them

    * proactively automate tailored offers to customers, based on known preferences or requirements

    * deliver all pertinent customer data to the agent's desktop during a customer interaction, providing an avenue to quickly resolve problems and then segue into cross-selling/up-selling.

    Real-time predictive analytics offers another attractive twist: It lets a company tailor the level of service delivered depending on the customer's current and predicted value. It's a fact of business life that 30 percent of customers are responsible for 70 percent of revenue. Knowing which customers are most valuable enables a company to craft special offers geared to nurturing and growing these relationships.

    Outsourcing has come a long way since the days when budget issues were its primary driver. While the cost-saving advantages of outsourcing will always be important, companies are now raising their sights. They're starting to view operational efficiency as a key subset of the broader relationship management strategy, and to understand that the customer experience - not savings alone - underpins a company's financial success.

  • 17 Jul 2008 12:00 AM | Anonymous

    Spanish bank Cajamar has singed a BPO agreement worth €15 million with EDS.

    The seven year contract will see EDS develop a new BPO centre in Almeria to support this and future business in the Andalucía region of spain.

    Once completed, the centre will provide mortgage processing, customer interaction, administration and document management for Cajamar.

  • 17 Jul 2008 12:00 AM | Anonymous

    The Australian Government has selected IBM Australia to support its Standard Business Reporting (SBR) initiative, which aims to reduce the reporting burden for business.

    As part of the contract, valued at AU$10m, IBM will leverage global expertise and a range of architectural design and program management skills to develop an entirely new system for the government. The finished product is expected to enable businesses to more easily interact electronically with the Government through a range of software and accounting packages.

    The Government hopes the new system to be faster, cheaper and easier for businesses and their intermediaries to prepare and file their reports. It is expected that Government departments will also be faced with fewer errors and faster processing times.

    The contract was signed during the second quarter of 2008.

  • 17 Jul 2008 12:00 AM | Anonymous

    British Airways has chosen BancTec, a global provider of complex business process automation solutions, to replace two obsolete and separate case handling systems with a single, integrated system based on BancTec’s eFIRST Process case management solution. Six departments have already been migrated to the new system – CHARM (Case Handling and Retrieval Management) – and four new departments are currently in process of being added.

  • 16 Jul 2008 12:00 AM | Anonymous

    The Brønnøysund Register Centre, a trade and industry body in Norway, has awarded Accenture a new contract to continue development and operation of Altinn, Norway’s citizen-centric online portal.

    The new phase of development, known as Altinn II, includes a three-year contract valued at approximately $44.4 m (230 million Norwegian Kroner) covering application development and continued management of the e-government portal, with the option for three one-year extensions.

    Under the new contract, Accenture will provide a new phase of application development and management of Altinn encompassing implementation of a simplified user interface, collaboration services, an advanced security solution, and operation of the company’s portal service.

    The Altinn portal service was initiated by the Norwegian government in 2002 to simplify the interaction between government, businesses and citizens by providing a single electronic channel for written communications with the public sector, enabling businesses and citizens to communicate with multiple government agencies through a single point of submission.

    Roy Grønli, managing director of Accenture’s Public Service practice in Norway, said: “The Altinn II solution adopts a business and citizen-centric, value driven approach that will continue to transform the way the Norwegian government interacts with both businesses and citizens. We look forward to building on our successful relationship with the Brønnøysund Register Centre with the development and implementation of Altinn II”.

    The Altinn portal became fully operational in the spring of 2004.

  • 16 Jul 2008 12:00 AM | Anonymous

    Convergys Corporation, a global leader in relationship management services, has appointed of Jim Goetz as Chief Information Officer. Goetz will report to Earl Shanks, Convergys’ Chief Financial Officer.

    As part of the role, Goetz will be responsible for strategic planning and global implementation of the information systems and technology function for Convergys including programming, systems development, database management, computer operations, telecommunications, and outsourcing. Goetz will also interact with clients as the strategic leader for Convergys’ technology solutions from an internal and outsourcing perspective.

  • 16 Jul 2008 12:00 AM | Anonymous

    Analyst house Pierre Audoin Consultants (PAC)'s latest figures for the UK telecom industry show outsourcing expenditure surpassing that of project services for the first time: outsourcing accounted for £860 million and project services £841 million in 2007. This trend was driven in particular by EDS's applications deal with Vodafone that saw the Texan firm jump from fourth to first largest IT outsourcer to the UK telecom market.

    The UK telecom sector has historically been slow to outsource IT compared to other sectors such as financial services. However, Vodafone's landmark applications management deal with EDS and IBM in November 2006 set the tone for change. The BT group was already actively outsourcing IT, but 2007 saw a step up in pace. It outsourced infrastructure management to Computacenter in March 07, F&A processes to Xansa in August 07 and HR processes to Accenture in September 07. Other examples include T-Mobile's infrastructure management deal with T-Systems in November 07 and THUS's application management deal with Nortel in May 07.

    This growing appetite for outsourcing results from the saturated UK telecom market. Operators can no longer rely on 'greenfield' customers, and must fight for the existing market. This requires operators to drop prices to remain competitive, and cut costs to protect their profit margins. An emergent trend in the UK telecoms market in order to achieve this is BPO, and BT is a company that has taken the concept to heart. It was amongst the first telecom operators off the mark in implementing BPO on a large scale, the deal with Accenture mentioned above being an expansion upon an initial deal signed in 2005, and the later deal with Xansa shows that it has the appetite for more. Other telecom operators are likely to follow suit in the hunt for further efficiencies.

    Another key trend is the growing acceptance of offshore IT. Where until recent years UK telecom operators were reluctant to outsource at all, they are now keen to make use of the reduced labor costs available offshore. This is helping offshore specialists like Xansa (now owned by Steria), TCS and Wipro to thrive.

  • 16 Jul 2008 12:00 AM | Anonymous
    The rise of India continues apace as global IT services provider HCL Technologies, part of the $4.9 billion giant HCL Enterprise, has announced the acquisition of the UK's Liberata Financial Services (LFS) for an undisclosed sum.

    The British BPO specialist provides end-to-end administrative and customer services for the life and pensions industry.

    LFS' parent company Liberata Ltd. will now focus anew on its public-sector business, where demand for its services is strong and growing, as pressures intensify to cut costs.

    Fulfilling predictions from sourcingfocus.com and other industry commentators that the strength of Indian outsourcing would inevitably mean acquisitions in the UK and Europe during the downturn, HCL will acquire four delivery centres in the UK, together with 800 staff who come to HCL with both domain knowledge and technical expertise.

    Acknowledging the significance of the deal, Ovum analyst Peter Clarke said: “The logic of the deal is clear. HCL Technologies has the capacity to take forward Liberata's financial services platform, using it to develop its LP&I business.

    “Liberata has done well to win business in this space but has constantly faced questions from clients about its ability to sustain its interest in the long term, given its relatively small scale in this highly competitive market.”

    HCL’s insurance practice will be strengthened by LFS’s core capability to manage complex transactions, as well as a number of multiyear contracts with its customers which include blue-chip names.

    Ranjit Narasimhan, president and CEO of HCL BPO, said: “This strategic acquisition of LFS enhances HCL’s ability to become an end-to-end provider of business process outsourcing services in the financial services space.

    “This acquisition will equip HCL with a ready capability across the value chain by providing access to an existing revenue stream of policy management, actuarial and analytics catapulting HCL to become a leading service provider in the UK market for the life and pensions industry.”

    It may also, of course, give HCL some leverage with a UK parent business that has embedded connections with many local authorities – as well as the obvious long-term revenue streams from within the more stable end of the financial services market.

    For Liberata Ltd, the deal offers some relief from the private sector uncertainties of the Western money markets, while also allowing it to focus on public-sector deals where both local and central government make promising medium-term customers.

    Robert Gogel, CEO of LFS' parent Liberata Ltd, confirmed this view, saying: "We are pleased to have found an appropriate buyer for this business, thereby assuring its long-term future development. We have made significant investments in people, platform and service line development which has allowed our clients to benefit from high levels of service excellence.”

    Of Liberata's plans for a stronger focus on the public sector, Ovum analyst Peter Clarke said: “Liberata has clearly convinced its private equity parent General Atlantic that this is sound logic.

    "Its recent wins at the Local Government Association [the body representing all local authorities in the UK], where Liberata now runs the LGA's whole back office, and at Rushcliffe and Charnwood District Councils, where it won preferred supplier status for a revenues and benefits shared services contract against old rivals Capita, clearly strengthen this argument.

    “Liberata recently demonstrated its long-term intentions in the public sector by becoming a Gold Partner with SOLACE, the Society of Local Government Chief Executives.

    “If the FSA approves [the HCL] deal, it looks like a win for all concerned and sends some important signals to the market.”

    Although LFS' new owner HCL has built a thirty-year business from private-sector areas such as retail, telecoms, and media – along with financial services, of course – the public sector might be a logical next step for it too as it seeks to build a long-term outsourcing base in the UK.

    But for now, there is money to be made in the downturn for ambitious Indian outsourcers.

  • 16 Jul 2008 12:00 AM | Anonymous
    Attending this week's NOA Global Sourcing event, sponsored by legal firm Lovells, one of the highlights (alongside lots of in-depth practical advice) was the 'War of the Worlds' debate.

    This pitched China, the Philippines and India against each other in a good-natured battle for customer hearts and minds, given voice by Todd Russock, Rob O'Malley and Roop Singh – each of whom has estimable experience of building success in their chosen regions.

    First up was Russock, who advises UK organisations about doing business in, and with, China.

    The Chinese saw 2007 GDP growth of 11.4%, said Russock, who had many other sobering statistics to hand: for example, four million new Internet users there every month, and a PC or laptop sold every second.

    Russock went onto describe a massive drift of the rural populace towards the cities and their suburbs – akin to how the UK's own industrial revolution created a sprawling urban middle class.

    In 2035, 70% of China's billion-strong population will be urban, he said. By contrast, roughly 60% of the population today is rural.

    In other words, in twenty-five years' time, China's metropolitan population will have increased by 300 million people – quite a government-backed opportunity for outsourcing in the future, he suggested (perhaps neglecting the downside of 300 million fewer people to farm the land and grow food).

    Nevertheless, Beijing now sees outsourcing as being the next big opportunity for China, after being the world's manufacturing powerhouse, he suggested.

    The downsides, however, remain the levels of English spoken, and the prevailing political and human rights climate, said Russock – although no-one seems to bring up Guantanamo Bay or extraordinary rendition when choosing a US outsourcing partner.

    Next up was Rob O'Malley, whose successful track record in the English-speaking Philippines call centre market is not to be (even very politely) sneezed at.

    O'Malley has set up a useful website called www.callcentreuk.com, which (rather confusingly) is all about working with call centres in the Philippines.

    This, though, is a big deal: during his five minutes onstage, O'Malley portrayed a Philippines economy that seems almost completely reliant on supplying English-speaking call centres to survive. If you are a graduate, he said (and just over half the population speaks English), you either go to work in a BPO or call centre company, or you work overseas. Even the Philippines president is not above attending the opening of a 500-seat contact centre, said O'Malley, such is his country's investment in the sector.

    Again, outsourcing seems central to a country's future prosperity: BPO has transformed the Philippines economy more than any economy in the world, said O'Malley, and voice has been the key (88% of BPO revenue comes from the voice market). Eight-five percent of overall BPO work is US based, he said.

    Downsides for the Philippines remain weak data security laws, rising numbers of poor-quality or unaccredited vendors (unsurprisingly, given the limited opportunities to do anything else, it seems), and the lack of direct flights from the UK.

    Again, the trend is that of an educated population drifting towards increasing numbers of urban centres on the back of outsourcing's influence on the economy, if O'Malley's viewpoint is correct.

    It seems to me, though, that O'Malley may have missed something obvious: the potential for legal process outsourcing in the Philippines: an area where higher education and good English would be a boon – and a good way to raise the profile of its legal processes to boot.

    Finally, batting for India was Wipro's Roop Singh, who made the only good joke of the day (something about homegrown software programmers and their companies' CEOs flying on aeroplanes, but I won't repeat it here).

    Singh spoke with the confidence of the representative of a country that has got it right so far. That said, he acknowledged, domestic labour costs have been rising 12% per annum for the past three years, so the attractions of labour arbitrage seem to be fast disappearing.

    Nevertheless, few offshore locations have India's potential to scale, said Singh, and China lacks India's English-speaking advantage in the market outside its own shores and territories.

    That said, as India's traditional IT workforce rises to 2.3 million in the near future, again the picture emerged of a country looking further afield for educated staff, in this case from smaller metropolitan centres. Outsourcing is redrawing the map of all major offshore locations.

    All in all an entertaining session, and one that highlighted the importance to various countries of making a national investment in offshore and inshore services work for the good of their local economies.

    All of which brings me to my next point: the potential for the 53 countries of Africa to make names for themselves in the offshoring markets.

    With Ghana, Morocco, Egypt and Senegal surely becoming fixtures in analysts' 'ones to watch' tables over the next decade, that continent surely has so much to offer: many highly educated populations, speaking English, French, and dozens of other languages, and the potential to build a world-class communications infrastructure, essentially from scratch in many parts of the continent.

  • 15 Jul 2008 12:00 AM | Abbie Lunn (Administrator)

    Aviva Plc, the leading provider of life and pension products in Europe, has sold its Indian offshoring operations to outsourcing services provider WNS Holdings Ltd. for £115 million.

    As part of the deal, an all cash arrangement, Aviva has also entered into a master services contract with WNS, who will provide offshoring services to Aviva's UK, Irish and Canadian businesses for the next nine years.

    In a statement, Aviva said that the deal gives it protection against inflation and foreign exchange rates, and added that by combining a sale with a long-term agreement it will continue to benefit from the expertise it has developed in this field.

    Cathryn Riley, chair of AGS and chief operating officer of Norwich Union Life, said: "We're proud of the significant offshoring capability that we've built over the past five years and we remain firmly committed to offshoring. After an extensive review, we've chosen one of our current suppliers to be our long-term partner, allowing us to build on the strength of our existing relationship to increase the flexibility and cost-certainty within our operation. WNS are a great partner; they understand our business and have demonstrated their commitment to helping us develop our customer experience and shared services model."

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