Industry news

NOA asks Prime Minister to ‘come out’ as a supporter of UK’s second biggest industry

As we await the Nash vs. Barnet Council Judicial Review, the National Outsourcing Association believes that the public mistrust of outsourcing is due to an informational imbalance brought about by fervent media criticism and elongated hyperbole when a deal goes wrong. Contrast this with restricted access to news / statistics of public sector outsourcing when it goes well, and the information gap becomes clear.

As outsourcing is ambient across government, the NOA believes that Mr. Cameron is, on the whole, a happy customer, and urges him to come out and say so.

Kerry Hallard, CEO of the NOA, has sent him the following missive.

Dear Prime Minister,

Re: the landmark judicial review of the One Barnet project, where Barnet Council’s right to create efficiency gains by outsourcing back office services to Capita has been challenged by a small proportion of its residents, it is time that Whitehall acknowledged its own part in this sorry situation.

Mr Justice Underhill was quick to point out that distaste for ‘back office outsourcing’ was a political matter, of limited consequence to the actual users of a service. Yet the distaste for public sector outsourcing rides so high – this is because a widespread lack of championing success, while the occasional failure finds itself emblazoned across the front pages for weeks. Central government needs to take a stand, and speak up on behalf the companies who are providing their services, and delivering a high degree of customer satisfaction and reducing costs simultaneously.

For the heart of the Nash vs. Barnet case is the misguided notion of “whether an outsourcing company which expects to maximise the profits it makes is really going to deliver the same or better quality of service as the in-house provision.” This highlights the general mistrust and misunderstanding around outsourcing that cannot prevail if the public sector is to reach its efficiency targets, which will only get harder in light of further spending reviews and expected cuts.

The government trusts outsourcing. Its prevalence within the public sector must mean that you are a satisfied customer. Some of your outsourced contracts have been repeatedly renewed, running for 20+ years. These contracts are never spoken about. Outsourcing success must be championed, not swept under the rug.

Government must also be seen to support the UK’s major industries - outsourcing is the second biggest aggregate employer in the UK, and with a turnover of £199bn, the fourth greatest contributor to GDP. The modern business environment is an outsourcing economy, where the majority of firms focus on leveraging external capacities, capabilities, knowledge and skills – the public sector chooses to leverage these competences also, but quietly, almost surreptitiously. Why is that?

The government should highlight that private sector service delivery is not privatisation, and that public sector agencies retain control of ensuring standards are met. Accountability is a core aspect of outsourcing – one that the media frequently chooses to turn a blind eye to. Speaking out about how the government’s successful outsourcing arrangements work in practice would help assuage the negative public perception around outsourcing. NOA research shows they mistrust because they misunderstand. ‘They’ don’t really know what outsourcing is, but they still find it in their hearts to hate it.

We beseech you to speak out about how outsourcing works, and how it fits into your strategy for rejuvenating the economy. Outsourcing helps you reduce your costs. But austerity isn’t the answer on its own. It never was – still, money saved by through efficiency gains can be more prudently invested elsewhere: infrastructure, shovel-ready projects, boots on the ground. More efficient spending is paramount: spending the right way will be what recalibrates the UK economy toward a period of growth. That means investing in your key industries, not just financially, but vocally.

A little support would go a long way: the UK business services community leads the world in terms of sourcing skills, experience and best practice. We are the global strategic hub – knowledge outsourcing is a growing export, a huge opportunity for the UK to boost jobs and wealth that needs to be harnessed to best effect.

You’re a PR man at heart Mr Cameron, as a former Director of Corporate Affairs, you know all about managing reputations. Yet you’ve let the reputation of an important policy of yours, Open Public Services, slide into disrepute. This has been due to some alarming failures. Thankfully, these have been few and far between – it’s time to provide a counterbalance, demonstrating to the UK public and beyond, that the good by far outweighs the bad.

Yours sincerely,

Kerry Hallard

CEO, National Outsourcing Association

The value of stock plummeted on Wall Street for Microsoft as the IT giant feels the full impact of the PC markets decline.

First quarter year-on-year PC shipments have fallen as much as 14 percent from 2012. Microsoft Share prices had dipped by over 4 percent at 4 p.m. ET.

Microsoft has been impacted by poor sales alongside other major IT manufactures, with HP seeing a 24 percent reduction in shipments in the first quarter of 2013 compared to 2012, while Dell experienced a drop of 11 percent from the same time last year.

Microsoft’s latest operating system offering Window 8 has also failed to enjoy strong uptake with the company being forced to lower the price as customers stick with previous iterations.

Microsoft currently generates 25 percent of revenue from its PC line, however the companies struggles in competing competitively in new sectors including mobile devices and tablets, have taken sales away from traditional PC hardware, have dented Microsoft’s sales.

Microsoft confirms $617 million contract to the US military

Microsoft expected to announce 15 percent dividend this month

Banking giant JP Morgan have recorded record first quarter profits for 2013, with a rise of 33 percent in profits from the same time last year.

JP Morgan reported strong performances from all of its business lines, with overall profits at over £4.2 billion.

The bank reported strong results after moving to reduce its hold on bad debts, achieving a reduction in mortgage loan loss by over £422 million.

Jamie Dimon, chairman and chief executive, said: "All our businesses had strong performance, and our client franchises did exceptionally well".

"We are seeing positive signs that the economy is healthy and getting stronger. Housing prices continued to improve and new home purchases are also starting to come back.”

JP Morgan Saves On Lower Cost Sites In IT Upgrade

Citi, BofA & JPMorgan to outsource $5bn of IT and back office projects to India

Woodside Petroleum has stopped work on a proposed liquefied natural gas (LNG) project, valued at an estimated $ 40 billion.

The energy company which ranks as the second largest Australian oil company, said that the pull-out on the LNG project stemmed from commercial reasons.

The project which has now been put on hold would have supplied gas to Asian markets.

While multiple LNG projects have been proposed in Australia, obstacles including the high Austrian dollar and large wages, alongside environment concerns have made such projects prohibitively expensive in comparison to projects situated in Canada and the U.S.

Despite the setback for Woodside Petroleum, Australia is predicted to become the world’s largest supplier of LNG by the end of the decade.

UK gas fears see Centrica acquire U.S. gas supply

New figures released by the Office for National Statistics (ONS) show resurgence in the UK’s construction sector.

Figures for February showed a 5.5 percent increase from the month before, however the new figures where still down 7 percent on those from the same time last year.

Weather has been blamed for the industry’s troubles as well the continued impact of recession including limited public investment and project development.

While 2013 shows signs of growth, construction is expected to continue to inhibit the UK’s efforts to strengthen recovery from recession, with little expectation from analysis that construction will return to the heights of past years.

EDF given the go-ahead to construct new generation of power stations

The release of the new U.S. federal budget heralds a decrease in funding after inflation is taken into account.

With inflation predicted at 4 percent over the 2012-2014 period, the new budget for research and development of $142.8 billion would see a small decline in overall funding.

Current R&D funding includes cyber security, health and supercomputer funding. High performance computing is being increasingly developed in Europe and China, with the new federal budget looking to capitalise and maintain the countries current position of leadership.

John Holdren, Director of the White House Office of Science and Technology Policy, said: “we have to admit a decline in real terms over this period".

The overall reduction in R&D funding comes at a time when China is set to overtake the U.S. as the number one spender on R&D, within the next 10 years.

http://www.sourcingfocus.com/site/newsitem/us_trade_group_send_letter_to_congress_criticising_chinese_it_supplier_ban/

Number of U.S. computing majors increases dramatically

Click here to access the video of Xchanging's latest research into stakeholder perceptions of procurement.

In this video Graham Copeland, Sales and Marketing Director at Xchanging Procurement Services, and Catherine Lawrence, Senior Category Manager, Professional Services and Marketing, discuss Xchanging's latest research into stakeholder perceptions of procurement today.

Graham and Catherine will be hosting a workshop on Thursday 18th April called THE TRUTH: The workshop will be far ranging and will provide an in-depth analysis of what Marketing Directors are looking for from their procurement departments.

During the workshop Graham and Catherine will be discussing ways in which procurement is adding value and thoughts on what specifically Marketing Directors think their procurement teams could be doing to play a more strategic role in the future.

This year will see the turning point for the public cloud, as a result of repeated security infractions and regulatory issues. Companies are beginning to realise that they need a secure and stable infrastructure, which is both fast and flexible. They need to think about systems that allow them to ramp up resources, as well as scaling them down depending on business needs.

For many service providers, 99% uptime is seen as good, however as the role of service providers becomes even more critical, that one per cent of downtime isn’t good enough anymore. This is what is starting to be seen with the public cloud. The fundamental question is, what infrastructure would you run your important business system on and how risky are you willing to be with business data?

The public cloud emerged as a quick and scalable utility that could revolutionise enterprise IT, however, due to repetitive data breaches and repeated downtime, the public cloud has been highlighted as disposable. Data breaches are fairly common stories in the media, and are usually dramatised, with millions of people’s personal data being stolen each time. The Yahoo! eHarmony and Linkedin stories are oft-quoted, but the real extent of data breaches is often greater.

The public cloud’s open and shared services approach always raised security concerns, and the fact that data can be stored anywhere in the world raises regulatory issues around data protection and ownership. For this reason, businesses simply cannot trust the public cloud’s offerings.

In the future, we will see the private cloud’s status increase. It continues to grow in popularity, especially with financial services institutions and global corporations. The private cloud is a much more secure form of data storage, which is why is has become so popular with these types of companies. With the level of flexibility now offered by private cloud providers, it is a more compelling proposition for hosting important business systems and business information.

Establishing their own personal infrastructure allows these companies to keep complete control of their data, while still achieving the flexibility benefits of running services through the ‘cloud’.

Companies are looking to invest in a service that matches their required business outcomes. They are looking to move away from traditional data centres and move towards an option whereby you can pay solely for the data and computing resources that you use. Companies want a predictable financial transaction, which can easily be paid off each month and aligns with their business outcomes.

Companies are looking to move away from outsourcing the provision of infrastructure and applications. Instead they want a supplier with SLAs relating to the availability of their business services.

The private cloud is the only solution that can securely protect a company’s information assets. The future of cloud is to deliver an end-to-end service and not just component parts. Suppliers who can supply SaaS, IaaS, PaaS, management consultancy and in-house processes will be the only ones truly able to deliver the outcomes that businesses require.

Businesses find cloud migration costly

Cloud computing: let’s work together!

Earlier this year the highly regarded procurement analyst Jason Busch heralded 2013 as ‘the year of Source to Pay (S2P) adoption in small to medium sized enterprises’. But at a time of continued economic uncertainty for many, is adding another cost line to already-strained IT budgets really a smart move? When it’s one that can deliver significant short term payback and resource reduction, the answer must surely be yes.

For many SMEs the first questions may be ‘what is Source to Pay’? Put simply, S2P systems deliver big cost savings by providing the tools to negotiate the best possible deals from suppliers, ensure employees buy compliantly from those suppliers and reduce process overheads by automating the exchange of orders and invoices.

Source-to-Pay software takes the legwork out of that entire sourcing and purchasing cycle, from the starting point of analysing spend and selecting suppliers, through to the endpoint of paying the supplier correctly. To aid understanding of this issue and solution I’ve identified five sourcing and purchasing pain points that are remedied by Source to Pay. In this post I will focus on the first of these – selecting your preferred suppliers.

So here’s the scenario - you decide to review your purchasing in a particular spend category that comprises hundreds of different products and a range of services, let’s say facilities management. This process shows that different departments are buying varied elements of this category from a number of different suppliers, creating many small ad hoc purchases at non-competitive prices. You decide to put out a tender to a vetted list of suppliers for a stripped down set of standard services. The aim is to consolidate what you buy and from whom so that you can increase buying power and negotiate a better price.

But going out to tender manually requires significant resource and is so long-winded and error prone that the process of reviewing suppliers never really gets off the ground. Writing effective tender invitations, then sorting through and evaluating varied and difficult to compare responses, slows the process and makes it harder to compare offers from suppliers. Your opportunity to reduce costs and ensure contractually secure products and services are used by the business falls at the first fence.

Source-to-Pay can largely automate this process. Tenders can be constructed within the system from pre-defined clauses dragged and dropped into place. Then suppliers actually respond within the system too, eliminating paperwork and manual checking. The system also automatically checks, compares and scores responses against chosen criteria. So significant are the productivity benefits of Source to Pay in this area that mid-sized organisations often see a reduction of around 85% in the time it takes to manage the tender process.

So Source to Pay has the potential to get your supplier and spending review off to a flying start with effective preferred supplier selection, but it doesn’t stop there. It’s an integrated cycle and in the next post we’ll look at the next two pain points it remedies – supplier contract management and maverick spend management.

On August 15, 2012, Saudi Arabia’s national oil and gas company, Aramco, suffered a debilitating cyberattack. More than 30,000 computers were rendered inoperable by the Shamoon virus. US Secretary of Defense Leon Panetta described this virus as the most destructive weapon ever used against the business sector. Network security is a growing problem in the IT industry today. The very trends that have revolutionized users’ access to data are the same ones that are leaving networks vulnerable to attacks by cybercriminals. No single security product can fully defend against all network intrusions, but a smart combination of existing products can provide a more flexible solution. Napatech’s intelligent adapter forms a key part of this response by ensuring that network monitoring and security appliances have the full capacity to monitor, detect and halt potential attacks.

Three recent trends in the IT industry have improved the efficiency and effectiveness of digital services: cloud computing, big data analysis and mobility. Cloud computing centralizes data and makes it accessible anytime, anywhere. Unfortunately, it also provides cybercriminals with fewer, and more valuable, targets. Big data analysis offers a sophisticated overview of complex information; however, such a wealth of sensitive information in a centralized location provides an irresistible target for cybercriminals. Mobility allows convenience; it permits users to access data on the network with different devices, such as mobile phones and iPads. But this severely compromises security as these devices do not have the same protections as the typical corporate laptop.

UK infrastructure faces cyber threat, says GCHQ chief

With increasing data availability, cyberattacks are becoming more common every year. The cost of these attacks to business, though declining from 2010 to 2011, is still high. According to the Ponemon Institute and Symantec Research, the average cost of a security breach in the United States was $5.5 million in 2011. Cybercriminals are becoming smarter, innovating new methods to penetrate defenses and often using several different kinds of attacks in combination. For example, a hacker can utilize a distributed denial of service (DDoS) attack as a diversion for introducing malware into a network. In the case of the attack in Saudi Arabia, cyberterrorists utilized a virus in a spear phishing attack in an attempt to disrupt international oil and gas markets. There are many types of security appliances and solutions deployed in networks, each with its own specific focus. However, these solutions are rarely coordinated, which hackers exploit using a combination of attacks.

To successfully defend against this, some kind of coordination is required between the various security solutions so a complete overview can be provided. But, even this is not enough, as detecting zero-day threats (new attacks that have never been seen before) is very difficult. It is therefore necessary to also monitor how the network is behaving to make sure that no attacks have penetrated the security solutions in place. To do this successfully requires that all these solutions are capable of monitoring and reacting in real-time.

Most networks already have monitoring appliances in place, such as a firewall, an Intrusion Detection or Prevention System (IDS/IPS) or Data Loss Prevention (DPL) application. Some products that consolidate these methods into one appliance include Universal Threat Management (UTM) and Next-Generation Firewalls. But single point solutions can only ever address a part of the problem.

Another solution to network security uses the concept of Security Information and Event Management (SIEM) which is based on the centralization of information from both network and security appliances to provide a holistic view of security. This is a real-time solution, constantly monitoring the network to detect any anomalies that might arise. That means that both the network and security appliances need to be able to provide data on a real-time basis to ensure that anomalies are detected the moment they occur. This, in turn, means that each of the appliances must be capable of keeping up with growing data loads and speeds.

One of the easiest ways of disrupting the security of the network is to overload the security and network monitoring appliances using a DDoS attack rendering the centralized SIEM system blind. This is a real threat if these appliances are not capable of operating at full throughput. By assuring that they can, you have just removed another potential attack vector.

Napatech intelligent adapters are used in both network monitoring and security appliances to guarantee full throughput under maximum load at speeds up to 40 Gbps. Napatech adapters can scale network throughput and combine different port speeds, distributing data flows on up to 32 CPU cores. The data can then be intelligently distributed to one or multiple security or network monitoring applications running on the same physical server—all of this accomplished without compromising CPU performance.

The information from network and application monitoring applications can be used to build network behavior profiles. The customer uses real-time information on network and application usage to detect anomalies as they occur. These anomalies can then be compared to data from security appliances to identify if an attack is underway. Napatech adapters allow for the proper maximization of monitoring and security applications for a multifaceted defense.

Cyberattacks on the world economy and infrastructure are becoming commonplace. The adoption of cloud computing, big data analysis and mobility have improved efficiency, but unfortunately they have also exposed critical vulnerabilities in networks. Utilizing SIEM systems on standard servers with Napatech adapters enables OEM vendors to provide solutions that can respond immediately to any detected anomalies in the network. By combining network and security information into a more holistic solution, attacks—such as the spear phishing assault on Aramco—can be deterred. By focusing on guaranteed data delivery and scalable performance, Napatech, the industry leader in adapters, enables its monitoring and security appliance vendors to build the centralized security solutions that can help protect networks in the years to come.

Time to ReThink Network Security