Industry news

Wokingham Borough Council has signed what’s been described as an “innovative partnership” with Northgate Public Services.

The five year, £8.5 million, contract, will see the services company manage the Council’s ICT, and focus on a range of issues including improving customer service, reducing cost, and improving ICT governance.

A two year extension is also an option under the terms of contract.

A relationship already exists between the two organisations, and it’s claimed Northgate’s experience in local government will enable “rapid improvement while managing risk through a phased approach to transformation”.

“Transformation is integral to delivering the efficiencies that the Council has pledged to make,” commented Graham Ebers, general manager of business services at Wokingham Borough Council said. “We believe that our partnership with Northgate will not only provide us with a stable and secure platform on which to operate, but will also be pivotal in enabling our residents to get wider access to improved service delivery by maximising our use of new technologies.”

Ian Blackhurst, managing director at Northgate Public Services said local authorities and public services in general face “challenging times”.

“Now more than ever, we need to focus on delivering better services for less. How organisations manage their people, processes and cost to provide this is an essential part of any forward looking strategy,” he added. “We are delighted that our relationship with Wokingham Council has now entered this exciting new phase and we look forward to working with it in serving the residents of Wokingham with efficient and effective services.”

Source: http://www.publictechnology.net/sector/local-gov/wokingham-signs-five-year-ict-partnership

Microsoft has begun rolling out test versions of several new add-ons and services to its Azure cloud platform

The new enhancements are designed to deliver: improved remote desktop functionality; Window Server 2008 R2 Roles, which allows users to take advantage of IIS 7.5 Applocker among other features; multiple service administrators – Windows Azure now supports multiple Windows Live IDs to have administrator privileges on the same Windows Azure account; and a better developer and IT professional experience.

At the Professional Developer's Conference earlier this year, the company said it would deliver these services by the end of 2010.

However, some services that Microsoft promised would be available have yet to be released.

These include server application virtualisation, SQL Azure Reporting and SQL Azure Data Sync. Microsoft said these services will be made available this month.

Microsoft said that the new enhancements are designed to make it easier for customers to run existing Windows applications on Azure, and enable more affordable platform access.

The new functionality is now available through the Windows Azure SDK and Windows Azure Tools for Visual Studio and the new Windows Azure Management Portal.

Source: http://www.computing.co.uk/ctg/news/1929280/microsoft-releases-add-ons-azure-cloud-service

Business as usual for companies using remote working via Cloud computing

Temperatures expected to drop below -20 with severe weather warnings for the next two weeks issued by the Met Office. More and more companies are struggling to keep their offices open and it couldn’t come at a worse time as the UK economy gears up for Christmas.

Small companies hit hardest by loss of productivity

With over 4 million SMEs in the UK (97% of UK businesses) productivity will drop at a time when business is ramping up for Christmas, and the figure could exceed the £12bn loss figure reached during last January’s bad weather. SMEs are highly vulnerable in the current economy.

There is a major trend developing this winter as more companies have geared up to enable remote working for their workers as the cost of the technology has started to fall. However many small companies are still not geared up for staff to work from home, which means their productivity suffered.

Piers Linney, joint CEO of Outsourcery which services 10,000 SMEs in the UK said, “In our business work is something you do not where you go! The disruption caused by the recent snow has created immense problems for thousands of businesses across the UK with many employees not being able to make it into work. With more snow predicted, the current cold snap will only further underline how businesses need to find alternative ways to keep their company running regardless of the weather conditions. With large numbers of workers having to work away from the office in the harsh weather conditions, businesses are finding that they need more effective ways to stay in touch with important stakeholders in their businesses.”

As companies take advantage of the falling costs of remote working and growing concern of the cost of disruption to their central operations, allowing staff access to mission-critical documents and emails means they are seeing the value that providing remote access brings to their businesses.

A significant driver of remote working is Cloud computing and as it gains momentum and acceptance, SMEs now have access to professional business applications, through a subscription payment model which allows IT to be ‘rented’ from an IT specialist, on a per user per month basis - turning it from a capital expenditure to an operating cost, making affordable for all sizes of organisations, and not just the large corporations as was in the past.

Linney continued, “Many firms are recognising the value of real time communications tools such as instant messaging, presence information, voice and video conferencing, Live Meeting for group discussions and document sharing can bring to their businesses. Employers can see the availability of all their employees – whether they are talking on the phone, in a meeting or online – and contact them in most time-efficient way and the benefits are really brought into focus during the current weather conditions.”

Source: http://www.freshbusinessthinking.com/business_advice.php?AID=7429&Title=SMEs+could+take+the+biggest+hit+as+big+chill+costs+economy+%A31.2bn+per+day

It’s been another busy week in the halls of power at Westminster, with the government’s decision to slash the number of migrant workers allowed to come to the UK causing a great deal of consternation.

David Cameron recently claimed that the immigration cap would be introduced in a way which would be ‘friendly’ to businesses - but it still seems that It seems that for many businesses, there is a fear that they will now not be able to bring in the skilled staff that they need. So what does this mean for the outsourcing community?

The announcement of the cap comes in the same week that a study was released estimating that outsourcing from the UK could increase by as much as 600 per cent by the year 2020.

Assuming we believe these figures, and accepting that many industry experts are forecasting a boom in outsourcing over the coming years, then surely there’s a chance that this announcement will create a large skills gap for British businesses to fill?

Perhaps the government would be better off changing its focus to examine how it can provide some of the 3 million British people who are unemployed in this country with the skills to add value where it is needed?

Indeed, it’s clear that if the government decides not to invest in training for its workforce and as Britain becomes increasingly dependent on skilled workers, there is a real danger that there will be none available in this country to perform their roles - a situation which could be even more damaging to the economy.

There’s never been a time when this country has been more dependent on foreign workers. A number of industries are highly dependent on workers from abroad, while the government’s spending review means that many public sector organisations are looking to those with specialist outsourcing skills as a means of managing their costs and allowing them to concentrate on their core competencies. But how will all of this be possible if there is a shortage of skilled labour?

It’s clear that the Home Secretary’s plan to allow intra-company transfers (ICTs) for staff paid more than £40,000 per year brings its own problems. Will organisations really be keen to pay an employee from abroad an inflated salary for coming into the UK do a specialised job?

The quality of staff is vital to the success of any outsourcing relationship. By not allowing businesses to make the decision as to whether or not they pay for the right skills, or develop quality skills, there is a real danger that business efficiency could suffer.

When it comes to launching new products like bonds, mortgages and private pensions, businesses in the financial services sector have two choices: they can either apply their own brand to an existing 'white label' product that's been produced by a third-party, or else they can create a product of their own, from the ground up.

The first of these options is attractive for many reasons. First of all, there are very few overheads involved with pushing out another company's product, since the team behind the product's inception will typically handle all of the regulatory requirements, product administration and IT systems behind the scenes. As such, all that's left for the vendor to do is add its logo, organise some marketing, sell the product and collect its commission.

However, these are of course pitfalls to this approach as well. For a start, the vendor in this scenario is wholly restricted in terms of the actual details of the product being sold. In other words: 'it is what it is'. The terms of the actual investment, the pricing, the potential returns, the commission and many other factors are normally set in stone at the beginning. As such, the vendor normally doesn't have the ability to modify any of these details, and so is therefore powerless to react to changes in the market or in response to customer feedback.

Despite these drawbacks, many companies – especially new players in this market like the large supermarkets and heavily branded firms like Virgin – may feel that it is easier to take this approach than to work with an outsourcer to develop a product for themselves. And for some of these new entrants to the market, that may be true – for the moment, at least.

However, simply selling the products of another company may be short-sighted for more experienced players, such as major banks and other established financial institutions. By adopting this approach, companies like these will be missing a chance to differentiate themselves with a unique product that would truly stand out in this crowded market. Not only that, but if these organisations are currently selling high volumes of white label financial products, they are also missing out on a significant amount of revenue, since their margins would be much larger if they were selling an exclusive product that they have created and launched themselves.

Most financial institutions are actually well set up to create these sort of products for themselves: they often just need a little support. A common fear among organisations in this sector is that they will need to build whole new systems and address large-scale administration and regulatory requirements in order to launch a new financial product of their own, but that is not always the case. By working with a specialist outsourcer, financial institutions can delegate the majority of this responsibility, and focus instead on creating an exclusive product that is in tune with its culture and brand, that is truly unique, and which will appeal to its own individual customers.

Tony Collins, CEO, OPAL

Businesses can cut their energy consumption by 91% by moving their on-premises applications to the cloud, research by US analyst firm Nucleus Research reveals.

The firm reached its conclusion after comparing the energy consumed by customers of Salesforce.com with the energy consumption of equivalent applications run in-house.

Salesforce.com customers saved the energy equivalent of 11 barrels of oil every hour, the study concludes. Businesses that move other applications into the cloud, could make similar savings.

"We looked at Salesforce because they have a diverse user base in terms of size, geographic location and how they use the application," said Rebecca Wetteman, Nucleus Research vice-president.

"Our view was that this was a good first proxy for customers looking at carbon consumption to estimate what the benefits of moving to the cloud would be," she said.

Cloud computing suppliers can get better deals on hardware, optimise their applications for the cloud, and load-balance so customers can gain access to computing power only when they need it, said Nucleus.

For organisations with a green IT mission, simply moving to cloud computing provides both a financial return and a tangible environmental benefit, the study concludes

Businesses need to identify what applications are best suited to the cloud, if they want to cut energy costs. Its best to avoid putting applications that have had a lot of customisation into the cloud.

"Those applications that are frequently used by a lot of users, those where you need remote or distributed access, those where you need a lot of flexibility to make changes, are likely to be candidates that generate green and economic benefits," said Wetteman.

Source: http://www.computerweekly.com/Articles/2010/12/01/244275/Save-90-on-energy-by-putting-applications-in-the-cloud.htm

Change is sweeping through the outsourcing sector. Often seen as the preserve of larger companies, outsourcing is being embraced by an increasing number of even the smallest SMEs as their recognition grows of its business benefits. Indeed, with the downturn and its lingering after-effects still weighing down on business performance, 2011 could be the year when outsourcing really comes of age among the UK’s four million SMEs. To reap fully the benefits though, SMEs need to have a keen appreciation of the pitfalls as well as the positives of outsourcing.

Business surveys, polls and research all point at an increasing take-up of outsourcing by SMEs. The IT sector, in particular appears to be benefiting. For example, a poll by online firm PeoplePerHour.com on IT outsourcing, revealed that close to 40% of small business owners plan to increase their use of contract/freelance IT professionals.

This marked change in attitude by SMEs partly reflects changes in the outsourcing sector. Traditionally, companies handed complete control of specific business functions to carefully vetted third parties on contracts that included detailed service level agreements and were of a long-term nature. This typically appealed to large companies as it required greater certainty, planning and commitment – and could also be expensive.

However, with the economic and business activity still depressed and corporate budgets tightening, outsourcing has become a more affordable, less structured, more flexible solution, which has increased its popularity among SMEs.

A small business owner’s time is often best spent on doing the tasks and implementing the actions that he is best suited to do rather than try and become a master of very single aspect of his/her business. And for growth businesses, constantly evolving and changing, outsourcing makes sense, as it allows them maximum flexibility to deliver on their expansion goals.

SMEs are in an excellent position to capitalise on the changes in the outsourcing market at a time when the focus on finance and service levels has never been higher or more intense. Outsourced services for SMEs can certainly deliver a range of business benefits, such as:

- specialised professionals committed to delivering a high-quality service;

- greater levels of efficiency as non-core services are outsourced;

- lowering of direct staff costs;

- transparent pricing structure on particular services for greater budget certainty.

For many SMEs, having the dedicated professionals and support teams that outsourcing firms can provide on particular functions and services is a luxury that they cannot afford internally. The greater level of expertise typically leads to greater efficiency, which also allows direct costs savings from reduced full-time staff and more flexible working arrangements.

Clear, standard pricing, which a outsourcing functions or services can deliver, is also of great benefit to SMEs, which are typically less equipped to manage volatile price moves from suppliers and core goods providers. A good outsourced offering can also minimise such things as errors on contracts, which can often incur penalty charges.

The more sophisticated way in which outsourcing firms offer their services is also more appealing to SMEs. Best-practice outsource companies now have more varied offerings, that allow companies to be at a modest level and then build up the level of service that they require as their business grows and becomes more complex and sophisticated.

As much as the positives are appealing, SMEs need to be aware of potential pitfalls too. For instance, SME CEOs need to be very clear about what they want the outsource company to do otherwise the process could complicate tasks and increase costs rather than the reverse. And even though a service may be outsourced, SME managers should not totally abdicate any role as there is still a need to monitor and ensure standards are being met and work is being done to the agreed level.

Overall, in such a challenging economic and business environment, outsourcing could help many SMEs simply just to survive as well as help underpin their future expansion plans. Like all business processes though, it needs to be carefully thought through, risk and rewards assessed and objectives and outcomes carefully considered. Just opting for the cheapest quote from a beauty parade of outsourcing companies, for instance, is not necessarily the best way forward even if superficially it may seem the easiest and most attractive. Cheap can often be expensive, in business as well as in life.

Source: http://www.outsourcemagazine.co.uk/articles/item/3647-smes-should-not-be-shy-of-embracing-the-business-benefits-of-outsourcing

Finnair has threatened to outsource some operations to lower cost countries after cabin crew launched a strike that left thousands of passengers stranded and ended the company’s hopes of returning to profit this year.

The Finnish airline, known for its strong long-haul network between Europe and Asia, grounded more than 100 flights on Tuesday, with a further 200 cancellations expected on Wednesday, after cabin crew walked out in a dispute over pay and conditions.

Mika Vehvilainen, chief executive, warned union leaders that Finnair’s current cost structure was unsustainable.

“It is tragic that parties are striving to hold on to old terms and conditions in an industry that is changing dramatically and irrevocably,” he said.

The airline had launched a strategic review to determine if some operations could be carried out “in locations with a lower cost level,” he added.

Analysts said the comments were intended to increase pressure on unions to compromise as Finnair tries to strike a favourable deal with cabin crew that would set a precedent for crucial negotiations with pilots planned for next year.

Finnair is one of several European airlines facing labour problems as the industry struggles to reduce its bloated cost base. Cabin crew leaders at British Airways this week announced plans for a fresh strike ballot after a series of costly stoppages this year.

Finnair said it would lose up to €2.5m ($3.2m) a day during its strike and warned investors to expect a full-year operating loss, having previously forecast a small profit.

Analysts said this indicated the airline was expecting protracted disruption.

The Finnish cabin crew union said one of the main sticking points was time off after long-haul flights and accused Finnair of making “unreasonable” demands.

The airline, 56 per cent owned by the Finnish government, has invested heavily in its long-haul network to promote its Helsinki hub as a gateway to Asia. By next summer, Finnair plans to fly 74 flights a week to 10 Asian cities.

There have been signs that the strategy could be working, with revenues up 26 per cent from last year in the third quarter to produce the company’s first quarterly profit for almost two years.

Pasi Vaisanen, analyst at Nordea, said the challenge was to maintain a competitive European network to feed its long-haul routes.

Source: http://www.ft.com/cms/s/0/26e65f4c-fcaf-11df-bfdd-00144feab49a.html#axzz16qyWZ7yU

Birmingham City Council has extended and expanded its existing contract with outsourcing company Capita in a deal worth about £300m. The original contract, delivered through the organisations’ joint venture of Service Birmingham, has been extended to provide ICT and contact centre services by five years to March 2021.

In addition, Service Birmingham will deliver the council's revenues service for ten years from 1 April 2011.

More than 150 council revenues staff will transfer to Service Birmingham under TUPE regulations.

The extension of the partnership is estimated to generate savings of £55m for the council over the lifetime of the contract.

Councillor Randal Brew, cabinet member for finance at Birmingham City Council, said: “At a time when we are facing an unprecedented financial challenge, we need to focus on driving efficiencies and getting value for money. This deal represents an excellent opportunity to achieve both.

"We have a successful relationship with Capita through Service Birmingham and we are confident that extending and expanding this partnership will mean we are able to continue to modernise services and meet the challenges we are facing.”

Equaterra’s 2010 UK IT Service Provider Study Ranks Wipro number 1 in Client Satisfaction, Applications Management, Infrastructure Management, Price and Governance.

Wipro Technologies, the Global Consulting, System Integration and Outsourcing business of Wipro Limited, today announced that Equaterra, independent sourcing advisors in more than 60 countries, shows Wipro as a leader for client satisfaction in its detailed UK IT service provider performance study. This annual report, recognised today as the most extensive and representative 'perception study' on the issues of Information and Communication Technology (ICT) sourcing, evaluated more than 650 outsourcing contracts held by over 220 of the UK’s top IT spending organisations. The study evaluated 25 service providers on the basis of responses from the CIO, CFO of the client organisations.

Wipro achieved 80% client satisfaction level amongst those surveyed, an 8% increase y-o-y, moving from 8th position last year to 1st place in 12 months. In addition, Wipro also ranked 1st on Pricing and Governance and also achieved Top 3 status for Quality, Flexibility, Relationship Management and Client Referrals.

“We are delighted by the results of this important UK market study” says Jeff Heenan Jalil, Head of Europe, Wipro Technologies. “We appreciate the recognition our clients have awarded us. We will continue to increase our investment in our people, building our industry capabilities and in expanding our footprint into new geographies. These results clearly demonstrate how an empowered team, with strong end-user engagement, can make a difference within what remain tough economic conditions.”

The study also confirmed Wipro’s strategic position in the UK market, with a 72% score on the strategic relationship KPI highlighting Wipro’s long-term commitment to the client relationship and end-user business objectives. Wipro’s No.1 ranking for pricing and governance sets the foundation for Wipro to deliver more quickly the benefits of an adaptable enterprise sourcing platform. The IT major’s continued investment in consulting and technology services has also been awarded with the number 1 satisfaction ranking in Infrastructure Management.

With 35 offices and 20 delivery centres spanning both Western and Eastern Europe, Wipro provides consulting, System Integration and outsourcing services to a broad client-base across multiple industries.