Industry news

Contact centre operator Journeycall based is Aberdeenshire and Angus is preparing to expand including hiring 50 new staff members in preparation for meeting increased demand from Olympics-related customer calls.

The centre will increase its workforce in hiring both full-time and part-time workers as well as temporary and permanent advisors. Journeycall which handles business for rail and bus clients is looking at massively increased demand for its services as the 2012 Olympic Games impact on transportation.

Trisha Pirie, Journeycall MD, said “We’re gearing up for an exceptionally busy few months when many of our rail and bus clients may experience unprecedented demand both before, during and after the Olympics and Paralympics events.”

Research carried out by Quartet FS found that 100 percent of UK banks saw big data as a significant problem. The research has 20 percent of IT managers placing big data as a ‘extremely significant’ problem.

The research comes as investment banks are increasingly predicting that in-memory analytics will come to the fore as the standard architecture in solving big data within the next three years.

Georges Bory, co-founder and managing director of Quartet FS, said “With the majority of the UK’s investment banks still relying on spreadsheets to analyse their data, it’s no surprise that they are struggling with the ‘Three Vs’ of big data: Volume, Velocity and Variety.”

Randstad Managed Services and SourceRight Solutions have combined as part of a rebranding strategy to become Randstad Sourceright. Randstad procured SourceRight Solutions having purchased their parent company SFN Group in 2011.

The combined brand will provide core services in recruitment business outsourcing (RPO), Managed Service Provider (MSP) solutions and in advising clients in formulating a talent strategy. The amalgamation will see the two services’ combine resources in order to achieve client expansion.

Sebastian O’Connell, UK director at Randstad Sourceright, commented: “This is an incredible evolution of our MSP and RPO services as we combine two leading brands to support our client’s growth and agility plans.

Despite the UK being behind the US on cloud adoption, recent times have seen that gap diminish as the UK trend for the cloud continues.

A survey from the Cloud Industry Forum (CIF) shows that current cloud adoption in the UK is at around 53% of organisations, compared with 76% in the US, however the UK cloud adoption is up 48% from this time a year ago.

Andy Burton, chair of the CIF said: "The most rapid growth in the UK is in the public sector as it catches up with the private sector, although it is still lagging at around 52% adoption compared with 54% in the private sector."

The continuing trend could have something to do with consistently high satisfaction rates, with the UK coming in with 96% just behind the US’ 98%.

Burton also referenced private clouds and developing models of cloud, predicting that most organisations are likely to pursue a hybrid model in the near future, which means a mix of on-premise, online, in-house and outsourced.

Many enterprises do not want to have their own device management infrastructure in-house; as a solution SAP's Afaria mobile device management tool is now available on the Amazon Web Services cloud.

"We have a number of customers that don't want to deal with and implement their own device management infrastructure in-house, because they view it as non-core, and instead they want a cloud-based offering," said Kevin Ichhpurani, senior vice president, Ecosystem and Channels at SAP.

One of the selling points of SAP’s Afaria is simplicity. It requires users to log on via Amazon Marketplace and can now be used on Google Chrome, Mozilla Firefox and Apple Safari, in addition to Internet Explorer.

SAP sees the outsourcing of mobile device management as an emerging trend that will continue to grow, and the company is also working with telecommunications operators and system integrators on other offerings, according to Ichhpurani.

G4S, the world’s largest security firm has revealed a 7.5% rise in first quarter revenue growth. The company has cited a thriving resources sector across developing markets and a contract to protect punters at the Olympic Games in London as reasons for growth.

The figure was up from 4.5 per cent in its last quarter and in line with expectations. Shares in the firm – the world's second largest private employer behind Wal-Mart – rose 3 per cent to 275.2p. A representative from G4S said: "based on recent contract awards, outsourcing trends and the group's bid pipeline, the organic growth rate is expected to continue to improve during 2012."

The contract for the Olympic games will see G4S as the official security provider for the 2012 Games, supplying 10,000 personnel for the event in a contract worth £200m to the company and will earn G4S £150m of revenue in 2012.

Financial outsourcer HML has secured a contract with Arrow Global, the debt purchase solutions provider which will see Arrow Global acquire a portfolio of loans serviced by HML.

Andrew Jones, HML's chief executive, said: "HML's role as a servicer means we're in a unique position to drive value for clients and buyers. We have access to the contacts to facilitate these deals and can reduce migration and on-boarding costs if we continue to service the portfolio, or migrate them onto our platform against a strict deadline if they are currently being serviced elsewhere."

Speaking at the Shared Services Outsourcing Network conference in Amsterdam, KPMG’s director, Claudio Altini, said the decision to outsource is no longer simply about reducing costs or headcount.

Research from KPMG shows that more than two-thirds of service providers polled were cautiously optimistic about pipeline growth for the next quarter and KPMG would expect that key areas of interest will be customer demand for IT services to increase between now and the end of June.

Altini summarised the key reasons behind changes in outsourcing: “too often, in the past, outsourcing relationships have broken down because of mixed messages around the three Rs – rates, results and responsibilities. Now, however, businesses are no longer prepared to accept standard terms and conditions for outsourcing their core services. They want proof that service delivery arrangements are flexible, can move with the strategic needs of an organisation and will meet the targets demanded by stakeholders.”

Two of the common words I hear from clients, suppliers and as you would expect advisors, is governance and innovation, neither of which is particularly well understood or managed, in my opinion in a vast majority of cases.

All too often governance is simply treated as a review meeting by senior managers, for senior managers. The agenda is all too often focused on SLAs, Quality, Financial status and any significant change requests and the implications of them.

Little consideration is given to the wider business outcomes that the programme is or is not delivering, i.e. strategic alignment between the business and the sourcing strategy, little on the human and learning aspects of the deal, little on relationship management and some lip service given to the idea collaboration.

Important areas in terms of how the relationship can be nurtured, how changes can be made to behaviours and attitudes across the teams to drive better value creation, how devolved decisions can be made across the programme to address business imperatives, whilst satisfying policies, processes and risk appetites and how trust is developed within and between the parties, are all largely ignored, or poorly managed.

Unfortunately, most governance structures consist of formalised meeting schedules, at different levels within the organisation; operational, management and senior leaders. What this does is reinforce the idea that governance is a backward looking function, examining what happened and why, rather than being a forward-looking discipline, which should be about what is happening now and what can be done to improve performance. Governance should be a real time activity, with checks and balances on a periodic basis.

Another unfortunate factor in most governance structures is the segmentation of governance meetings by seniority – an effective class system for organisations. Although on the face of it, this would appear to have some benefits, what it does is hide or disguise the reality on the ground. Disputes, distrust and dysfunctional processes at ground level are never exposed or understood by the senior governance teams, and therefore nothing is done to change behaviours, policies, processes etc to drive performance. The status quo remains, or worse, changes are made with good intentions, which have little chances of making any real difference.

Governance must be an enterprise-wide philosophy; it must seek to remove the silos that exist within and inter-organisations, yet the very silo nature of governance today make this task next to impossible.

Lincolnshire County Council’s recent commitment to a new public services network suggests that the public service is starting to catch up with private sector in terms of ITO.

Public sector ITO is worth around £16 billion, accounting for around 40% of ICT outsourcing in the UK. Last year the Public Administration Select Committee criticised overspending and lengthy procurement processes while the National Audit Office released a report into inefficiencies in shared services. However, this looks to have struck a note with local authorities, as the situation improves.

It seems local governments are taking a logical approach in sourcing IT – through shared services. Like the majority of sourcing strategies, cost-cutting is a core goal and some of this will be achieved through cutting jobs, but the long term cost rationalisation will be driven by new innovative processes. Efficiencies are driven in the long term incrementally as processes increase in productivity. It is all very well outsourcing to a firm who will run things just the way they are, driving savings through low cost of labour, but should the deal come to an end, there will be no infrastructure in place to allow this to continue.

This has to be taken into consideration at the start of the venture, and as Rod Matthews, an expert CIO who has worked for Knowsley Metropolitan Borough Council, the Cabinet Office and the London Borough of Barnet, states, forward planning is vital. Matthews states in ComputerWeekly.com: "Shared Services have significant advantages, but this delivery route needs to come with a bit of forethought. If you only specify continuing things as-is, or you think it is a magic bullet, you might find adapting around your shared service to be labour intensive.

Matthews continues: "Seated above the commodity are the technology enabled business processes. These are often bespoke and will likely have a range of possible forward plans."

Like any other outsourcing deal, it is also important to gain a cultural understanding of the organisations involved and have patience. Organisational wants and needs may differ slightly, but if the long term benefits are kept in sight the need for cooperation should remain a priority. Terry Huggins, Chief Executive of South Holland Council, agrees.

Huggins was quoted in The Guardian: “You will have small differences in the way you see things, but it's crucial you don't fall out over things that are only worth a few thousand pounds, and in the process prejudice potential savings that are much larger."

South Holland District Council set up shared services company Compass Point Business Service with fellow Lincolnshire district council, East Lindsey. Last year the company signed a five-year deal with Capita to run certain processes, such as finance, HR and benefit schemes for both the councils. Running the operations in tandem is believed to have saved around 20%.

Jos Creese, CIO for Hampshire County Council sums up as: "a collaborative approach where we pool resources, and say we're going to operate with a single business model and operate in a very transparent and semi-commercial way."

Shared services are an extremely effective way for organisations to extract maximum value from the resources they have. Pooling people, budgets, strategies and infrastructure allows for less investment while still gaining every benefit of innovative strategy.

I'm looking forward to reviewing the case studies entered for their Shared Service Centre of the Year award. The award will be judged on the basis of its ability to deliver both initial and on-going business value to the clients, incorporating both best practice and continuous service innovation.

For more information or to enter the award please see award number sixteen in the PDF below.

NOA_Awards_Entry_Pack.pdf