Industry news

I was told that in his engaging, thought-provoking presentation at the EOA conference, Carlos Flores Ramirez, Vice-President & Country Manager at NIIT Technologies Limited, said that a large percentage of IT outsourcing contracts do not deliver the success expected.

He felt there was a common reason for this is - the client did not really know what it wanted.

He said that in an industry where successes and failures are shared, this is an interesting situation. It was his view that in the outsourcing market place, there tends to be two types of client. Companies that are mature, experienced procurers of outsourced services - these companies know exactly what they want and know how to get it. The other kind is less mature in the market place and needs a supplier to be a partner that they can discuss things with.

He implied that problems can arise when the latter attempts to emulate the former, but doesn’t put in the requisite effort.

My reaction is that this is nothing new, if you don't put the effort in you don't get much out, but I think the danger with both of Senor Ramirez's types of users is that even mature organisations can underestimate the amount of effort that is required, not just to procure outsourcing services, that's the relatively easy part, but to maintain the relationship through the 5, 7 or 10 years that the contracts runs for.

Of course there is another difficulty - maintaining relationships during transition from one supplier to another, as many of my friends in the public sector can testify, where, because of procurement rules, they have had to re-tender even when the relationship and value has been good.

I do not know what was meant by "not delivering the success expected," but quite often the benefits identified in the business case are not tracked throughout the life of the outsourcing service, and actually, they might never be looked at, at all.

So sometimes this lack of success is the view of people that perhaps were not involved with the original project or the fact that what they were "expecting" wasn't even part of the deal!

So how could you prepare for this, especially if you are one of Senor Ramirez's less mature customers?

One thing’s for sure: however experienced, procurers of outsourcing should never rush into things. It is possible to sign a contract one day, and the next day, it’s already outdated. Properly clarifying your requirements takes time, money and cultural understanding.

Companies that do not put in the spadework - specifying the work to be done, the metrics for measuring success, managing the ongoing relationship - will never reap the true benefits of outsourcing.

If you're new to outsourcing, getting involved in an NOA knowledge-sharing event offers you the best way start to your outsourcing journey. Our members include a multitude of end-users, suppliers and consultants; our collective depth of experience is unrivalled.

We can show you what to consider when setting out, how to manage throughout the life of the contract and things you must know when formulating your all-important exit strategy.

The deal sees TfL and the Greater London Authority (GLA) (including the Metropolitan Police, the London Development Agency and the London Fire and Emergency Planning Authority), implementing Asite's Cloud Software.

Asite's technology will provide TfL and the GLA with a single integrated data management solution for all aspects of the contract administration process across their significant on-going portfolio of construction and facilities management works. TfL staff as well as their entire construction supply chain will use Asite's Contract Administration applications to manage contract change and to provide real-time visibility of their actual schedule and cost position against budget. This will assist each of the participants in the supply chain delivering the TfL public works programme by providing further transparency across the complexities of the gamut of forms of contract in use in the field.

Tony Ryan, CEO of Asite said, "we will be providing TfL with a true SaaS Platform, with a government grade pedigree of security, compliance, and enterprise systems integration. Our Cloud Platform will give TfL the flexibility to deliver Contract Administration to their supply chain within their existing and proven processes. Asite cSaaS and AppBuilder offers TfL and every member of their supply chain the ability to interact with critical project information in their own way by providing each participant with the information they need when they need it.

Redknee, a leading provider of business-critical billing and charging software and solutions for communications service providers, has entered into a global partnership with Tech Mahindra, a global systems integrator and business transformation consulting organisation focused on the communications industry, to jointly deliver software and services to the communications service providers market.

Redknee and Tech Mahindra announced the partnership at the Microsoft Worldwide Partner Conference 2011. This partnership brings to the market the strongest combination of Microsoft expertise to communication service providers pairing Redknee, the leading solutions provider to successfully integrate its real-time billing capabilities with Microsoft Dynamics CRM, and Tech Mahindra, the 2011 Microsoft Communications Sector Partner of the Year Award winner.

Larry Goldman, Head of Telecoms Software Research at Analysys Mason, commented: “Communications service providers increasingly value fully integrated software solutions. This agreement provides a broad range of integrated billing, charging, customer care and OSS capabilities that deliver improved time to market and reduced cost."

Outsourced printing firm and India’s largest books exporter, Repro India Ltd, is believed to have bought a controlling stake in the Indian arm of business process outsourcing firm MPS Ltd, owned by UK-based publisher Macmillan.

Shares of MPS spurted 13.3% on the buzz to Rs45.90 apiece on the Bombay Stock Exchange while the stock of Repro, which counts Penguin Books, Pearson and Oxford University Press among its clients, rose 8.45% to `146.95 at close on Wednesday.

Macmillan holds 61.46% in MPS. Based on the firm’s Wednesday’s market capitalisation of `77 crore, the promoter holding would be worth as much as Rs47.3 crore. A further 9% equity is held by Macmillan Staff Trust.

2bm has been chosen by Yorkshire Water to design and build a new facility in Bradford.

Work on the seven figure project is due to start later this year and will deliver the utility company with a state of the art new facility that takes advantage of the very latest thinking in cooling technology.

"We're delighted to have been chosen by Yorkshire Water," explained 2bm Sales Manager Neil Roberts. "Our approach to design and build is pretty simple really. We take the time to understand the needs of the client and we're not afraid to challenge traditional thinking."

"We put forward what we felt was a very innovative and cost effective design, one that we are confident will deliver real long term benefits for the team at Yorkshire Water."

Terrorists are using cloud computing to plan attacks and remain undetected - and the UK Government needs to keep up with such technological advances.

This was the message of Home Secretary Theresa May, who outlined the Government’s updated counter-terrorism strategy, known as CONTEST.

Cloud, one of the hot topics in the IT world right now, is one example of how terrorists are using modern technologies for their own ends.

“Cloud computing offers new means for storing, sharing and distributing material online," May warned.

"It can be encrypted and configured to work with mobile devices, leaving little or no trace of the data behind."

The Listening Company (TLC), which became part of Serco earlier this year, is now fully operational at Durban House, Bognor Regis, after winning a four-year contract to deliver contact centre services for West Sussex County Council.

Louise Goldsmith, Leader of West Sussex County Council joined TLC staff, including former England rugby captain Lawrence Dallaglio, Sales Director at The Listening Company, and several other County Council cabinet members to mark the occasion.

TLC will manage calls relating to a range of services across the council including social care, highways and library renewals with staff acting as the first point of enquiry for citizens calling the council.

Neville Upton, CEO, The Listening Company said: “I am delighted that we have been selected to deliver contact centre services on behalf of West Sussex County Council. We are committed to delivering excellent customer service which will bring benefits for the Council and local communities across the County. The decision to appoint TLC reflects our strong track record for innovation in the delivery of high quality and efficient services for our customers across the UK.”

Michael Brown, Cabinet Member for Finance, West Sussex County Council said: “It is with great pleasure that we welcome The Listening Company to West Sussex. They have an excellent reputation in the Public Services industry having delivered services on behalf of a wide range of public sector organisations. They are renowned for both their deployment of cutting-edge technologies and their innovative people practices. We expect contact centre staff to thrive under their stewardship and for the people of West Sussex to experience excellent customer service.”

Market Leading Cloud.com Platform Lets Customers Build Clouds the Way the World's Most Successful Clouds Are Built

Citrix Systems has acquired Cloud.com, a market leading provider of software infrastructure platforms for cloud providers. The company's innovative CloudStack™ product line helps providers of all types deploy and manage simple, cost-effective cloud services that are scalable, secure, and open by design. This acquisition further establishes Citrix as a leader in infrastructure for the rapidly growing cloud provider market.

The transition from the PC Era to the Cloud Era is expected to fuel a massive build out in cloud infrastructure, creating a new market projected to exceed $11 billion by the end of 2013, according to industry analystsi. This market will feature thousands of providers of all shapes and sizes, offering a vast array of new cloud services ranging from business, infrastructure and development offerings, to consumer, mobile and gaming services. Most of the clouds that service this market will look nothing like traditional enterprise datacenters. They will run on radically different platforms purpose-built for cloud computing – platforms designed from the ground up to deliver multi-tier, multi-tenant services in the simplest and most cost-effective way. The world's largest and most successful public clouds are all built this way today.

The Cloud.com product line is not a traditional enterprise server virtualization platform with cloud management layered on top. It is a powerful, hypervisor-agnostic solution designed from the ground up to help providers build clouds the way the world's largest and most successful public clouds are built – simple, automated, elastic, scalable and efficient. This proven approach has helped Cloud.com customers around the world roll out new cloud services up to 50 times faster, at one fifth the cost of alternative solutionsii.

With the addition of Cloud.com, Citrix now offers a complete portfolio of virtualization, orchestration and networking solutions purpose built for the Cloud Era — solutions that are not only among the market leaders individually, but also designed to help customers avoid vendor lock-in by letting them use the hardware, software, management products and service providers of their choice.

Outsourcers unanimously agree that FM is facing a margin squeeze

Over two thirds (71%) of outsourcers and facilities management suppliers agree that the Government should do more to help smaller businesses win more of its work, according to a survey by Interim Partners, the leading provider of interim managers to the private sector.

The survey, which was conducted among Chairmen, CEOs and CFOs of some of the UK’s largest outsourcing and facilities management businesses, found strong industry agreement among 64% of respondents that the Government favours larger outsource companies when allocating contracts.

Mark Kitchen, Head of Practice for Business and Support Services at Interim Partners, comments: “Despite the Coalition Government’s attempts to improve outsourcing to SMEs, industry leaders agree that more should be done to help smaller bidders for Government work.”

“Whilst some contracts can only go to outsourcers that have reached a certain scale, there is the concern that too much of the outsourcing market will consolidate in the hands of just a few players.”

“Directors of mid-tier FM providers and outsourcers do not want to see the rapid consolidation within the sector that could happen if small providers are permanently locked out of the market for Government work. Many larger providers sub-contract some of their work to small, specialist providers so they want to see as healthy a supply chain as possible.”

Weak economy means margin squeeze

Every single survey respondent agreed that FM contracts are under more margin pressure than before the credit crunch.

Interim Partners explains that the poor performance of the economy and the timing of the Government’s austerity drive have put a squeeze on FM clients’ budgets.

Mark Kitchen says: “The squeeze on margins means that facilities management companies, as well as wider outsourcing providers, have to become more efficient than ever before in providing a high quality service.”

“Interim managers have a proven record of stripping out unnecessary costs to maintain margins and service delivery quality, even when clients are asking for a cheaper service.”

Government austerity drive likely to signal more work

Although margins are being squeezed, 79% of providers say they still are expecting more work because of the Government austerity drive.

Mark Kitchen continues: “It’s increasingly accepted that outsourcers and FM providers can help the Government to deliver a lot of public services more cost effectively than the Government can itself. As further cuts are implemented support services businesses are expecting an increase in demand from central and local government.”

New services for customers critical to future growth

The survey also reveals that 64% of outsourcers and FM providers expect growth to come from adding new service lines, rather than international growth (21%) or UK growth from existing service lines (14%).

Mark Kitchen adds: “Senior support services figures are saying that strong future growth is going to come from offering clients additional services, such as back office outsourcing, rather than selling to more customers in the UK or expanding overseas.”

“It is always difficult to launch a new service to customers because of the perception of inexperience in the market place but hiring an interim manager can really help. The business can market the interim’s previous experience of delivering the service to help it win new business. When the interim spearheads delivery of the service for the client they will also train up permanent staff.”

In a speech in London yesterday, the PM argued the need to give individuals and local communities more control and more choice over the services they receive.

Mr Cameron said the reforms were a “people power” revolution that will replace bureaucratic control with “more freedom, more choice and more local control”.

He described public services as “the backbone of the country” but said that they still operate with a “take-what-you’re-given” philosophy that has failed sufficiently to close gaps between the life quality of the rich and poor.

“I know what our public services can do and how they are the backbone of this country. But I know too that the way they have been run for decades – old-fashioned, top-down, take-what-you’re-given – is just not working for a lot of people.

“Public services were centralised with all the right intentions: to drive progress through from on high, to keep tabs on how that progress was going with targets and rules and inspections. But the impact of this has been incredibly damaging.”

The PM’s speech follows the publication of the Open Public Services White Paper which sets out the government’s approach to public services by applying five key principles:

•Wherever possible we should increase choice by giving people direct control over the services they use;

•Power should be decentralised to the lowest possible level;

•Public services should be open to a range of providers competing to offer a better service;

•The state’s role is to deliver fair access, fair funding and fair competition; and

•public services should be accountable to users and to taxpayers.

The White Paper will be followed over the summer by a wide-ranging discussion with individuals, communities, public sector staff, providers and others with an interest in how public services are delivered.