Industry news

The Cabinet Office is launching a review of its IT outsourcing contract strategy – project “Ocean liner” – with the intention of moving away from a number of its long term outsourcing contracts that are due to expire during this parliamentary term.

“Ocean liner” comes with the Cabinet Office’s acknowledgement that many of these outsourcing deals have failed to deliver value and its claim that “the opaque nature of service delivery hides the fact that many [contracts] are not good value for money”. The review follows the National Audit Office’s “Open-book accounting and supply-chain assurance” report last year, where the NAO encouraged every government department to have a solid policy on when to demand more transparency from its service providers.

The Cabinet Office is likely to face criticism from lookers-on, who will speculate as to why the government is only choosing to review these contracts so close to their end-dates.

Recent NOA research has found that the days of the outsourcing megadeal are likely to be numbered, with the notice periods for contracts, along with the actual contracts themselves, expected to become much shorter in the future. The full report, titled Outsourcing in 2020, will appear in the Outsourcing Yearbook 2016 and be released in March 2016.

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Related: Whitehall hits 25 per cent SME procurement target

An international study, published by Infosys, found that four out of ten young people believe robots will be able to do their jobs within a decade.

The survey was conducted by ICM Unlimited and included around 1000 young people each in different countries such as Australia, Brazil, China, France, Germany, India, United Kingdom and the United States.

Half of the youngsters surveyed in the Western developed countries insisted on the limitations of their education. The skills gap displayed in the survey revealed that almost 80 per cent of the students globally have to learn new skills not taught in school. The rapid technology change requires a constant process of learning new skills which the schools are unable to provide.

Vishal Sikka, Infosys CEO, said: “Technologies have evolved far faster than what was thought possible even 10 years ago, while the educational system remains wedded to practices initially designed for agrarian societies 300 years ago”.

The study also found that youngsters from developing markets feel more positive about their job prospects than their peers in developed markets.

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Related: HP intends to cut 30,000 jobs through automation and offshoring

BT’s takeover of EE – which is expected to cost the telecoms services company £12.5bn – has been given the go-ahead by the Competition and Markets Authority, following a six-month inquiry into whether consumers will face escalating bills as a result of the merger.

John Wotton, chairman of the inquiry, concluded that the takeover is unlikely to cause “significant harm to competition or the interests of consumers”, a claim that had previously been made by Vodafone and TalkTalk, as well as other rivals. Direct competitors O2 and Three are also planning to unite forces, pending the result of the European Commission’s own inquiry, the verdict of which will be revealed in the spring.

It is possible that the BT-EE merger could result in an outsourcing strategy shake-up. BT Group is already an experienced buyer of outsourcing, with subsidiary company Openreach making the shortlist for two outsourcing awards in 2015: the “Outsourcing Works – Award for Delivering Business Value” at the NOA Awards and “Pan-European Buyer of Outsourcing Services of the Year” at the EOA Awards.

It was recently reported that BT is striving to create more sustainable supply chains, raising the company’s environment credibility through the introduction of a sustainability assessment tool that allows for supplier feedback.

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Related: High Court allows Cornwall Council to terminate £160m BT contract

Capita, the outsourcing giant, has been singled out as the council officers’ preferred bidder in a deal for the management of five district councils’ shared services.

The outsourcing company will provide a variety of corporate services including revenues and benefits, customer services, human resources, IT and procurement to the councils of South Oxfordshire, Vale of White Horse, Hart, Havant and Mendip District Councils.

The contract has a nine-year term and is valued at £139m. It will see Capita introducing a pioneering shared services platform capable of meeting the different requirements of each council.

It is now left to each of the councils’ cabinets to formally appoint Capita as their preferred bidder.

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Related: Capita becomes the UK government’s main supplier of 2015

Ofcom, the UK’s communications regulator, has announced it will outsource its IT management, including help desk, data centre and application management services, to NIIT, an Indian IT services provider.

The contract, which lasts for 6 years and is worth £23m, sees NIIT implementing a service delivery model with new service management processes and tools.

According to David Doherty, Ofcom’s ICT director, “We set out to select a partner who will align well with our organisational culture, manage the transition smoothly, provide a robust technical solution and focus on innovation. NIIT Technologies’ solution for Ofcom fits well to these needs.”

NIIT Technologies EVP, Satya Samal, declared that the NIIF “is confident that we will be able to deliver value to Ofcom through our strong understanding and proven capabilities in the application and infrastructure management services domain."

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Related: India, the world’s most attractive outsourcing destination of 2016

Barclays decided to downgrade its investment rating on MITIE, a support services group.

For the year 2016, Barclays expects to see increasing pressures on UK employee costs as well as rising employer pensions contributions. Once these extra costs pass through on existing contracts, it would not be a surprise “to see customers asking their services providers to share some of the cost pain when it comes to contract rebids”, a broker at Barclays said.

Analysts have already cut their price target per share by 8.2 per cent, implying a downgrade of the original price.

This Thursday, the 14th of January, MITIE’s share value went down to their lowest value of 268.3 pence per share. However, by the end of the same day the share value went up to 285.2 pence per share.

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Related: Mitie joins Serco and G4S in embracing government’s national wage hike

GMB, a British General Union, sees the expansion of IT outsourcing at British Airways (BA) as a risk to security and UK jobs.

The IT outsourcing project, which is expected to be concluded by April, includes a deal with Tata Consultancy Services (TCS), an Indian firm.

GMB fears that up to 900 IT jobs will go to TCS and be filled with staff from India. This Union reported the situation as an “abuse of Tier 2 visas” by BA and TCS.

The Tier 2 allows IT suppliers with UK operations to bring in staff from overseas hence making it possible for these firms to bring in low-cost labour. A situation that makes it harder for local IT professionals to compete.

Mick Rix, a national officer for civil aviation at the GMB, believes it is dangerous to offshore important national security reporting work to companies abroad during “these times of very heightened security measures due to the threat by terrorists to civil aviation flights”.

In self-defence, BA said the “IT services are now provided globally by a range of suppliers… a very common practice across all industries and the UK Government”, BA adds.

As an important employer in the UK – responsible for the hiring of 1000 new jobs every year – BA insisted they “would never compromise the integrity and security of their IT services” and that only 200 of their IT staff would be affected by the deal.

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Related: BA integration with regional airline bmi threatens 1,200 jobs

Is a world where robots can learn to do the work of a store manager too far out of reach? Or what about a world where self-aware, autonomous drones can help data scientists validate complex data models related to traffic patterns and management, for example, in a matter of hours rather than weeks? Or a world where application repair is automatic – where users can submit a defect to a smart management system that could drive the self-healing process for repairing this application, without involving any humans. Is it possible to develop a smart system where managers are given real-time updates on software performance and provided with predictions on potential risks and mitigation strategies? Will we see these solutions come to life during our lifetimes? Perhaps. Many of these scenarios are quickly moving from the dominion of science fiction into reality thanks to the integration of Robotic Process Automation (RPA), Data Science and Cognitive methods called Cognitive Robotic Process Automation (CRPA).

Testing services, as an industry, is at the cusp of a transformational revolution that is being brought about by the adoption of CRPA. Many large IT companies are currently working on building platforms or solutions to prepare for this new trend. Why are these systems so desirable? Because there are bound to be anomalies in the application development process, whether large or small; human or machine. Not only that, but identifying and remedying an anomaly within an application is a time consuming process for all who are involved – it can take days, sometimes hours, to locate, isolate, or even fix a given defect. However, with new advancements that the industry is seeing in the CRPA field, solutions and systems – instead of people – can now predict and prevent these anomalies, and drastically shorten, or even eliminate, the time, effort and cost needed to fix them.

Automation is not a new process to those in the IT industry – various automated processes have been around for years and have plenty of time to mature. As these processes have matured, and been fine-tuned, the natural next step is to start looking into how machine learning and intelligence can be incorporated into these processes. With cognitive computing, systems will be able to contextualise and use reasoning to assess problems, instead of just solving the “usual” repetitive problems that IT faces.

Cognitive computing can also help businesses shift their focus towards prioritising “IT wellness” – placing more value on product quality (rather than just process quality). By being able to effectively process businesses’ data, coupled with the ability to learn from past experiences, these systems can learn and eventually master the tasks they are given. In short: continuous improvement. In the Quality Assurance (QA) space, there are two facets of AI technology that could successfully solve this equation:

1. Cognitive Automation: Data analytics forming the foundation of algorithms, pattern recognition and methodologies

2. Autonomic Healing: A one two punch of Natural Language Processing (NLP) and Machine Learning

While not deployed adequately in the QA process yet, both have the ability to inject dynamic intelligence into strong, existing systems and with Continuous Improvement, make them reliable over decades. The following are the key areas where CPA can make a significant difference in the QA process.

1. Proactively Monitor Application Health: Using CPA, application health can be monitored by a variety of BOTS (Software Robots) during application development. These BOTS observe data patterns , discover trends and use models to predict the impact of a given change on the application with allied risks and vulnerabilities.

2. Optimise Testing: Traditional optimisation techniques become inadequate when changes to applications are frequent and where large assets already exist. Manual intervention is ineffective and the QA process could be compromised. Cognitive computing, using continuous learning systems optimise and automate Test Assets to maintain a lean, dynamic risk based Test Suite that self-maintains throughout the application life- cycle.

3. Self-Healing: Identification of anomalies in an application and the subsequent effort required to accurately identify, isolate and fix them is time consuming and tedious. A learning based system coupled with the development of self- service BOTS (which can be invoked when a defect is detected by other BOTS or a human) can make the Defect Management process intelligent. This results in significant effort elimination that current QA systems necessarily entail.

Whether for monitoring application health, self-healing or optimising the testing process itself, there is extensive applicability for artificial intelligence – or Cognitive Robotic Process Automation - in testing. As a result, we will start to see its widespread adoption across the IT industry.

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The NOA has launched the world's first RPA workshop and qualification, ideal for all of those looking to instigate RPA at their organisation.

Whitehall spending on management consultants is on the rise again, the government spending watchdog reports.

The findings by the National Audit Office (NAO) reveal that, in the first years of the coalition, spending on consultants and temporary staff fell, but that it resumed in the past four years going from £400m to £600m.

Despite the recent increase, outlays are still far below 2010 levels, when spending amounted to £1.5bn.

The NAO emphasized that the reported amount is smaller than overall spending since it does not include spending on legal and financial advice, outsourcing contracts and running of IT projects, for example.

The auditors criticised the government for its inability to record temporary staff who have been at their posts for long periods of time. The practice is problematic since, as the report also found, specialist staff contracted out by Whitehall was on average paid twice the amount of equivalent rank in-house staff.

Meg Hillier, chair of the public accounts committee, called out some departments for “playing fast and loose with taxpayers’ money”. She also pointed out that with the contracting out of temporary staff, there is inevitably “a loss of skills when their contract ends, perpetuating existing shortages”.

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Related: NAO survey finds digital skills gap in Whitehall

The telecoms firm hopes to raise the environmental credentials of its supply chain with the introduction of a sustainability assessment tool.

Florian Tremblay, a sustainable development expert at Sagecom, said this tool will enable suppliers to measure their own practices by: “providing useful feedback to suppliers regardless of their performance level, the tool will educate and support individual companies in a tailored and effective way”.

The assessment involves a series of questions to evaluate the company’s existing sustainability practices. The answers are then compared with the best sustainably operated companies in the world. The assessment will finish with some recommendations on how the company can improve its sustainability measures.

The use of BT’s sustainability tool will be tested by Sagemcom, the makers of BT Home Hub. The pilot programme to test the assessor’s result will include the participation of some of BT’s suppliers, in order to study the advantages and limitations of the tool.

“The sustainability assessor means we can extend the benefit and learning of the Better Future Supplier Forum even further into our supply chain”, said Erik Raphael, BT’s wifi and devices director.

This project took off soon after BT’s Better Supplier Future Forum in 2012, where the company sought to develop sustainable business practices.

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Related: Paris Agreement on climate change pushes for a procurement strategies review