Industry news

VMware, Inc., the global leader in virtualization and cloud infrastructure, has announced its intention to acquire Digital Fuel, a leader in IT Financial and Business Management SaaS solutions. Digital Fuel’s solutions enable companies to plan, manage and optimize cost and value in the emerging world of cloud based dynamic IT. W

With this acquisition, VMware will enable enterprises to more effectively manage the business impact of IT environments, centralizing visibility of IT costs, integrating financial discipline into IT decisions, and delivering meaningful measurements and reports that drive engagement with the CFO and line of business stakeholders. Terms of the acquisition were not announced. The acquisition is scheduled to close in July 2011, subject to customary closing conditions.

"Cloud computing represents a fundamentally new model for IT, enabling enterprises to realize unprecedented gains in operational efficiency, while also understanding, managing and optimizing IT resources based on granular business metrics," said Boaz Chalamish, VP and General Manager, VMware.

"New levels of financial visibility and control in cloud environments will enable CIOs to engage with the CFO, line of business stakeholders and others around how IT investments translate to real business value. As an authority on helping organizations navigate the business operations of IT, Digital Fuel will add a significant capability to our portfolio, broadening beyond operational management to include business-centric capabilities."

Local council transforms print infrastructure to achieve cost savings of 30 per cent

Xerox will support BT to reduce Sandwell Metropolitan Borough Council’s office printing costs by up to 30 per cent in a five-year, multi-million pound managed print service agreement.

The new managed print service will provide the council with a complete view of its office print environment, enabling it to take control of all costs and processes related to office output devices. Xerox and BT will work together to implement a print management strategy helping the council meet sustainability targets, increase efficiency and reduce costs.

The managed print service will be rolled out as part of ‘Transform Sandwell’, a 15-year partnership between Sandwell Metropolitan Borough Council and BT to transform Sandwell’s IT infrastructure. Xerox will work with BT to integrate the managed print service into its broader IT service to ensure a seamless user experience.

The Xerox/BT programme includes the replacement of 1,500 printers with 150 new energy-saving multi-functional printers. The team will also introduce ‘follow-me’ printing, which will enable council staff to send a print job to any device on any floor of the council’s premises and release the job with a swipe card. This will ensure documents do not go unattended or unclaimed, helping improve efficiency and security as well as reducing waste.

Stuart Kellas, Sandwell Metropolitan Borough Council’s finance director, said: “This initiative with Xerox and BT not only saves the council a significant amount of money straight away, but will ensure costs are controlled and managed over the lifetime of the agreement. The partnership’s joint expertise gives great confidence that our crucial cost-reduction, service and wider business objectives will be delivered.”

The Nuclear Regulatory Commission (NRC) has selected Dell's wholly-owned subsidiary, Perot Systems Government Services (PSGS), a unit of Dell Services, to provide a full scope of Information Technology Outsourcing (ITO) support services as well as hardware, enterprise, and software products.

The program will aid the commission in planning, directing, and overseeing the delivery of centralized and efficient information technology infrastructure and information management services. Under the 6-year, $252 million contract, Dell Services will operate, maintain and enhance a comprehensive, agency-wide IT infrastructure for the NRC's Office of Information Systems.

The core areas that Dell Services will provide support include: program management, Blackberry Support Services, Email and Messaging, File and Print, Personal Computing, Software License Management, Network Management, Remote Access, Integration and High Performance Computing. Additional services within the contract include: Computer Facilities Management, Data Center Systems Administration, management of the Nuclear Security Incident Response Operations Center, Wireless Communication, Information Assurance and Security, Technology Assessment and management of the Emergency Response Data System.

The expansion of Manchester's Metrolink tram network could generate £80m of work for engineering contractors.

The city's transport body, Transport for Greater Manchester, has published a tender document which details a framework agreement it plans to establish with up to 50 contractors.

The value of the work on offer will range from £35m to £80m over a four-year period.

Capgemini, one of the global leaders in consulting, IT services and outsourcing, has entered into exclusive negotiations with the funds managed by Apax Partners and the Prosodie management team with a view to acquiring Prosodie, the multi-channel services operator.

This acquisition would enable Capgemini to round out its services offer in the dynamic client-relationship solutions market. It would be a perfect fit for the Group’s growth strategy in new IT operating business models (NBM). This involves Capgemini building, alongside existing services, a proprietary solutions offer. In spite of the economic crisis, Prosodie has delivered steady organic growth and strongly increased its profits over the past four years.

The acquisition would be done based on an enterprise value of €382 million, including the cost of two recently-announced acquisitions, Internet-Fr in France and LevelIP in Italy. The transaction would be financed in cash from the Group’s net cash balance and would be accretive to net earnings per share from the first year.

Capgemini France and Prosodie are currently in the process of informing and consulting with employee representatives. Authorization will be sought from the French competition authorities. The transaction is expected to be finalized by the end of July.

HP Enterprise Services has announced Avista Corporation, a Washington-based public utility, has signed a seven-year technology and applications outsourcing renewal agreement to help with its ongoing transition into a digital utility.

As an HP client for almost two decades, Avista, which serves three western states, looks to HP to manage most of its major enterprise systems as well as its data center and workplace environments.

“Along with the rest of the utilities industry, we’re transforming ourselves with digital and smart grid technology while also keeping the lights on and gas flowing for our 359,000 electric and 319,000 natural gas customers,” said Jim Kensok, vice president and chief information officer, Avista. “HP partners with Avista applying its deep applications, technology and industry knowledge to further our digital journey while keeping an eye on managing costs.”

HP will continue to provide Applications Management Services for Avista’s enterprise applications portfolio, including its customer information and work management systems. Under the agreement, HP also will provide Applications Modernization Services that will help replace some of Avista’s custom applications, improving efficiency and creating a path for Avista to continue operating among the lowest cost utilities in the United States.

Innovation Day

Wednesday 8th June 2011

As companies struggle through the current austere times, many are investing in processes that will be cost effective and beneficial in the longterm.

Modern outsourcing relationships now offer and deliver much more than just cost savings.Businesses are often transformed through innovation to achieve far greater efficiency and productivity.

Innovation is perhaps the most misinterpreted term in outsourcing. It seems everyone wants a slice of the pie, but many are unsure of what the pie actually consists of..

The National Outsourcing Association’s Innovation Day was chaired by Lee Ayling, NOA Board Director for Innovation and featured the latest information and advice on how to implement innovation in your outsourcing deals.

Lee announced the results of the NOA’s latest research, carried out in association with KPMG, "Driving Innovation Through Collaboration" and looked at varying interpretations of innovation.

What is Innovation?

· Innovation has no standard definition and means different things to different people

· To avoid misunderstandings, definitions and expectations of innovation should be agreed upon with each service provider

· Innovation is not applicable to all service provider relationships

· Innovation is new ideas or ways of working to drive commercial gain and / or competitive advantage

Lee said: “Coming out of a financial crisis, many businesses are looking at innovation to increase their profit margins, streamline processes and improve services quality.

Following on from this, we felt the NOA needed to put together a very recent piece of legislation to investigate and highlight trends in outsourcing.

“Driving Innovation Through Collaboration” Research Highlights"

· 70% of respondents consider innovation to be very important and 50% are discussing innovation once a quarter

· Improving quality and lowering costs – but also decreasing time to market and replacing old legacy systems are key drivers

· Less than a quarter of all user organisations do have a formal innovation methodology to support the outsourcing process

· There is a disconnect between the way users and suppliers want to fund / are funding innovation

· Around 80% of the user organisations don’t measure innovation quantitatively

· Users and suppliers agree that both organisations should take the lead role for innovation, but that rarely happens in practice

· When innovation is important to you, consider appointing named leaders to ensure this topic gets enough attention

· User organisations can do much more to support their innovation initiatives

· Both users and services providers think most innovation is possible in ITO, KPO, customer care and niche areas, while least innovation is possible in BPO.

David Baker, formerly United Biscuits, discussed innovation in practice and focussed on how innovation was achieved as best practice at United Biscuits through the contract, governance, structure, behaviours, gainshare mechanisms and finance. David said: “Additions to original contractual arrangements are usually examples of true innovation. Suppliers should have full knowledge of how an end user’s business operates in order to effectively incorporate innovation in the best possible way.”

Innovation Lessons Learned

· Do it yourself before someone does it to you

· Get the contract right and the rest follows

· Create an environment for change

· Get the funds to demonstrate quick wins

· Don’t just look at “headcount or price savings” – reduction in working capital, right first time.

“Innovation distinguishes between a leader and a follower” – Steve Jobs

“Without change there is no innovation, creativity or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable”

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow” – William Pollard

“Innovation is not the product of logical thought, although the result is tied to logical structure” – Albert Einstein

Debra Maxwell, arvato, emphasised the importance of relationships and transparency when developing innovation.

Debra said: “A true partnership should be used to push innovation and truly ‘innovate’. Transparency is very important with our clients, we need to be able to see what is happening and what is not happening in order to bring change.

"Service level agreements need to outline exactly what requirements are needed.Space is also very important when trust is involved. Time is needed for trust to be earned through results and expectations which are met.”

Nick Pantlin, Herbert Smith, discussed contractual innovation in outsourcing and gave examples of two innovation contracts.

· Innovative Contractual Structures

Multisourcing Services

Integrators/Service Managers

Global

Frameworks/New contractual structures

· Innovative Contractual Provisions

Innovation

Funds

Gainsharing

Innovation

SLAs

Nick said: “In this age of austerity, outsourcers are required to provide more for less. Is innovation something that can actually be contracted for and do end users really know what they want when they ask suppliers to ‘innovate’?

“It is also hard to present on innovation without mentioning the cloud which is one of the tool sets set to change the outsourcing landscape.”

Will McAllister, Aegis, provided a view of innovation from a supplier perspective and outlined examples of best practice.

· Innovation which drives a better business outcome is the goal – keep it real

· Innovate using the knowledge collateral that your colleague community represents.. and your clients if possible

Will said: “Innovation takes a number of forms but to be considered as innovators we must address them all”.

IIan Oshri and Julia Kotlarsky presented the latest Warwick Business School research on innovation in outsourcing.

Two Surveys:

In early 2009: A survey of 263 CIOs and CFOs of the largest firms in the UK andother European countries about realizing value in outsourcing.

In late 2010: A survey of 253 CIOs and CFOs of the largest firms in the UK and other European countries about innovation in outsourcing.

Qualitative input from both surveys was obtained along with indepth interviews on key findings with CIOs and CFOs from leading European multinationals. Input from research was conducted with a dozen multinationals on their outsourcing decision making processes, practices and impact on their business. IIan commented: “Many organisations do not effectively measure the effects of innovation or even allow room for innovative practices. It is really hard to envisage what innovation will be and it is very hard to imagine at the beginning of a partnership what that will be.”

Research Findings

· Client firms want vendors to deliver innovation that has significant impact on the firm performance

· Client firms don’t want to pay extra/premium for innovation

· Contracts are not designed to accommodate innovation

Jim Hemmington, Head of Strategic Contracts, BBC, outlined how the BBC continues to drive innovation in its outsourcing contracts.

Outsourcing at the BBC fell down to three reasons: cost reduction, service improvement and business improvement.

BBC Outsourcing Requirements

• Maintain quality

• Control cost

• Achieve value

• Increase value

• Meet customer changing needs

• Do more for the same

Supplier Outsourcing Requirements

• Retain margin

• Increase margin

• Take out cost

• Increase scope

• Achieve lowest acceptable quality

• Do the same for less

Jim said: “You need a sense of urgency to drive real innovation along with an incentive. Risk always comes with real innovation and unless you have open and frank discussions with your suppliers, you will never really reap the benefits.”

The interactive breakout sessions at the end of the day focused on three key topic areas of innovation in an outsourcing context

1. How should organisations document and contract for innovation?

2. How should organisations govern, manage and measure innovation?

3. What are the people and roles needed to drive successful innovation?

The breakout session groups discussed a number of item in each area and then selected a primary item for discussion on each topic to feedback into the main session

Documenting and Contracting

· clear visibility in contract

· incentives on a corporate and individual level

• Use of incentives in the contract to drive innovation – including the use of

both corporate and individual incentives (selected idea)

• Definition of what innovation is and isn’t required up front (shortlisted)

• Use of competition to drive innovation (shortlisted)

• Drive short term innovation by competitive threat

• Document mutual expectations

• Access to senior execs with a board to review ideas

• Clear IP agreements

• Simple friendly contract language

• Innovation framework with decision trees

• Capped T&M / hybrid commercial model

• Penalties for not innovating

• Painshare approach

• Seconding supplier people into client to understand business

• Documented customer led process

Measuring, Managing and Governing

• Create an “Innovation Forum” to air ideas across end user and supplier teams and organisations (selected idea)

• Innovation as the first topic on the governance agenda (shortlisted)

• Clarity of R&R and incentives

• Collaboration between procurement and inlive service teams

• Agreed metrics and measurements

• Focus on guarding against not invented here / use of different hats approach

• Clear baselines to measure benefits against

• Best practice / case study achievements

• Communications in and between both parties

• Supplier personnel continuity

• Clearly documented, communicated and understood objectives

• Named leaders for innovation

• Links to wider teams

• Considered deployment roadmap / effective prioritisation of innovation

People, Skills and Roles

•Strong leadership with clear objectives

• Focus on innovation through reskilling and strategy

• Reskill the retained organisation to focus on innovation and strategy and less on marking supplier organisations (selected idea)

• Named innovation leaders with credibility in their organisations (shortlisted)

• Empowerment and sponsorship from above (shortlisted)

• Get direct ideas from the “customer” (e.g. users in the business)

• Clear communications that everyone should be able to contribute ideas etc

• Tapping into the wider supplier workforce

• Swap / imbed roles between the organisations to give teams each other’s view points

• Use of Lean etc process reviews and redesign

• Ensure suppliers bring in the ideas of their subcontractors

• Planning for what roles and skills required to deliver innovation are needed

The seminar came to an end with a panel discussion and networking with drinks.

Please see the Innovation Day slides for further information and visit www.noa.co.uk for details on upcoming NOA events.

The first generation of recruitment outsourcing concentrated on doing exactly what it says on the tin – taking over the responsibility of sourcing new staff from the external market. And in most instances the best players in the sector achieved the targets set for them by their clients and everyone patted themselves for coming up with such a clever idea and for a job well done.

But the world moves on.

What seemed like a near perfect model in the 1980s and 1990s now looks as dated as a Spandau Ballet LP or a Madchester t-shirt. Today the focus is no longer just on making recruitment processes cheaper or more efficient, but on the whole spectrum of talent management. And that means, not just sourcing the very best new talent for organisations, but also developing and sustaining productive relationships with individuals, who have already worked for them, but have moved on to pastures new.

Research across the Ochre House Network, an extended think-tank, which is made up of over 650 major employers including GE, Kimberley-Clark, Lilly, Microsoft and United Biscuits found as many as four out of every five leavers would consider working for their employers again. But very few businesses have established effective systems for tracking and bringing back the best people.

At its latest meeting the think-tank concluded that an employee’s resignation and departure should be regarded as a natural and possibly temporary process rather than as a cut-off point. Organisations should be thinking in what were described as ‘Hotel California’ terms – “you can check out any time you like, but you can never leave.” Delegates cited Johnson & Johnson’s ‘boomerang’ scheme and Astra Zeneca’s open door policy as prime examples of this thinking put into practice.

It seems that too many employers seem to see resignation as the end rather than the beginning. Yet it’s much more realistic and productive to accept that it’s natural for the best people to explore new career opportunities, but can often be enticed back through ‘keep in touch’ programmes, perhaps even more skilled and able than when they left. The key to success seems to lie in a clear allocation of responsibility for such programmes and a commitment to regular, relevant, but nor intrusive contact. But so far, few companies have succeeded in building this elastic talent pipeline. And, in my view, it’s down to outsourcing partners to ensure that such pipelines stop being an aspiration and turn into a concrete reality.

Helena Parry is a director at recruitment outsourcing and talent management specialist, Ochre House.

Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, through its Financial Services global business unit, and MUREX, leader in the global market for software development in front, middle, back-office and capital markets risk management, have signed a global partnership. This responds to a sharply increasing demand from financial institutions for the industrialisation and package development of their IT systems.

This global agreement positions Capgemini as a reference integrator in financial package services. It provides a significant enhancement of the technical and functional skills for Capgemini consultants, in the Murex package suite. An intensive academic and practical training program lasting several weeks, and focusing particularly on back-office, reporting and data migration, has already been launched.

“Capgemini employs over 3,000 professionals specifically dedicated to financial markets. This new partnership with Murex, a player internationally recognised for the quality of its platform and its expertise, demonstrates our willingness to accelerate our growth in this segment. It will enable us to better respond to the increasing demand from our clients for package integration projects, which are an integral part of their pursuit of greater efficiency, cost reduction, and a greater ability to develop their business,” says Aiman Ezzat, Head of Capgemini’s Financial Services global business unit.

A contact centre run by actors has signed a deal with international relief and development agency, World Vision.

Charity members and potential donors will be able to discuss development work World Vision does with RSVP call centre agents.

The agency is one of the world’s largest humanitarian aid agencies, covering child sponsorship in almost 100 countries as well as emergency relief programmes. As a member agency of the Disaster Emergency Committee the charity is one of the first points of contact for donations at these times. Call volume can increase dramatically, during a crisis.

RSVP employs 208 agents at its contact centre in Canary Wharf, London. All members of its management team having arrived via a performing background. It employs ‘resting’ actors, as they have strong communication skills.

Dean Hurst, RSVP, operations director said: “It’s a privilege to be supporting World Vision. There’s a real feel good factor in that our agents feel that they are playing a part in making a difference in helping callers. This is a very important client for us. We would welcome the opportunity to expand our services to more not-for-profit organisations, both in the UK and on an international scale.”