Industry news

  • 12 Aug 2014 12:00 AM | Anonymous

    Serco have paid the price for its series of outsourcing scandals as operating profits drop 59% in the first half of the year. The Serco scandal found the outsourcing giant to have overcharged the UK government on contracts providing electronic monitoring of offenders and escorting prisoners to court. Serco shares which have almost halved there value in the last year, were 6.7 per cent higher in early London trading.

    Serco write down value of loss-making contracts

  • 11 Aug 2014 12:00 AM | Anonymous

    Public sector organisations in Surrey, including Surrey County Council, Surrey Police and University of Surrey, are launching a shared online portal to advertise contracts. The Supply to Surrey website is due to launch in autumn with an aim to increase the number of contracts being awarded to local companies, as the council has a pledge that 60% of spending is to go to the local community. This site is similar to BuildSurrey, a website set up to encourage suppliers in the construction industry to bid for contracts which has now been used for £10 million worth of deals.

    Surrey council achieves savings of £83 million through contract renegotiating

  • 11 Aug 2014 12:00 AM | Anonymous

    Sitel today announces their latest contract win with TDC, Denmark’s largest telecommunications company, in what TDC say is its most comprehensive outsourcing action following internal analysis and part of a major initiative that will significantly improve customer service at TDC Group in the years ahead.

    From October, Sitel will provide future customer support including other customer service functions for TDC. A number of employees from TDC's customer support will transfer to Sitel who will partner with TDC Group's own customer service function that, combined with more digital self-service options, is designed to create 'Denmark's best customer experiences'.

    Sitel is one of the world’s largest providers of customer service and support. The company has 56,000 employees in 23 countries, and manages support functions for a number of global and local brands with the UK managing a number of support functions for many of today’s companies in the Nordic market.

    Bert Quintana, Sitel’s President, CEO & Chairman of the Board, comments; “Our core strength is providing high quality service and support that helps to retain and increase our clients’ customer base. We are delighted to be chosen to work with TDC Group.”

    Jens Aaløse, Senior Executive Vice President at TDC Group, says; “"I am very pleased that Sitel is undertaking to provide our customers with excellent support as this will also release resources that over time will enable us to significantly improve our customer service. Our goal is to set a new standard for the industry.”

    The changes in TDC Group's customer service result from an internal survey implemented at the beginning of the year. The survey identified where and how TDC Group can hand over existing operating functions to external partners as changing market conditions increasingly prompt the telecommunications, content and entertainment industries to merge.

  • 8 Aug 2014 12:00 AM | Anonymous

    Outsourcing provider Cognizant posted disappointing Q2 results causing the company to reduce its growth predictions from 16.5% to 14% at year end. As a result investors were left concerned at the prospect of an outsourcing slowdown which saw Infosys and TCS share prices plunge. Although the second quarter results were less than expected revenues were up 17% year on year at $2.52 billion.

    Cognizant lands FAO deal from ISS in Nordics

  • 8 Aug 2014 12:00 AM | Anonymous

    Middlesbrough FC plans to save £30,000 by outsourcing their food and beverage procurement at their Riverside Stadium and Rockcliffe Park training ground. Pelican Procurement Services will oversee supplier tendering, sourcing and pricing negotiations for them. The plan is not only to reduce costs but also reduce the amount of time chefs spend on purchasing and administration.

    Liverpool FC employs public cloud

  • 7 Aug 2014 12:00 AM | Anonymous

    Flipkart the Bangalore based ecommerce firm currently runs its customer service call centre inhouse but are looking to move to a hybrid model of a combination of insourcing and outsourcing to deal with their growing customer needs. Flipkart are currently in the process of signing call centre outsourcing deal with Aegis, the contract is expected to last 3 years and be worth over rs 75 crore. The deal comes as good news after Aegis recently sold it BPO operations in the Philippines, Costa Rica and U.S. to Teleperformance for $610 million.

    Teleperformance buy Aegis USA (AUI)

  • 7 Aug 2014 12:00 AM | Anonymous

    Stephen Kelly, Chief Operating Officer (COO) of the Cabinet Office will resign from his post in November in order to take on the role of Chief Executive of software company Sage Group. Kelly joined the civil service in 2011 and took up the role of COO a year later. He has played a key part in transforming digital government under Francis Maude by leading the Efficiency and Reform Group.

    Kelly’s departure follows a number of high profile officials leaving Whitehall including Denise McDonagh, Chief Technology Officer of the Home Office.

    Significant Cabinet reshuffle to favour women

  • 7 Aug 2014 12:00 AM | Anonymous

    The outsourcing market has undergone a revolution over recent years. At the start of the millennium, cost reduction was the primary driver for organisations outsourcing their business processes and nowhere was this better illustrated than in the contact centre.

    In the UK, there was a drive towards offshoring services to countries with lower labour and overhead costs. There were issues though with quality of service and often there was a disconnect between business processes of the outsourcer and those of the end customer. The banking sector was one of the first to realise cost isn’t the only factor in the customer experience equation.

    Over time, there was a backlash against this approach coupled with a growing realisation that existing outsourced approaches were making the customer work harder to get what they wanted and even creating disaffection amongst them. Outsourcing fell out of favour.

    Today, that’s all changed. Outsourcing is back in fashion – and thanks largely to the cloud and other disruptive but enabling technologies, it’s the fact that it can drive business agility and enhanced efficiency that is making it more popular rather than the cost savings it supports.

    To take a typical start-up as an example. Traditionally, if you wanted to set up a business, you would have had to make a significant investment upfront in an office, staff and in IT infrastructure at the outset.

    If you are looking to do the same thing today, you either don’t need an office at all, or you only need a much smaller one because many of the functions can now be virtualised. You can outsource the infrastructure and the staff and you can pay for the resources and services that you are consuming on a per interaction basis. That means you can get a much tighter alignment between the investment decisions that you make and the revenue coming in and shorten the cycle from making the investment to getting a return on it. Effectively, you are only paying for what you are making money from.

    It’s an attractive model for a growing number of companies and that’s why we are seeing the global IT outsourcing market flourishing today. Indeed, Gartner predicted in July 2013 that the market would “reach $288 billion in 2013”.

    The Customer Interaction Challenge

    The fact that organisations are increasingly attracted to the enhanced business efficiency and agility that outsourcing delivers is, of course, great news for business process outsourcers. But if they want to build customer loyalty and sustained success they need to ensure that they are using the kind of flexible technological infrastructure in place that supports agile customer service provision.

    The foundation layer of their customer service provision is typically provided by infrastructure as a service (IaaS). There are a whole host of companies operating in this space, delivering piece of mind to their customers by managing their servers, managing uptime and delivering five 9s availability, for example. BPOs can then look to build on this platform by providing a software as a service (SaaS) model. End customers benefit by only paying for what they consume and from transferring the responsibility for maintaining the server to the BPO.

    Critically, they also gain by being able to offer much more flexible customer service. With the SaaS approach, businesses can run virtualised contact centres, with agents, (either your own employees or part of an outsourced operation) not only able to work from home but also able to use tools like Microsoft Lync, Cisco Jabber and unified communications to route calls, to message people and to use presence where appropriate. The result for the BPO’s clients is that they benefit from the ability to deliver enhanced service to their customers as part of a flexible approach which enables them to outsource their infrastructure; their platform; and their people.

    More and more business process outsourcers are today benefiting from the use of customer interaction technology integrated with its other systems to deliver the optimum level of service to multiple clients. Towers Watson, a leading outsourcing provider of pension services, is a case in point.

    The company recently moved away from its traditional customer service environment in order to deliver faster, more effective customer service through Enghouse Interactive’s Contact Center: Enterprise – a solution which fits within Towers Watson’s primarily Mitel-focused environment.

    Top Tips for BPOs to get the most out of their Deployment of Customer Interaction Technology

    So how can you as a BPO ensure you are getting the most out of your deployment of customer interaction technology? Here are some top tips to help you get the most out of your implementation.

    • Make sure you have control and visibility of your customer-facing operations

    • Be flexible to be competitive

    • Pitch the technology as part of your service offerings

    • Outsource multichannel activity such as webchat

    • Focus on providing quality of service and regulatory compliance including call and screen/activity recording for you and your clients

    • Concentrate on delivering ease-of-access and fast response times

    • Make sure that your contact centre is integrated with your underlying systems

    • Support multiple clients separately

    • Centralise control but enable your clients to remain independent

    • Provide service-based differentiation - Client contracts no longer specify simply dial tone. They want a contact centre capable of delivering service to their customers by whichever medium is appropriate. And in this model, enhanced functionality can be deployed once, centrally, and then made available to all customers accessing the service;

    • Deliver operational ease - It reduces risk and standardises the technology used across clients, in a shared service framework;

    • Enable elasticity - Scale up and scale down resourcing as required. In the outsourced contact centre this is a constant and ongoing requirement because of the varying call arrival patterns associated with clients’ multi-sourcing strategies or with campaigns, seasonality and emergencies, for example;

    Provide cost-based differentiation - Flexibly deliver the required services to your clients, with commercial models that accommodate per-unit pricing in a “utility” model. In this context, it becomes so much easier to earn commercially appropriate margins across the lifetime of the contract, while still allowing your customers to work in the way they want to.

    Integration into your system with visibility

    It is of course critical that business process outsourcers remain at all times in full control of all of their client campaigns. In this respect, call monitoring and call recording delivered as part of fully coordinated quality management approach can have a critical role to play. Data can be mined and analysed, enabling the BPO to better monitor its performance in campaigns and start to address any issues that have been identified. Agent calls can be better serviced and end customer issues more quickly resolved.

    The ease of integration of customer interaction technology into third party systems is also critically important in ensuring that BPOs are able to deliver a high-quality and fully coordinated service to their clients.

    The Multi-tenanted Approach

    Most BPOs looking to implement a multitenant approach are doing so because they want to achieve commonality, efficiencies and economies of scale, thereby creating a reduced operating cost. This allows them to offer the end customer a price that is cheaper than if they were running the service themselves and yet still allows the BPO to make a profit.

    The only genuine alternative to a true multi-tenanted approach is to virtualise the software multiple times on multiple servers. However while it can be done, this approach is inevitably time-consuming inefficient and unwieldy.

    If the BPO wants to enable its own flexibility and also that of their client, they need to implement a true multitenant approach. That way, the BPO gets the benefit of a shared infrastructure and having a single instance of the software in place. Yet, at the same time, their end customers get the agility and flexibility they need to tune and tailor their individual view of the software exactly as they require it.

    They can make their screens look a certain way; they can adjust the way reports look or are structured and what variables are shown; and they can add users or schedule for documentation to be issued at certain times. And if they are working on a true cloud-based multitenant platform, they will be able to access it anytime, anywhere anyhow.

    Looking Ahead

    Today, outsourcing is becoming a more attractive option for all sizes and types of organisation. Business process outsourcers are increasingly well placed to take advantage of this, thanks largely to new technologies like cloud and unified communications that drive enhanced flexibility. And it is in the area of customer service and customer interaction that the benefits of these technologies are being most keenly felt as BPOs can use them to deliver improved efficiency and agility to their customers and in this way ensure that the outsourcing revival is maintained.

  • 7 Aug 2014 12:00 AM | Anonymous

    The total volume of deals in the manufacturing sector was also up, rising by 50%, along with first time outsourcing - where the services in question were being outsourced for the first time - which increased from 33% in the first half of 2013 to 66% between January and June of this year.

    The data was compiled by business process outsourcing (BPO) provider arvato, in partnership with industry analyst, NelsonHall.

    arvato says the increase in outsourcing activity is being driven by broader growth in the manufacturing sector. Figures from the British Chamber of Commerce released in July, based on a survey of almost 7,000 companies in the manufacturing and services sectors, found that 42% of manufacturers reported a rise in domestic sales in Q2 2014. This represents the highest reading since the survey began in 1989.

    Commenting on the strength of the manufacturing sector, Debra Maxwell, Managing Director of arvato UK, said: “While not seen as a traditional market for business process and IT outsourcing, manufacturers under increasing growth pressure are turning to outsourcers to help support non-core functions, allowing them to focus on their expansion strategies and product innovation. The flexibility and efficiency savings outsourcing provides is the ideal tonic for their growing pains.”

    Local government outsourcing continues to mature

    The findings from the latest arvato Quarterly Outsourcing Index also served to highlight the maturity of the local government market. Three quarters (75%) of all contracts during the first six months of 2014 were extensions, renewals or the replacement of incumbents, up from 43% in the first half of 2013. During the same period, the average deal value in local government increased by 67% year-on-year.

    “UK local government has been at the vanguard of public sector outsourcing globally for many years,” continued Debra, “and our findings show that outsourcing strategies are continuing to deliver value for local authorities with experienced clients using partnerships to do more with less against a backdrop of continuing austerity.”

    Quarter on quarter performance of UK outsourcing

    The private sector dominated the volume of outsourcing deals in Q2 2014 with a 95% share of the total number of agreements secured. Telecoms & media, financial services and energy & utilities were particularly active industries, which together accounted for 70% of total spend (£513m).

    arvato's latest Quarterly Outsourcing Index once again found that BPO deals were most in demand, accounting for over half (52%) of all agreements. HR outsourcing - which includes services such as payroll, benefits administration and recruitment process outsourcing - was the dominant service line, as it was during the first three months of the year. Eight deals – 23% of total volume - worth £17m were agreed.

    The outsourcing industry had a quieter second quarter than at the start of the year, with values falling by 67% to £134m, although the Index reports only a slight dip in the total number of deals, from 39 to 24. It also reported the number of first time agreements remains significant showing that the outsourcing industry continues to grow – rising from 59% to 62% of all contracts.

    Debra concluded: “A number of large individual deals meant that our Index showed a bumper first quarter for the industry in terms of overall value, but the volume of new outsourcing activity has remained relatively constant. Encouragingly, the number of first time contracts remained significant, which shows the continued popularity of outsourcing as a strategic solution, particularly in the private sector. As UK economic growth continues to gather pace, we expect outsourcing to do the same.”

    The arvato UK Quarterly Outsourcing Index was compiled by leading BPO and IT outsourcing research and analysis firm NelsonHall, in partnership with arvato. The research is based on an analysis of contracts completed in the first half of 2014.

    For more information, please go to: www.arvato.co.uk/outsourcing-index

  • 7 Aug 2014 12:00 AM | Anonymous

    As I was saying, to anyone who’d listen, outsourcing is the #1 key driver for economic recovery. We live in an age of constant surveying and reporting, and the latest set of stats from the Office of National Statistics seem to support my long-held belief that outsourcing is the answer to any economic woe, be it at micro or macro level. It’s widely known that GDP is back up to pre-recession levels, but not every industry is booming; British manufacturing for example, is 13% down on pre-2009 levels. Sadly, many other industries are in the same boat.

    Nowadays the ‘business services and finance’ and the ‘government and other services’ sectors - as the ONS statisticians shoehorn our industry into - are the heart and lungs of economic recovery, putting such an enormous contribution (business services and finance running at nearly 1% compound growth per quarter since 2009) that the economy, on paper, looks in better shape than it was before the financial crisis.

    Whilst all other studied sectors have their good quarters and bad quarters, the ONS states: “Output in the ‘business services and finance’ industries has grown more steadily and in May 2014 was 4.2% above the pre-downturn peak in February 2008. The pattern in the ‘government and other services’ industries, meanwhile, is of slow but largely steady growth, mostly driven by human health activities.”

    Together with the ‘distribution and accommodation’ sector (where do they get these sectors from?), ‘biz services and finance’ and ‘gov and oth’ now make up a whopping two-thirds of the UK economy. I do feel, however, that if it wasn’t for such rudimentary lumping together of economic activity, there might be much better, clearer, broader recognition for how much the outsourcing industry contributes to the UK economy, particularly from the Chancellor of the Exchequer, George Osborne.

    Mr Osborne was in the news this week, offering “prizes for finance technology innovators in a new bid to become the world’s leading centre for the sector” because “key to the government’s long-term economic plan is cementing Britain’s position as the centre of global finance.” So, if the plan is to cement the UK as the global strategic hub for finance, it makes sense to position us as the global strategic hub for business services at the same time. For the same reasons: world class knowledge and experience and superior skills. As such, I’d really like to see equivalent governmental advocacy and marketing initiatives that support the UK outsourcing industry just as much as its ONS stats bedfellow, finance.

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