Industry news

Francis Maude has launched a detailed plan for the implementation of the Government’s new ICT Strategy which is projected to deliver around £1.4bn of savings within the next 4 years and help deliver better public services digitally.

The Strategic Implementation plan sets out how the vision in the ICT strategy will be translated into real outcomes. This will make a real difference for:

•citizens – by delivering better public services digitally

•government departments – by directly supporting them to live within their budget settlements by improving the efficiency and quality of our ICT

•businesses – by creating a fairer, open and competitive government ICT marketplace that removes barriers to SME participation and supports innovative and agile ICT solutions.

Francis Maude said: “Government ICT drives the delivery of public services, from government web services for the submission of tax returns to enabling our armed forces to operate in Afghanistan. This government is committed to delivering a better service to the taxpayer on government ICT projects.

Today’s Strategic Implementation Plan sets out how we will do this. It gives a detailed breakdown of how the reforms this government is making to ICT projects are going to be delivered. In August we announced that we had already saved the public purse £300 million by applying greater scrutiny to our ICT expenditure. And now we are going even further and save even more money, while delivering higher standards for government ICT.”

The implementation of a project to create a centre to streamline back-office functions for the seven research councils has so far not been good value for money and there is a risk that the councils may not recover their investment. When finally operational 15 months late, the Centre was delivering services across the five functions planned but some services, particularly finance, are not yet where they need to be.

The aim of the Shared Service Centre was to share services, such as finance, HR and procurement, in order to make savings. By the end of March 2011 the project was £51 million over budget. The councils have not monitored benefits effectively, resulting in a lack of clarity about the savings delivered. However, the available evidence indicates that to date the project has underachieved against total expected savings by at least £73 million. And it is likely to take two years longer than planned before the project recovers its set up costs.

Amyas Morse, head of the National Audit Office, said today:

"This is yet another example of a project embarked upon without the necessary planning. Once it did start to go wrong, proper governance or intervention from the Department should have rectified the problems, but this did not happen until a great deal of taxpayers’ money had been spent.

"The Department, the research councils and the Shared Service Centre now need to get performance up to where it needs to be. Any plans for expanding the range of clients served by the Centre must be based on a thorough and realistic assessment of value for money."

The European Commission is set to propose investing almost €9.2bn (£8bn) in a massive rollout of super-fast broadband infrastructure and services across the European Union.

The plan is partly aimed at stimulating further investment in rural broadband.

“Here in Europe we face several problems in deploying broadband, with insufficient investment, problems in accessing capital, and a weak business case for rollout in less populated areas,” said Neelie Kroes, vice president for the EC’s digital agenda initiative. “This is potentially a serious barrier to growth.”

It is hoped the initiative will also help to create a single market for digital public services.

CSC, a leading global IT services company, today announced that Michael W. Laphen has informed the Board of Directors of his plan to retire as Chairman, President and Chief Executive Officer. Laphen, 61, will continue to serve until a successor is named and the CEO transition is complete, but no later than October 31, 2012.

The Board has formed a search committee to identify a new CEO and has retained Heidrick & Struggles, a nationally recognized executive recruiting firm, to advise the Board on potential candidates.

“I began my professional career with CSC in 1977, and I am proud to have been a part of the Company’s growth and evolution into a premier, global IT services company,” said Laphen. “CSC’s dedicated employees and management team have put CSC on a solid footing, and I am confident that the company is well positioned for its next phase of growth and development. I look forward to working with the Board of Directors and my successor to ensure a seamless transition.”

Noble Systems Corporation, a global leader in unified contact center technology solutions, has announced the acquisition of Melbourne, Australia-based Open Wave, a Workforce Management (WFM) software and solutions specialist. The transaction includes all assets and intellectual property including Open Wave’s award-winning, functionally-rich ShiftTrack WFM solution.

"Acquiring Open Wave’s talent and technologies will enable us to offer the most dynamic and responsive WFM product in the global marketplace,” said James K. Noble, Jr, President and CEO of Noble Systems. “We welcome Open Wave clients and partners from Australia and around the world and look forward to continued growth and success under the Noble Systems brand.”

CPA Global, the world's leading intellectual property (IP) management specialist, has announced the launch of Insight, a set of custom portfolio analytics designed to help companies align their IP and business strategies by making more informed patent portfolio decisions.

"Intellectual property is having a larger-than-ever influence on corporate bottom lines as companies look for new ways to maximize value and save money," said Rich Kolar, patent intelligence manager, CPA Global. "IP departments now face high-pressure, patent management decisions, which can drastically affect a company's strategic direction. The tailored information obtained through Insight allows these managers to identify competitive threats as well as opportunities to better align IP portfolio management with the overarching business strategy."

C3 / CustomerContactChannels, a global provider of customer management solutions, announced plans to expand operations with a new contact facility in Sofia, Bulgaria. The new facility, slated to open immediately, will have capacity of over 500 multi-lingual customer service representatives. The center will initially service a global travel client. C3 plans to significantly expand its European operations over the next year, a move driven by increased interest in European centers from existing and potential clients. Bulgaria will serve as a strategic location for business growth and C3's European expansion.

"We've seen substantial growth in the European market and we want to make a long-term commitment to the region," said David Epstein, C3 CEO. "We're looking to strengthen our presence in Europe by offering the same unique services and solutions we've come to be known for, but with a distinctly European focus."

Serco's innovative approach to facilities management at Forth Valley Royal Hospital in Larbert, Scotland, saw it and its partners, the Forth Valley NHS Board and Forth Health, share the coveted 'FM Excellence in a Major Project' Award. The award was presented on the evening of 10 October at the prestigious 2011 British Institute of Facilities Management (BIFM) awards ceremony.

The award was won in a highly competitive environment against strong opposition from organisations including the Co-Operative and KPMG.

“From managing large scale R&D projects – testing product safety, monitoring reports, clinical data management and clinical development activities – and from supply chain networks to even leading on customer service, outsourcing has become an integral part of the way large, multinational pharmaceutical companies are run,” says Sanjiv Gossain, Cognizant Senior Vice President and head of UK & Ireland.

Although figures released this week by TPI state that investment in Pharmaceutical Outsourcing is down % from $6.3 bn to $2.6 bn, this reinforces Everest Research’s comments earlier this year: “The spike we saw in 2010 was largely the result of pent up demand from the recessionary economy. However, the business drivers for outsourcing adoption remain and continue to evolve. Cost pressures, a changing pharma ecosystem, emerging markets and other market forces are continuing to drive the market. Moving forward, we expect to see an increase in sourcing of drug development and research, supply chain, data management and analytics functions.”

BPO, in other words. Outsourcing of non-core business processes sits well with the pharmaceutical industry, as it always desperate for any development that will speed up time to market. As Pharma has a long R&D cycle, outsourcing of things such as sales force automation and back-office functions – anything that will get the drug on the shelves quicker - is readily accepted.

As a result, says Duncan Aitchison of TPI: “Companies in the Drugs & Biotechnology sector tend to invest more heavily in BPO services, particularly industry-specific solutions. Take up of BPO outsourcing is led by Finance & Accounting (28% of companies), HRO (20%) and Procurement (20%). Other activities include specialist business processes such as Pharmacovigilance, Clinical Trials and Lab Automation.”

According to Everest, “firms have increasingly outsourced drug development process work as well as F&A, human resources and procurement.” This increase in R&D outsourcing has seen a rise in pharmaceutical-specific service providers such as Advinus, inVentive Health, PDI, Publicis Touchpoint Solutions and ZS Associates.

Not to be outdone, massive outsourcing players are finding innovative ways to enter the fray.

“AstraZeneca has taken an innovative approach to responding to the NHS’ changing needs and we’re delighted to be a part of that,” says Mark Brown, Managing Director, Contact Centres & Loyalty, arvato UK. Arvato will to design and manage a new support and information service for healthcare professionals. From the beginning of March, a team of ABPI (Association of British Pharmaceutical Industry) accredited Customer Service Agents - based on-site at AstraZeneca’s UK Marketing Company headquarters in Luton - will enable AstraZeneca to offer healthcare professionals the opportunity to engage in telephone dialogue about AZ’s medicines and value-added services. “We are looking forward to helping AstraZeneca retain, support and grow its existing relationships, as well as develop new relationships, with healthcare professionals,” said Mark Brown.

Arvato has long been involved in the pharma space. For the last 18 years, they have partnered with Beckman Coulter, one of the world’s leading manufacturers of systems and consumables in the field of clinical diagnostics and life sciences. Arvato provides Beckman Coulter with a customised distribution solution service. The in-vitro diagnostic industry has special needs regarding specific cold chain requirements and the handling of hazardous materials. To do this, Arvato faces the challenge of guaranteeing global export shipments comply with the latest regulations and strict packaging requirements for transporting sensitive medical products and hazardous materials.

This is a prime is example of how the healthcare industry is very different, and major outsourcing suppliers need both flexible structures and cross-industry expertise to succeed in a heavily regulated environment (and rules are often rewritten, don’t forget!).

Duncan Aitchsion says: “The costs associated with healthcare reform and expected revenue loss when patents expire have been strong motivating factors for companies to build up and speed up new product development pipelines.”

As we all know, when companies need it faster, slicker, cheaper – outsourcing is the answer. Investment in pharmaceutical outsourcing was so abundant in 2010, it comes as no surprise that there has been a drop off in 2011. sourcingfocus.com predicts that, as the most common outsourcing drivers are so prevalent in the pharma industry, the drop is a blip, and and investment in pharmaceutical outsourcing contract will bounce back with a vengeance over the next 12 months.

Last month we brought together key thinkers in the HR profession for our annual HR Directors symposium, Redefining Business Value Through a Talent Centric Approach, and the debate certainly raised a few issues. One key trend throughout the day was the acknowledgement that HR is under growing pressure to enable growth whilst making operations leaner, faster and more cost effective to run, pressure which shows no signs of fading.

As this pressure has grown there has been a nagging suspicion building that the Ulrich model, an application which was put in place to help HR grow and develop, is no longer having the desired outcome. At a time when HR needs to connect on all levels within a company, the Ulrich model has in some cases removed the all-important middle and created a disconnect between process and strategy, an important connection which can be rebuilt as the profession reacts to the changing business climate.

A partnership approach

One of the speakers at our event, Gyan Nagpal, former head of talent in APAC for Deutsche Bank and now CEO of the consultancy, PeopleLENS, emphasised the fact that corporate boards are looking for greater involvement and depth of insight from HR, which means it is now more important than ever that the profession presents its business case in a more structured and robust manner.

In a challenging and ever changing economic environment where it is difficult to forecast skills and organisational needs, CEOs are looking to strategic outsourced business partners for assistance, but, in many instances, they still do not see the HR function in this role. To counter this, HR professionals either within or outside the organisation need to align talent strategies with real industry needs.

In the first instance there is a level of education needed on both sides. For senior line management a better understanding of how talent management can contribute to the bottom line is desirable, whilst HR professionals in return needs to learn the inner workings and language of corporations to be able to quantify the business impact of talent management in a way the board easily understands. Using the people agenda as an example, HR professionals need to be able to put this HR topic into more quantifiable, commercial terms, for board members to see the incentives behind it before they can agree to such an investment.

The new opportunity

Over the next year or two, external and internal talent management specialists alike will need to take more risks when it comes to talent management in order to retain the right talent needed to keep up with the changing environment. Instead of working separately, HR professionals and line managers should be combining their talent management efforts to maximise success and support each other as strategic business partners should.

It’s no longer an option for a company to simply outsource the talent management function externally and take a step back. The ideal approach is instead a partnership whereby both parties draw on their experience to work together to develop robust strategic principles which provide the talent for a business which is yet to be defined. This is a great opportunity for HR professionals to be the guide business leaders are looking for and achieve the board room credibility desired by talent management professionals both as an outsourced function and internal resource.

The full analysis of the HR Directors Symposium is available in the Ochre House White Paper Redefining business value through a talent centric approach. For a copy of the report please contact Prashanie Dharmadasa: prashanie.dharmadasa@ochrehouse.com