Industry news

Retaining staff seems to be an industry-wide issue for Indian outsourcing service providers, and it’s been reported that Infosys are the latest organisation to be suffering. According to the Economic Times, “Infosys is losing its cachet as the employer of choice for a generation of young IT workers, with staff leaving at an unprecedented pace”. Attrition rates were a record 18.7% at end-March (2.4% points higher than last year), almost a fifth of the company’s workforce. As a comparison, the attrition rate at Tata Consultancy Services was 11.3%.

Infosys will need to work hard to keep their remaining talent and to ensure they attract new graduates, something that Infosys President, Pravin Rao is taking steps to rectify. After implementing changes to staff pay and promotional opportunities, as well as tackling the need for more sales, Rao is “confident that once these changes start sinking in ... and growth comes back, attrition will come down," he said.

Infosys raises forecast after outsourcing contract wins

The NOA shares its views on the industry in Lyonsdown’s Business Reporter which focuses on outsourcing and is distributed with the Sunday Telegraph. The report includes features on how many UK companies are in the process of reshoring jobs, the debate surrounding the financial incentives of outsourcing, and an update on the best blogs and apps.

Click here to download the full report.

New research from Grant Thornton indicates that two in five global companies either currently or plan to outsource back office processes. The International Business Report (IBR) from Grant Thornton shows the most common processes to outsource are tax (49%), IT (46%) and HR & Payroll (36%). From the three in five companies that have no plans to outsource, 44% use the reason that they don’t wish to lose control of a key process.

Grant Thornton highlights investment growth in the financial and UK business support services market

Serco recently held its annual AGM and in a bid to air their views, a small group of protesters gathered outside the central London location who say they are “Sick of Serco”. Amongst the protesters were Pat Waterman, Chair of Greater London for NAPO and Cat Hobbs, a director at the anti-privatisation campaign We Own It.

According to a recent poll undertaken by We Own It, nearly 80% of the public think outsourcing company Serco should be banned from bidding on public service contracts. In an interview with IBTimes UK, Cat Hobbs called for “more transparency, more accountability and more of a say for public service users”.

Ever since the controversial news that Serco had been reportedly overcharging the Ministry of Justice for tagging offenders, they have featured in the news almost every week. Some stories have been good (recent contract win with Qatar in the Middle East), but many have been damaging; contract losses, lower margins, requirements for emergency funding, 62% fall in profits last year and a warning that profits would fall a further 20% this year, plus the fact they are still under investigation by the Serious Fraud Office and had suffered a ban on being awarded new contracts by the UK government that ran until January.

Let’s hope their new chief executive Rupert Soames, incidentally grandson of Winston Churchill, can effectively lead the outsourcing giant into battle against these protestors and win over the general public.

BRIC dips, whilst Cognizant excels

According to the report by former City Minister Lord Myners, the Co-operative Group’s current board is "manifestly dysfunctional" and that "radical decisions on governance structure need to be taken very soon - and with resolution - if the Co-op, as my mother knew it, is to be saved."

Outsourcing professional take note!

We at the NOA believe that good governance should be at the heart of every successful outsourcing contract. Get this right and your outsourcing deals have a healthy chance of flourishing, get this wrong and the consequences could be felt for years.

The importance of good governance has increased over the years due to the growing complexity of outsourcing arrangements. Getting the right people, structure and frameworks in place from the get-go is vital and witnessing failures like the Co-op Group should further highlight to outsourcing professionals the importance of governance in outsourcing contracts.

The Co-operative announces plans for 3,000 jobs in Legal Services

A variety of results have been announced. According to HSBC’s emerging markets index, firms across the whole BRIC region suffered a drop in business activity. That said Chinese firms now take 5 out of the top 10 places of the world’s biggest public firms. The other 5 slots go to American companies, with European companies sliding out of the top 10 list this year.

G4S’ results showed a return to growth (4.8% up in Q1) – thanks to stability in developed markets and moreso growth in emerging markets (16% up). Serco by contrast was down.

Cognizant announced bumper results with 35% Q1 revenue growth. Overall revenues now stand at $2.42bn.

G4S profits hit by tagging charge

HM Treasury has replaced its old single provider ICT model with a number of new providers. NTT Data has won a three year contract to provide core ICT services to HM Treasury, while Centerprise International has been awarded a contract for printing services. With these new contracts they hope to become more flexible and competitive, keeping in line with the government’s strategy for ICT.

HM Treasury select SME for first 2015 ICT contract

HM Treasury tenders for new ITO contract

The Department of Health has selected the Kahootz cloud collaboration service from online collaboration specialist INOVEM Limited to deliver more cost effective ICT infrastructure through a shared service agreement, providing services to NHS England, NHS Health Research Authority, the Care Quality Commission and 20 other agencies and public bodies.

As part of the shared services agreement and G-Cloud call-off frame work, the Department of Health (DH) will only pay for direct usage allowing DH to scale consumption accordingly.

Oxford NHS to save £1 million through Vodafone cloud service

Sri Lankan ICT seminar

Date: Wednesday 28th May

Venue: Sri Lankan High Commission, 13 Hyde Park Gardens, London, W2 2LU

Time: 9.30 – 12.30

Register: Click here to register

Sri Lanka is increasingly seen as a rival to India as a software development hub as the recent growth in the software sector in India has caused costs of IT staff to rise significantly and labour turnover is becoming a major issue. Pearson , the UK educational publisher already employs 300 people directly in Sri Lanka working on software development for electronic publishing of its materials as well as e- , m- learning and assessment modules. The sector employs already 60000 workers who generate $300 million of export turnover and this is expected to double in 5 years. The London Stock Exchange started outsourcing various IT projects to a local company called Millenium which gradually became so critical to its operations that it eventually acquired it and will give a testimonial at the event.

1. www.Statseeker.com

Owners of have large IT network installations need to be able to manage demand and capacity.

A number of network managers have traditionally downloaded free management tools from the Internet but these don’t always collect data from all the hardware in the network and they don’t “roll up” , whereas with Statseeker’s compression tools , a network manager can see historical data going back months or years if required to see past areas of pressure in the network and use this to predict future use which can help them either reconfigure the network itself rather than deciding whether new hardware is the answer.

Statseeker already have track record in the UK , they already have reference clients such as Peterborough regional college and New College Nottingham , Monash University , and Texas A&M in the USA and Fedex globally. Following an acquisition by an Australian private equity company they are looking both for major endusers and distributors in the UK.

2. www.99xtechnology.com

Looking to meet educational software companies who would obviously not consider outsourcing/offshoring their core product development work , but may need some support in disciplines such as QA , user experience testing , security testing , performance testing , test automation , mobile integration.

A particular characteristic of their work is the ongoing need maintenance of retired modules still in use where the software developers’s focus for its own staff in bringing forward new products which 99X can offer doing anything from running a helpdesk for a retired product on behalf of the client to development of social media/mobile interfaces for such products. They have expertise in Microsoft , Java , IOS/Android and HTML5/JS technologies.

They would be willing to consider either a contractual relationship or possibly an equity joint venture with a UK software company.

3. www.negete.com

Negete have expertise in particularly in mobile applications development , having worked on the engineering for a number of clients involved in mobile learning applications where the client perhaps develops an app completely in one format such as IOS but needs to offer it in Android and Windows too , or needs to develop a series of sequential learning/assessment modules for an e- / m- learning product.

They also have 2 products , one called m-sales which may be of use to companies who use mobile sales forces to take orders in person and recording sales data while travelling. The other is rush-route which uses wifi-triangulation / NFC technology inside buildings to help users guide them around . It’s currently being piloted in the Dubai Mall in Dubai.

They would be keen to meet software providers who have a need for mobile app work as well as any interesting in developing general sales for m-sales (target anyone with a mobile salesforce) or the for rushroute.

4. www.calcey.com

Virtually all of Calcey’s client base is currently in Silicon Valley , often small start ups who are developing mobile learning technologies for blue chip clients , particularly on the IOS platform. Their work has been used in products sold to CISCO’s training division, 3M’s internal training division and Stanford University’s distance learning courses as well as mobile integration with the university’s administration ERP system.

They would be keen to consider a contractual or collaborative partnership with a UK company developing software involving either mobile solutions (including their integration with web apps) , database integration with front end apps.

5. www.cslworld.com

One of Sri Lanka’s largest outsourcing companies with 400 staff , CSL operate dedicate teams on behalf of clients , work on development of complete modules and applications and offer support services. They are a preferred global vendor for Microsoft having developed the search functionality in SharePoint 2010 and 2013 and offer support for large Sharepoint installations globally.

CSL has also operated a BOOT model for clients such as Cambio Healthcare Systems of Sweden where they set up an outsourced BPO operation on Cambio’s behalf in Sri Lanka which was transferred to Cambio ownership once established with CSL being retained for management contract.

They would like to meet any company considering outsourcing of software development.

6. www.orioncity.com

Operator of Sri Lanka’s largest software park , home to Pearson’s captive facility , plus Sri Lankan Airlines and outsourcers such as WNS , Tetran , Camoplast and ISME Netherlands.

They would be keen to meet any company seeking to set up an operation in Sri Lanka offering office space of 300 sq metres upwards.

Registration is free of charge but please register here.

There will be opportunities for the audience to network over coffee with the delegates , however we are organising 1-2-1 sessions from 11.40-12.40 of 20 minutes each for each Sri Lankan delegate should a visitor wish to have a confidential discussion – for these please email robert@edgetradeinvest.co.uk direct.

Liz Samandi of sourcing company Darian looks at how global sourcing can help British industry on the road to recovery.

The manufacturing and engineering industries have suffered as much as any during the long years of recession. Whilst output is now up and the future looks brighter than it has for some time, companies cannot afford to be complacent. In fact, one of the advantages of recession is that it forces businesses to adopt more economical practices; to work leaner and to develop more efficient business models. It’s important to maintain that mind-set once the good times return.

One of the most successful business strategies used by engineering and manufacturing companies during the recession has been global sourcing of components. Whether in times of economic depression or growth, global sourcing enables companies to remain competitive whilst maintaining quality and a cost effective supply chain.

However, global sourcing isn’t a fix-all solution: it needs to be researched thoroughly and carried out with care. Choose the wrong supplier or the wrong location and your reputation (and even your business) could be at risk. With over 20 years’ experience in the industry, these are my key tips for making outsourcing work.

Avoid a monopoly - rising production costs continue to be an issue for most businesses. However, global sourcing offers the opportunity to shop around a range of suppliers for the right combination of price and quality. A supplier with a monopoly also has the balance of power in any negotiation, but if you have access to a range of viable suppliers, they are more likely to offer competitive prices, improved service and stick to deadlines.

Look for quality - when choosing a supplier, ensure that a thorough quality audit is carried out prior to signing contracts and that you have a comprehensive quality agreement in place so standards are maintained. This makes it easier to resolve any quality issues should they arise.

Compare the market - get several quotes from different suppliers to compare price, service and quality. This is particularly important if working with a company based in a country that you have never operated in before as you will need some sort of benchmark to work from.

Get the figures right - don’t assume that going abroad will automatically be cheaper: you need to understand all the cost factors. For example, currency values can fluctuate significantly, so check currency markers regularly. You may be able to renegotiate prices for a more competitive deal. It may also be advantageous to buy in

the local currency.

Know your supply chain - factor in transport and storage costs. It may be financially sound to warehouse products in the UK, a service often offered by a sourcing partner. Price up the options to make an informed decision. With the right transport partner, distance shouldn’t be an issue and you may be able to purchase larger volumes with a quick turnaround time.

Go into partnership - researching overseas markets and suppliers takes a lot of time and requires a lot of local knowledge. Linking up with a sourcing partner saves time and money, whilst offering the necessary local knowledge and presence.

If using a sourcing partner, check that they have offices overseas with staff on hand who are conversant with the local culture. Having associate offices in a variety of key locations means that any problems can be addressed quickly at source. It can also act as an extension of your purchasing department. Your representative can visit suppliers, compare quotes and monitor quality, improving communication by removing any language barriers.

Benefit from bundling - using an outsourcing partner enables that company to ‘bundle’ products for their customers. Whilst you might only require relatively small quantities, your partner can purchase in greater volumes – which means cost savings for you.

Global sourcing may not solve all your problems or be the answer for every company in the manufacturing and engineering industries, but it is becoming increasingly common as technology advances and obstacles to international trade recede. However, it is essential to carry out your research and do the groundwork – or link up with someone who can do it for you. As new markets open up and distance becomes less of an issue, companies need to evolve and adapt if they are to make the most of the long awaited opportunities that recovery offers.

About the author

Liz Samandi is Managing Director of global sourcing company Darian (www.darianglobalsourcing.co.uk.) Darian has been working with companies and suppliers across the world since 1986. To find out more about global sourcing, for free advice or a consultation with no obligation call 01858 433096 or email info@darianglobalsourcing.co.uk.