Industry news

On Wednesday 27th June, the European outsourcing Industry gathered together for the Annual European Outsourcing Association Awards - the premier awards ceremony that celebrates pan-European outsourcing best practice. The event took place at the prestigious Law Society in Central London.

Following a comedy set from host Hal Cruttenden, the ceremony got underway…

The winners were:

BPO Contract of the Year: arvato and Microsoft

The BPO partnership covers global contract-to-invoice processes for four major lines of Microsoft’s business that together represent 90% of the company’s revenues, or more than $60billion in FY2011. With unique scale and complexity, the global BPO contract serves customers in 152 countries from six locations worldwide (Dublin, Reno, Fargo, Monterrey, Singapore, Manila). It employs 1,100 people dealing with more than 4,000 individual processes in 15 languages.

IT Outsourcing Project of the Year: Luxoft and Hotwire Inc

This was a closely contented category, however the Luxoft and Hotwire entry illustrated a lean and agile international case study, whereby the service provider was truly embedded with their customer and its future growth. It clearly demonstrated best practice and was deemed of an exceptional standard.

Outsourcing Service Provider of the Year: BDO

BDO have invested in quality and in-country services, enabling its customers to confidently move from a diverse international multiple suppliers to one international (but working locally) supplier, which allows SMEs to operate as if international. The judges felt this was an impressive pan-European solution and the depth is demonstrated not just by the financial results but by the wide range of customers BDO provides these services to. The support provided, particularly to SMEs, is very encouraging in the current economic climate.

Outsourcing Advisory of the Year: Proservartner

The entry from Proservartner was extremely high quality. It is clear that Proservartner have found a unique method to combine their social objectives with a powerful corporate proposition. The case studies were unique, detailed and illustrated a focus on quick returns on investments, whilst ensuring the delivery of excellence. Proservartner manage to combine a focus on thought leadership with a drive to demonstrate value for their clients - and risk significant fees based on this delivery.

Offshoring Destination of the Year: Morocco – MedZ Sourcing

After careful consideration the judges felt there were two leading submissions; from South Africa and Morocco–MedZ Sourcing. However there can be only one winner and the award went to Morocco by a narrow margin. Morocco's strong points include: a wide range of services, a stable political environment, and leading brand testimonials, combined with geographic, cultural and linguistic proximity for European companies.

Outsourcing End-User of the Year: Merck

Merck Shared Business Services’ submission covers a $56million agreement running over 5 years and spanning over 50 countries. Merck consolidated its outsourcing agreements from 8 suppliers to one (Genpact) to deliver finance and accounts services and IT and HR helpdesk services. Over 5 years the agreement will deliver $15m in net savings from the consolidation plus 30% operational expense savings over the term. A benefit sharing agreement is helping keep things on track for both parties.

Award for Innovation in Outsourcing: Genpact - Smart Enterprise Process

Genpact has developed the first scientific, methodology, Smart Enterprise Processes (SEPSM), for managing business processes; SEP can deliver 2–5X the business impact compared with traditional approaches. This service offers a truly innovative business insight and is a great example of targeted analytics. The judges felt that Genpact provided an excellent submission in a very strong category.

Award for Corporate Social Responsibility: SPi Global

SPi Global has achieved an ambitious goal of generating 20,300 employee volunteer hours to help youth by holding simultaneous CSR programmes within 24 hours across the company’s global locations. They also have an innovative way of contribution by gain share to the benefit of their clients, their staff and the charities they support.

With all targets exceeded, the judges selected this submission as the winner due to its excellent objective, implementation and the fact it has clearly helped so many.

Award for Best Multi-sourcing Project of the Year: Centrica - British Gas

The judges felt the Centrica/British Gas submission was extremely detailed and very convincing. It demonstrated a true partnership between four big players in the IT outsourcing arena, plus spanned across several countries.

European Outsourcing Association Chairman and EOA Awards Co-host, Martyn Hart said: “Outsourcing professionals really are the pillars of the European business community these days– all of us here have a great responsibility towards the communities in which we work, the tax payers who fund public sector expenditure, those that work within the private sector and everyone who consumes the services. We have a responsibility to everyone in our communities, to get Outsourcing and shared services right. Which is why these awards are so important; they celebrate best practice, they celebrate getting it right. These awards are a major initiative toward making outsourcing and shared services consistently successful. Congratulations to all of the deserved winners.”

In today’s ultra-competitive financial services market, many firms are looking at the role that ‘closed books’ can play as part of a wider business strategy for selling insurance policies and pensions. Although closing a book reduces marketing costs (as no new customers need to be acquired), administration costs will normally.In order to offset this expense, cross-selling additional products to existing members can be a great tactic. As consolidation continues to gather pace, insurers face a number of challenges (as well as opportunities) when it comes to selling additional products to members of closed books.

For example, although most financial services providers already allow their customers to increase their contributions if they choose to, this option tends to be buried in the small print somewhere. Firms that really want to sell this option need to make the opportunity to increase contributions much more visible as this is a straightforward way of generating revenue.

Offering follow-on products is another good way maximising the value of an existing book. For example, why not offer clients an income-bearing investment after a critical illness claim? Firms can also use this same approach to offer complementary products. Some have achieved great results by targeting people who have left their company pension scheme with the offer of health insurance, for instance.

After all, an important part of maximising the value of an existing book is customer retention and, more specifically, customer engagement: it’s vital to build loyalty so that another provider doesn’t lure valuable customers away. Firms need to redesign their interactions with customers and look for useful, creative ways to reinforce their client relationships, whether that means helping clients to manage multiple accounts more effectively or placing the occasional phone call in the name of customer service.

All of these different activities will need to be combined into a single joined-up strategy – encompassing not only the marketing, sales, and customer service departments, but also actuarial, finance and risk – in order to build an overall business strategy that promotes ‘intelligent’ customer retention. This approach is essential, as retention needs to be embedded at the very heart of the business: in management objectives, performance targets, reward schemes, core processes, management information and more.

With all of these different parties requiring involvement, product-to-market times clearly are considerably lengthened. In practice, all of this means that providers will need to review and alter their policy administration systems – or outsource to achieve the same effect. Solving this challenge – or outsourcing it to a specialist provider – is the key to getting cross-selling right, first time, every time. Bringing in a third party can create opportunities to consolidate, tidy up and cross-sell products in a cost-effective and efficient manner and breathe new life into old books.

MTI Managed Service Series for the CIO

PART 2: Managing and monetising big data

Increasing volumes of data are a major concern for CIOs up and down the country. At the forefront of their minds are questions about how to manage and monetise it. Struggling to deal with not only the amount, but also the rising complexity of this data, CIOs are not receiving the extra resource they need to handle the challenge.

Recent MTI research found that more than a quarter of IT professionals working in the UK (27%) feel that adding extra resource to their IT departments would allow them to become a strategic tool within the business. For example, if the task of storing and managing large and ever-changing volumes of data is removed from a CIO’s daily list of tasks, then more of their time can be spent on the strategic analysis of the data, transforming the IT environment into a valuable asset. MTI clients that originally outsourced data to the cloud simply for efficiency reasons, are now seeing a real return on investment from the move, with the IT department now actually bringing money into the company.

With the support of a solution such as a managed service, a CIO can outsource backup, file serving and archiving capabilities to the cloud, removing the need for storing data on-site. CIOs can still retain control by deciding exactly what kinds of data they want to sit in the cloud, and then a tailored solution can be created. The management of the cloud environment can also be outsourced, with teams monitoring the infrastructure 24/7 and flagging any problems before the effects hit the network. This can also help to avoid costly system downtime.

In these tough economic times, organisations are increasingly focused on scalability, whereby they only pay for the services they need and use. Flexible and scalable IT solutions enable CIOs to run efficient and cost-effective IT environments, whilst also enabling them to access more storage or bandwidth if required. Managed services allow CIOs to outsource as little or as much of their data and applications as they want or need to, for a price that matches the service.

Outsourcing large amounts of complex data to a managed service provider can liberate a CIO, allowing them to focus on analysing the data and turning it into a valuable asset, which can benefit other business lines driving company growth and profitability.

The successful international manager needs to have developed the competencies and personal attributes necessary to allow him or her to work effectively in an international and cross-cultural environment.

This is an environment in which staff will be expected to interact, manage, negotiate and even live and work effectively as individuals and in teams with people whose values, beliefs, languages, customs and business practices are different from their own. It is also an environment where relationships are all important and where misunderstandings can lead to costly mistakes and even business failures.

Increasingly, outsourcing organisations are looking for ways to develop their managers and internationally focused staff to handle this important dimension. A professional approach to the selection and development of international staff can help avoid the problems that may arise from appointing an individual through a 'knee-jerk reaction' who is the most 'technically' competent and readily available person.

Experience shows that technical competence, while important, does not of itself produce an effective international manager. The first step in this process therefore, should be to identify not the people but the competencies, motivation and personal attributes required for success at international, managerial, functional and personal levels and then select and develop potential international managers against these.

While there are international competency models that have been developed to help in the selection and assessment process, it is essential that the one which is eventually used by the organisation reflects both the specific and various cultural needs of its markets and the organisation's culture, which sometimes can be in conflict.

In identifying the personal attributes needed, it is also important not to assume that there is a single attribute (or personality) profile for all markets or cultures. For example, the person who is ideally suited, in terms of their motivation and personality, to work in one market, say the USA, may find it very difficult to work in another, more relationship orientated culture of say India or Pakistan.

This assessment process should not be left until a vacancy arises. It should be ongoing and one through which people, who are considered as high performers with international potential, are identified as early as possible in their careers and then given the appropriate opportunities to develop their experience and skills in that direction.

Consideration should also be given to planned exposure to the international side of the business through projects that require them to visit and work for short periods in the organisation's overseas operations, or with its customers. This would allow in-market senior managers to assess and provide feedback on how effectively, or otherwise, the person is able to work with the local team and in the different cultural environment.

A further part of the process should be to give individuals the opportunity to attend relevant country briefings and cross-cultural awareness workshops. This can help them more fully appreciate the opportunities and challenges of an international career and allow them to take an informed and objective view of what they might be letting themselves in for. In this way, there can be a process of self-selection which helps ensure that the people, who eventually are offered and accept an international role, are fully committed to it.

At this point, formal training should become an integral part of the process, ideally including advanced management and functional skills training, and country briefings covering the historical, political, economic, social and business environments of the required market(s). Also needed will be cross-cultural awareness training to help them appreciate the values, beliefs and practices of the other cultures and how their own culture may be seen by people from the host nation. Time should also be allocated for language training – experience has shown that effort to acquire a basic ability to converse in the national language greatly assists in overcoming cultural barriers and improves project outcomes.

Farnham Castle is a world leader in Intercultural Business Skills training and Global Mobility Programmes and can help with language training and more detailed briefings on individual cultures.

After long term rumours Dell has announced that it is to buy Quest Software for £1.5 billion.

Quest Software specialises in infrastructure software including database management systems and information security services. Dell will acquire the portfolio of Quest software products which compliments many of Dell’s own systems.

The move comes after a series of acquisitions from the creation of a new software division at Dell. Quest CEO Vinny Smith said: “Dell is acquiring Quest as the foundation to their software business."

Microsoft is set to absorb a loss of $6.2 billion this quarter due to the impact of low returns from the 2007 purchase of aQuantive.

The marketing company aQuantive was purchased for around $6.3 billion which ranked as the largest ever acquisition at the time, in order to improve Microsoft’s online marketing capabilities.

A statement issues by Microsoft said: “the acquisition did not accelerate growth to the degree anticipated, contributing to the write down,".

Sony has announced the purchase of gaming cloud platform Gaikai for £242 million. The finalisation of the deal had been rumoured for several weeks.

The company provides cloud gaming services enabling PC titles to be run through the internet and streamed to the user without the use of powerful software.

Sony’s implementation of the software has yet to be announced, but it is likely to be integrated into the release of PlayStation 4.

RBS has denied media reports that IT workers in India had made errors that had resulted in the disruption of IT services for NatWest and RBS customers.

In a report to MPs, RBS stated that it had been in fact Edinburgh based IT staff that had been responsible for the failure.

RBS chief, Stephen Hester wrote: “The initial reviews we have carried out indicate that the problem was created when maintenance on systems, which are managed and operated by our team in Edinburgh, caused an error in our batch scheduler.

Dyfed Powys Police, the first emergency services organisation to employ Cisco Unified Contact Centre Enterprise (UCCE) technology, have reduced call times, while helping to deal with large numbers of calls.

The Cisco technology allows operators access to real-time information and have reportedly allowed for faster response times.

Mark Hall, head of network services at Dyfed Powys Police, said: “The new system is truly state of the art. The implementation process was fast and seamless."

Apple is looking to put in $1 billion over the next ten years into a Reno, NV project that will include a data center dedicated to iCloud and a separately-located business and purchasing development.

According to online postings from city and county officials uncovered by the Reno Gazette Journal, the deal was months in the making and encompasses both a downtown Reno data center and "business park" as well as a recently-proposed separate 2,200 acre data farm near Sparks, NV.

The developers behind the massive undertaking, dubbed Project Jonathan, said that while the Reno facilities have been under planning for years, Apple only approached local and state officials about the Sparks center earlier this year.