Industry news

The Academy Enterprise Trust, the largest academy chain in the country with 77 schools, is planning to outsource all non-teaching jobs to for profit organisations within the next month. The trust has selected PricewaterhouseCoopers (PwC) as a partner in the plan and has proposed to set up a limited liability partnership which would be paid up to £400m of taxpayers money over 10 years. They will be responsible for providing IT staff, librarians, caretakers, speech and language therapy to name a few. PwC do not have a background in such services so is expected to subcontracts to other private companies.

Lewisham develop new ICT Framework for Education

AstraZeneca opens a $9 million IT facility in Chennai, India as part of their plan to bring services back in house after outsourcing for 13 years. They plan to open a second site in San Francisco in 2015 and a third in Eastern Europe in the next two years. Currently 70% of the IT spend is with third party suppliers however the plan is to reduce this to 30% in the next three years. Bringing their IT services in house AstraZeneca hope that they will be able to reduce their costs, increase efficiencies and make their data safer.

AstraZeneca moves to buy respiratory drug specialist Pearl

Leading LPO provider, NewGalexy has launched cloud-based solution ContractPod™ to enable general counsel and law firms to manage 'cost and efficiency' challenges.

This solution enables legal departments to gain “single touch point” control across the lifecycle of every single document – right from contract assembly, approval workflow, negotiation, revisions and renewals through to termination.

NewGalexy have also partnered with Uberall Solutions Limited to produce NewGalexy Practice League - an enterprise practice management system (PMS) for small to medium sized firms.

For more information, visit www.newgalexy.com.

The department for Health and Social Care in Northern Ireland (HSCNI) has selected HP and Business Services Organisation (BSO) to transform their data centre infrastructure, refresh patient administration systems and implement regional e-prescribing system. The £100m agreement will last 4 years and is expected to support up to 1.7m people in the region. HP have been tasked to make the current ICT system agile. HP and BSO will be working with multiple suppliers and SME’s to delivery services and products during this contract.

According to an article in The Telegraph, IT outsourcing supplier Hewlett-Packard predicts massive transformation for Britain’s tax and benefit infrastructure should Scotland vote “Yes”.

HP are developing contingency plans for both scenarios, however separating the IT systems used in HP’s deal with the Department of Work and Pensions (DWP) should Scotland gain independence, will take time, effort and money.

It is estimated by the Treasury that setting up a new IT system to pay benefits will cost a Scottish government £400m. Whitehall has also estimated that there would be another bill of £500m to create new systems to handle tax administration, due to happen by 2020 on Alex Salmond’s schedule. HP would be expected to bid for the extra work.

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Saudi Aramco, General Electric (GE) and Tata Consultancy Services (TCS) have jointly opened the first Saudi all female business process outsourcing (BPO) service centre. With the aim of providing 3000 jobs to Saudi women over the next three years this service centre will specialise in finance, accounting, HR, material supply and library services.

Supported by the Human Resource Development Fund (HRDF), the staff have been trained in communication and presentation skills, corporate etiquette, global culture and basic computer programmes such as Microsoft Office and Excel. This new venture will bring significant value in diversifying the economy and society and will help address the challenge of creating jobs for talented and skilled females in Saudi.

Cognizant Technology Solutions has bought TriZetto, the US healthcare IT services provider. Cognizant paid $2.7bn in cash to private equity group Apax – a valuation of nearly four times its $700m turnover. The acquisition grows Cognizant’s healthcare revenue to more than $3bn.

The integrated company will focus on three core areas: traditional IT services; high-growth businesses such as management consulting, business process services and IT infrastructure services; and emerging delivery models, as it looks to capitalise on shifts in health-care information technology driven by regulatory reform.

Although shares originally rose 3% on the back of the announcement, they are now trading flat following speculation that Cognizant had paid too high a price. The deal is subject to regulatory approval and is expected to be completed in the fourth quarter.

With 5 days to go until Scotland votes on the Scottish independence referendum business have being releasing a constant stream of contingency plans to move south of the border in order to mitigate financial uncertainty. TSB, John Lewis, Asda and Tesco Bank are all set to follow suit in the Scottish withdrawal.

Outsourcing will undoubtedly be affected if Scotland vote “Yes” at the ballot box, though some see an independent Scotland would open a new market to outsourcing, international outsources will be meet with unstable economic climate and newest of tax compliance issues.

Outsources currently contracted to the NHS in Scotland could see services being withdrawn with an Independent Scotland planning to reverse all privatisation and outsourcing of NHS services.

Procurement bill passed by the Scottish Parliament

With the introduction of the Mortgage Market Review (MMR) in April, the main challenge for lenders has been how to comply with regulation effectively whilst still delivering excellent customer service and retaining their competitive advantage. As a result, how to efficiently evidence MMR compliance has been, and will continue to be, a key focus for lenders of all shapes and sizes. Audit trails and detailed records will have to be kept to show that lenders are acting appropriately, with robust systems, controls and processes needed in order to manage the production and collation of these reports.

One of the main factors to remain compliant within arrears management is having a clear understanding of each customer’s individual circumstances. After the introduction of MMR lenders must evidence, on request, that they have made customers aware of every single option available to them. They also need to demonstrate that borrowers understand the product they have agreed to, as well as the responsibilities they have to make repayments.

Benefits of outsourcing

Here is where third party software and outsourcing solutions can be beneficial. Suitable software used by well trained and managed teams can help to ensure consistent processes, strong controls and an audit capability, all in a cost effective manner.

It is important that collections departments establish comprehensive insight into each customer with the aim of truly understanding their individual needs. Here, a system that is intuitive to the user can help lenders overcome any customer reluctance to divulge information. Prompts and scripts are provided to help ensure that all the relevant questions and checks have been made in order for a full assessment to take place, with these records providing lenders with the foundations of a resilient case review process.

Outsourcing supports good lending

However, it is not just at the beginning of the customer journey that appropriate processes are important. There are other requirements which are not customer facing, such as ensuring that arrears charges are a ‘reasonable calculation’, rather than an estimate. As a result of this, lenders will have to carry out specific fee justification exercises to demonstrate that fees are both reasonable and fair. The administration associated with these tasks can be time consuming and challenging. Utilising an outsourcer who has a focus on activity costing can provide lenders with the support and transparency they need to meet the regulator’s demands.

As the regulatory landscape of the financial services industry continues to evolve, the importance of policy, process and procedure will continue to increase. Partnering with an experienced outsourcer is one way that lenders can ensure they are working within the regulatory framework, whilst at the same time operating in a time and cost effective manner.

The London Borough of Lewisham have developed an ICT Framework for education. The Framework valued at £60m will support educations bodies and authorities across London to procure IT equipment and services. An estimated 160 suppliers and service providers are to be included in the framework due to operate for 4 years. Suppliers wishing to be included on the framework are to make a bid by October 20th 2014.

Steria awarded £1 billion Cabinet Office contract