Industry news

Convergys Corporation, a global leader in relationship management, is seeking candidates to fill approximately 370 open positions at its Barreal de Heredia and Ultra Park II contact centers in Costa Rica.

New employees proficient in Spanish and English will provide customer service and technical support for three Convergys clients in the cable and financial services industries.

Convergys, a FORTUNE 1000 company traded on the New York Stock Exchange, offers employees comprehensive paid training, as well as a competitive wage and benefits package.

“Due to the very high levels of quality and professionalism provided by our current employees in country, increasing numbers of clients are requesting to locate their customer service operations in Costa Rica,” said Jason Brown, Senior Director of Operations for Convergys in Costa Rica. “Convergys is committed to delivering superior service to its clients’ customers and we’re delighted to offer these bilingual positions to anyone in Costa Rica interested in starting a career at Convergys.”

As companies struggle through the current austere times, many are investing in processes that will be cost-effective and beneficial in the long-term. 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 mis-interpreted term in outsourcing. It seems everyone wants a slice of the pie, but many are unsure of what the pie actually consists of..

Defining Innovation

It is extremely hard to narrow down one definition of innovation in outsourcing. One man’s innovation is another man’s day-to-day activity.

The following points were raised at the NOA’s end user forum:

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

• Innovation is not applicable to all service provider relationships. For example no innovation expectations may exist for smaller or commodity relationships.

• Innovation can be both incremental and radical. Innovation is not continuous improvement.

• Innovation is new ideas or ways of working to drive commercial gain and or competitive advantage.

According to Tony Morgan, Chief Innovation Officer at IBM: “The definition of innovation is flexible - it changes and evolves. From an outsourcing point of view, the supplier and the end-user need to work through, develop and agree a working definition of innovation to make sure their objectives are achieved.”

The NOA innovation steering committee meets on a regular basis to discuss potential research into innovation, share best practice and work together to produce a NOA innovation framework. At the last steering committee on the 13th April, the following discussion points were raised:

• Innovation has to be flexible and is not needed for every project and collaboration. The management of innovation is critical

• Who sets innovation vision? A consistent definition is needed

• Innovation in multisourcing is more prevalent

• Getting suppliers to work together to maintain delivery of innovative services is crucial

• Contractual obligation for suppliers to attend ‘innovation workshops’ can be seen as best practice.

• Theme of ‘collaboration’ is ongoing and essential in innovation

• Cloud gives opportunities but it needs to mature before it becomes viable for corporate use

• Suppliers are driving the way forward with innovation through best practice

• Increase Cloud innovation. Cloud without governance

Innovation Framework

There has been much talk about the development of an innovation framework. To date, thinking has been that this framework is comprised of two distinct areas:

1) The hygiene factors for innovation: essentially the processes, the way in which a problem is approached, which can be included in contracts.

2) The Governance structures, which are used to manage and progress innovation. The innovation management process itself provides the operational governance framework and a structured approach to fast track projects through idea generation and selection, development, confirmation of sponsorship and business case validation and on into hand-over to project delivery and tracking of benefits realisation.

On the other hand, many believe that innovation shouldn’t be put into a framework and ‘managed’ as it should naturally evolve from a partnership.

Simon Briskman, FieldFisherWaterhouse, opens the debate: “Putting innovation into a contract can often be a problematic approach. Many companies just want innovation to be included without understanding what it is. Procurement asks suppliers to show innovation and include the requirement in an RFP. But these requirements are generic and so that makes it very difficult for a lawyer to translate into the contract, outside of requesting continuous improvement requirements and reducing the price year on year.

“If the user can state the exact innovation they are looking for and how to transform it, then the contract can be more specific and a Governance structure built up to work and so make the contract an enabling framework to deliver that innovation – this is however a rarity.”

A modern outsourcing relationship should help a business to innovate whether metrics are set from the start or organically produced as a product of the relationship. However a framework can assist outsourcing partners to determine their objectives and formalise the innovation achieved. Developing metrics will also help to share the results and prove the worth of outsourcing-led innovation.

As I suggested in last week’s blog, it seems as though the wind of change is blowing hard through public sector procurement processes at the moment - and large suppliers of outsourcing are feeling the full force of the gale.

Last week’s announcement from the Cabinet Office, in which it pledged to bring down what some have referred to as the ‘ICT oligopoly’, is clearly bad news for larger suppliers of outsourced IT, many of which have had the government locked into contracts for a number of years.

Clearly, the move to open up the procurement process is aimed at increasing competition, in terms of both quality of service and price, while allowing smaller organisations to take a slice of the public sector pie. But is it necessarily a good idea to ostracise larger suppliers completely?

At present, it’s thought that 18 large ICT suppliers control as much as 80 per cent of Britain’s public sector contracts, many of whom look set to have the rug pulled from beneath them as part of the government’s focus on supporting SMEs with a view to, potentially, multi-sourcing, with a number of smaller suppliers.

It’s clear, then, that this strategy is not without risk. After all, many large, established suppliers have a solid, established infrastructure, with resources which allow government departments to deliver projects in a fraction of the time it would take other suppliers.

Perhaps, moreover, there’s a much greater risk that in opening up the procurement process to smaller suppliers, who have little or no experience in dealing with public sector procurement, we’re running the risk of throwing the baby out with the bath water?

It’s worth remembering that large suppliers of ICT outsourcing have been dealing with the public sector for many years, which means that they have an increased understanding of its requirements, and what it needs to make the relationship a success.

Moreover, it seems to have gone unnoticed by many that the Cabinet Office’s announcement related largely to ICT, which typically refers to the provision of hardware and software.

It’s worth remembering that most major outsourcing and shared services contracts are also dependent to a large extent on building relationships and understanding business processes, which, if not effectively established, can lead to operational inefficiencies.

If the government is to ditch most of its larger suppliers and open the procurement process up to SMEs, surely it will be vital that there is an element of knowledge transfer in place for all of these relationships to ensure that the transition causes as little trouble as possible?

Of course, by opening up the procurement process to smaller suppliers, the theory goes that efficiency of service should improve, as the public sector will have more options in terms of which organisations it partners with.

Even so, it’s worth recognising that unless the short-term transition is managed effectively, the government’s shift in procurement strategy could cause as many problems at it solves…

The Capita Group Plc ('Capita') has acquired Right Document Solutions Holdings Limited ('RDS') for a consideration of £30m on a cash-free, debt free basis, plus a deferred consideration of up to £10m.

The acquisition provides a good strategic fit with a number of Capita's professional services businesses by building upon existing design, bulk print and document management capabilities. Established in 1988, RDS provides document consultancy and managed print services through long term contracts with a range of public and private sector clients. Clients include financial services companies, legal firms, media businesses and educational institutions.

RDS made a pro forma operating profit of £4.4m on turnover of £12.2m in the year to 30 June 2010. Commenting on the deal, Paul Pindar, Capita Group Chief Executive Officer, said: "The UK market for print solutions has been estimated to be worth around £650 million in 2010 and is shifting increasingly towards managed print services. The acquisition, alongside Capita's existing print and document management services, will ensure that Capita is well positioned to participate comprehensively in this market. These services also play an integral role in many of our businesses and contracts and we can therefore provide further service efficiencies to both Capita and its clients by delivering these services directly."

Paul Gillett, Managing Director of Right Document Solutions, said: "We have a strong track record in delivering customer value through reduced costs and improved efficiencies. I am confident that combining our core strengths, especially those in managed print, with Capita's capabilities in wider document related services will differentiate our market proposition and give us a range of compelling unique selling points. Being part of the larger Capita Group will allow us to reach our full potential across both private and public sectors."

As part its commitment to change the way that Government does business, the Minister for the Cabinet Office, Francis Maude has outlined new plans to improve the way that Government deals with its major suppliers.

From now on, ‘Crown Representatives’ will ensure that Government receives the best value for money, by ensuring that the Government acts as a single customer. They will put an end to the days when departments were able to sign up – without any central control or coordination - to a series of different contracts with the same supplier.

The Crown Representatives group will also be responsible for developing ‘emerging players’ to the market, ensuring best value through new competition for public contracts.

These appointments follow the renegotiation of contracts with over 50 suppliers since July last year. The renegotiations have saved the Government £800 million in 2010/11.

Francis Maude said: “Our priority is to make sure the taxpaying public gets the best possible deal - and one of the ways of doing this is to ensure we’re really using the scale of government to push down prices. That is why any dealings with our big suppliers have to be coordinated and our approach has to be strategic – the new Crown Representatives will make sure this happens.

“Today’s announcement shows that we were serious about changing the way that Government does business. We have already saved £800 million since May by starting to establish Government as a single customer. But, in doing this we also recognised that we need better, more efficient relationships with suppliers over the long term."

Fujitsu, one of the world’s largest technology and communications companies, has announced plans to work in collaboration with Virgin Media, TalkTalk and Cisco to deliver next generation internet services to 5 million homes in rural Britain.

The Fujitsu open access wholesale network will be underpinned by Cisco’s world leading technology. Virgin Media and TalkTalk intend to access wholesale products via this network in order to retail next generation services to customers in remote parts of the UK. The network will also be open to other service providers on wholesale terms.

The proposals will provide future-proofed connectivity to 5 million households and beyond that would otherwise be unlikely to benefit from commercial investment in next generation digital networks.

Duncan Tait, CEO of Fujitsu UK and Ireland said: “There is a unique opportunity for the UK to re-establish itself as a world leader by having the world’s most advanced fibre network. If done correctly this can be a key vehicle to accelerate recovery in the UK and bring genuine choice to generations of communities starved of participating fully in the UK economy. We believe our approach, in collaboration with these major industry leaders, will provide a future proofed network for at least the next 20 to 30 years.”

SITA to provide BAA with all telecom functions as part of Capgemini consortium improving information sharing across airports

SITA, the world's leading specialist in air transport communications and IT solutions, has announced that it has joined the consortium led by Capgemini UK plc to provide core IT services to all six BAA-owned UK airports including London Heathrow, the UK's only hub airport, in a €120 million outsourcing deal.

Rob Watkins, SITA Regional Vice President for Northern Europe, speaking at the Aviation ICT Forum 2011 in London, said: "This is a major outsourcing win. SITA, as part of the consortium, will provide ITIL based service management, contract management and transformation services across the six airports. We will orchestrate and manage telecom services across the whole BAA airport IT network environment. The five-year agreement covers the direct provision of network, telecommunications and radio services to six major airports including service transition, transformation and revenue generation. In addition to cost savings, outsourcing IT to an industry specialist like SITA will give BAA access to a much wider range of IT experience and know-how, allowing it to focus on its core business."

Minister for the Cabinet Office Francis Maude and Business Minister Edward Davey have outlined plans for a new Public Data Corporation.

The Corporation will, for the first time, bring together Government bodies and data into one organisation and provide an unprecedented level of easily accessible public information and drive further efficiency in the delivery of public services.

Supporting the Government's growth agenda, it will open up opportunities for innovative developers, businesses and members of the public to generate social and economic growth through the use of data.

The Corporation will also have the potential to attract investment, reinforcing and accelerating the development of these world class assets and their contribution to the knowledge economy.

By bringing valuable Government data together, governed by a consistent set of principles around data collection, maintenance, production and charging, the Government can share best practice, drive efficiencies and create innovative public services for citizens and businesses. The Public Data Corporation will also provide real value for the taxpayer.

Francis Maude said: “We have entered a new era of transparency in Government and have already made an unprecedented level of data available. But we want to go further and faster, this agenda is more important than ever.

“Public sector information underpins a growing part of the economy. The technology that is around today allows people to use and re-use this information in new and different ways. The role of Government is to help maximise the benefits of these developments. At present many state agencies face a conflict between maximising revenues from the sale of data and making the data freely available to be exploited for social and economic gain. Creating the PDC will enable the conflicts at the least to be managed consistently with a view to opening up access, and at best to be eliminated."

A consortium of water companies is inviting tenders for call handling services during major operations.

The contract is to ‘provide a consortium of water companies with a call handling contingency plan’ in the event of a major operational incident that causes an unexpected increase in incoming customer calls. This could be during a burst water mains when customers are trying to call suppliers.

The members of the consortium are Veolia Water East, Veolia Water Central, Bristol Water, South Staffs Water, Scottish Water, Cambridge Water, Dee Valley Group, South East Water, Wessex Water, Northumbrian/Essex and Suffolk Water.

CSC has announced that it has signed a seven-year information technology (IT) outsourcing contract renewal with Tryg, the second-largest insurance company in the Nordic region. The new agreement expands the scope of the existing contract to include new services and extends to include Tryg’s most recent acquisitions in Finland and Sweden with Moderna. This extension, which was awarded during CSC’s fiscal 2011 fourth quarter, adds $348 million to the previously announced contract, which now runs through December 2017, if all options are exercised.

As part of the agreement, CSC will deploy a series of innovative new technologies including CSC Dynamic Desktop and private cloud technologies that will provide further IT cost efficiency and flexible support for the transition and business development of Tryg.

Under the terms of the contract, which supersedes the previous agreement signed in 2007, CSC will continue to provide IT infrastructure services, including help desk, mainframe, midrange, network, Web hosting, project work, print and distributed computing. These services will support approximately 4,500 users at Tryg locations in Denmark, Norway, Sweden and Finland. These services have resulted in continued cost reductions over the course of the previous seven-year partnership, while delivering high-quality IT services to support Tryg’s business and its partners.

“We are pleased to confirm our partnership with CSC in signing this new agreement to support our insurance activities across the Nordic countries,” said Morten Hübbe, group chief executive officer, Tryg. “It is important to Tryg’s future business development that we establish an affordable and world-class IT support with the geographical breadth and depth that matches our ambitions.”

“This expansion and extension represents a milestone in our partnership with Tryg,” said Andy Williams, president of CSC’s Northern European Operations. “This renewal is testament to the benefits Tryg has received from outsourcing. CSC’s expertise and growth within the financial services industry will provide Tryg with the next generation of innovative, flexible and cost-effective IT services to support its business agenda.”