Industry news

Hundreds of workers at a north London council are taking part in a strike in protest at changes to their terms and conditions, according to a union.

Unison said about 400 of its members at Barnet Council were staging a one-day walkout.

Highways, planning and crematorium workers are among those taking strike action over planned outsourcing.

The Capita Group Plc has announced that it has acquired Insurance Medical Group Limited (IMG) for an undisclosed sum. IMG provides medico-legal reporting, diagnostics, and pro-active physiotherapy and treatment services.

The acquisition, which follows the acquisitions, last year, of Premier Medical Group and First Assist, adds further expertise and capacity to Capita’s wellbeing and health business. It also opens up new parts of the medico-legal market, particularly claims management companies and small and medium sized law practices.

Commenting on the deal, Jason Powell, who moved to Capita with the acquisition of Premier Medical Group and now heads up Capita’s medical reporting business, said: “IMG produces more than 20, 000 medical reports each year and arranges more than 50,000 physiotherapy appointments through the Physio-link network. This acquisition will add important new expertise to Capita’s range of health services, enabling us to provide of a full suite of medical reporting and screening services. The deal also further demonstrates Capita’s commitment to, and investment in, the medico-legal market.”

HP has announced its expanded Enterprise Security Solutions portfolio, designed to help enterprises establish and execute a comprehensive security strategy that addresses threats and potential liabilities resulting from the rise of mobility, cloud computing and social media.

More than 50 percent of senior business and technology executives surveyed believe that security breaches within their organizations have increased during the last year. Nearly 30 percent responded that they experienced a security breach by unauthorized internal access, while 20 percent responded that they had experienced an external breach.

The expanded portfolio includes new capabilities to help enterprises assess, transform, manage and optimize their security investments.

“Organizations today are quickly realizing the importance of a comprehensive risk management strategy to securing assets across their corporate infrastructures and protecting corporate reputation,” said Jan Zadak, executive vice president, Global Sales and Enterprise Marketing, HP. “HP’s extended security portfolio provides the protection that enterprises require, while providing customers, employees, partners and consumers with instant access to the right enterprise assets without compromising risk.”

National Outsourcing Association Chairman Martyn Hart has commented on the Unison claim after General secretary Dave Prentis has said that taxpayers’ money had been ‘wasted’ during the outsourcing of public services.

Martyn Hart said: “Unison members are guilty of 22.8% of public sector procurement fraud, costing the UK taxpayer 547m a year. That’s nearly half a billion of your hard earned pounds down the drain, and it’s all Unison members fault.

These figures were calculated out using the same ridiculous, unscientific, logic that Unison has employed to suggest that outsourcing is responsible for 55% of procurement fraud. It remains unclear where the data in the Annual Fraud Indicator has come from, or how this estimate of a £2.4 billion ‘fraud bill’ was deduced.

“More sensible figures are mentioned in the government report Eliminating Public Sector Fraud, stating that £0.5 million has been identified for recovery. Overpayments and underpayments are common in any ongoing contractual relationship, and these are resolved in audit, and balances paid in due course. Given the size of these contracts, half a million is a pittance. A section of this new report mentions that the Home Office already has such arrangements in place concerning overpayments made to their suppliers last year.

“With regard to the allegations of price fixing, as the nature of government procurement is competitive tender, and tenders are put out to the whole of Europe, that means every company in Europe would have to be in on it. The whole of the European service sector colluding against the UK government. Now there’s a conspiracy theory.

“The National Outsourcing Association welcomes the call for civil servants to end the ‘pay first, check later culture that exists within the public sector. Strong governance is a key feature of successful outsourcing contracts. If public sector leaders need guidance on how to optimise contracts and manage ongoing relationships, we are here to help.

“The first step in the NOA's lifecycle model says you should consult your own staff on how you can achieve your objectives. Unison would be better off coming up with ideas on cost savings by asking its members, rather than relying on spurious statistics to discredit ‘the enemy.’

As the world of industry changes, the outsourcing sector has found it increasingly important to adapt to new technologies which are continuing to drive forward new, innovative services. As such the industry is now beginning to implement cloud computing, rather than just talk about adopting cloud services, and the benefits of accessibility, availability and scalability are more conspiuous than ever.

Ditlev Bredahl, CEO OnApp, believes that one of the biggest changes we’ve seen this year is the growth in cloud services provided by the traditional hosting market.

Ditlev Bredahl said: “The world’s hosting providers, which a company might already use for web hosting, application hosting, colocation and so on, are becoming the ‘go to’ people for cloud computing services. That’s especially true in the SME market. In many cases the service remains the same - you’re still hosting your website, your apps and so on – but you can now take advantage of lower prices, pay-per-use billing, instant scalability and the other benefits of the cloud model.

“As the cloud hosting market matures we’re going to see hosters begin to focus on specific industries and applications, and design services around the needs of different segments of the market. That will give companies more choice than ever when sourcing IT services in the cloud.”

Although many more organisations are looking at Cloud to deliver solutions, There’s very little doubt that a number of end-users still view the Cloud with suspicion, particularly while questions around security and data storage persist.

According to a survey carried out by hosted IT service provider Rise, a staggering 91 per cent of businesses strongly feel more needs to be done to educate end-users about the business benefits of adopting a Cloud infrastructure.

The survey, conducted at a recent IT industry event, also identified that when it came to Cloud uptake the biggest concern for firms is where their data is being stored, with 64 per cent of surveyed participants identifying this as a key issue. It also indicated that fears around security and potential loss of data were a big deterrent for businesses not investing in a Cloud infrastructure.

The research also highlighted that with over half of respondents still unsure about the business benefits of Cloud Computing, IT vendors need to take on a bigger role when it comes to educating end-users.

According to Steve Holford, a director at Rise, one of the biggest barriers to Cloud uptake is lack of education. “For a lot of firms, right from SMEs to large enterprises, Cloud uptake still remains something to be approached with caution. Last year, the message we were hearing from customers was: What is Cloud Computing? This year has seen that move on – people are aware of Cloud Computing but are unsure how this can be applied to their business. They understand that there are benefits to Cloud adoption but there is confusion around how this can be seen within their organisation.”

Aram Kananov, Product Marketing Manager EMEA, Platform and Cloud at Red Hat agrees and suggests that even though a cloud model frees organisations from managing hardware and offers scalability and flexibility; organisations of all sizes often struggle to accurately predict their need for computing capacity for 6 months or even a year in advance.

Neil Thomas, Cloud and Virtualisation Product Manager at Cable&Wireless Worldwide believes that more attention should be given to the network used to access the cloud.

“Enterprises need to be looking at a complete end-to-end picture when investigating cloud computing. This requires looking beyond the features, capability and assurance levels of the cloud solution to making sure it can be accessed quickly and securely via a next-generation network” said Neil Thomas.

“Robust and secure hosting environments need to be combined with resilient, high performing and secure next-generation networks, and both need to be ensured with stringent Service Level Agreements. This isn’t just about security – IT is about delivery of service and if applications are moved further from their end users then performance will suffer if this isn’t managed correctly.

“The best way to secure the cloud computing environment, and to ensure application performance, is to ensure that the prime access routes are via the organisation’s own internal network (Wide Area Network), not the internet. By placing services in a secure cloud environment within the Wide Area Network, and using the established methods of data separation, data becomes intrinsically safer, and performance is not only better, but can also be managed by advanced Application Performance Management networking tools.”

It is understandable that businesses are reserved about the security aspects of cloud services; however it appears that the main fear is being out of control as applications are spread over ever more complex set of heterogeneous environments and information could get lost or put in an insecure place

Craig Beddis, Regional SVP at UC4 Software said: “Surely the more complex the environment, the more important it is to ensure that data is secure and all applications are managed and under control. And the move to the cloud should be no exception to this rule; especially with issues around cloud sprawl.

“By adopting automation, software can be run to orchestrate workloads across hybrid environments, whether services are outsourced or not, which if used effectively can solve these issues. Service governance, as its natural evolution, will predictively diagnose and trigger resource provisioning at precisely the right times in line with agreed SLAs, around the clock, reducing manual resource requirements and capacity expense and limiting virtual and cloud sprawl.”

Companies are increasingly looking to cloud computing environments in order to accelerate value in business financials and reduce costs. Cloud computing is highly appealing to today’s organizations, not only because of its projected cost savings but also because of the cloud’s flexibility.

Aram Kananov said: “Cloud offers the opportunity to scale capacity up and down as demand and financial ability dictates. In short, the cloud offers a level of efficiency and flexibility unachievable through traditional IT. The risks are security and trust. There is no inherent interoperability built into the majority of clouds, offering institutions no defence against vendor lock-ins.”

Cloud is now poised for widespread adoption and will continue to be, a core part of the outsourcing sector, and one in which we expect to see significant growth.

As a model for buying services, the cloud will be transformational in 2012, but organisations have to take a pragmatic approach when considering how the transition can benefit the client base. Customers are at varying stages of cloud ‘maturity’ and there are still concerns about privacy and security from some sectors which need to be addressed through education and industry best practice.

Organisations may be attempting to sweat their assets a little longer than in the past, but most are still swapping out hardware as soon as the vendor states it is ‘end of life’. But is this really the right approach for the business? Migrating core applications to a new platform is a major expense and incurs significant business risk. And at what gain?

Unless the legacy equipment is inherently unreliable, user performance appalling, or key software applications risk losing support, can the IT team really make a business case for investing in new hardware? Even demands for greater energy efficiency can actually be realised by changes in data centre design that are less expensive and incur minimal business risk; while the use of emulator software can deliver energy efficiency and performance improvements without the need to modify the application in any way.

As Mark Hodge, Technical Director at Maindec explains, unless organisations understand the options and the performance, energy and reliability figures associated with each solution, it will be impossible to make a valid business case, leading to unnecessary expenditure and significant business risk.

Compelling Argument

Organisations are under ever greater pressure to replace legacy equipment. Faster processors promise greater productivity, reduced energy costs, smaller data centres and a contribution towards reducing the carbon footprint. Sounds compelling. But do the figures really add up? Is the existing equipment unreliable? Are users experiencing unacceptable performance? Or is the IT team simply folding under pressure from vendor salesmen, or a boardroom looking to meet its CSR pledges, and/or, the fallacious perception that old equals unreliable?

The temptation to swap out old equipment is clear. But the decision should not be a given. There are very real business risks and costs associated with replacing tried and tested software; with migrating users to a new platform; and adopting up to date operating systems that are, to be frank, often far less reliable and robust than many earlier alternatives.

Some organisations need to be far better informed before making such a significant decision. They need to understand the alternatives to full blown replacement and, where possible, get some real insight into the true cost/performance/energy consumption equations. Making such a decision on a best guess model is high risk. Without effective monitoring tools that can provide accurate insight into day to day figures on cost, performance and energy consumption over a period of time – including month and quarter ends, or other performance spikes – and a measured comparison with a number of alternative approaches, organisations risk an expensive investment that may achieve minimal improvements.

Options

So what are the options? Of course, there are cases when legacy migration is essential: if the company is dependent upon critical business software that the vendor will not support unless it is a recent version running on up-to-date hardware, then migration is essential. However, there are alternatives that can address issues of performance and energy consumption without incurring the risk and cost associated with major software redevelopment and migration.

One option is to use emulator software which replicates the legacy hardware environment on current software such as Windows 2008, enabling organisations to run an application developed for a DEC Alpha or VAX platform, for example, on a new machine. This option not only removes the need to re-develop software but can also deliver significant improvement in performance – with companies experiencing up to 300 times improvement in batch processing for some solutions, whilst also providing the greater energy efficiency associated with new equipment.

Alternatively, organisations do have the option to do absolutely nothing to the hardware. If it is reliable and user performance is adequate, why change? Even those organisations under pressure to reduce energy emissions and carbon footprint do not necessarily need to replace aging equipment. There are very valid options for improving data centre design, using innovative air cooling techniques, for example, to attain significant energy reduction without incurring the cost or business risk associated with replacing core hardware platforms.

Furthermore, vendor assertions that equipment is ‘end of life’ or ‘end of service life’ are not automatic green lights for replacement. ‘End of life’ simply means the organisation is no longer making that equipment – it will continue to offer maintenance for some time. Even when the equipment is ‘end of service life’ and will not be supported by the vendor, there are a number of highly experienced organisations that will extend the life of that equipment for at least five years, perhaps much longer, enabling organisations to safely continue running proven business software in a reliable environment.

Understanding Choices

Consider these options pragmatically. Yes, equipment may be approaching ‘end of life’. And new equipment will be faster and more energy efficient. But unless it is essential to retain support for key software solutions, migration is not always necessary and not always the best business decision, despite vendor ‘spin’. Upgrading is not straightforward: this is a decision that needs quantifiable justification. It requires a real insight into the business choices, costs and risks. Organisations need to understand existing performance and energy consumption; they need to assess the alternatives such as the use of emulator software and more efficient data centre design. And they need to understand the cost and business risk associated with the hardware exchange.

It is those organisations that look to attain baseline performance statistics, measure user performance, system reliability and energy consumption options for upgrading, using emulators or retaining the status quo, that will be best placed to make the right decision at the right time and avoid the risk of unnecessary, expensive mistakes.

Loyalty programs have undergone a technological metamorphosis from its rudimentary beginnings. Arguably it was American Airlines that kick started this transformation nearly three decades ago. From ‘nice-to-have’, loyalty programmes have become a strategic imperative for customer-centric organisations. Contemporary customers in the post-global market are more demanding than ever before and thus organisations are forced to adapt their loyalty programs to be more sensitive towards the members they serve.

Most of the interactions between the program and the members have become customised including communications, promotions, rewards etc. It is technology that is playing the most crucial role in facilitating this change. The technology platforms on which today’s loyalty programs are run can enable quicker enrolment, accruals, redemptions and creation of varied promotions all fuelled by automated analysis and reports.

Attaining deployable customer-centricity in a loyalty program is indeed a gradual & progressive process which also requires the re-orientation of an organisation’s internal processes and conditioning of employees to put customer needs first.

Translating Insights into Action

The success of a loyalty program lies in its popularity among the members. We suggest a few pointers from our implementation experience that would go a long way in helping you create an effective loyalty solution.

• Capture transactional information accruing at the point of purchase terminal. Use customer segmentation to decipher purchase behaviour(s). This will enable in the creation of customised communication ensuring better response to campaigns.

• Have a business intelligence strategy in place to generate multiple analytical reports-tactical and strategic. While tactical reports will focus on improving revenue at a unit level like store-specific promotions, up-sell, cross sell opportunities etc, strategic reports will track the overall program performance. Used in tandem these reports can help in ensuring that the program is adhering to attaining its original goals.

• Use data from various sources (enrolment form, accrual & redemption patterns along with transactional data to identify MVCs (Most valuable customers) so that the organization can rationalise its expenses towards providing preferential treatment to them.

• Ensure your solution recognises customers' individual milestones, and allows you to reach out to them on a regular basis.

• Identifies "valuable risk customers" on a regular basis facilitating timely intervention thus reducing customer churn

Steps to Adopting Customer Centric Loyalty Marketing Solution

Needless to say, a customer centric marketing loyalty solution is critical for maximizing profits, out-performing competition and expanding market share. Maturation of a loyalty marketing solution happens over time with the help of the most critical ingredient-transactional data. Adaptive responsiveness to evolving customer needs is decided by the stage of technological and business maturity of a program.

Collect and organize data - Adopt a customer loyalty solution that allows not just the collection of data but its organisation into smaller and usable modules which will help in the accurate assessment of actual ‘market’ and locate existing and emerging trends. Organised data can be extrapolated not only with information on prevailing economic scenario but also to competitive landscape to fine tune a loyalty program that is future-proof. It goes without saying that the more detailed loyalty data repositories are, resultant reports generated would be more pointed making loyalty offers more attractive to its members.

Profiling customer segments – psycho-social profiling of customer segments is integral to the analysis of the health of a loyalty program. Besides demographic segmentation, your solution should allow you to pull up data that displays attitude, behaviour, spending, and customer satisfaction. This helps in ongoing fine-tuning of the loyalty strategy.

Integrating loyalty with organizational goals - Once insights are obtained, it is important to align them to organizational goals thereby drawing out a winning, fit-for-purpose marketing loyalty program. By identifying target groups and actionable touch points, it is far easier for organizations to get higher returns on loyalty programs. Research shows that when it comes to loyalty programs, one size does not fit all as customers are promiscuous by nature and thus heterogeneous in their preferences.

Adopt tailored tactics – While generic marketing is about broadcasting, loyalty marketing is the practise of narrowcasting thus its tactics has to be tailored to needs of specific customer segments. These tactics may be based on regions, gender, spend, membership to specific social class etc. Specific customer insights go a long way in sharpening visual merchandizing, planning campaigns & promotions and ensure that spend on any media returns more bang for the buck!

Conclusion:

In summary, while designing and implementing a loyalty program, it is important for an organisation to identify a partner who has multi-industry, hands-on experience. Such a partner can help not just in facilitating the implementation but also advice on tracking the effectiveness of promotions, identifying the MVCs, and setting the parameters to identify the overall profitability of the loyalty program. ITC Infotech prides itself as a pioneer in enterprise loyalty implementation across verticals including airlines, hospitality, retail to name a few. Our greatest assets are our people who have seen loyalty programs from close range and have been advising clients on loyalty strategy thus making our implementations relevant and accelerated.

So are you ready to go out and leverage the benefits of customer centric loyalty marketing?

The landscape of service contracting is changing, as service providers and customers are replacing traditional agreements with contracts based on agreed outcomes. These outcome-based contracts (OBC) allow customers to buy the outcome of a product or service that is delivered, rather than merely the parts or repair services required for the product or service.

OBCs emphasise the concept of value-in-use, where value is the benefit the customer obtains through using the product or service. This compels the service provider to bring the customer into its sphere to allow the provider to optimise the service delivery together with the customer, in a process that involves both parties co-creating and co-producing value. As a result, the objectives of both the service provider and the customer become much more aligned under OBC.

OBCs are becoming increasingly popular with business-to-business transactions, particularly in the service of supporting and maintaining equipment, such as maintenance, repair and overhaul (MRO) contracts in the defence and aerospace industries. A good example is Rolls-Royce’s Power by the Hour® contract, where the continuous maintenance and servicing of engines are remunerated according to how many hours the customer obtains power from the engine, rather than by measuring the spare parts, repairs or activities rendered to the customer.

OBCs are fast becoming an important component of managing after-sales service supply chains beyond defence and aerospace contracting. It is also permeating into other service industry sectors, such as ‘no win no fee’ offerings from legal firms and revenue sharing models where fees paid to consultancy firms are based on how much savings they can help their customers make.

Why are OBCs becoming increasingly popular? Customers and suppliers are realising that it is not just enough to acquire world-class equipment; they also seek innovative and cost-efficient ways to achieve the same outcomes through reduced production of materials – leading to improved sustainability - and better service and maintenance throughout the useful lifespan of the equipment. They are beginning to see the benefits that OBC can provide in this respect.

Benefits of Outcome-Based Contracting

One major benefit of OBC is that by only paying for a measurable and predictable outcome, customer firms are able to make more accurate cost projections. OBC also helps lower total contract costs, as both the customer and service provider contribute complementary resources towards a joint outcome.

At the heart of OBC lies the notion that risks and incentives should be more equitably aligned between suppliers and customers than has been possible under traditional ‘fixed price’ or ‘cost-plus’ contracts. This better alignment between the interests of both parties means less scrutiny of the service provider is necessary, resulting in lower transaction and monitoring costs. Also, by rewarding them based on delivering measurable outcomes, service providers are incentivised to ensure the equipment they provide is of high quality and delivers the performance as promised.

Service providers also stand to benefit from OBC. Managing OBCs usually leads to greater internal effectiveness as a result of the improved understanding of, and alignment with, the customer’s requirements. This in turn results in higher staff satisfaction and loyalty, while improved effectiveness of service delivery leads to greater customer satisfaction and loyalty.

The closer relationship between the service provider and customer also enables the provider to have greater control and efficiency of service delivery. This in turn facilitates better use of resources and cost efficiencies while still achieving acceptable outcomes, such as through capacity sharing across multiple contracts. This close customer relationship also allows service providers to better anticipate customer needs, and therefore drives innovation to meet the customer’s changing requirements.

An integral part of a successful OBC is the service provider’s ability to manage customers for better co-creation and co-production to deliver the appropriate outcomes. Service providers which become adept at this will develop a unique competitive advantage that can help them secure more future contracts.

OBC is changing the way service providers and customers interact and create value. The role of the customer within the service provider’s delivery space requires new ways of thinking, and shifting to an outcome-based model requires both parties to adopt new skills sets, change attitudes towards the service provider-customer relationship, and acquire a better understanding of how to maximise the advantages of OBCs. It may also prompt a move away from traditional functional organisational structures towards the empowerment of cross-functional service teams spanning multiple organisations.

Challenges for customers and suppliers

While OBC is intuitively appealing to the customer, it however poses a huge challenge for the service provider as it requires a change in its business model. Research has found several organisational challenges that arise from this new business model.

First, the complexity and unpredictability in costs results in the need for a balance between delivering an innovative and effective service capable of dealing with changing circumstances, and the need to forecast costs to ensure that service delivery is economical and profitable. Second, the cultural change resulting from the move away from a traditional business model can cause individuals to question their role and value, hence significant priority must be given to dealing with the effect on individuals within the change process.

OBCs also tend to give rise to a perceived loss of control, both on the part of the customer with regards to its changing role under OBC, as well as with the service provider, where while the complexity and unpredictability can lead to higher monitoring and transactions between management and the support and delivery teams of the firms.

As both the service provider and customer work together to co-produce the outcome, boundaries can also become blurred. Boundaries can either be held rigidly as a result of not fully understanding the roles each party must play, or become fluid with out-of-contract requests being accommodated so as to build better relationships.

Finally, a big challenge for service providers is the coordination with its sub-contractors or suppliers. Issues arise from the need to reconcile and align the OBC with the firm’s suppliers, and to integrate their role within the contracts and fitting their components into the outcomes achieved by the provider with the customer.

To ensure the successful implementation of OBCs, these factors need to be addressed. Some factors that might mitigate these challenges include better and easier access to complementary information, materials and skills; better empowerment of the service provider and also individuals in both firms; the need to transform behaviours and attitudes of employees to ensure better usage of equipment by the customer; encouragement of teamwork both within the service provider firm as well as with its customer, and with its suppliers; acknowledging and addressing the perceived lack of control from the outset; and aligning the service provider’s and customer’s expectations.

Despite the many challenges associated with the transition from conventional to outcome-based contracting, it is highly likely that OBC is the future of business-to-business service contracting. Organisations should therefore prepare to deal with the transformation involved in acquiring true service value delivery capabilities.

Irene CL Ng, is Professor of Marketing and Service Systems at Warwick Manufacturing Group and a Fellow of the Advanced InsFellow of the Advanced Institute of Management Research (AIM Research)

It’s not necessarily the burden it first appears to be, writes Shirley Barnes, Client Relationship Director, Dinamiks Ltd

Employee legislation has not made it any easier to do business in the UK. The latest significant piece of legislation was the abolition of the Default Retirement Age [DRA] which came into effect on April 1st 2011 in a phased manner. The completion date is October 1st this year.

It means that employers will no longer be able to use the DRA to compulsorily retire employees. Employers who fail to embrace this new legislation may face claims of unfair dismissal and discrimination

Preceding it with another challenge to employers is legislation that has increased the maximum limits on statutory unfair dismissal compensation, redundancy payments and other awards.

The increase in retirement age means that many companies will experience situations where age/experience/capability will be a challenge and where the companies will require evidence leading up to and beyond the legislation change to justify why people should retire from a role or even why they should stay.

Employee legislation can help employees but it also increases costs and adds to the many burdens that businesses face. Legislation changes also add a layer of complexity to HR and other aspects of the business.

Changes provide challenges around constructive dismissal, data protection, DRA, disciplinary procedure, equality, employment tribunals, fair and unfair/wrongful dismissal, grievance procedures, statutory rates, working time regulations, performance, training, coaching and productivity.

Key points about, and arising from, the abolition of the DRA

Guiding principles associated with the retirement age change are provided by ACAS. Below are key points to consider and take action on.

Until April 6th, the law set a DRA of 65 years. Provided an employer properly followed the prescribed statutory retirement procedures, a business could fairly dismiss an employee on the ground of retirement at or above the age of 65.

The DRA change means that in order to retire an employee, a company now needs to demonstrate just cause and follow due procedure.

“Just cause” and “due procedure” are viewed as problems but, as with other issues arising from employee legislation, can be managed to a satisfactory conclusion with an online system that…

(i) Aligns every employee's objectives to those of the business

(ii) Provides the means to set development plans, track and record progress

(iii) Provides a record of capability for all employees, thereby supporting a common and consistent set of guidelines and principles that apply across all employee ages of the business.

(iv) Allows an employer to demonstrate just cause and follow due procedure

A variety of factors can determine at what stage an employee should step down. All these can be tracked, recorded and analysed by the system.

The DRA has long been viewed as a valued stake in the ground for employers, because it has been a focus for performance issues and succession planning. It has allowed poorly performing employees to retire gracefully and has enabled - in an orderly fashion - open discussion for succession planning. That has now changed. From October 1st, the door closes on it.

The “stake in the ground” concept does beg the question of why or how organisations don’t take action about poorly performing employees before they retire. Succession planning may have been months or even years in the making, to ensure a smooth transition and the engagement of a [hopefully!] more productive employee, but that does not excuse the inaction.

The opportunity for businesses

The reasons why unproductive employees are tolerated are not in the scope of this article, but the subject does lead us to the question “Is the change in retirement age actually an opportunity for employers to re-tune the business in an era of suppressed economic activity, squeezed margins and demands from investors to optimise performance?”

We can also ask if the legislation that increases the maximum limits on statutory unfair dismissal compensation, redundancy payments etc, helps a business in unintended ways? If the business uses a system that helps it conform to employment law while improving performance, then, yes. The system does this by providing an audit trail of performance, behaviour, attitude and the ability of individuals to meet set objectives.

A manager in the business can track an individual’s performance over a period of time and share the view he or she has of it with that individual and/or with another manager, such as the individual’s line manager.

There is the belief in some quarters that employees don’t like change, but in reality we find that if the CEO and board get behind change initiatives, staff are happy to learn and advance in order to help the business and themselves. In fact, many desire it and employees in outsourcing are no exception.

That desire can, if harnessed, help business benefit from new, or changes to, employee legislation, by re-scoping the business where it needs it.

More at www.ikdevelopments.com

Without a doubt, there are a number of compelling benefits associated with cloud computing, especially in terms of the agility and scalability that cloud can provide. However, that doesn’t necessarily mean that cloud computing is the cheapest, fastest or simplest option for your IT delivery, regardless of what some vendors may have told you.

Any decisions in this area must be driven first and foremost by your own particular business requirements, and not simply by the availability of this technology. Cost will be one of many important areas to consider in this regard, especially as there are a number of potential costs hidden ‘in the cloud’ that may not be immediately apparent.

When evaluating the cost versus the benefits of any cloud computing solution, you’ll need to look at three very important areas. The first is licensing costs. A lot of people don’t realise that software licensing can actually account for between 30 and 40% of their total IT costs. Also, the pricing of these software licenses will vary widely by vendor. You’ll also need to check whether the software licenses that you’ve purchased for your traditional infrastructure environment will transfer to the cloud, since many won’t, especially if you haven’t subscribed to a maintenance contract.

Does it matter? Absolutely. If you decide to migrate some or all of these services to the cloud, you’ll need to make sure that you understand the current licensing agreements that you have in place, and then carefully work out the cost implications before moving any/all of them to the cloud. For example, Microsoft will happily allow you to migrate your existing software licenses to the cloud, but only if you have Software Assurance in place for them. If you don’t, then you’ll basically have to purchase the licenses all over again.

The second important factor to consider is transition costs. Unfortunately, moving a service to the cloud will never be as simple as some vendors would like you to believe, so you’ll definitely need to do your homework before rushing into any decisions. To begin with, you’ll need to consider what internal resources and/or third-party services will be needed to support this transition to the cloud, and you will also need to be aware of the associated risks.

The cost of the bandwidth that you’ll need to support a cloud solution is the third area that will need to be considered. Cloud may be able to give you easy access to your data, storage and applications via internet, but that means that your connectivity to the internet will become even more important in terms of resilience for availability and also bandwidth for performance.

As a result, you may find that you’ll have to upgrade your internet connectivity, but again, you’ll need to do your homework first. Why? Because you’ll want to make sure that any new bandwidth charges won’t outweigh the cost savings that you were hoping to achieve with cloud in the first place! An alternative (and recommended) solution to gobbling up loads of extra bandwidth is to deploy thin client technology to reduce network traffic and increase application performance. However, implementing a thin client solution such as Citrix will obviously have its own cost implications to consider.

One thing is for sure: any change in delivery method will require both money and effort, and will inevitably cause some at least some disruption to your business-as-usual processes. In addition, you’ll almost certainly need to do some integration work in order to keep your key processes tightly knitted together.

So, while the ‘headline’ cost of cloud computing may seem attractive at first glance, the costs involved with migration, integration and consultancy will also need to be considered very carefully, especially as these costs can vary wildly depending on the state or complexity of your current IT environment, as well as your future requirements. Asking these key questions at the outset and apply careful analysis and evaluation will definitely help you to avoid any unexpected costs further down the line.