Industry news

When Sebastian Vettel stood on the podium at Suzuka in early October and held up, politely, two fingers to signify his second consecutive Formula One World Drivers’ Championship, he could equally have been indicating the two key partners who made his victory possible.

Without question, Formula One demonstrates the pinnacle of collaborative best practice between client and supplier. In Vettel’s case it is Red Bull Racing and Renault, but you could equally point to McLaren Mercedes, Williams with Honda in the past and Cosworth today; the list goes on. In fact, it’s not only engine suppliers, but also sponsors, tyre manufacturers and IT hardware and software providers that make up the collaborative F1 circus.

When asked to justify the millions of dollars sunk into cars racing round a track each year, all of those involved claim that developments at the ‘bleeding edge’ of car or engine design result in a trickle-down to the driver of an average saloon.

Sadly, F1 aside, the examples of collaborative success in the IT industry are generally less obvious. There are, of course, some stand-out exceptions. Without a famous meeting between the lately lamented Steve Jobs and his biggest rival, Bill Gates, Apple would have ceased to exist. Had there been no collaboration between Intel and most of the world’s personal computer providers, we might still be taking 15 minutes to download and process 250kb of data. Smartphones wouldn’t be so smart without collaboration between handset manufacturers and Google, Facebook or app developers.

However, at the less glamorous end of the IT client/supplier relationships, collaboration seems to be a dim memory. Portfolio theories, of which there are many, would suggest there are optimum methods of managing these relationships and the indirect organisational relationships around them.

Like Maslow’s Hierarchy of Needs, customer/supplier relationships range from the purely transactional for simple survival, with little or no contact between the two, to fully integrated, strategic alliances with a desire to change society.

There has been regular debate across the IT industry about the increasing commoditisation of IT. Essentially, this means a move ever further towards the transactional end of the relationship spectrum.

Needs must when the economy drives

Ironically, with the latest global economic pressures, the time may be ripe for a resurgence in collaborative best practice.

When it comes to outsourcing, for some years now cost has been one of the client’s key drivers and is currently almost exclusively at the top of the justification list. So, as clients consistently try to cut their costs or losses, innovation is one of the first elements to be cut by suppliers. Why? Because innovation is labour intensive and, therefore, expensive. This is where collaboration comes in.

By creating an ‘innovation gap’ the opportunity arises for single-idea collaboration. This means a different approach between client and supplier in terms of project development and use of technology.

Increasingly, technology is being designed with collaboration in mind; cloud computing is the perfect example. In a recently commissioned report for Xantus, a third of CIOs highlighted collaboration as a major benefit of cloud, with some even stating that a non-collaborative approach could become a significant competitive disadvantage. The collaboration may only be for a single application or data handling service, but it is collaboration nonetheless.

From a financial perspective, the ‘innovation gap' also requires a collaborative mindset. One example of this is where clients and suppliers have viewed service credits as a means of funding innovation and collaboration rather than seeing them simply as a revenue stream.

Lap of honour

So, as you watch another case of premium champagne being sprayed at the end of the remaining 2011 F1 races, it’s worth considering that the collaborative investment of money and time to develop innovative ideas may be the best way to pop the cork on successful, beneficial, long-term relationships between clients and suppliers.

The agency workers directive (AWD) comes into force on 1st October 2011 and will give an agency worker the right to the same 'basic working and employment conditions' (pay, the duration of working time, night work, rest periods, rest breaks and annual leave) as a comparable direct recruit after 12 weeks on an agency workers assignment.

The key right is that basic working and employment conditions must be no less favourable than the basic working and employment conditions (certain elements of pay, holiday, hours) the worker would have been entitled to had they been directly hired by the organisation for which they are working.

This right accrues after the worker has worked in the same role for a hirer for 12 continuous weeks.

Other equal treatment rights include access to facilities and amenities and access to vacancies which apply from day 1 with the hirer i.e. there is no qualification period.

The Regulations provide entitlements to “agency workers” and do not provide any rights in respect of employees whose terms and conditions, principally in respect of pay, may be less favourable than those of some “agency workers”.

The responsibility and cost of providing the same basic working and employment conditions (certain elements of pay, holiday and hours) to the worker rests with the Agency. The Company however is obliged to provide the Agency with the relevant details to enable the Agency to make such provision and to arrange to ensure other aspects of equal treatment can be effectively managed within the Company. If the Company fails to do this then it may also be liable to the worker for the inequality in basic working and employment conditions. The Company will be solely liable for any breach of the “day one” rights.

The Regulations are both complex and ambiguous in part and case law development will need to be monitored over time.

So what does this mean for businesses engaging a high volume of temps, especially those temps on or just above the minimum wage? The implication are serious: a potential increase to the cost base of a business.

Many United Kingdom based businesses will struggle to meet the demands of the new directive not only from a potential financial aspect but also from a process, control and monitoring viewpoint.

To support our customers mitigate the risk and effectively manage all aspects of temporary labour spend, we at Xchanging Procurement Service , have developed a sophisticated web ordering managed service model. We call it Enhanced Resourcing Service.

So, how does this work? The Enhanced Resourcing Service allows vacancies to be captured and routed to a consolidated supply base for fulfilment, which is fully compliant under the new Agency Workers Directive regulations. It allows customers flexibility in their approach which are aligned to their company Agency Workers Directive policies e.g. to provide comparable pay after 12 weeks or from day 1. This service provides an organisation:

Control & Visibility

• Process is compliant to Agency workers directive

• Compliant Supply Chain

• Single source supplier

• Transparency of spend across all locations, regions, job categories and suppliers.

Cost Mitigation

• Cash Flow generation by introducing gain share models

• Process Efficiency / Streamlined Administration through automation

• Cost Reduction through supplier leverage and cost out approach

• Improved Working Capital via standardised payment terms and supplier leverage

Risk Mitigation

• Legislative obligations achieved or deferred

• Vendor neutral to support ‘fair’ sourcing

Many leading organsiations today realise that being prepared is critical. We are already engaged with a range of businesses to:- to:-

• Conduct impact assessments, including reviewing the supply and use of temporary contract workers, identifying which workers will be in scope and which will be outside scope of the Agency Workers Regulations and assessing any cost impact.

• Work together to consider options to minimise risk and cost when supplying and engaging workers in and outside scope of the Agency Workers Regulations

• Put new contracts in place with appropriate agreement on risk apportionment

With the fast changing regulatory environment, increasingly organisations are looking to implement a tailor made solutionfor long term sustainable benefits and process efficiencies and to manage and mitigate the risk of changing employment legislation. How prepared are you?

Alexander Mann Solutions, the provider of world-class talent and resourcing capability, has announced that it has hired Isabelle Hung as its Global Head of Internal Resourcing. The role will see Isabelle manage a team of 15 resourcing experts across the UK, Europe and Asia-Pac, who together are responsible for resourcing within AMS’s global workforce of 1,500 executives.

As one of the world’s leading providers of resourcing solutions, AMS helps major companies to hire key talent into their business and ‘flex’ their workforce up and down to meet demand. In the current economic environment, this is becoming even more apparent with businesses needing to make significant changes to their workforce, often at short notice or for a short period of time. In response, a major part of Isabelle’s role over the next six months will focus on internal mobility and ensuring that employees can ‘flex’ with client demands and are comfortable working in an assignment-based culture.

Hung explains: “Many companies are making changes to their workforce in response to economic conditions through carefully reviewing capacity opportunities within business areas. We all know that when a department is flat out another is often underutilised due to demands from internal and external customers changing in-line with market needs.

"At AMS we have been promoting an assignment based culture, similar to that of the management consultancies; where our consultants have the opportunity to work with a number of blue chip clients over the course of two years. In return, this provides our clients with flexible solutions that mirror their business demands.”

Parliamentary ICT (PICT) on behalf of the House of Commons and House of Lords is seeking to procure a contract for the provision of strategic web hosting for the Parliament website (www.parliament.uk), Parliament Intranet and other online channels.

Parliament’s online channels are high profile increasingly business critical and in the last 12 months received 16 000 000 visits, from 10 000 000 unique visitors, with daily visitor traffic varying from a low of 6 000 visits to a peak of 158 000.

The supplier will be responsible for providing a service which meets service levels around availability, support and issue management. The supplier will be expected to demonstrate flexible commercial models which ensure Parliament can get value for money and be proactive in ensuring that Parliament’s online channels are delivered in a resilient, secure and robust way.

We are keen to work in partnership with the supplier to take advantage of new opportunities that technology can provide and provide a flexible and scalable service that can accommodate all Parliament’s web hosting needs over the next three to five years.

Sitel and LifeScan, won the Best Outsourcing Partnership of the Year at the European Call Centre and Customer Service Awards. The event, which saw the coming together of the European Call Centre Awards and the National Customer Service Awards, recognised the best and brightest shining stars of customer service in Europe.

Sitel and Lifescan were recognised for having a very tight and effective client/outsourcer relationship based around clear goals, mutual respect and a high-quality multilingual operation with an engaged workforce.

“We are delighted that our work with Lifescan has been recognised with the Best Outsourcing Partnership of the Year award,” said Lawrence Fenley, Sitel Managing Director for UK and Ireland. He added “winning this award last year was a great success, but to win this award for the second year running is a phenomenal achievement.”

Aviva Insurance Ireland, is reported to be planning to announce around 850 redundancies and the outsourcing of an additional 300 staff.

The company, employs over 2,000 staff in Ireland. In addition to the 850 redundancies, 300 workers will be outsourced. However, information on the outsourcing is not available.

The recent TPI Q3 results show a broader market, at an all-time 3q high. 31% up q/q and 41% y/y on a €5.8b acquisition-related mega deal

All three regions saw tcv up for the quarter and ITO up 50% q/q.

- 3Q11 TCV is notably up, primarily the result of a single acquisition-related mega deal

- Without the mega deal, 3Q11 sustained typical global performance

- EMEA 3Q ahead of the recent third quarter TCV performance

- ITO – without Mega Deal- drops Q/Q though ahead by 10%Y/Y in EMEA

- BPO 3Q steady; should end 2011 with a solid performance

- Expect EMEA to support and Asia Pacific to strengthen the outsourcing market going forward

- Outsourcing market should end the year, well within the historical norms

The BBC has leaked a memo from the RBS CFO, Chris Kyle, revealing 11 new cost cutting initatives with IT spending freeze at the top of the list.

The memo states that a "Freeze on hardware and software spend to be implemented for the remainder of the year. Direct approval rights to be withdrawn from cost centre users. All hardware and software spend must contain the approval of the relevant ExCo member and Regional CFO so that it can be considered on an exceptional basis."

RBS is also set to cut up to 5,000 jobs, according to reports, with up to 1,000 UK jobs threatened. The bank is 83% owned by the UK public.

IBM has announced that Westpac New Zealand has renewed its strategic information technology (IT) outsourcing agreement for a further five years to 2017. Under the new contract, which expands on an agreement first signed in 2000, IBM will deploy new technologies to improve customer service and sustainability, and upgrade existing systems.

IBM has prime responsibility for Westpac's key IT infrastructure services, including mainframes and midrange systems, storage, security, data center raised floor services, data center network services, workplace services, and workplace printing.

"Westpac is pleased to renew what has proved to be a successful and constructive long term relationship. It supports the Bank's strategy of making it easier and faster and providing an experience that delights our customers," said Jim Stabback, General Manager Customer& Technology Services, Westpac.

Dell has opened a new 5,000 square foot data center in Slough, United Kingdom.

The data center, which will be in operation on November 3rd, is part ofthe company's two-year, $1 billion global data center expansion strategy that it first unveiled in April.

"We are excited to announce the expansion of Dell's global footprint with the opening of a next generation data center in the United Kingdom," said Don Mann, VP infrastructure and cloud Computing at Dell Services. "[The new facility] reinforces our commitment to deliver industry-leading services and solutions that help our customers innovate and drive business results."