Industry news

With plans for a new uniform benefit systems underway, the National Audit Office's latest report on the DWP's computer systems doesn't make for encouraging reading.

According to the NAO. many of the administrative failings at the Department for Work and Pensions (DWP) are down to its IT systems. The DWP overpaid claimants by an estimated £1.1 billion over the past year, and made underpayments of £500 million.

The NAO noted that in 2007 “the Department introduced a number of IT system enhancements, such as a customer information system to share common data across existing IT systems in order to reduce the risk of administrative error.”

But it found: “Despite these efforts, the Department’s commitment has served only to hold the level of error steady, not to reduce it. Between 2006-07 and 2009-10 there has been no discernible decrease in the estimated cost of overpayments or underpayments due to administrative error as a percentage of benefits expenditure.”

In reality many DWP workers have to use IT systems that do not interoperate and communicate, according to the NAO. "Different computer systems were used to process benefits but they did not communicate well with each other," said the report. 'Staff reported that human error was also a key factor in administrative errors. By this they meant a transcription or typographical mistake in data entry.”

The Coalition Government's plans for a new universal benefit have been described as not being dependent on “mega IT systems”. But last week it was revealed that delays to HMRC IT roll out would likely impact on the delivery of systems to support the benefits scheme.

Source: http://www.publictechnology.net/sector/central-gov/dwp-shortcomings-tied-back-incompatible-ict

Brewing giant SABMiller has signed a multimillion-pound outsourcing deal with HP.

The maker of Grolsch, Coors and Peroni has contracted HP to provide support for its users and IT infrastructure as part of a project to save money and standardise IT across the regions in which the brewer operates.

The company will see its servers and storage consolidated and virtualised, using HP's BladeSystem products, plus the provision of services to cover helpdesk, desktop management, and Exchange email support.

The contract is worth more than $100m and will last for eight years.

Andrew Derodra, business development director at SABMiller Europe said, "We look forward to a productive business partnership."

Source: http://www.computerweekly.com/Articles/2010/11/25/244121/Brewing-giant-SABMiller-signs-100m-HP-outsourcing-deal.htm

Moving IT to the public cloud could cost IT departments more than running services in-house, research from analyst firm Ovum has revealed.

Despite claims from suppliers that cloud computing will inevitably cut costs, businesses could find themselves having to pay more, said senior analyst Laurent Lachal.

"Every time you talk to a service provider, they tell you buy my stuff because it will lower your cost and boost your profit. It might be the case but you better do your calculations first," he said.

In reality, IT departments will need to invest heavily to integrate cloud services into their own IT structures, if they are to benefit from the flexibility the cloud offers.

"This integration and orchestration requires a lot of effort," he said. "You have got to think about integration at all levels, governance, management, process and data integration."

At the same time, IT departments will come under pressure to upgrade their own systems to match capabilities of the cloud, Lachal warned.

"One of the key challenges of the public cloud is for IT to keep up with the cost transparency and ease of use of the cloud, " he said. "In the public cloud, you know what things cost, while cost transparency is not something that many data centres yet deliver."

"The move from a data centre that is funded on the basis of an annual budget to a data centre that is funded based on the use of IT assets is a big challenge," he said.

Source: http://www.computerweekly.com/Articles/2010/11/25/244127/Organisations-underestimate-the-cost-of-cloud-computing.htm

Hertfordshire County Council has signed an eight year, £200 million deal with services giant Serco for the provision of a range of front and back office services, including ICT – a deal it hopes will deliver as much as £25 million annual savings over the period.

The contract also covers a range of other business functions such as finance, payroll and HR, support services, customer contact centres and occupational health.

All resident-facing services will continue to be based locally using the council’s existing offices but over 400 staff are being transferred to Serco as part of the new service arrangements.

Hertfordshire said it expects the new system make it easier for people to access its services and will make a significant contribution to project budget savings. It will also provide a sound platform for local shared services.

"The new arrangement with Serco will allow us to make our services even more efficient and save taxpayers' money by sharing the contractual arrangements with district and borough councils and the police authority in Hertfordshire,” commented David Lloyd, executive member for resources.

“This means that they have the opportunity to buy into the contract should they wish to do so and share services such as IT, payroll, HR and call centres."

Source: http://www.publictechnology.net/sector/local-gov/herfordshire-200m-outsourcing-deal-serco

To celebrate best practice in outsourcing, the NOA held a breakfast seminar on Wednesday 24th November which featured presentations from some of the winning entries from the 2010 NOA Awards.

Dominic Dryden, Partner, Outsourcing Group, Olswang LLP provided the first case study and explained how Olswang integrate innovation into a partnership, explaining that: “Best practice only comes with investment and sheer hard work. We have been engaged by businesses with emphasis on sharing ideas and innovation.

“Through our own workshops we have realised that best practice is an evolution and innovation continues to be the hot topic. We have put together our own outsourcing health check and innovation life cycle to assist with the management of effective partnerships.”

It became clear from the presentations that there were a number of recurring themes, including governance, innovation and relationship management. It was also noticeable that all case studies emphasised the importance of culture in outsourcing and offshoring as well as the significance of having the right people in the right jobs.

Mark Hall, Deputy CIO, HM Revenue & Customs said: “A true partnership is one which is formed from shared success and shared risk. Organisations do business with people not contracts. Putting the emphasis on the relationship is a huge challenge for many businesses but it is absolutely vital for success.

“Measures tend to drive behaviour in partnerships and are very important to use. Joint key performance indicators are changed regularly throughout the contract in line with our requirements therefore they are not contractual.”

Kevin Devoy, Procurement Manager, Centrica, explained the benefits of their ‘Managing Effective Partner Relationship Programme’.

“The programme touches on the theoretical side of building effective partnerships but undoubtedly the key reason why the programme has been so successful is that it focuses on the use of real examples to fully develop the learnings within each of the modular elements.

“Each modular element has been designed to encourage learning through interactive team exercises, presentations and debate. The programme has been designed to encourage delegates to bring their issues to the table in terms of examining both in pre-work and during the programme how their relationships work against best practice and practical experience/input.”

Questions from the various attendees (end users and suppliers) dealt principally with contract lengths, flexibility, relationship management, building in innovation, renegotiation and cultural issues.

Yvonne Williams, Representative for Individual Professional Development, NOA, concluded the seminar with an observation on key themes. “It is interesting to note that every presentation this morning has mentioned the softer skills, relationships and communication. These have now come to the forefront of outsourcing and show how the industry is evolving and maturing.”

The importance of having a quality IT system is especially evident when it stops working properly: downtime and disruptions can lead to business loss, while inadequate security measures can cause data breaches, leading to costly fines and reputational damage.

But high-quality IT support is not always seen as affordable, especially when an organisation needs a bespoke, hyper-efficient, extremely secure service. In reality, sharing an IT Service Desk with other organisations within the same sector is an easy way to gain access to high levels of IT skills and specific expertise at a reduced cost.

Organisations may be concerned that, with this solution, their data and intellectual property are not secure, or that shared support personnel will give reduced attention to their business or perform poorly.

In fact, the structure of a shared service desk should guarantee an improvement in service levels compared to an in-house desk. Service Level Agreements and Key Performance Indicators ensure the provider is hitting the levels your organisation requires, and performance is improved thanks to staff trained to follow best practices and experienced in your specific industry. Since the shared aspect of the service means all of this will be delivered for a reduced cost, the benefits in terms of cost-efficiency become apparent.

However, a shared service is not for every organisation. The primary benefits are seen when the sharers are similar organisations, but it might not create strategic advantage over competitors. Due to this, in industries such as retail or banking a shared service may not be appropriate; but for organisations in the public sector or industries where collaboration is commonplace, such as Law firms, the likelihood of competitive advantage being affected is slim.

While clearly not applicable to every organisation, a shared services model bypasses the dangers typical of services that achieve cost-reductions by cutting down on quality, guaranteeing instead an efficient service at a reduced and affordable price.

Pete Canavan is Head of Support Services at Plan-Net

About Plan-Net

A specialist in transforming IT operations into high-performance, cost-efficient platforms for business success, Plan-Net works with clients of all sizes and needs to help them maintain high levels of service while still meeting demands for a reduction in IT spending.

The NOA’s 8th Annual The Sourcing Summit was held on the 16th and 17th November at Grange St Pauls, confirming its reputation as the UK’s leading conference focusing on outsourcing and offshoring strategy.

The conference was focused on developing mature outsourcing partnerships and driving innovation to deliver success. The programme reflected developments across the sourcing sector, examining the rise in innovation and the renewed focus on multi sourcing.

Martyn Hart, Chairman of the NOA, opened the summit and said: “It is always a pleasure to open this summit. These are very interesting times for outsourcing and I hope you will all gain some invaluable insights from the combination of expert speakers and superb networking opportunities which we have arranged for you. We have a very exciting programme this year including high-level case studies, a best practice exchange, workshops and peer-to-peer networking discussions."

In the context of the current economic climate, the conference provided an excellent insight into methods to drive real business efficiencies through outsourcing.

Tuesday was arranged into four sessions; Outsourcing – lessons learned from a maturing market, driving and delivering innovation in outsourcing, streams and crafting and renegotiating effective contracts. Industry experts delivered presentations for each topic before taking part in a panel discussion.

The streams were an opportunity for delegates to choose from three outsourcing workshops which were facilitated by business experts and involved case studies as well as active discussions. The streams consisted of business process outsourcing, moving into the cloud and a NOA practical insight, solutions, and actions workshop.

Wednesday was arranged into three sessions; Developing an effective partnership – the human factor, peer to peer networking sessions through zones and offshoring and near-shoring – what is the future?

Delegates were able to choose one of three discussion zones, each facilitated by a NOA board member. Outsourcing in financial services, corporate social responsibility and environmental concerns and SME outsourcing.

The interactive and informative conference was attended by a variety of organisations involved in outsourcing including Siemens, Carphone Warehouse, BP, Tube Lines and Intetics. Highlights included the cloud workshop, Elexon and JLT case studies, CSC presentation on an innovative commercial model and all panel discussions.

In the last week we’ve seen Prime Minister David Cameron announce plans to redevelop London’s East End into a ‘Tech City’, with the construction of a £200 million network of technology and innovation centres to rival Silicon Valley.

The thinking behind this is clearly that a technology hub of this sort will help to encourage foreign investment and give the economy a boost.

It seems that research and development is one area which will act as a key driver to helping the private sector pick up new contracts and create new jobs in the months and years ahead, especially important in the wake of the recent public sector cuts.

Indeed, a technology centre in London can only help to cement the UK’s position as a top research and development destination, with leading technology players such as Intel already expressing an interest in setting up base in East London.

It’s clear that Tech City is being planned with a view to , leading more businesses to recognise East London as an area with access to leading innovations and technology to outsource their work to.

But what do business’s gain from outsourcing their research and development? There are a number of benefits for end users, including access to knowledge, resources and experts which they may not have or need in the long term.

Indeed, outsourcing product development to specialists can offer a more productive method to businesses who would otherwise have to undertake a project themselves - which can prove problematic when the core skills are not in place and more expensive.

David Cameron is keen to use Tech City to improve the economy by using it to encourage business and investment. Of course, all of this is good news for the outsourcing industry with the prospect of international businesses using the UK to source high level, fully trained technology professionals.

However, it’s not just about stimulating growth in the UK economy - it’s clear that a growth in onshoring to the UK can also offer tangible benefits for business.

For instance, onshoring services here could provide greater cost efficiencies for businesses, wherever they are, as they look for ways to beat the effects of a global recession, these efficiencies will help to stimulate their markets which in turn will boost trade for everyone.

So, it seems that the future for UK-based technology outsourcers is bright, and Tech City will be a major part of that. It’s important to understand that a technology hub in London is not only good news for outsourcers, but also for British business in general - and the economy as a whole, too.

The Royal Liverpool and Broadgreen University Hospitals NHS Trust says it has boosted efficiency via early use of a new portal that brings patient data from multiple sources into one place.

"Just being able to view all critical information about a patient on one screen is a revelation," said Patrick Chu, consultant haematologist at the Royal Liverpool and Broadgreen University Hospitals NHS Trust. "The use of portals is clearly the way forward to help increase efficiency, improve treatment and diagnosis and patient safety."

The trialled system - the Clinical Information Portal from supplier CSC, implemented with technology from Carefx - has been shown to save around 30 minutes average clinician time during its 60 day evaluation.

The portal is letting healthcare professionals get a single screen view of a patient's notes, collated from information currently held in disparate clinical and administration systems across the trust, such as the trust's PAS (patient administration system) and PACS (picture archiving and communications system).

It has also allowed consultants, their registrars and specialist nurses to consult with patients by viewing patient medical history, key treatments, referrals, diagnosis and test results electronically rather than by paper case notes.

The system also shows promise for reducing admin load on nursing and back office staff, who may end up spending much less time moving case notes around and searching for and preparing case notes.

The pilot is also significant as it forms part of the early evaluation stages of the NHS Interoperability Toolkit, a Connecting For Health initiative to connect disparate systems and data sources instead of replacing them.

The portal was tested in the hospital's haematology and dermatology departments which then extended to include cardiology and renal.

The trial was to see if Royal Liverpool and Broadgreen could eventually find a technology-based replacement for paper case notes - which feedback suggests is now highly achievable.

"We are aiming to begin full roll-out of a portal system at the beginning of 2011," added James Norman, Director of IM&T at the Trust. "We are excited about the efficiencies and opportunities that a portal can bring to the trust through the elimination of case notes and improved access to the right information at the right time for clinicians."

Royal Liverpool and Broadgreen University Hospital Trust is one of the largest in the North of England, with an annual budget of over £400 million, more than 5,500 staff and almost one million patients being seen every year.

Source: http://www.publictechnology.net/sector/nhs-health/new-portal-csc-gets-green-light-royal-liverpool

Microsoft has abandoned efforts to make profits in the US out of its “HealthVault” cloud computing system designed to store personal medical data, because of the complexity of the country’s health system.

Peter Neupert, corporate vice-president for health, told the Financial Times the benefits to Microsoft in the US of HealthVault was simply to “increase the brand relationship” by raising its image with customers as “important, critical and trusted”.

HealthVault provides a way for individuals to store details of their medical consultations, prescriptions and results of home-based medical monitoring in the “cloud” so it can be easily read, transferred and analysed.

Mr Neupert said Microsoft would not make any charge to US users because of the fragmentation of the system, with information managed by different health insurers and providers.

The decision highlights the commercial difficulties for software providers moving into medical applications – even in the world’s largest healthcare market with a high number of users with online access. The company has decided not to charge users directly for HealthVault in the US. Mr Neupert said the company had also resolved not to pursue sales from advertising or other revenue sources via third parties within the country.

Microsoft took the unusual step three years ago of making its coding for HealthVault open to competing software developers so they could provide applications for the system.

But it has also decided to reject its rival Apple’s commercial model of taking a cut on applications developed by others and sold through its “app store”.

Mr Neupert would not disclose how many Americans use HealthVault, but when asked whether it was “tens of thousands”, he replied “far more than that”.

HealthVault is generating revenues in some other countries, with Microsoft receiving financial sponsorship in Germany, Canada and Wuxi province in China. It continues to look for funding in other countries and regions to generate income.

In the US, it has charged some large users such as Medicare/CMS for its “blue button project” to help make their medical data compatible with HealthVault, but that move only generated modest income.

Mr Neupert said Microsoft was instead concentrating its business efforts in its health division in the US on the commercialisation of a separate product called Amalga, which helps hospitals in real time integrate data from across their different existing systems.

Source: http://www.ft.com/cms/s/2/6e10b422-f58d-11df-99d6-00144feab49a,dwp_uuid=9a36c1aa-3016-11da-ba9f-00000e2511c8.html#axzz16HtDD590