Industry news

RAC Limited, the UK-based automotive services company, has signed a deal with Getronics for the provision of IT services. The deal will see RAC using Microsoft’s Azure as its cloud platform.

Getronics will also be in charge of running infrastructure as a service (IaaS) and disaster recovery as a service (DRaaS), as well as providing IT support for staff in three UK locations and other datacentre services.

The five-year deal is an extension of a contract signed in 2011 between the two companies for the development of RAC’s IT infrastructure. According to Steve Goodwin, CIO of RAC, “Getronics has delivered a highly agile solution which enables [them] to be nimble and flexible in what is a highly demanding, competitive and time-pressured industry.”

In an attempt to cut costs without sacrificing customer satisfaction, RAC uses automation in its service desk, as well as a cloud-based telephony and customer relationship management service. The company says that since the introduction of the latter in April 2015, customer satisfaction ratings have increased and the proportion of abandoned calls has been cut to less than three per cent.

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Related: Microsoft vies with Indian ITOs to provide India’s new goods and services tax network

Essex County Council has announced its aims to create a data share platform in order to improve its social, education, health and economic services.

The council seeks to engage with suppliers to develop a data hub and will launch a tender process in January 2016. It has announced plans to initially develop a prototype that will focus on families and households before extending the platform fully.

Beyond some of the initial platform requirements - such as the support of anonymisation and pseudonymisation of data, the possibility of sharing data, the support of predictive risk modelling and reports trough dashboards – the council wants to know whether suppliers can also provide a system to perform predictive modelling against certain behaviours.

Potential partners have until the end of the month to submit their proposals.

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Related: Westminster City Council selects Ricoh to aid digital transformation

Over the course of just one year, Sheffield City Council has achieved savings of £140,000 related to heating installations.

The savings were managed through a partnership between the council and Central Housing Investment Consortium, Procure Plus and Efficiency North on a £863,000 project, which involved the purchasing and instillation of heating systems across the city – over 400 in total.

This partnership allowed the council to refurbish an additional 70 properties without increasing its yearly budget. Janet Sharpe, director of housing at Sheffield City Council, said that this process allowed the council to find an alternative to the traditional market, where they previously had to choose between cost and quality.

In addition, this procurement process not only allowed Sheffield City Council to reduce costs and increase efficiency, but also included a new training process which will better equip council professionals when tackling similar matters in the future.

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Related: UK Government issues new procurement guidelines to help national steel production

The National Outsourcing Association has unveiled its vision for how the UK can become the global strategic hub for outsourcing by 2020, a status that will drive job creation and significant growth to GDP through ensuring that more outsourcing contracts will be signed and governed in the UK.

The NOA has also called on David Cameron’s government to provide some “long-awaited, much-needed support”, identifying five key areas for immediate government focus:

• Improved skills development

• Less restrictive immigration policies

• A balanced approach towards outsourcing transparency

• Further investment in infrastructure

• Active and vocal government support

The hypocrisy of the Conservative government was also highlighted. The UK government currently uses outsourcing more than any other government globally, spending £120 billion on outsourced public services during its last term, yet the NOA pointed out that Whitehall currently hinders UK outsourcing more than helping it.

“The UK government… prefers to castigate outsourcing to save ministerial skins and puts up barriers that prevent innovation,” chided Kerry Hallard, CEO of the NOA. “The UK government needs to drop its fixation with the manufacturing industry and recognise that we are living in the services economy. We have a very real opportunity to become the global leader in this space and enjoy the growth opportunities that come with it, but I fear we are losing ground to the very nations we outsource to: India, China and Poland being prime examples.

“For an industry to contribute so significantly to the UK economy, yet be ignored to this extent by its government, is quite frankly disgusting. It used to be the manufacturing sector that put the ‘Great’ into Great Britain – today it’s British services and outsourcing. Just imagine how much more the UK could achieve in terms of economic growth, employment and productivity if outsourcing had the government’s full backing.”

The NOA CEO made similar claims in her article ”Can the UK become the global strategic hub of outsourcing?” published by Government Business.

Read the NOA’s full press release.

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Related: NOA defends Metropolitan Police outsourcing and encourages force to expand commercial expertise

Capita, Computer Sciences Corporation (CSC) and Ebix are all bidding for the procurement outsourcing firm Xchanging.

The service provider which offers procurement, technology and business process services saw its shares jump significantly over the past few months due to this bid battle. Michael Hunter, journalist at the FT, commented that the interest displayed by the three companies “is a sign of the growing demand for business process providers, as more companies look to outsource administration to third parties”.

Despite Capita being the most advanced in this bidding process, with an initial offer of 160 pence per share for the company – which value the company at £412 million – its offer has been topped by the other two competitors, with CSC offering 170 pence per share last week. However, Monday saw Ebix make the highest offer of 175 pence per share.

The acquisition of Xchanging could renew the performance of its procurement arm, which has been described as poor due to drop in revenues over the past two years. The opportunity to take over Xchanging is a tantalising prospect for many companies in the outsourcing industry, with the outcome still yet to be determined.

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Related: Xchanging board recommends shareholders accept Capita takeover bid

The government has opted to sell a £13 billion chunk of the debt it bought when acquiring Northern Rock mortgages during the credit crunch, accounting for roughly 125,000 mortgage and loan customers.

The sale is the largest to date by UK Asset Resolution (UKAR), the body that manages the mortgage assets on behalf of the government, getting private equity companies and banks to form groups in order to submit competitive bids.

TSB is just one organisations looking to acquire part of the mortgage book held by the government’s “bad bank”, accompanied by Goldman Sachs, Blackstone and JPMorgan, the Financial Times has reported.

UKAR is an organisation with proven outsourcing prowess, with a procurement team that oversees £160 million in third party expenditure and commercially manages nine large materially outsourced suppliers.

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Related: NOA implores government to stop hindering UK outsourcing and start helping

Supply chains are suffering a rise in costs and multiple disruptions due to the reintroduction of border controls in Europe and the rise of radical Islam in the Middle East.

The Charted Institute of Procurement and Supply (CIPS) – with a presence in 150 different countries – confirms that ISIS activity and Russia's rigid attitude in world politics have contributed to the heightened risk.

Meanwhile, the migrant crisis is making some European countries close their borders, as is happening in Hungary, Croatia and Slovenia. Crossing the border in these countries can take up to 90 minutes, while other activities such as the transport of livestock have stopped entirely for several days in the past month.

This supply chain issue has caused the delivery prices for some German companies to rise by as much as 10 per cent and has increased the risk of the supply chains in other several countries of the Middle East and North Africa, such as Kuwait, Bahrain, Turkey and Tunisia.

However, the easing of sanctions on Cuba and Iran has brought new routes for the flow of goods. The positive effects of these routes on the global supply chain are yet to be discovered.

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Related: Outsourcing in the Ukraine: Hit or Miss?

Virgin Care, a private provider of NHS services owned by the Virgin Group, has struck a deal worth £64m to run community child health services for the NHS in Wiltshire.

The five-year contract, set to start in April 2016, will see Virgin Care delivering specialist community nursing, health visits, and speech and language therapy in the county. The services are currently being provided by five NHS bodies.

Richard Branson’s company is rapidly extending its grip on the healthcare market, as NHS trusts pressured by tightening budgets put more services out to tender. The private health provider already has 330 NHS contracts.

Community services are expected to be one of the fastest growing areas for private providers in the healthcare market. LaingBuisson, the healthcare analysts, estimate the market for out-of-hospital services to be worth between £10bn and £20bn.

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Related: Xerox partners with Trusts to help NHS “go paperless by 2020”

Serco, the outsourcing giant, has announced it will exit an unprofitable contract with the Australian government for the maintenance of twenty Armidale-class patrol boats. The deal was signed in 2010, and contributed to Serco’s £1.35bn reported loss for 2014.

The contract, expected to run until 2022, will now be terminated in 2017. The agreement started running into trouble more than a year ago, when Serco reported the boats suffered from major design flaws, which led to corrosion and cracking demanding critical repairing.

The overhaul of the contract is part of Serco’s new CEO, Rupert Soames, review of the troubling outsourcing firm, aimed at transforming Serco’s ruinous business practice of winning contracts at any cost.

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Related: Serco fined £200,000 for death of Woolwich Ferry staff member.

The UK government has released new public procurement guidance aimed at supporting British steel suppliers.

In the announcement released by the Department of Business, firms who wish to participate in public bidding processes must seek the best quality steel instead of the lowest purchase price.

The guidance applies to deals worth more than £10m with a “significant steel component”, and expects bidders to only purchase steel made to high environmental standards. According to the document, firms must take into consideration the “social impacts of competing suppliers”.

Matthew Hancock, chairman of the Steel Procurement Working Group, claims that "By asking procurers on major UK projects to consider social and environmental impacts, we are building a Britain that is happier, healthier and better off.

"We will always strive to get the best value for money for taxpayers and we are going to do so in a way that strengthens our economy and bolsters the long-term prosperity of people across the country.

"I don’t want contracts going abroad if the best bid is a British bid with all the social and economic benefits that brings."

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Related: Wipro Named World’s Most Ethical Company