Industry news

A recent report from the Shared Services & Outsourcing Network examined the mid-market companies in the German economy. These make up 99 per cent of the country’s companies and are often described as the motor that drives the German economy. Interestingly, the report found that shared services were a common denominator for more than half of the sector, which goes to show that shared services are not the exclusive preserve of huge corporations.

Shared services can be a valuable way of streamlining business operations and delivering them in a cost effective way, but the heads of these shared services centres (SSC) face pressure from all sides. They face pressure from the Board, who are always looking to cut costs; pressure from outsourcing suppliers, who need to make a profit from the services they are delivering on what is often an aging asset base; and pressure from the business units, which are quick to speak up if they do not get the level of service they believe they deserve.

The ultimate aim of all SSC is to constantly provide a better, more efficient service, while driving out unnecessary costs and innovating. But all this needs to be done while keeping the ‘lights on’ and the business running as usual. And as if that isn’t enough, the move to multiple, niche outsourcing providers means there are more ‘moving parts’ to manage.

For an SSC looking to address these issues, there are three steps they should take to help optimise the function. The first is to identify the desired business outcomes and then work down through the different layers of the organisation to understand the business services that are needed to deliver these outcomes. This provides a clear understanding of the different services that contribute to the overall objectives and how they work together. This is especially useful as SSC often manage multiple outsourcing providers feeding into the business.

This allows SSC to move to step two, which is engaging with the business units using a common business language they understand, rather than meaningless tech jargon and service level agreement terms. By being able to talk the language of the business, SSC will ensure they focus on the priorities that will make the most difference to the strategic business objectives.

The third step is for the SSC to build a business service catalogue of the most popular delivered to the business and then charge the business units accordingly. By doing this, the business units are given a far clearer view of the services they are spending money on and they can then change their behaviour according to what they’re willing to pay for.

This enables SSC and the business to build a business performance management capability that shows how each service is being delivered and how delivery is improving over time. This will help SSC evidence to the business how they are contributing to its strategic objectives and delivering an increasingly efficient operation, against a backdrop of innovation and improvement.

Salesforce has opened its first European datacentre in the UK as part of a new strategy to build three facilities in Europe, it will next open in France and Germany in 2015. They intend to create more than 500 new jobs across Europe within the next year. The new centre based in Slough will be fully powered by renewable energy sources. Salesforce has delivered 42% growth in the European market year on year and will be using the new data centres to increase this further.

Salesforce data centre opens in the UK

With the pressure to save £3million before 2016-17, it has been reported that Burnley Council are seriously considering outsourcing certain services. However, due to the lengthy procurement process new appointments are not expected to begin until early 2016. Unions are hoping a change in government will signal a better deal for Burnley and will be looking at the results of next years’ General Election.

Councils still using shared services and outsourcing to enable transformation

According to a report from India, IBM have reduced its Indian-based workforce from about 165,000 in 2011 to 113,000 in 2014. A decade after IBM invested in building an army of engineers and software services in India, IBM have shed the number of staff and investment. IBM Global Services are the world’s biggest IT services firm. Indian based outsourcer Tata Consultancy Services (TCS) are now IBM Global Service’s biggest competition.

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Confirmation of major outsourcing deal with IBM and Europe’s biggest airline getting closer

EE are set to cut 350 support jobs from their Hatfield office over the next few months as they plan to outsource to IBM in India. One of the buildings at the Hatfield site will close and where they can jobs will be relocated to other EE offices including their head office in Paddington. This is part of a major restructuring of its customer services with staff in IT, admin, sales and marketing facing the axe. EE are also planning on bringing back 1,000 frontline customer services jobs over the next two years.

Confirmation of major outsourcing deal with IBM and Europe’s biggest airline getting closer

HMRC will move away from the Aspire contract when it comes up for renewal in June 2017. According to HMRC’s chief digital and information officer, Mark Dearnley, ditching the deal will save taxpayers at least £200m in costs. The replacement for the Capgemini Aspire contract will likely be much shorter than 10 years and could be broken up into smaller parts. If Capgemini fail to win any of the new HMRC contracts they will lose just under a tenth of their total revenue and 60% of UK public sector revenues.

Despite success HMRC’s Aspire contract lambasted for scope creeps costs

Interserve, Sodexo and GEO Group have been included as part of the preferred bidders for 21 criminal probation service contracts worth a total of £450 million a year.

According to a recent article, Britain plans to outsource more of this work and those chosen will be responsible for running the bulk of Britain's rehabilitation centres for around 200,000 low and medium-risk offenders, which includes overseeing community orders and supervising unpaid work. Others chosen include seven private firms, sixteen charities and voluntary organisations and four probation staff mutuals.

French supplier Sodexo was provisionally awarded six contracts in partnership with the offenders rehabilitation charity NACRO, while British based Capita did not win any of the contracts it applied for. Interserve has been selected for five contracts as part of a partnership with social enterprise firm 3SC and charities Addaction, P3 and Shelter with the collective value of Interserve’s contracts expected to be worth around 600 million pounds over seven years. Another consortium chosen includes four charities and Amey (British subsidiary of the Spanish group Ferrovial) which has been awarded two contracts. G4S and Serco were banned from bidding.

Contractors will only be paid in full if reoffending rates fall and work is expected to commence early next year.

The changes represent the largest level of outsourcing of probation services in the world. It means 70% of the work will be contracted out to private companies and the voluntary sector.

Bath probation staff move to strike over outsourcing plans

Free online Outsourcing Lifecycle Assessment launched to rapidly identify and fix outsourcing pain-points

The National Outsourcing Association (NOA), the professional body and industry association for outsourcing, is today launching its corporate accreditation programme, developed to recognise and reward excellence in outsourcing by the users of outsourcing services.

The NOA’s corporate accreditation programme is an in-depth assessment process that measures outsourcing performance against world-class standards with the key objective of driving best practice in outsourcing, so that companies can achieve the best value from their outsourcing programmes. It gives an organisation’s stakeholders and investors assurance their outsourcing is governed in line with global best practice standards – something frequently asked, but previously hard to prove.

The NOA’s accreditation programme has been developed over the past 12 months around the NOA’s Lifecycle Model, which has helped imbed best practice into over 200 organisations and been subject to continuous critique and review. For the first time, all that learning has been condensed into an integrated platform of tools and templates that tells an organisation, quickly and easily, exactly how they compare to leading-edge best practice. The NOA has partnered with Op2i to develop the platform which is powered by Governance Director, Op2i’s enterprise governance system.

As the first point on the journey to accreditation the NOA has developed a free and easy-to-use online Outsourcing Lifecycle Assessment (OLA) tool designed to give rapid insight into the performance of a project/division/company’s outsourcing maturity level against the NOA’s tried and tested Lifecycle model. The online assessment, which takes circa 15 minutes to complete, comprises 87 questions and contrasts inputted answers to NOA Lifecycle Model knowhow to deliver an immediate outsourcing maturity rating and personal performance report. The report also highlights areas for immediate process improvement and indicates readiness for industry accreditation.

Kerry Hallard, CEO of the National Outsourcing Association, commented: “Our Corporate Accreditation programme and free Outsourcing Lifecycle Assessment tool further demonstrate NOA’s commitment to driving excellence in outsourcing and complement our portfolio of professional qualifications for those working in outsourcing. Although the full accreditation programme is targeted at the buyers of outsourcing services, we actively encourage suppliers and advisors to use this tool in order to consistently drive performance across the outsourcing spectrum.”

Organisations showing readiness for full accreditation can either: subscribe to the NOA’s OLA integrated platform to quickly and easily guide them through two further tiers of Lifecycle processes whilst assessing their outsourcing maturity against NOA standards; or they can review their own performance against the NOA’s published LifeCycle model. Organisations then need to book in with the NOA for a pre-audit meeting or full audit session. The full audit involves reviewing practices in greater detail (at tiers 2 and 3) and providing the NOA assessor with clear evidence that practices meet NOA standards.

The NOA will accredit organisations who achieve Silver (Competent) and Gold (Excellent) standards, but will also categorise outsourcing maturity at Basic and Foundation levels. Accreditation lasts for three years, with a requirement to demonstrate ongoing commitment to best practice annually. Full accreditation can be achieved within a 3 month window if outsourcing processes are largely already optimised. It could however take in excess of two years if an organisation needs to embark upon a significant improvement journey.

The Department for Education is proactively looking to inject competition and contestability into “one of the last areas of local government not subject to market forces.”

The DfE’s consultation to test the market appetite for the outsourcing of child services has naturally generated an emotional response, as the perceived “privatisation of children’s social services” is considered “radically different, crown jewels stuff.”

Before we go any further, outsourcing and privatisation are different - most of you know that, I’m sure. But a lot of people don’t know the difference and think the DfE is trying to sell off child services, when it is in fact exploring alternative options and looking to improve services because it has serious concerns about how things are being done at the moment. According to the Guardian, “at least 10 struggling council children's departments could face official intervention.”

Where Ofsted deems a child services department to be failing, the DfE needs to find alternative solutions. As Alan Wood, director of children’s services in Hackney, and DfE advisor, says: “If we carry on doing what we do in the way we do it, we just get the same, only there will be less of it.”

I’m a Mum, and the fact that there are children out there who are vulnerable and in trouble and in desperate need of external support saddens me. Children need help, urgently, and I really believe that well thought-out private sector involvement can improve the quality and amount of help on offer.

I don’t agree that this move is ‘privatising vulnerable young children’ - this is a move to wrestle control from social services departments that Ofsted reports are failing, and improve services. Whatever your ideology, that’s a good idea, right? Who could argue otherwise?

The DfE thinks so too, and is engaging in informal conversations to find ways to improve things, and wants to create a vibrant market for the private and third sector provision of child care services. This could be the only way the desperately needed transformation is going to happen. According to the Guardian, the DfE is worried that “many of England's 152 children's services do not have sufficient in-house expertise or staff capacity to drive through improvement plans.”

But private sector providers have a huge appetite for transformation, and the expertise and capital to make bold process improvements and drive for efficiency. Combine that with the expertise of appropriate third sector organisations and there could be huge positive effects, using technology/ apps to streamline the paperwork side of things, improving the availability of face-to-face time with kids and parents, ensuring the best advice is passed on and nothing is missed, and also building a body of real-time evidence to improve transparency and accountability in the big decisions.

At the same time, there does need to be pragmatism and flexibility in the delivery of child services; they are complex by nature and contracts must be designed to empower social workers to do the best possible job… there can be no output-based, itemised billing; the contracts must be built to put the children first, not box ticking over practicality, not time-sheets over quality time. If ever a contract was crying out for an outcome-based approach, it’s this. This needs to be gotten right first time. There is no other option.

Opinion polls show immigration as a major concern form voters a concern which has helped fuel the rise of UKIP. UKIP have backed more immigration curbs at the next election to tackle the problem.

A new report showed the outsourcing giant Capita who had been hired in 2012 to check the records of more than 250,000 people who should have been removed the UK, failed to trace more than 50,000 people. The parliament’s Public Accounts Committee also highlighted in the report that government could not check whether those who had been refused the right to stay in Britain had actually left.

The damming report has put Cameron’s government under fire with The Committee, made up for lawmakers from the 3 main parties saying it was “disturbing” that the government did not know where these people were.

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Immigration policies continue to restrict recruitment