Industry news

BP’s partner in the Deepwater Horizon disaster has blamed them for the majority of the failures that preceding the oil spill.

Now estranged from BP, it was Transoceant that owned the rig, also supplying most of the personnel. The lawsuit brought by BP is valued $40 billion (£24.8 billion).

After holding its own internal investigation, Transocean decided to plug the well using cementing techniques that are not approved in the USA. It claims that BP misinterpreted critical pressure tests for the well, and missed vital warning signs of a possible blowout. Their report states that the force of the gushing oil stopped the blowout preventer from sealing the well. BP stands accused of using a faulty well design.

BP said yesterday that the Transocean report “fails to acknowledge the significance of Transocean’s role in the event.”

On 20th June, the European outsourcing community gathered in Madrid to debate the latest trends and learn from each other’s experiences. Now in its 2nd year, the European Outsourcing Association Summit & Awards also rewarded the preeminent projects, providers, innovations and locations for best practice in pan-European outsourcing.

“We come together to learn from each other” said Juan Luis Rodriguez Sanchez Del Alamo, of Repsol, during a rousing opening speech that set the tone for the whole event. Indeed, a prodigious amount of knowledge came forth from the lectern, as the masterminds of Europe’s premier projects took to the stage, magnanimously giving the inside track on their successes and challenges in the past year.

First up was Duncan Aitchison, Partner & President of TPI, whose presentation “What’s in store for the sourcing industry?” was optimistic for 2011/12, explaining that “after a period of financial turmoil, demand never comes back in the same way it left” before going on to detail how “there is a lot more scope coming to market. Things that haven’t been outsourced before are being sent out.”

Outsourcing has become more prevalent due to the current times of austerity with the public sector as an example, outsourcing more tax paying services than ever before.

One of the most intricately detailed and deeply insightful presentations of the day came from Santiago Uriel Arias, of Confederación Espanola de Cajas de Ahorro who heads up the collaboration between all savings banks in Spain. This gives him a uniquely omniscient perspective as he speaks about efficiencies brought about by technology and BPO-sharing. “Size does not equal efficiency – it is the sourcing model that is the key,” he said, while demonstrating his theories graphically.

Chris Halward, of the NOA, presented on NOA Pathway - the Middlesex University-accredited qualification for Outsourcing Professionals - before giving way to Jon Burbanks, of Capital One, a highly experienced outsourcing contract negotiator, who is currently working the Pathway. He is undoubtedly a star student - the audience were enraptured by his self-chosen project: “Why did deals work better than others? Why did some need more work than others?”

The afternoon session was themed around transition – specifically renegotiation, renewal and exit. Presentations from Heather Rodgers of the NOA, Juan Carlos Ferrer of Everis, and Wolfgang Fritzmeyer of EOA/ Baker & McKenzie were full of practical recommendations about change management, building flexibility into contracts and how to avoid the need for litigation. Juan Carlos focused on increasing productivity and cost efficiency by “becoming more ‘lean’ in outsourcing contracts,” while Wolfgang covered what to do in various scenarios of exit management. “Lawyers always come last; sometimes they even come a bit late,” he quipped.

Then came then the whisky! Scottish Development International (SDI) provided a fine selection of single malts to a thirsty mob gathered around their stand, and Douglas McCheyne, Senior Executive of International Marketing, was delighted how the event was “helping to keep Scotland at front of mind when investment decisions are made.”

The EOA Awards took place in the historic Casino De Madrid. Speaking before the awards, Andy Rogers, EOA board representative for corporate users said “The submissions this year were of an exceptionally high standard and the record number of submissions – more than double that of last year – shows that the EOA Awards are becoming the de facto standard of quality for the European outsourcing community.”

After a delectable dinner, and copious vino tinto, the award winners were announced. Outsourcing Service Provider/Advisory of the Year was Luxoft, who were also instrumental in the Ukraine’s successful bid to be Offshoring Destination Of The Year. BPO Contract of the Year and IT Outsourcing Project of the Year were Centrica PLC & Ferrovial S.A. respectively. Outsourcing End-User of the Year went to Telefonica Germany while Business Integration Partners and Prisa walked away with the Award for Innovation In Outsourcing. A hard-fought tussle, too close for the judges to call, resulted in CSC – Orange (France Telecom) and Indra being declared joint winners of the Award for Corporate Social Responsibility.

CSC’s Director of Customer Experience Mike Plummer was “delighted and proud to have won. It reflects great team work with the client,” he said, referring to the joint project with Orange regarding incentivising customers’ recycling of mobile phones.

The celebrations continued into the night… one bleary-eyed delegate – who asked not to be named – told how he was on the town til 4am!

The high standard of presentations continued the next day, particularly from the charismatic Carlos Flores Ramirez, of NIIT Technologies, whose engaging presentation was laden with thought provoking analogies – he stimulated debate by comparing outsourcing contracts to arranged marriages and tango dancing.

In a joint presentation Valueshore and PromoMadrid highlighted the credibility of Spain as an ITO and BPO nearshoring destination, presentations that fellow sponsors Invest In Spain would have definitely approved of. Valueshore’s Daniel Naoum spoke of the support that they can offer making inroads into Spain, finding “the right companies, the right contracts, the right contacts.”

The nearshoring vs. offshoring debate continued during a panel discussion featuring Valueshore and Stefanini TechTeam – who are truly global, have a presence in 27 countries worldwide – whose representatives, Rik Demeulemeester and Liveen Van Brackell had earlier given a presentation entitled ‘How To Break The Offshore / Nearshore Dilemma.’

After presenting on innovation, and how to address the disconnect between what suppliers are doing and what end users want, via metrics, structures and governance, KPMG’s Lee Ayling said of the conference and awards “absolutely fantastic – really diverse, drawn from all of the chapters. The quality just gets better and better.”

Jaco de Vries, of OmNext, said: - “the success of European Outsourcing Association Summit & Awards proves outsourcing is growing, getting more professional, leading to more collaboration, more partnership.”

For further information on the EOA summit and awards, visit www.eoasummit.com

Metro Bank, the first new high street bank in the UK for over 130 years, has agreed to outsource its recruitment function to RPO specialist, Consort Group, for a further three years. The deal follows on from an initial agreement to outsource recruitment to Consort concluded in March 2009.

Consort Group is targeted with bringing the total number of Metro Bank employees to 400 by the end of the year as part of a drive to expand the bank’s existing Store network to a target of 200 sites by 2020.

“Our focus is on our customers,” says Metro Bank CEO, Craig Donaldson, “and to make sure that we provide them with the best possible service, we have taken the view that we should partner with the experts in process areas such as recruitment and IT, the best of breed who can provide us with flexibility and scalability. We’ve chosen to work with Consort Group because getting recruitment right is incredibly important to Metro Bank – our people and the service they provide are the key points that set us apart from the competition. Consort have shown they have the passion, the commitment and the expertise to deliver exactly the sort of people this organisation needs.”

“The relationship between Metro Bank and Consort Group works so well because we are both highly entrepreneurial businesses with a total focus on customer service,” says Consort Group director, Julie Bullock. “Working with Metro Bank is a fantastic opportunity to create and build a state of the art recruitment function which can identify, attract and deliver the type of individual who will make the bank’s ambitious growth plans happen.”

National Savings and Investments is planning to set up an IT outsourcing contract worth between £700m-£1.5bn to replace its current deal with Siemens when it expires on 31 March 2014.

In an advertisement in the Official Journal of the European Union, it says that it plans to start its procurement in the last quarter of 2011.

On 11 July it will hold an event in London to provide information on the scope of requirements, sourcing model and procurement timescales.

The European Commission (EC) has approved CSC's acquisition of healthcare software maker iSoft.

The acquisition was announced earlier this year after iSoft suspended shares and put itself up for sale. Many believed the deal was necessary for CSC to preserve its contracts with the NHS, which have recently been slammed by the National Audit Office (NAO) as bad value for money.

GlassHouse Technologies, a global provider of independent data centre consulting and managed services, has announced that it has been selected to lead the IT infrastructure upgrade at Olswang LLP, one of Europe's leading law firms. Under terms of the deal, Olswang will completely outsource its IT department to GlassHouse, tasking them to manage the infrastructure, automate manual processes, improve efficiencies and streamline IT operations. These managed services support and IT enhancements are critical for Olswang as it looks to sharpen its edge in the highly competitive legal industry and continue to expand operations globally.

The project, which kicks off in July, is a continuation of work by Systems Group Integration, acquired by GlassHouse in September 2009, and is a combination of GlassHouse’s managed services and consulting services. GlassHouse will help run the Olswang environment more efficiently, outline best practices for operations and provide overall support for the infrastructure. The initial project will focus on three distinct initiatives – workspace management, exchange migrations and archiving.

Key to the agreement was GlassHouse’s global reach and Olswang’s ability to outsource its IT operations. The integration of the GlassHouse team with the Olswang IT staff allows for a deep sharing of knowledge on modern IT infrastructure implementations while also providing the Olswang IT staff with benefits like added IT resources to complete projects and the ability to reallocate staff to focus on other mission-critical initiatives.

“Our rapid growth and drive to expand globally necessitated a more strategic approach to better manage our existing and newly acquired operations,” said Clive Knott, IT director at Olswang LLP. “With GlassHouse’s expert team, we are outsourcing our IT operations to a knowledgeable third-party to automate processes, reduce costs and improve efficiency across our organisation. Integrating into GlassHouse’s IT team has given us the flexibility to accomplish our IT goals while also providing benefits and the capability to reallocate staff to broaden their expertise on strategic IT initiatives.”

Oxfordshire County Council is looking to get another provider to run its £7.8m supported living and daytime support service, with 12.5 full-time equivalent posts lost in the process. The service employs 284 staff caring for 380 people, providing day centre care, transport, and help with tasks such as moving house.

The move is part of plans to slash £114m from the council’s budget over the next four years.

Last night, disabled rights champion Mark Smyth said: “We have been working with the council to manage the cuts, but when the council gives up its responsibilities in this area it can, in some instances, be frightening for people with learning disabilities."

HCL Technologies Ltd., a leading global IT services provider has announced its partnership with Trintech, a leading financial software provider. HCL will leverage Trintech’s Last Mile of Finance platform to deliver its customers with cost reduction and process improvement capabilities.

“HCL is glad to collaborate with Trintech which is a perfect fit to HCL’s strategy to offer wing-to-wing F&A services across O2C, P2P and R2R by adding ‘disruptive technology’ to F&A levers. We are confident that Trintech’s Last Mile of Finance platform will bring tangible improvements to our clients R2R processes, thereby enabling HCL to support clients in key operational and strategic areas of business,” said Randy Mueller, Vice President – F&A, Business Services, HCL Technologies Ltd.

Trintech offers a robust web-based platform on which HCL can transform its clients’ R2R processes. By leveraging Trintech’s Last Mile of Finance platform HCL will provide clients with complete, real-time visibility across multiple ERPs and disparate legacy systems; the Trintech platform enables HCL to automate clients’ reconciliations and streamline the entire financial close process to ensure compliance, improved cycle times, and reduced costs.

‘Trintech is pleased to include HCL in our partner portfolio. BPO services have matured and are not just about labor arbitrage any longer. Process standardization and operational excellence, enabled by technology such as Trintech’s ‘Last Mile of Finance’ platform, delivers year-on-year efficiency gains, providing standardisation, control and automation as well as visibility and transparency across the organization which is now key for CFOs particularly when looking to outsource to external providers,” said Paul Byrne, CEO Trintech.

A UNISON survey reveals that more than half of all councils have backtracked on outsourcing contracts by bringing services back inhouse, or are considering it, after failings by private companies.

The UK’s largest union’s evidence proves that privatisation is a risky experiment, as these councils revealed money was drained, standards were driven down and they had a lack of control over the services.

60% of council officers surveyed said the need to improve efficiency and reduce service costs had led them to consider bringing services back in-house. After cost, 44% of respondents said there was a need to improve service quality.

When the scale of savings was compared to the scale of the service back in-house, almost 13% of respondents said insourcing could lead to savings of up to £25,000 a year. A further 8% reported savings of up to £250,000, 6% said £500,000 and 5% said £1 million could be saved per year.

Other advantages of insourcing included flexibility (64%), greater local responsibility (52%), improved staff morale (33%) and better terms and conditions (25%).

Dave Prentis, UNISON’s General Secretary, said: “This survey exposes the real danger of outsourcing services to private companies. Councils currently seeking it out as an easy option must realise that it will cost them more in the long run.

“These private contractors have failed on their promises and the councils have been left with huge costs and lower standards of services. As well as the huge impact on the public, privatisation risks the jobs, pay, pension, terms and conditions of hardworking staff.

“The quality, efficiency, accountability, flexibility and economics of inhouse public services just cannot be matched. Councils under pressure to review their budgets must learn a harsh lesson from this research - keeping services inhouse is best for the community, workforce and the economy.”

This research commissioned for UNISON by APSE, gives evidence of major contracts being brought to an end and services coming back inhouse - benefiting workers and the public.

The Ministry of Justice has confirmed that it has entered into a radical new contract with BAE Systems Detica to provide security services through a managed service arrangement.

The contract will cover a full spectrum of information assurance and cyber security services. Detica will focus initially on support and advice around the Ministry's IT architecture, its security policy, governance and risk management and compliance with regulatory requirements. It will also advise on cyber security and protective measures.

Optional components include security testing, protective monitoring of both internal and external activity, and forensics.

This announcement follows a hard fought competition using the Office of Government Commerce Buying Solution framework.

The engagement offers a significant benefit from traditional security engagements in that it provides a very efficient way for the MoJ to secure a wide range of information assurance and cyber security services through one supplier, thus enabling a substantial cost saving.

Traditionally departments have augmented their security teams through the use of contractors, often in response to temporary requirements. These arrangements have led to an ad hoc mix of suppliers and teams which doesn't always deliver the desired result within budget.

Detica will provide an on-going service to the MoJ which should enable the MoJ to make substantial cost savings around its security requirements and transfers delivery risk from the MoJ to Detica by being outcome based. Performance metrics will be gathered to monitor efficiency and allow the service to improve over time.

Bob Nicholls, Head of Information Assurance (Information Communication Technology), Ministry of Justice comments: -This contract introduces a new way of working for my ICT IA team and we anticipate it will deliver real benefits to the Ministry of Justice, both in terms of security and cost efficiency. Protecting the Ministry's data and systems is vital to the smooth running of the Justice system and we look forward to working together closely with BAE Systems Detica to achieve this."