Industry news

NorthgateArinso to provide in-house and outsourced services to Government agency

Historic Scotland, the Scottish Government agency responsible for Scotland’s historic environment, has signed a five-year contract with NorthgateArinso for a combination of systems and outsourcing services. A March 2011 implementation is anticipated.

For its HR administration, Historic Scotland is adopting NorthgateArinso’s ResourceLink Aurora solution, including training and HR self-service modules. In common with its application in other Scottish Government organisations, the solution will also include an interface with Historic Scotland’s pensions system to enhance efficiency.

The chosen arrangement for payroll is with NorthgateArinso’s part-managed bureau payroll service. All of the data entry will be carried out by Historic Scotland, again using ResourceLink Aurora, but the processing, pay runs and production of payslips (which will be delivered electronically rather than on paper) will be carried out by NorthgateArinso’s payroll bureau.

Cloud computing should be embraced across Europe, but needs an increased focus on security and data protection, according to the European Commission.

Neelie Kroes, vice president for the Digital Agenda, said that putting personal data in the cloud is a leap of faith for most people, and that it is down to regulators and member states to make sure that citizens can trust in the security of such services.

"Cloud computing is more than a technical challenge. By putting our personal data on remote servers we risk losing control over that data. The protection of personal data is a fundamental right in the EU, and this demands several actions," she said.

Kroes explained that Europe needs cloud assurances that apply to all member states, and recommended the development of new laws and codes of practice.

"A cloud without clear and strong data protection is not the sort of cloud we need. Having clear and cloud-friendly rules can help IT companies know exactly what is allowed and what is not," she said.

Existing rules are a grey area, according to Kroes, and self-regulatory initiatives such as industry codes of conduct should be used for international data transfers.

"Data protection is a must-have feature for consumers, individuals and society in general. A cloud without robust data protection is not the sort of cloud we need," she said.

Kroes added that cloud users should be assured that their provider protects data efficiently, and that there are legal frameworks in place to make sure they do so.

The commissioner added that the EC is working on a cloud computing strategy which needs the input of all European Union authorities.

"It takes brave governments and brave thinking to deal with these issues, and the Commission is prepared to be brave too. For this work, we will need your input in the first half of 2011," she said.

The UK government is likely to react favourably, after communications minister Ed Vaizey said earlier this week that the cloud offers real economic benefits to businesses and consumers.

"Cloud computing is a good illustration of the need for international co-operation to ensure that the important developments on the internet that hold great potential are taken forward," he said.

Source: http://www.v3.co.uk/v3/news/2273492/cloud-protection

Sony expands outsourcing to 50%, says report

Sony will increase its outsourcing orders to 50% of its total shipments, from the previous 30%, according to the japanese report Yomiuri Shimbun. Due to the relationship between Foxconn Electronics (Hon Hai Precision Industry) and Sony, Chimei Innolux (CMI) will be the major beneficiary.

Yoshihisa Ishida, president of Sony's TV business group, took over the management in April 2009. Under Ishida, Sony has gradually reduced its production costs and increased its outsourcing. Sony has reduced its assembly plants to four, from nine plants two years ago.

Due to weaker than expected demand in the US market, Sony will not be able to reach its shipment goal of 25 million units for the 2010 fiscal year ending on March 31, 2011, but the vendor aims to ship 35 million units for the 2011 fiscal year.

Foxconn and Wistron from Taiwan are the major OEM partners of Sony, and CMI expects to land more LCD TV panel orders from Sony further helping to improve CMI's utilization rates and operations.

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

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.