Industry news

HP today announced it has helped Bank of India, one of the five largest banks in India, realize increased revenue and profitability, significant cost savings and improved process efficiencies through a major transformation of its business.

In collaboration with HP, Bank of India has implemented a core banking solution that is integrated with a new centralized data center and an information management warehouse. This has enabled the bank to transform itself from a branch-centric organization to a truly customer-centric financial institution.

According to an independent study by research and information services firm Thoughtware Worldwide, HP has helped the bank realize a 234 percent return on investment, a 209 percent internal rate of return and $182 million in savings over a five-year period, with the bank reaching its breakeven point in less than two years.(1) During the same period, Bank of India also doubled its revenues, tripled its profits and expanded its branch network by 22 percent.

Today, Bank of India uses a flexible and scalable architecture to meet the needs of changing market dynamics and to differentiate itself from the competition. The HP solution has enabled Bank of India to aggressively compete with new private sector banks while providing state-of-the-art capabilities, channels and products.

“Bank of India wanted to achieve faster time to market for new products and services as well as efficiently allocate resources to free up talent trapped in branches with centralized operations,” said Andy Orent, director, Banking and Capital Markets, Financial Services Industry, HP. “HP used its technology and industry expertise to develop a scalable technology infrastructure that helps Bank of India deliver consistent service levels and an overall improved customer experience.”

“Internet didn’t replace the phone and social media won’t replace the call” says

Denis Creighton, European CEO of outsourcing contact centre Conduit.

People are communicating more than ever before, and not just by phone. Social networking sites have become primary communication tools for a new generation of digitally aware consumers. So should businesses be ditching the traditional forms of engaging with their customers?

When the Internet was introduced to the general public around 12years ago, so called experts warned the contact centre industry that it would soon replace the phone as the way consumers interacted with brands.

Interestingly, what happened was quite the reverse. The World Wide Web made a mass of information available to consumers. And what did more information lead to? More questions, which people wanted answered over the phone.

Internet–enabled communication models are clearly growing their audience base, so it is important that businesses recognise and adapt to these communication trends, whether this is instant messaging, or social media sites like twitter. They provide another way to connect and, in these tough times especially, organisations need to connect with their customers.

But how much through this online medium depends very much on the audience. In the UK, 90 per cent of teens spend time on social networking sites. So for example if your client base has a young demographic, say pay as you go phone users, then you have a big opportunity to connect through a medium that is online based and as instant as possible.

The Internet provides the ability for people to share experiences, generate content, buy products and more. Social networks are becoming integrated communication hubs for a number of businesses and many are even employing a separate work force to respond to the online demand.

Does social media present customer services with an opportunity? Yes. A challenge? Yes. Is it the right tool for all audiences? No.

Video didn’t kill the radio star, and social media won’t do the same for the phone call. The savvy organisation of the future will be the one that identifies the space where its audience is communicating and recognizes how to enter it in a way which creates ambassadors for its brand.

Outsourcer Conduit delivers first-class results for clients including Vodafone and Sky from contact centre in the UK and Ireland. For more information visit www.conduit.ie

NOA Awards 10

Paul Corrall

So it was with feelings of excitement and anticipation that I jumped into a black taxi heading to the 7th NOA Awards with my suit under one arm and a list of nominees in the other. Just before I left the office, I was grateful to a colleague who had reminded me to take my suit. I guess jeans and a jumper are one way to make an impression at a black tie event.

Sourcing Focus had sponsored the award for Telecommunications, Utilities and High-Tech Outsourcing Project of the Year and I, as editor, was down to announce the winner.

I was nervous, very nervous. It is one thing introducing yourself to an industry and another to trip on stage smashing your award on the stand.

The guests all mingled before the ceremony, overlooking spectacular views of the London Eye, Houses of Parliament and Big Ben. Comedian Jack Whitehall opened the ceremony and invited Martyn Hart, Chairman of the NOA, to the stage to introduce the awards.

Jack Whitehall was very very funny. After some jokes about living with his parents, he even managed to fit in some outsourcing gags which must have taken some research.

My category was announced and as I took to the stage, all feelings of ‘get me out of here’ disappeared and I very happily announced Infosys as the winners, who came forward to collect their award.

Party band Madhen kept the dance floor busy until the early hours and overall the evening was a fantastic experience due to a great venue, great food and great company. I managed to speak to some of the biggest names in the business and officially introduced myself to the outsourcing industry.

Looking forward to the NOA Awards 2011 already.

In the last decade alone, outsourcing has fundamentally changed from a pure client and supplier relationship, to a much deeper partnership. While the quantitative aspects of finding and selecting an outsourcing partner are still important, there is a much deeper relationship to be developed if businesses are to benefit from all that outsourcing has to offer.

According to Nasscom-Evaluserve, European companies saved $25 to $30 billion by outsourcing IT last year, with a lot of business driven by the challenging economic climate, which forced businesses to reduce overheads and speed up productivity with minimal costs.

There is an element of dependency when it comes to outsourcing, even if it's from a top-down perspective. It is one thing for a company to get services provided from a lower-cost geography, but it’s another thing to realise that the ability to execute its own internal strategy is highly dependent on the outsourcer. This is largely because the business has to rely, not just on their supplier's technical ability to do basic delivery, but also on their ability to adapt strategically and to move with their clients. It is this flexibility that defines the move from a contract to a partnership.

As a true partnership, a whole new world of possibilities opens up when is comes to being flexible, open and transparent within the relationship. A fundamental part of forming such a close alliance is trust. Strictly defined contracts can only go a part of the way to ensuring that things run smoothly.

That's not to say that contracts and rigorous criteria should be thrown out the window, these are still vitally important for underpinning the foundation of the relationship. However, the legal aspects should be guided by the managers rather than the lawyers - who are often trying to mitigate the risk and not necessarily trying to create operational success.

A certain level of flexibility can be pre-negotiated, particularly when renewing a contract with an existing, trusted partner – but a lot of it is simply based on responding to changes in the business, the industry and the economy. This has been particularly apparent during the global economic recession, when many businesses were unexpectedly forced to make tough decisions.

The most innovative outsourcing suppliers are those that can create contracts that are as much about changing the agreements as about the services that are started with. There are very few companies that can predict the next five years, and contracts need to be defined accordingly. Both sides need to think about how their partners would respond, how they would respond, and how the framework would respond to changes in technology, economy and strategy. Vitally, this has to be done before the changes start happening as it's very difficult to build a relationship in the midst of a crisis.

Offshore service providers are often criticised as not being innovative, but those that are willing to invest in this much deeper relationship with their clients can take the discussion beyond just cost and on to value. Implementing an ‘Employees First and Customers Second’ management philosophy can enable companies to bolster year-on-year revenue growth by empowering employees and increasing satisfaction in the workplace by up to 70 per cent.

As a case in point, in December 2006, life and pensions company, Skandia UK decided to outsource application optimisation, including development, maintenance and support (across all platforms) and remote infrastructure management. In 2009, Skandia began the transition to an online business model. This was originally scheduled to span a two-year period, but working hand-in-hand with a reliable partner, the project was completed in six months.

However, Skandia's new business model also necessitated a reinvention of the original outsourcing contract. With the creation of a joint 'crossover' plan Skandia could mobilise new skills and rebalance capacity across the business. Part of this involved creating a new Infrastructure Projects Organisation that adopted an outcomes-based pricing model that neither party had used before. Integrating the outsourcing company into the inherent risk and reward of Skandia's own business further strengthened the relationship to meet restructuring goals. Creativity and shared risk are part of the journey, and it is innovations like these that truly differentiate today's outsourcing companies.

In this post-recession world, organisations will be dealing with different strategies than they had before the financial crisis. As macroeconomic conditions change, the ability of companies to think and act strategically with their partners will be a key factor in whether businesses succeed or fail in the delivery of these new strategies.

The government will look again at investor "short-termism" with the view that its behaviour is dangerous.

Vince Cable, Business Secretary, said on Sunday that “short-termism” is damaging in takeover battles. The Takeover Panel published proposal on Thursday after the wake of anger which was felt regarding the controversial 11.6 billion pound takeover of Cadbury by U.S rival Kraft Foods.

Cable felt that the Takeover Panel did not commit to some of the more radical plans such as restricting the rights of short-term investors however he also expressed concern that executive pay had far outstripped shareholder performance during the past decade.

Cable said: “It is a tricky issue whether we legislate to give shareholders more voting power.”

The takeover of Cadbury caused outrage and concern in a lot of areas. This was partly due to the hedge fund's role in securing the deal. Kraft also annoyed many by going back on a promise to keep a plant open.

Three London councils are to set a landmark for shared services by merging all their services to create a “super-council”.

Hammersmith and Fulham, Kensington and Chelsea, and Westminster hope that the move will save them between £50m - £100m a year. Each council would keep its own identity but would share services (such as ICT provision) under the scheme.

Working groups will look at merging three areas – environmental services, family services and corporate services. The groups will feedback next February with their feedback a more detailed plan will be put out for public consultation.

The council’s leaders are hoping that the scheme will soon become the norm for local authorities who are looking to keep costs down.

A statement by Colin Barrow (Westminster), Stephen Greenhalgh (Hammersmith and Fulham) and Sir Merrick Cockell (Kensington and Chelsea) states that sharing service “is a way to reduce duplication and drive out needless cost".

The statement said: "To achieve this in the age of austerity we need to seriously examine new ways of working including sharing service provision with other local authorities to deliver more for less. That is why we have met and agreed to progress with plans to share every council service between our three councils.”

Google has said that businesses who try to get special treatment with cloud providers will not succeed instead customer service should be based on vendor selection.

Cindy Yip, legal head of Google’s European enterprise division, said: “It wouldn’t be practical for a cloud service provider to meet the demands of one customer.”

Yip stated that as cloud computing providers can offer IT services at a lower cost than traditional outsourcers due to their commoditised services and delivery from multitenant architecture – it is not in their interest to provide custom service offerings.

Yip said that customers will try to negotiate special deals regarding data security and service level agreements.

It is predicted that cloud service providers will not be negotiable as the same service is needed for all businesses. One universal and similar service for all customers will guarantee the reductions in service charges.

Yip advised that a better way for customers to ensure their demands are met is to find a provider with an appropriate SLA, and to ‘shop around’ for potential suppliers. She added that customers' time would be better spent establishing who takes responsibility in the event of a data breach than attempting to receive special security provisions.

Google’s remarks will be seen as discouraging for many businesses who are attracted to the cost savings of cloud computing but also want a tailored service due to their unique set up and requirements. Time will tell whether the option of ‘vendor selection’ will be enough for businesses wanting a specific service agreement and a business arrangement which is uniquely their own.

More than £200m will be invested by the Government in a network of elite Technology and Innovation Centres to drive growth in the UK’s most high-tech industries, it was announced today.

The centres, which were announced by Prime Minister David Cameron in a speech to the CBI today, will bridge the gap between universities and businesses, helping to commercialise the outputs of Britain’s world-class research base.

Business secretary Vince Cable said:

“We need to do more to ensure the UK benefits from its world-class research.

“These centres will help take ideas from the drawing board to the market place. They will play a key role in helping firms develop new products and processes so they can grow and prosper.

“Companies will be able to access technology and skills that would otherwise be out of reach.

“High-tech industries are the future of the British economy. Growing sectors that exploit these new and emerging technologies will help re-balance the economy and provide the highly skilled, well-paid jobs we need.

“Thanks to this major investment, British companies will be at the forefront of innovation.”

The centres, which will receive the money over the next four years, will be based on the model proposed by Hermann Hauser and James Dyson. The network will support businesses in developing and commercialising new technology.

They will allow businesses to access equipment and expertise that would otherwise be out of reach as well as conducting their own in-house R&D. They will also help businesses access new funding streams and point them towards the potential of emerging technologies.

Each centre will focus on a specific technology where there is a potentially large global market and a significant UK capability. Areas identified as possibilities by Hermann Hauser included plastic electronics, regenerative medicine and high value manufacturing.

On Friday, Hewlett-Packard announced with the Bulgarian president, Boyko Borisov, that it will be expanding its outsourcing services to Bulgaria.

There are currently 3,200 people working for HP in Bulgaria and it is hoped that the expansion will result in an additional 2,000 new job positions for engineers and qualified personnel.

Over 30 countries were competing for the investment which is a HP initiative and was not set up with the aid of any EU funding. Sasha Bezouhanova, HP public administration director for central and eastern Europe, would not announce the figures of the investment as exact expenses could not be planned. The recruitment for the centre will start immediately and the centre should start working at full capacity next year.

Borisov said: "More than 300 highly qualified Bulgarians living abroad have returned to work for the HP centre here because the salaries are better than what they have received in the countries they have been working in. After the new job positions are open, even more people will return.”

HP has announced that the development of the centre would be a good investment in education as well. At present, the company is cooperating with three Bulgarian universities for general education programs.

Nick Clegg has dismissed reports from a leading think tank that the spending cuts will hit the poorest the hardest.

The Institute for Fiscal Studies (IFS) said on Thursday that the cuts would actually hit the bottom half of the earners hardest and not the top tax players – as the coalition government had claimed.

Clegg responded today and stated that the report from the IFS was “complete nonsense” and that the Treasury had tried to provide more than a snapshot of tax and benefits.

The IFS said that the biggest losers from the cuts would be families with children due to the reduction in welfare. However Clegg suggested that they did not take into account such factors as public spending inputs that include children and social care.

Clegg said: “We just fundamentally disagree with the IFS. It is complete nonsense to apply that measure. The richest are paying the most.”

Clegg also acknowledged the fact that it was a hard decision to raise tuition fees as the Liberal Democrats had actively opposed such a move throughout the election.

Clegg added: “It quite understandably raises questions about promises politicians make. I signed a pledge that I have not been able to honour.”