Industry news

Although putting critical spend categories under the microscope to ensure best value sourcing is commonplace in organisations, the sheer breadth of spend categories to cover is likely to mean attention is restricted to the highest value direct commodities that are critical to the business operation. This is a sound strategy in dealing the main body of sourcing efficiency. However it does leave an extremely long and inefficient tail of smaller spending, on myriad indirect categories where potential savings generally remain untapped.

For this reason, organisations are increasingly choosing to outsource part or all of sourcing itself. Beyond the traditional popularity of expensive management consultants brought in to reengineer how major products and services are sourced, the tactical skills of specialist sourcing consultants have become highly sought. These experts have the luxury of running dozens of events annually across the top 20 or so indirect spend categories common to every organisation. Thus their well honed approaches have gained traction as an outsourced service.

Repeated exposure to the same contract types and supplier communities gives sourcing consultants the edge in terms of being able to answer all the fundamental questions needed to drive savings. This knowledge can range from choosing the right categories for strong savings opportunities, to selection of the tactics required for the best outcome. Knowing the best frequency for sourcing activity per category and scope for bargaining are also critical.

One such active Sourcing Consultant is Alun Morris of Wax Digital. Alun spends his time helping clients through the process of well constructed eTenders and eAuctions designed to find cost savings in every corner of spend. Over the next few weeks Sourcing Focus will feature blogs from Alun, each providing insights into specific indirect spend categories where certain nuances must be applied for the best possible results. Watch this space for the first in the series focusing on IT Consumables.

The latest paper from Gartner has branded cloud computing on a potential path to ‘disillusionment’. Certainly, uptake of the cloud hasn’t been quick, but I wonder if it’s simply that the value proposition of the cloud hasn’t been clearly communicated enough in simple terms to the layman.

Fundamentally the Cloud is a utility, packaged so that services, infrastructure and resource costs can be exploited in addition to traditional managed hosting, leased infrastructure and private facilities.

Knowledge is power

Francis Bacon said that knowledge is power. The same statement has never been truer than it is today. Data is at the core of everything we do. But how do you extract real value from it? To date there has been four widely accepted V’s of data: Velocity, Veracity, Volume and Variety (or the what and the how!). One V - Value (or the why!) - is missing. Big data only works when you can turn it into actionable data. You only have that when you have the right data, in the right person’s hand, at the right place, at the right time. After all, knowledge and tools are useless in themselves without context.

The challenge is that now, everyone is everywhere. We travel a lot. We want data everywhere. When I’m on my way into work, in the office and when I’m overseas. On my desktop, laptop, tablet and mobile. And I want it now. The cloud offers utility, access and services on top. Big data offers timely, responsive actionable intelligence. The missing link in this is data distribution on demand. Services and intelligence are useless if there are barriers to basic real time communication.

Data on the move

That’s where the problems start to crop up. Big data must have a real-time element. Big static data is useless. The cloud is great at supporting mobile, and we’re seeing no shortage of apps being built and driven from the cloud. But how do you get the demand for big data out to a mobile workforce? This is the real challenge.

Unknown, not disillusioned

The cloud is not on the path to disillusionment and neither is big data. Sure, there are still performance hang-ups and security hang-ups but the cloud is maturing every day as more technology vendors enter the market and offer a richer service. Technologies such as our data on demand product DiffusionTM can facilitate data transfer over secure internet ports, and is one way to utilise the cloud whilst reducing the security risk.

The cloud approach is new. This brings new challenges and requires new technologies and a new approach to moving data that is not the traditional ‘message bus’ approach.

Remember that we are coming out of a recession. Businesses are nervous in taking risks, especially when it comes to the security of one of their most valuable assets and make no mistake, that’s what data is. The cloud has automatically lent itself better to certain industries such as utilities and ‘controlling your home on the move’, transportation and supply chain management. With more innovation and investment in better and richer technologies the cloud will become more main-stream - facilitating true innovation based upon core values and clear contexts (the why!); then we will see the bigger share of the market and faster-paced organisations start to adopt.

BAE Systems and EADS who own the Airbus manufacturer group have announced a joint merger to create a £30 billion pan European aerospace company.

The merger would offer increased competition to global defence systems manufactures including American defence giant Boeing.

The merger would see EADS own 60 percent of the business with BAE owning the remaining 40 percent. EADS would also be able to use key BAE connections to new markets including the company’s links to the Pentagon.

The announcement of the merger saw BAE shares rise by 11 percent. In a statement BAE said: "BAE Systems and EADS believe that the potential combination … offers the prospect of significant benefits for customers and shareholders of both companies. These benefits include cost savings, such as from procurement and sourcing efficiencies available to the enlarged group, and substantial new business opportunities."

Zurich Insurance Group has signed a seven year IT services contract extension with outsourcing giant CSC.

The new contract, which allows for a further extension of three years, will begin at the start of 2013. The announcement of the extension comes shortly after the end of CSC’s failed Lorenzo project with the NHS.

Ray August, president of CSC’s Financial Services Group, said: ““Zurich’s selection of CSC underscores our wealth of experience in the insurance industry and the success of our global service delivery team”.

G-Cloud user and UK start-up Huddle has entered into a key software contract with the US Government.

The firm has secured a technology contract, for an undisclosed amount, with the Department of Homeland Security and the National Geospatial-Intelligence Agency.

Huddle will provide innovative and collaborative solutions to both the Agency and Department as part of its first US government service delivery, with Huddle chief executive Alastair Mitchell, saying: “"Once you work with these guys, you get accredited by the rest of government."

Surrey County Council has selected BT to deliver superfast broadband to the region in a contract worth £33 million.

The service will supply 90,000 homes and businesses with broadband speeds of up to 80Mbps. The contract is the latest in a series of broadband procurement successes as councils seek to develop IT infrastructure and broadband speeds.

The Council has estimated that the new service could increase the local economy by £28 million annually, with almost complete coverage of superfast broadband expected by the end of 2014.

Peter Marin, Surrey’s deputy leader, said: ““This will be a great boost for business, from start-ups in small offices through to multi-nationals. It can be crucial to the continued success of Surrey businesses and a huge attraction to those looking to move in.”

Companies including Twitter, Virgin Media and O2 have raised concerns regarding the government’s draft of the Communications Data Bill.

The bill would require communication service providers to keep details and records of usage if requested by law enforcement.

Twitter raised issues regarding the practicality and legality of the bill as it would see companies holding UK customer data outside of the country.

The internet service providers trade association (ISPA) raised concerns regarding the disadvantages that the bill posed to commerce: “Far too much discretion is given to the Home Secretary without the necessary Parliamentary oversight to ensure that significant changes proposed are proportionate and necessary.”

Sitel has been awarded Global Standard Accreditation from the CCA a leading authority on customer contact strategies and operations.

Launched in 2001, the Global Standard© is a key set of principles defined by industry experts, assessed every three years to ensure continual improvement to customer service.

Independent auditors for the CCA carried out a rigorous assessment of Sitel’s contact centres in Newcastle upon Tyne, Stratford upon Avon and Watford, with sites in Exeter and Kingston upon Thames also evaluated.

Rob Pike, Chair of the CCA Standards Council said: “We are delighted to announce that Sitel has met the CCA Global Standard. This honour is a clear recognition of the commitment and drive demonstrated by Sitel in working towards improving standards and customer experience across the organisation.”

The new service will be delivered by Everything Everywhere, now rebranded as EE, to four UK cities during the testing phase.

While EE users will have access to the new service under that ‘superfast’ brand, current Orange and T-Mobile users will not, when the new service goes live.

London, Bristol, Cardiff, and Birmingham have now all received the 4G network which will now undergo stress-testing. Mayor of London Boris Johnson said: “We are now the city with the greatest 4G coverage anywhere in the world".

4G with potential speeds of 21Mbps is expected to have 98 percent UK population coverage by 2014.

The delivery of 4G services by EE has been widely criticised by the mobile operator’s competitors and the UK government has had to negotiate a one month pause on any legal action, due to the threat of delay.

Chinese telecommunications giant Huawei have stated that they intend to invest £1.2 billion within the UK within the next five years.

Ren Zhengfei, founder and CEO of Huawei, said in a meeting with David Cameron, that the company would spend £6 million on local procurement with a further £6 million on research and development in the country.

Zhengfei said: ‘‘The UK is a centre of innovation, has a highly skilled workforce, and is respected internationally for the quality of its legal and educational systems. It is for these reasons we have selected the UK as the location for a number of our centres of excellence.”

Huawei currentely employs 800 people within the UK, with plans to expand this number to 1,500 by 2017.