Industry news

Whether you are realigning your current deal or entering your first outsourcing contract, benchmarking data can be used to manage and improve provider performance.

As we are slowly but surely climbing our way out of recession, corporations are shifting emphasis from maintaining position to focussing on achieving sustainable profitable growth and seeking ways to scale and replicate successful business processes globally. Process benchmarking is one of the effective ways of identifying the best processes to replicate or highlighting those which need improvement.

Although the benefits are obvious, benchmarking seems to be one of the major IT challenges facing Government departments.

Martyn Hart, NOA chairman, has a clear view on the subject. “I am of the opinion that no government contract costing more than £1 million per annum should be signed off without a clearly-defined, rigorous benchmarking programme. In order to analyse value-for-money, major projects should use an independent organisation to benchmark the deal. Benchmarking needs to incorporate a detailed normalisation process, employing a wide range of parameters, to allow for like-for-like comparison against other outsourcing contracts.

“This is essentially an outsourcing exchange rate mechanism, enabling you to review spending against a peer group of highly-complex, seemingly disparate, outsourcing deals; helping you test your provider not merely against other government department projects, but the IT marketplace as a whole. If your project is seen to be under-performing, then there are consequences for your provider. It would have to improve scope and quality of services, reduce costs, or maybe even give a refund… imagine the sensationalist headlines that would make!”

Mr Hart believes that the basis and methodology for normalisation should be open and transparent – there should be no secrets, no ‘black box.’ Currently, there is no internationally recognised formula for benchmarking and normalisation.

It seems as if a ‘normalisation’ of normalisation processes - a global code of IT benchmarking – could make deal comparisons clearer. This, in turn, could drive up standards and make the marketplace even more competitive. All of which would be truly in keeping with the key teachings of the Open Services white paper: transparency of information and freedom to choose the best provider for the job.

Although benchmarking is a time-consuming process, it can also provide research for organisations to compare and align internal strategies.

Last year Ochre House benchmarked a range of major companies, as well as a targeted selection of fast growing SMEs to measure their talent management strategies. Ochre House found that one of the most worrying findings of the research has been the fact that very few organisations have any real concept of what skills and capabilities their employees will need in five years’ time, let alone how feasible it is to source such skills in the current marketplace.

Helena Parry, director at recruitment outsourcing and talent management specialist, Ochre House, said: “From our own benchmarking, we found that few businesses really plan ahead for their employees’ needs and development. Those businesses who take the idea of strategic workforce planning seriously are able to provide a template for any others that might care to follow their lead. One of the most striking examples is Arcelor Mittal, the world’s leading steel company. Here HR is one of only two functions that report directly into the chairman and CEO, Lakshmi Mittal and is tasked with maintaining a rolling plan which identifies what capabilities the company will require over the next three and five years and how to access them.”

Overall - benchmarking is not simply a technique. Your organisation is unique; and it needs a specific recipe for your specific needs for your specific situation. Benchmarking is also not just collecting metrics, or numbers. How to achieve those numbers is the fundamental mission of benchmarking, but if all you do is collect numbers, all you’ll accomplish is to be a good number collector. However, if you compare and contrast your process measurements with those organisations superior to yours, then you will learn to change for the better.

So final words of wisdom? Formal benchmarking should be used wisely, sparingly and jointly. The entire operation should be benchmarked – client-side and supplier side and jointly and openly respond to findings. Mutually select the benchmarking company and methodology and do it once or twice thoroughly in a 7-10 year deal.

In the past weeks, two key players in business software and enterprise services have moved rapidly to expand their social media capabilities in order to enhance their cloud-services, a byproduct of the increasing competition facing the Cloud market.

Both Oracle and Salesforce.com have recently enhanced there social media analytic capabilities. Salesforce.com have recently acquired social marketing vendor Buddy Media while Oracle has purchased Collective Intellect.

The £449 million acquisition of Buddy Media by Salesforce is designed to provide the company with specific targeted marketing capabilities through such social media sites as Facebook, LinkedIn and YouTube. Salesforce had previously acquired social media analytics firm Radian6 in 2011 which provided the database firm with the ability to track conversations through social media. Oracle moved to acquire Collective Intellect last week as the company looked to match the social media drive of its competitors. Collective Intellect, like Radian6 provides technology to track conversations through social media.

Salesforce.com acquires social media marketing vendor for £447 million

Oracle has recently moved to compete against the likes of, IBM, HP, Microsoft and particularly Salesforce whose strategy had revolved around social media and software for some time in delivering cloud-based customer management. The purchase of Virtue in May indicated the companies move into social media marketing, with the acquisition of software allowing for coordinated marketing campaigns and data analysis to measure effectiveness.

Oracle CEO Larry Ellison announced this month the company’s focus on cloud-based applications when talking on the merits of the new software. His comments came as a departure from past remarks on the “gibberish” of the technology.

Oracle has now said in a statement that they possess the “most advanced and comprehensive social relationship platform," demonstrating the company’s commitment and speed in moving to aggressively compete in the social media market.

Oracle claims it is ready to deliver world’s ‘most comprehensive cloud’

The recent trend of Salesforce and Oracle alternatively buying businesses or ‘listing platforms’ with expertise in social media, reflects the on-going social media capabilities ‘war’ to deliver the most comprehensive product.

Rivalries in certain cases have gone from business rivalry on the markets to legal proceedings in court. Conflict erupted between Oracle and HP, with accusations and court proceedings following the end of Oracle’s support for HP technology. Oracle’s name crops up again in a legal dispute with Google over the copyright of the Java platform, which saw the presiding judge accusing Oracle of perusing damages like a “fishing expedition.”

The ‘war’ between business software and enterprise services providers is a fast moving case and casualties are inflicted on all sides in the race to capitalise the market. Oracle itself has struggled this year, failing to meet its second quarterly expectation, and has struggled to make gains against IBM in terms of server sales.

Competition between cloud software companies is getting fiercer, with no end in sight as the technology advances and the markets having yet to be saturated. The move towards social media, in providing advertising and analytics, reflects another step that IT firms are going to in order to differentiate themselves from their rivals.

This year represents a pivotal period for outsourced contact centres, with financial pressures, technological advances, compliance issues and consolidation all driving deep and lasting change within the industry.

One of the key trends will see contact centres increasingly recognised as a strategic asset rather than a tactical operation. There’s little doubt that customer service is seen as a key battleground in competitive markets, and many organisations are prioritising initiatives that will improve customer acquisition, advocacy and loyalty. Outsourced contact centres that can demonstrate how they will contribute to such business-building efforts will certainly be favoured.

At the same time, budgetary constraints mean that cost control remains paramount, so contact centres that can offer savings will have a significant competitive advantage.

Clearly, aligning these two apparently conflicting demands is a difficult proposition, but it’s one that will accentuate the importance of new technology. MATS (Multi Application Tracker System), for example, is a highly flexible and comparatively low-cost web-based solution that helps manage communications with customers and third parties by generating automated progress update messages.

These messages, through multiple channels such as SMS text or email, can be sent at key stages of almost any particular process, whether an enquiry, application or complaint. The objective is to keep customers proactively informed in a timely manner without placing further demands on staff. On the contrary, this solution has been shown to reduce incoming ‘chaser’ calls by up to 60 per cent, which in turn reduces the need to recruit vast banks of call handlers – a feature of the offshoring movement which is now being reversed.

Adoption of such solutions gives outsourced call centres a significant value-added proposition that will not only improve the service levels delivered to customers but simultaneously reduce fixed costs in order to present a better deal overall.

This approach also assists measurability. Since the system inherently logs and tracks progress on a case-by-case basis, real-time performance reports can be generated which calculate aggregate statistics about case completions. Such data can prove invaluable to both the call centre service supplier and its client.

Another advantage of this approach is that it supports the evolution of unified communications. The key is to achieve consistency across the many channels through which customers can be reached – particularly on mobile devices via SMS text, email or even personalised web pages.

The emergence of unified communication represents an opportunity for call centres, but the practical demands of delivery will necessitate increasing adoption of supportive technology, such as the MATS solution.

These types of offerings will not only increase the attractiveness of outsourced providers but also the traction they can gain within the client organisation, which will help cement long-term relationships.

This is true at all levels of the market, but particularly for mid-tier call centre providers, which will require agility, scalability and innovation to compete with the larger players, including some of the major BPO organisations which are continuing to grow through acquisition.

Comments from Martin Scovell, CEO of MatsSoft, the provider of a web-based managed service that combines workflow, communication and reporting tools to support integrated processes and improve both the efficiency and the effectiveness of customer relations. Users of the system include some of the UK’s largest financial institutions, as well as clients in the public sector.

Outsourcing Governance: 4 things to ask yourself

In this series of blogs, Paul Hart, IBM, shares his observations and thoughts on outsourcing governance to consider during your next governance meeting.

The trap of too many meetings is one I come across frequently. I was once on a project, where I was struck by the negative attitude the management team had towards governance. It was so obviously a chore, a never ending cycle of meetings for which they had little enthusiasm or derived any benefit other than the satisfaction of getting through a purportedly burdensome task unscathed.

I have myself experienced the frustrations of meeting overload from the provider side. I once worked on a project where I was told that I couldn’t have a meeting with a group of managers for many weeks to discuss a governance issue. I was told that “everyone is too busy in back to back meetings all day, every day”.

So, forgive me for singing the familiar tune of ‘back to basics’ but if you find yourself stuck in a series of perpetual meetings, my advice to you is to remind yourself of what you’re actually trying to achieve. There isn’t an ‘off the shelf’ answer to that, but based on my many years of experience here are a few questions which can help you gain that perspective and make your governance process operate more effectively.

1 Administration – who is responsible for all governance related administration? Are all inputs, minutes and outputs lodged centrally? Are your meetings locked down in your calendar months ahead? Is the meeting calendar published and are the logistics planned and updated regularly? Re-scheduling of meetings wreaks havoc for maintaining a focused agenda with the right attendees.

2 Preparation – Are you always briefed well before meetings? Ideally the meeting agenda and supporting information should be with you a couple of days beforehand as a pre-read providing you with the opportunity to absorb the salient facts and prepare any groundwork. A healthy approach can also be for client and service provider to reach agreement on what options are to be discussed, before a meeting.

3 Agenda & Attendees – Does the meeting agenda reflect business priorities? Are all outstanding actions and decisions clearly identified? Is the right information readily available and in the right format to enable clear decisions? Are options on the table? One of my peers recently remarked to me that his latest governance session had been, “a slow death by presentation material”. Are the right people attending the meetings? Roles, responsibilities and decision making rights should be clearly defined to ensure appropriate empowerment of individuals and their counterparts.

4 Meeting discipline – Do people turn up on time, or at all? Are meetings conducted in an orderly and productive manner? Are jointly agreed minutes taken and subsequently published? Are decisions and agreed actions directed at those who need to know?

Addressing these points will help any team move forward and make governance meetings more productive and powerful.

CCI BPO is the largest outsourcer in South Africa and is sponsoring the EOA Awards and NOA Conference. sourcingfocus.com caught up with Jamel Ziani, CCI BPO Managing Director, to discuss sourcing trends and what makes CCI BPO differant.

Can you define your business and your specialities?

Our Delivery Centre in Durban, South Africa is the home to 4000 Full Time Employees dedicated to serve our Clients across multiple verticals and industries. CCI BPO specialise in supporting our Clients who wish to outsource their Order to Cash Back office functions: From Credit Vetting to Payment Allocations, we offer to support the entire customer life cycle for our Clients with a team of fully trained Customer Representatives, Highly skilled Order to Cash Managers and dedicated Order to Cash Expert Lab® Executives

• Durban is the most culturally aligned South African city to the UK due to the high ex-pat population

• Located in the fastest growing commercial and residential growth markets in the country

• Largest skilled workforce pool in South Africa, which dramatically reduces recruitment and training lead times

• Accent Neutral area of South Africa which assists in optimal service delivery for international projects supporting our Clients in the UK, Ireland, USA and Australia

• 4000 agents serving our Clients in our unique state of the art Delivery Centre in Durban

• Expert teams dedicated to training and mentoring on site

• Order to Cash Expert Lab ® onsite delivering Innovation and Transformation to our Clients’ teams onsite but also within their retained organisations onshore

• 4 Order to Cash SMART Centres to support Delivery Excellence and Cost Optimisation

• Team Management solely sourced from the UK, Continental Europe, USA and Australia to meet Clients’ needs in terms of governance

Order to Cash is the end-to-end process that begins with managing customer credit worthiness and customers’ sales & services orders and ends with the collection and application of customer payments. These processes are focused on customer contact and collaboration, transaction processing and analytics.

Order to Cash encompasses the majority of activities typically referred to as “Accounts Receivables”. Success is measured by improved cash flow, fewer disputes, reduced bad debt and revenue leakage, increased customer satisfaction and enhanced process visibility and control. The Order to Cash process focuses on Collections and

Process Improvement to improve past due debt.

How do you differentiate yourself from your competitors?

At CCI BPO for Order to Cash, our main focus is to support our Clients’ Operations with four critical BPO Business Outcomes:

1. Working Capital Optimisation

2. Operating Cost Reduction

3. Revenue Maximisation

4. Customer Experience Improvement

At CCI BPO for Order to Cash, we offer more than ‘lift and shift’ engagements where savings are made from onshore labour pools being shifted offshore which provides the Clients with a one-time only cost savings lever on their P&L. Once we have done that for our Clients, our ability for further productivity gains and new business value is demonstrated through continuous process improvements, increased quality of technology delivery and innovative methods of service delivery.

We are dedicated to our Clients and their customers’ satisfaction this is why our Order to Cash Sales Executives our Clients meet during the introduction meetings and contracting process are also fully responsible for the delivery of the service for the whole duration of our partnership:

• We are easy to do business with at all levels of our Organisation

• We are dedicated to our Clients and strive to meet their needs

• We can adapt to our Clients’ business changes and scale up and down our delivery model very quietly to meet changes

• We deliver on our targets and always try to outperform to support our Client Growth

• We continuously offer Innovation to support productivity improvements and better business outcomes

In your opinion – what are the top 3 outsourcing hot topics / trends at the moment?

• Business outcomes outsourcing to support Client business growth instead of just cost to serve and offshoring

• Specialised outsourcing with expertise instead of generalists who can only offer offshoring and labour arbitrage cost reduction

• Change in contracting towards price per transaction instead of rigid FTE based contracting

NHS Wales have awarded a five-year contract to SME Software Europe to provide expenses management across Welsh NHS facilities, which is expected to deliver £750,000 in cost-savings.

The contract will cover the delivery of an online staff expenses system, designed to remove manual processing and paper administration. The new system will provide services for around 194,000 claimants.

Paul Thomas, assistant director of employment services at NHS Wales Shared Services, said: "We expect the system to help us provide a quicker reimbursement of travel expenses incurred by NHS staff.”

Gloucestershire and Oxfordshire councils have launched a shared services program designed to save £675,000 per year from back office expenses.

The partnership between the authorities within the two councils, known as ‘Go Shared Services’, will provide services in finance, procurement, and HR. While the service was expected to bring high-cost savings, the partnership was expected to result in job losses in roles to be shared.

Cotswold DC councillor Barry Dare, who is in charge of GO Shared Services at Cotswold, said: "We can now do more with less and, in many instances, do it better because we are bringing together a pool of expertise and experience."

Statoil, the Norwegian oil giant, plans to invest £18 billion in U.K North Sea oil fields. The move would see the creation of 300 jobs.

The move comes after Statoil previously announced the creation of 700 jobs from a £6 billion investment. The investment would last the lifetime of the North Sea fields with the potential to provide 800 million barrels of oil.

David Cameron commented after meeting with the Norwegian Prime Minister Jens Stoltenberg, on creating closer energy links between the two countries, that the move represented "a big investment into North Sea production."

Vodafone has taken a controlling stake of Vouchercloud, a mobile based savings firm, with 57 percent ownership.

Vouchercloud who has just entered the Irish market, provide discounts and vouchers to a wide range of UK shops, restaurants and leisure providers. The service is tied to a GPS service which provides the location of the closest offers.

The move comes as Vodafone looks to deliver on mobile commerce. Vodafone commercial development director Tobin Ireland said: “Mobile couponing is set to grow rapidly across Vodafone's businesses as cost-conscious consumers increasingly turn to their smartphones to hunt for bargains and collect loyalty points."

A new £2m supercomputer which will help scientists study the universe has got the go-ahead after funding was awarded to the University of Leicester.

It will be used by academics to help them understand the formation of stars and planets.

The university has been selected as one of four sites to host national high performance computing (HPC) facilities.

Dr Mark Wilkinson from the Theoretical Astrophysics Group at the University of Leicester is the principal scientist for the project. He said: “This is incredibly exciting news. We will now be able to carry out the largest and most detailed simulations of planets, stars and galaxies that have ever been performed and answer questions that we could not even have asked just a few years ago.”