Industry news

The Future = Indirect Procurement

Many of us in Procurement would have to admit: we love 'buying bits for production'.

A glimpse under the covers at Xchanging reveals that Indirects constitute the vast majority of what is outsourced. Why? Because companies consider their Directs as core, and would never outsource them. But whether handled in-house or outsourced, there is a job to be done by Indirects buyers - and in just about every business. This is good news.

It seems that the future for career-minded buyers may indeed lie in Indirects. So what's in there? The key categories include:

IT, Telecoms, Facilities Management, Property, Travel, Fleet, Professional Services and Labour

Positives

• Longevity. Whereas (at least for the First World) Manufacturers face a continuing threat from low cost producers, the Service sector is relatively secure. The Indirects they buy will always be required.

• Transferable skills. Buying IT or Legal Services is pretty similar, irrespective of the business type or sector.

• Coverage. All businesses need Indirect goods and services - including manufacturers, retailers, and the Public Sector.

Differences

1. Finding the customer. With Directs it is usually pretty easy to trace an e2e line through Production right through to the end consumer. For Indirects there exists a multitude of ownership and responsibility models across different businesses.

2. Budgets. Rarely an issue for Directs buyers. But in Indirects you are helping the budget holders to get value for money.

3. Understanding Supply. For Directs this is usually about getting to grips with the supplier's manufacturing process (and costs) and then optimising the inbound supply chain. This also applies to some Indirects but more often it's about specifying and then getting great service and then measuring it.

Fortunately, there still exists significant local and regional capability in most categories so it’s not impossible to develop a multi-tiered supply structure. Negotiating a transition from Directs to Indirects can be problematic. It’s easy to get pigeonholed. But it definitely makes good sense to develop one's skills and experience in this area, with a view to a long and prosperous career – so what are you waiting for?

Unison General secretary Dave Prentis has said that taxpayers’ money had been ‘wasted’ during the outsourcing of public services.

‘The whole drawn-out, costly exercise is often a recipe for disaster. Many employers have to bring services back in-house after money, quality and efficiency has gone down the drain.

‘The government’s Open public services white paper can only lead to the public paying a higher price for fraud.’

Unison’s full response to the white paper is due at the end of September.

Australia's largest telecommunications company Telstra is said to have engaged Tata Consultancy Services for outsourcing parts of its finance, accounting and voice-related back-office processes.

As part of this multi-year deal which is said to be worth over $50 million, TCS will take over 100 back positions from Telstra.

Local councils of the future may undergo a process of ‘Californication’ as they respond to budget cuts, new analysis predicts. A report published today by localism think tank the New Local Government Network (NLGN) outlines three new models for town halls of the future as councillors navigate budget cuts in the coming decade.

One scenario outlined in the ‘Future Councils’ report suggests that a lack of funding and new rights for citizens over planning and service delivery could by 2020 leave local authorities in the same kind of position as the Californian state government: struggling to provide services in the face of high demands, low income and increased direct democracy.

NLGN Director and report author Simon Parker, said: “Local authorities are quietly preparing to transform the way they work in response to budget cuts. Some services will change radically as councils become commissioning hubs. Expect councils to redesign everything from social care to street cleaning, more delivery by the private and voluntary sectors, and an increased reliance on personal budgets.

Google announced on Thursday that it acquired the restaurant rating company ZAGAT.

“ZAGAT will be a cornerstone of our local offering — delighting people with their impressive array of reviews, ratings and insights, while enabling people everywhere to find extraordinary (and ordinary) experiences around the corner and around the world,” Marissa Mayer, vice president of local, maps and location services at Google said in a blog post. “I’m incredibly excited to collaborate with ZAGAT to bring the power of Google search and Google Maps to their products and users, and to bring their innovation, trust and wealth of experience to our users.”

Research carried out by the Contact Centre Management Association of Ireland (CCMA) revealed the sector employs more than 29,000 people spread of over 100 contact centre operations nationwide.

More than half contact centre companies in Ireland witnessed growth in revenue in 2010 – with almost three-quarters expecting to see rising turnover over the next 2-3 years.

With support of the IDA and Enterprise Ireland, the research provides insights, including its capacity for growth, competitiveness, skill levels and challenges ahead.

Tracy Kennedy, board member of the CCMA and head of customer operations for Bord Gáis Energy said: “These figures outline the crucial role the contact centre sector plays in the Irish economy, and the high level of service which is provided by skilled professionals throughout the country.”

Cognizant, a leading provider of information technology, consulting, and business process outsourcing services, today announced that it will provide a range of application services to Cambridge Assessment, a not-for-profit examination group owned by Cambridge University.

As part of this multi-year, multi-million pound engagement, Cognizant will work with Cambridge Assessment and help rationalize and consolidate its portfolio of applications, and deliver application maintenance and production support services to enable the organization to improve the management and processing of examinations.

Cambridge Assessment is made up of three exam boards—Oxford Cambridge and RSA (OCR), University of Cambridge International Examinations, and University of Cambridge ESOL Examinations (English for Speakers of Other Languages)—and plays a leading role in the research, development, and delivery of educational assessment to over 8 million learners around the world.

Cambridge Assessment engaged with Cognizant in June 2011 to consolidate application support services in its portfolio to ensure efficiencies and competitiveness in a demanding market, as well as the flexibility to continue to respond to the current and future needs of the business.

In the SWC Technology Partners survey, just 3.7% of respondents said that their company has adopted a cloud solution for the whole company. 54.2% of respondents indicate that their company is not pursuing any cloud computing initiative. Privacy and security (20.9%) are stated to be the of greatest concern when considering cloud, followed by cost (9.8%).

Elliott Baretz, vice president of SWC, said: "The technology industry can be rife with hype. Most reasons for eschewing the cloud have nothing to do with technology. Privacy and compliance and legal issues are what are keeping businesses on the sidelines."

On 19 September, over 1,000 Fujitsu workers will strike on as a result of unsatisfactory pay conditions. This will affect HMRC, the Office of National Statistics and the DVLA, amongst other public agencies.

The workers – members of both PCS and Unite trade unions – will strike for 24 hours from midnight on Monday 19 September.

Sony has appointed a chief information security officer, Philip Reitinger, in the wake of a series of enormous data breaches.

Reitinger, previously worked as head of the US National Cyber Security Center and for Microsoft, is now its senior vice-president and chief information security officer of Sony.