Industry news

Accenture has been awarded a 10-year contract by the US Department of Education to continue the operations and maintenance of the federal financial aid system for students, worth $966 million.

Continuing a relationship that first began in 2001, where the firm provided integrated system operations, customer service, application maintenance and hosting support for federal student aid programs, the new deal will oversee the assessment and delivery of over $1 trillion in federal loans and grants.

‘We are proud to be able to continue supporting the department’s efforts to deliver federal student financial aid to millions of post-secondary students in a secure and reliable manner,’ said Paul Peck, who leads Accenture’s work at the Department of Education.

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Read this next: Accenture Wins £350m NHSmail Contract

Genpact, the global company specialising in designing, transforming and running intelligent business operations, has been named a ‘Leader’ in Everest Group’s latest PEAK Matrix Assessments of service providers of order-to-cash (O2C) and record-to-report (R2R) services.

For O2C, Genpact was the only service provider assessed that received top scores in all areas: scale; scope; technology solutions; delivery footprint; buyer satisfaction and overall market success.

This has proven to be a great accolade for Genpact - the firm has been delivering end-to-end finance and accounting process delivery solutions for over 16 years.

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Read this next: HP and Aecus Release ‘The Innovation Agenda’

BPO firm eClerx has announced the acquisition of CLX Europe, in a deal worth up to €25 million.

CLX Europe creates, manages and delivers creative assets globally for luxury brands and major retailers. Based in Italy, the company has over 40 years of experience working with some of the biggest in the global retail industry.

Commenting on the deal, eClerx co-founder PD Mundhra declared that “Today’s acquisition of CLX Europe will deliver consolidated digital marketing services to our current and future clients around the globe. Uniting our service offerings and respective client bases will build on our high quality and cost-effective solutions to accelerate and expand our Digital division revenue streams.”

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Accenture has been selected as the preferred supplier for the NHSmail service.

The framework is valued at £350 million, is open to use across the public sector and relates to services delivered at a minimum of IL2 security level.

The Health and Social Care Information Centre (HSCIC) has confirmed that the service is expected to be implemented over the coming year. Accenture was selected from a shortlist of five suppliers which also included BT, CSC, Vodafone and GDIT.

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Read this next: MPs Condemn Failure of NHS Outsourcing Contract

Aecus, in collaboration with HP, have published the findings from their global innovation survey. The resulting ‘Innovation Agenda’ report sets out to explore the fundamental questions about what innovation means for businesses today: What is innovation? Why does it matter? What tools and technologies are driving it? How can it be achieved?

The analysis was based on 84 responses; the methodology involved a survey, followed by a series of follow-up interviews.

The survey found that, for 91 per cent of respondents, innovation has never been more important to their organisation, yet only 31 per cent of those questioned believed that their organisation has been successful at harnessing innovation. 57 per cent thought this was due to lack of internal resources; 33 per cent cited a lack of leadership.

The report concludes that innovation is not one thing – it is a spectrum of ideas that can be driven either internally or in an open-ecosystem of collaborators. It goes on to acknowledge that, while fostering innovation can be difficult, it is a critical factor for the future success of businesses.

Download your free copy of the full report for more information.

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Harrow Council has selected Sopra Steria as a new IT partner, to provide IT services and deliver technological improvements that will benefit users of the Council and local residents.

The contract, valued at £37 million, will commence on 1 November 2015 and will continue for an initial period of five years. Sopra Steria aims to deliver savings of roughly 20 per cent for the Council and ensure that staff and residents start taking advantage of the new digital services at their disposal.

The service provider has also committed to a number of initiatives including apprenticeships, work placements, jobs for residents and support for local events, along with committing to pay its employees the London Living Wage.

Sopra Steria has already seen some phenomenal success working with the public sector – its ongoing contract with Cleveland Police being a prime example.

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Read this next: Northamptonshire Council Expands Outsourcing Operations

Vishal Sikka, Chief Executive of Infosys, will personally oversee around 1,000 outsourcing projects, as part of a pilot to improve the company’s returns.

This hands-on approach will see Sikka monitor accounts, as well as writing code and developing solutions where needed, with the Indian ITO firm looking to strengthen its ties with important customers and generate extra revenue from its top accounts.

Fred Giron, research director at Forrester Research, told India’s Economic Times that "Sikka is making everyone at Infosys go through design thinking and I think it's an interesting move - I don't think it will change much among the 170,000 Infoscions.

“But at least there is a strong message coming from Infosys that is saying 'we need to change and we need to reinvent the way we engage with our clients, we need to reinvent the way we deliver value to accounts'. I think it’s a very good start.”

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Read this next: Indian Outsourcing Companies to Lower Premiums

Now I want to move into the possible future trends in outsourcing and here it does become opinion. Again I will use my recent experience at National Rail Enquiries, particularly in IT outsourcing but including other areas; however, it is all part of the build-up of information and experience over the years.

National Rail Enquiries is driven very much by the technology its users want to use. Twelve years ago it was all about person-to-person call centres, then it was the web, now it is moving to mobile channels. The National Rail Enquiries desktop website usage has been growing by 25–30 per cent for years, but in 2012–13 it grew by 2 per cent, and they expect 2013–14 to see a fall. Overall volumes are still rising sharply but they are more in the mobile internet and mobile app areas, where the number of contacts on mobile apps reached the same level as for the desktop site within 18 months of the apps first being released.

This change for them has two very different aspects from the move from call centre to desktop internet.

Firstly the mobile channel isn’t homogenous. For a website you need to be compatible with different browsers and different operating systems but desktop internet is pretty standard. Mobile isn’t like that – with different operating systems and devices, mobile internet, Apple iOS, Google Android, Blackberry, Windows, phone, smartphone, tablet, tablet mini etc., not only do you need a large number of versions to meet all the market, you also have old versions being dropped and new ones coming in with alarming rapidity.

The second difference revolves partly around the speed of change in systems but also in the increasing rise of customer expectations. With mobile, things are expected to be quick and your development cycle needs to reflect this.

So this means from the customer side you have a trend of a widening variety and an increasing speed of change.

Customer needs drive our business strategy and so our outsourcing strategy.

From the supplier side there is also an impact of technology. Yes there is a widening variety of platforms for user services but the systems are relatively well known and easy to work on. The Apple operating system iOS is used by many small developers, as is Android and the other smartphone operating systems. This means that the small app developers can now compete with the big multi-billion pound system integrators in delivering systems and software for relatively large clients.

Coupled with this is the increasing use of open-source software. The competitive edge that proprietary software gave to the big suppliers is being eroded.

In addition you have changes in hosting impacting on how you approach outsourcing. For example in order to build a website for a company that receives a large number of visits you used to have to go to a big supplier for hosting and software together. Now it is easier to split the services as it is simple to sign up with Amazon, Azure, Salesforce, etc. and get access to huge capacity and performance on a “pay as you go” basis. You can then go to a small boutique web designer to design your website but still get access to industrial-sized hosting capacity.

Cloud is still relatively new and complex, but knowledge of it is increasing and there is support out there to help you make the transition.

In the past few years there has been a trend towards multi-sourcing, partly driven by the factors above. This is especially so in the public sector where there is a drive to introduce more work for SMEs and less for the oligopoly of large suppliers that currently exist. In an earlier chapter I covered the significant amount of public sector work run by the likes of Atos, Serco, G4S etc. I see the trend to multi-sourcing continuing and this presents challenges for suppliers and clients.

Suppliers will see average deal sizes fall. This isn’t a bad thing overall as multi-sourcing does expand the supplier market. However they will have to adapt to be able to compete with smaller outsourcing suppliers in areas that have traditionally been the domain of the larger organisations. Larger suppliers will need to be able to provide the small, discrete services within

their traditional organisation. We have already seen that with some of the suppliers at National Rail Enquiries. Multi-billion pound system integrators developing consumer apps alongside their traditional business of multimillion pound one-stop-shop systems delivery.

This trend also creates a challenge for the client - clients need to be geared up to govern these smaller contracts to get the full benefit. That involves rethinking your skillset and looking at what you need to do to manage the future.

Read part 2 of 'Is the Future Bright for Outsourcing?'

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Derek Parlour's book, Successful Outsourcing and Multi-Sourcing, is available to purchase here. Members of the National Outsourcing Association are currently eligible for a significant discount - just use the code G14IZN30 on the Gower Publishing website.

This week we’ve seen the UK’s political parties release their manifestos for the 2015 General Election: the Conservatives have offered 1.3 million families the right to buy housing association properties, while Labour has pledged to boost the minimum wage and cut the deficit. But what do their prospective policies mean for the world of outsourcing?

The Conservative Manifesto

On page 19 of the Conservative’s manifesto, the party claims that it “will raise the target for SMEs’ share of central government procurement to one-third, strengthen the Prompt Payment Code and ensure that all major government suppliers sign up”.

The coalition had already set itself the target of giving 25 per cent of public sector contracts to SMEs, which it “supposedly” met during this term. If the Tories do come through with this policy, the increased target of 33 per cent would be a fantastic boost for the UK’s smaller service providers.

Kerry Hallard, CEO of the National Outsourcing Association, agreed with this sentiment, but warned that there are other problems affecting SMEs that also need to be addressed:

“There remains the issue of how many contracts are awarded directly and indirectly. Many SMEs work through subcontractors and these cause the bottleneck in payments – so although it all sounds great for smaller businesses, there is currently no guarantee of speedy payment to sub-contracted SMEs working on Government contracts.”

The Labour Manifesto

On page 24 of its election manifesto, the Labour party stresses the need for a larger number of paid apprenticeships in the UK:

“we will guarantee every school leaver that gets the grades an apprenticeship. We will create thousands more apprenticeships in the public sector, including the civil service. Every firm getting a major government contract, and every large employer hiring skilled workers from outside the EU, will be required to offer apprenticeships.”

Kerry Hallard commented: “Upskilling the UK’s outsourcing industry is critical to its growing success and is essential if the UK is to become the global strategic hub for outsourcing - which is a very real opportunity!

“Negotiation and relationship skills, as well as much-needed tech and digital skills, are critical in today’s work environment and not currently taught well in schools. Any initiative which provides today’s youths with jobs and upskills the UK’s workforce is more than a good thing – ignoring the requirement for these skills is a threat to the growth of the UK economy.”

The Green Party Manifesto

Interestingly the Greens have promised in their manifesto that, if they achieve power in May, they will aim to cut down on the outsourcing of government IT contracts.

A recent study conducted by Node4 found that more and more organisations in the UK are favouring IT outsourcing due to the country’s chronic tech skills shortage – the government is in exactly the same boat, meaning it might not be so easy to simply stop ITO all together.

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In a new research report, the Everest Group has revealed that the practice of BPO in supply chain management (SCM) has grown rapidly as an industry over the last five years.

The practice saw a 25 per cent compound annual growth rate between 2010 and 2014, leaving the market size at over $1 billion. Everest also found that SCM BPO is adopted most frequently in North America, while the Asia Pacific region currently shows the highest rate of industry growth.

For the future of SCM BPO, Everest predicts that ‘control tower based solutions’ are likely to become more popular, along with the uptake of data analytics as tracking progress in SCM becomes increasingly complex.

Download a complimentary 14-page preview of the report to learn more.

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Read this next: There’s Little Future for Employees of Outsourcing Buyers, Research Suggests