Industry news

The practice of outsourcing recruitment processes is now well accepted in Europe and the US and, increasingly, on the Pacific Rim. But should organisations be going one step further and partnering with outsourcers to support the vital work that goes into retaining staff as well?

I would argue that giving responsibility to an external organisation which already looks after hiring processes would help companies avoid an all too common trap - trying to address retention when it reaches its crisis point and an employee has already expressed a wish to leave. Which is, of course when it is far too late to do anything productive. Once someone has decided to go then what I‘d call the psychological contract has been broken. And when that happens, no matter how much time, effort and money is thrown at the problem, that individual will almost certainly move on – perhaps not immediately, but within a relatively short period of time during which they will become less and less effective.

To be really effective, organisations need to be thinking about retention issues from the very first point when they engage with a potential employee. Of course this means ensuring that front line recruiters are treating the individuals they deal with in a consistently professional fashion - and not just those that are right for the role or the organisation but those who do not match the spec as well. Blogs, twitter and social networking sites have made it all too easy for a disgruntled applicant to do serious damage to an employer brand.

Its also very important for recruiters to be communicating the right messages about the organisation to potential hires. Over-selling a job or a working environment is a recipe for disaster. The more an individual understands about the job and the culture in which it sits then the less likelihood that expectations will not be met and the employee will vote with their feet. It’s all about joining up the talent management process to make it work in the most effective way rather than looking at each part of it in isolation.

We all recognise that the idea of the job for life has gone the way of the dinosaur so 100% retention is completely unrealistic. However retention initiatives are absolutely vital to business success because they can help an organisation analyse exactly what elements of its workforce it really needs to hang on to and how to marshal its resources to do this. Equally as important is the management of attrition. Once a company accepts that people will leave it can target its efforts at ensuring that they leave with the most positive view of their time there. By doing this it will be sending out ambassadors for the business who will help generate new customers, new recruits, new partners. And the flip side of this is just too unpleasant to contemplate.

Paul Daley is a director at recruitment outsourcing and talent management specialist, Ochre House – www.ochrehouse.com

by Mike Henley, outsourcing expert at PA Consulting Group.

In the first of a two part series, Mike Henley, outsourcing expert at PA Consulting Group with 20 years experience in the legal sector, discusses how, in the light of fundamental and permanent changes in the legal market, the greatest issue is whether legal firms and their people can accept and deliver revolutionary change.

The last 18 months to two years have been difficult for most law firms. A minority of firms have managed to do well in terms of maintaining revenues and profits, but most have seen revenues and profits drop in the recent past, in some cases quite alarmingly.

Many firms have been reducing staff numbers and trainee intake and most are trying to reduce cost and control expenditure much more tightly. Some are being looked at very carefully by their bankers, who no longer regard law firms as being immune to catastrophic failure. It has not been a pleasant time for many partners, some of whom have been managed out altogether, whilst others have been demoted from equity status. For those remaining in the equity, many are being asked to take on greater personal risk with the prospect, at least in the short to medium term, of less reward. They are being required to contribute more capital at a time when their drawings and profits are reduced.

What makes this a period of fundamental significance for law firms is the fact that the economic turmoil of the last two years is only one of a number of dynamics which together will reshape the legal marketplace. What are those dynamics?

• Substantial reductions in revenues and profits, caused by lower volumes, particularly in corporate finance and real estate sectors,, have weakened firms. The position is made worse by the fact that many current and prospective clients have been experiencing serious financial troubles, and in reviewing their spending categories are looking to pay their lawyers less.

• Clients are asking, where is the value for money? It is becoming increasingly difficult for law firms to justify their fees when balanced against the tangible value they add to a client’s business. Law firms are being asked whether their activities are making a difference, whether the fees are proportionate to the difference made or how easily an alternative comparable service could have been procured for similar or lower fees?

• Competition is increasing, most notably in the form of increasingly powerful in-house teams and ambitious new entrants to the market in the form of providers of legal process outsourcing (“LPO”).

• Liberalisation of the legal market will drive commoditisation. Non lawyers are entering the market place and are bringing proven business tools, technology and techniques to deliver consistency and reduced cost.

• There are too many law firms. Competitive dynamics, fee pressure, the current trend for clients to rationalise and manage their relationships with firms more actively and the contraction of the economy all point to significant overcapacity in the market.

In the second of this two part series, Mike Henley will demonstrate how law firms must react to these changing dynamics to secure their future success.

Public sector organisations are leading the way in outsourcing software applications and IT infrastructure to third-party providers, but cost savings are not always the biggest draw.

The Nursing and Midwifery Council (NMC) announced last week that it will outsource its core applications and IT infrastructure to Business Systems Group (BSG) in a deal worth £5.2m over five years.

Elsewhere, Bridgend County Borough Council has renegotiated a deal to host its COA Solutions e5 financial accounting system with hosting company 2e2, saving an estimated £488,000 over the course of the five-year agreement. But this was compared with the cost of the previous outsourcing contract, rather than in-house provision.

The NMC had a large outsourcing contract with EDS, which ended in 2002, but has kept applications and services in-house since then. It will move 50 servers from one of its own datacentres into a BSG facility also in London, as well as the storage area network and all the applications those servers host. The NMC will keep a separate datacentre operational for disaster recovery purposes.

Jolyon Ingham, interim head of ICT for NMC, said actual cost savings compared with in-house provision were negligible – it was the attraction of moving responsibility for IT provision and disaster recovery to a third party, leaving the NMC to focus on providing core services, that won the argument.

“Cost savings are pretty cost neutral. We had a small team of four guys that has been transferred to BSG. But we also used consultants and contractors and it had become very expensive to continue to manage the infrastructure ourselves,” he said.

“When we come to refresh the hardware in two to three years’ time, we will look to buy services rather than make a capital [infrastructure] investment. Infrastructure is more of a commodity these days, and we recognise this.”

All NMC’s software apps will be hosted by BSG, including its OpenAccounts fin ancial management system. The deal also covers systems monitoring and technical design services provided by BSG, as well as support for the NMC’s Exchange email system, its Cisco CallManager IP telephony system and, later, Citrix desktops after a scheduled move to thin client PCs as part of the agreement.

“Being a public body, we are subject to the Data Protection Act (DPA) and so data confidentiality forms a large part of the BSG contract,” he added.

Bridgend County Borough Council is also required to store its data in the UK to comply with DPA and privacy regulations, although it is not subject to Financial Services Authority rules. All its accounting and general purchase ledger information will reside on 2e2 servers going forward.

Although it has had a similar outsourcing agreement with 2e2 going back to 2002, it has recently switched platforms.

“We have been using COA Solutions e5 financial accounting system for a long time now, but this is a move to a completely new delivery platform from the old Unix-based one,” said Steve Durbin, Bridgend council’s group manager for applications delivery.

The e5 software is delivered to up to 300 users who regularly log in and download changes to the Java-based application, which is cached on local PCs. Legacy users of other systems will be brought on board over the next 12 months, as well as users of the council’s purchasing system.

While cost savings played their part in the decision to retain 2e2 during the tender process, Durbin revealed it would still have been cheaper to opt for in-house software provision. Rather, it is the flexibility, reduced management overhead and ease of future scalability that swung the argument, with 2e2 going the extra distance to retain the business.

“They [2e2] would have cost a little more than an in-sourcing solution, [but] it saves us all the hard work and means the accounting department is given a fixed cost for IT,” he said.

Research company Gartner has estimated that the value of enterprise software delivered globally via the software-as-a-service model will exceed $8.5bn (£5.5bn) in 2010, a 14.1 per cent increase over 2009, as a broader range of applications and Web 2.0 integration prove more tempting.

Bridgend is currently considering switching other in-house applications and services to a hosted model, most notably security and threat management.

Source: http://www.computing.co.uk/computing/analysis/2269289/why-outsourcing-worth-cost#ixzz0z1G23inx

The Indian IT sector on Wednesday termed the Ohio state’s bill to ban outsourcing of its IT projects discriminative and counter-productive to the US government thrust on reducing public deficit.

“Ohio’s ban on outsourcing can only be viewed as counter-productive to the US government thrust on reducing public deficit and possibly lead to an increased tax burden on its citizens,” the industry’s representative body Nasscom said in a statement.

Noting that the move came at a time when the November elections to the US Congress and Ohio governorship were drawing closer, Nasscom president Som Mittal said that more such electoral rhetoric could be expected in the next few months.

“We are taking up the issue with the US officials concerned later this month. We will also seek the support of the union minister for Industry and Commerce Anand Sharma, who will be in the US at the same time,” Mittal said.

Endorsing Nasscom’s stand against the controversial move, Indian IT bellwether Infosys Technologies expressed concern at the banning of offshoring of IT services by the Ohio government.

“We are concerned with the news from the US over banning offshore outsourcing by the Ohio government departments,” Infosys chief executive Kris Gopalakrishnan said in a statement here.

The company, however, hoped that its initiative in the public services sector would not be affected as it is focused on creating a domestic delivery centre in the US.

“Though the public sector in the US represents a small fraction in the overall demand for off-shored services, it is focus areas in the future for the Indian IT industry, as governments world over are seeing the benefits of employing IT in public services,” Mittal asserted.

Nasscom is also studying the legality of such a bill being passed by the Ohio state government though international trade is a federal subject.

“It is imperative that the focus on free trade remains strong, but instances like Republican senator Schumer’s Borders Security Bill and the Ohio state ban on outsourcing only reinforce our stand on discrimination,” Mittal pointed out.

Since India was opening up not only in IT, but also in other areas for global firms, Nasscom has decided to work with key stakeholders to minimise the impact of such discrimination by highlighting the benefits of IT with international governments.

Source:http://smetimes.tradeindia.com/smetimes/news/industry/2010/Sep/09/it-sector-terms-ohio-s-outsourcing-ban-discriminative61987.html

BPO services provider Firstsource Solutions Ltd said it signed a five-year outsourcing agreement with Axis Bank Ltd.

Firstsource, as a part of the agreement, will offer customer contact services (voice, email & web chat) to retail customers of Axis Bank.

Services to Axis Bank retail customers will be across the fixed, savings and current account category while credit card services will be to its platinum, corporate, regular and travel card customers.

Firstsource will provide these services from its centres in Mumbai and Chennai in 11 Indian languages. Firstsource currently derives 24% of its revenues from the banking, financial services and insurance (BFSI) vertical, said the company in a statement.

On Tuesday, Firstsource shares declined 0.9% to Rs26, while Axis Bank shares rose 0.2% to Rs1,398 on the Bombay Stock Exchange. The benchmark Sensex gained 0.5% to 18,645 points.

Source:-http://www.moneylife.in/article/8/8926.html

Mahindra Satyam has launched a single-window ‘Art-to-Part’ engagement model for partners in Aerospace and Defence. This 3600 partnership model covers both design and manufacturing areas to provide a seamless engagement experience for partners, covering the complete product development lifecycle including after-market services.

The new proposition leverages synergies within the Mahindra Group, drawing on the skill sets and experience from Mahindra Aerospace and Mahindra Defence, which specialise in aerospace manufacturing and defence systems. Mahindra Satyam, which works with 5 of the top 8 global Aerospace and defense organisations, provides end-to-end product engineering capability, covering aero-structures, avionics, wiring design, systems design, manufacturing engineering and consortium-led manufacturing projects, for both civil and military sectors.

Mahindra Satyam’s single ‘interface’ model provides a continuity of service to minimise recurring costs, improve time to market, and maintain research and development at reduced costs and reduced risk. The business model is built around creating significant value for partners by taking end-to-end responsibility of mission critical systems and sub-systems. This not only provides cost and time-based arbitrage but also means that Mahindra Satyam will share the ‘risk’ with its partners.

Gaurav Gupta, Associate Vice President Strategic Partnerships, Aerospace and Defence said: “Clients in this market sector increasingly require partners which can deliver an entire solution as opposed to a particular, discrete service. Mahindra Satyam can draw upon a wealth of expertise from within the Mahindra Group in this sector to offer a complete 3600 relationship. We are creating various Centres of Excellence, not just in Aerospace, but also in Defence including Land and Air. This market looks set to boom in the next two to five years with India predicted to spend Billions both on ‘Buy’ and ‘Make’ programmes. We also created the ‘Technology Advisory Council’ for Aerospace and Defence, A&D, constituted by key recognised leaders from the A&D industry, Academia and Mahindra Satyam, which is a unique step towards creating technology-based innovation, developing new engineering and design talent, and building a blueprint for tomorrow.”

He continues: “As a large scale integrator we will support our global partners in developing their commercial interests in India, as a home market. Our ability to impact costs for both recurring and non-recurring parts of a programme enables our partners to fulfil their offset obligations more effectively. Our aim over the next 12 months is to build on our existing relationships, and create new partnership opportunities through our ecosystem for design and consortium based manufacturing. Of course, risk arbitration will drive innovative commercial modelling in this sector and is the key to building large, strategic partnerships.”

Chancellor George Osborne’s predicted cuts of 25% in Public Sector expenditure will have huge impact on all of the UK’s businesses - many of which count the Public Sector as a major client. As they all wait in trepidation for the 1st October announcement when swingeing cuts – predicted to be the biggest in a generation - are expected to be announced, there is re-focus on how to lessen the impact by increasing efficiencies and reducing costs still further.

In a week where another catastrophic IT disaster hit the headlines (the Tax Office this time) costing six million taxpayers hundreds, and the government itself, billions of pounds, critics argue that it is time for the government to seriously revise its IT tendering system to prevent a catalogue of IT failures and non-delivery. The current system is weighted towards large IT companies (Tier I) who charge a premium for their services because of their recognised names. It is clear the Government needs to focus on credited Tier II suppliers who are viable and offer better value for money, saving millions in the process, while the savings can be used to bolster front line services.

Chris Papa managing director for communications specialist company Qubic said, “Tax payers deserve a better deal than the millions they are paying for successive over runs, over budgets and disasters that occur on a regular basis. Historically, the bigger suppliers have taken the lion’s share of Public Sector contracts partly because of the tendering requirements, and partly because of the fear factor as there existed a perception that ‘bigger’ provided a measure of security. However over the years there have been some very high profile failures and there has been a lot of publicity where suppliers have been taken to court because of failure to deliver on time and on budget.”

He continued, “In today’s tough economic environment smaller companies and Cloud computing have driven wholesale change, and as public sector departments look for specialisation as well as savings, this has opened the door to smaller suppliers which typically are specialists, can move fast and have a more favourable price strategy – a now critical consideration.”

One Public Sector department which has seen the benefits of new technology provided by a smaller supplier is the Ashmolean Museum in Oxford which has used PC Power Down technology from the Qubic Group to reduce the costs of running its 200 workstations needed to meet the increasing number of public-facing ICT initiatives (eg gallery touch screens), needs of staff and academic researchers.

Dr Jonathan Moffett of the Ashmolean Museum said, “Computers were frequently left on day and night and even over the weekends and understanding that a single PC can waste as much as £50 per year and be responsible for a quarter tonne of C02 if left on is quite shocking. Typically in an educational establishment or public space it is often unclear who should be switching off equipment and we needed something that would address this issue.”

While this year’s research from Gartner predicts that the widespread adoption of Cloud computing is now here, more forward-thinking companies are looking at the next generation of Cloud computing which takes a more holistic approach to all IT and communications factors and promises to supply further increases in efficiencies and cost savings through the true integration of computers and telephony, enhancing collaboration and communication and providing savings in time, effort and costs.

Cloud computing has barely permeated the consciousness of the business world when the next development in this technology is making waves. Cloud technology has gained wide spread adoption over the past year as the recession has caused pressure on businesses to cut costs and seek greater efficiencies in an effort to remain competitive. Additionally, the impact caused by the way Cloud computing is paid for has turned the IT industry on its head and changed IT expenditure from a CAPEX to an OPEX cost, a factor highly attractive while the banks continue to resist all attempts to increase lending to businesses and debt finance is tough to obtain.

This should not come as a surprise to government officials as the 2004 Gershon Report*, which warned of the needs for savage cuts, sounded warning bells years ago - which apparently fell on deaf ears. It highlighted that radical changes were needed, and was focussed on achieving greater efficiency across the whole of the Public Sector in a continuous drive for improved public service delivery.

More than half of European organisations plan to increase their use of outsourcing this year, according to Gartner, even though overall spending may not rise.The analyst group found 53 percent of organisations said they would outsource more in 2010, with 40 percent of organisations planning to boost spending on external IT services.

There is a growing trend for some organisations to outsource the majority of their IT, a Gartner survey revealed.

The percentage of organisations spending 50 percent to more than 75 percent of their IT spending on external service providers is on the rise, the analyst house noted.

“However, the results also showed that the pressure on capital and IT operating expenditure is still strong, and European organisations expect providers to deliver further cost reductions,” said Claudio Da Rold, vice president and analyst at Gartner.

“Although 40 percent of respondents said that they will increase the external share of their budget, only 24 percent said that they will increase the budget for providers, and almost a quarter of organisations still expect that their IT services budget will continue to decrease in 2010.”

Gartner has found evidence that outsourcing is increasingly attractive to smaller organisations. It found that almost 15 percent of organisations with IT budgets of less than €1 million (£830,000) expressed interest in outsourcing, up from barely six percent in 2009.

"Organisations can see that managed services and cloud computing financial models allow them to achieve their goals whilst reducing capital expenditure, said Nathan Marke, CTO of IT services company 2e2.

He highlighted the way infrastructure as a service and platform as a service offerings could allow organisations to re-platform legacy applications and sweat their assets for longer.

However, Gartner suggested that after several years of rapidly increasing interest in software as a service (SaaS), cloud computing and infrastructure utility (IU) delivery models, demand for these “industrialised services” delivery models may have peaked.

Gartner found cost control is the major consideration in outsourcing decisions but end users also increasingly require access to resources and capabilities, flexibility and scalability. “This more complex set of business requirements is not easy to address," said Da Rold.

An online survey was conducted among 206 organisations in Europe during in the first quarter of 2010. The survey was directed at individuals who were involved in decision making on outsourcing and IT services in 2010.

Source: ComputerWorldUK

IT services company Atos Origin, has set up offices in Egypt and the Gulf Cooperation Council countries, in order to best serve its customers and to take into account cultural and geographical differences.

The company said that having operations in the area will enable them to capitalise on the predicted growth in IT investment over the next few years in the region.

Atos Origin has appointed Samir El Awadi CEO for the region, who will report to Francis Meston, executive vice president for Systems integration.

Prior to this appointment Samir, 55, has held a number of senior positions in Atos Origin.

Most recently, he was vice president for Sales at Atos Origin in the Netherlands.

Other roles include: sector director for the Pharma & Healthcare market; global account director for Akzo Nobel and senior management consultant for the Philips global account.

He is a member of the board of the Dutch/Egyptian business and diplomatic community; a member of the jury board of the International Sales Management Association in the Netherlands; a member of the advisory board of Vacansoleil international cycling team and a former commercial director of the year (2008).

Atos Origin senior executive vice president Charles Dehelly said that the company has an ambitious growth plan and setting up operations in Egypt and the Gulf Cooperation Council countries is a clear example.

"Samir's international sales experience and his extensive political and cultural knowledge of the region and its markets will be a considerable asset to accelerate growth in this strategic and growing market," Dehelly said.

A start-up company founded and funded by ex-Staffware CTO and board member Jon Pyke will officially launch tomorrow, promising to help companies migrate IBM Lotus Notes and other applications to the cloud, CBR has learned.

The firm's technology promises to enable companies to automatically migrate their Lotus Notes databases and collaboration processes into more generic processes hosted in the cloud, in a common format that could be hosted on the likes of Amazon, Google or salesforce.com's cloud platforms, Pyke told CBR ahead of the firm's launch tomorrow.

The name CIMtrek was inspired by the tag-line 'Collaborate in Motion'.

Pyke, who left Staffware after it was sold to Tibco and went on to start business process management (BPM) cloud firm The Process Factory and then worked at Cordys as chief strategy officer, believes the firm could tap into a huge market of installed Lotus users who are looking for a roadmap that takes them into the cloud - and potentially away from the IBM Lotus maintenance contract.

"The Process Factory idea was sound but is not quite what the world needs most urgently," Pyke told CBR. "Lotus Notes gave people an environment where they could share information, process workflows, build applications and collaborate, but there's nowhere for those users to go to get to the 21st Century. If anybody is going to seize the desktop it will have to offer an alternative to Notes."

"There are 160 million IBM Lotus users worldwide, and at least 6,000 Lotus Notes customers in the UK," Pyke said. "This is a massive opportunity for CIMtrek and for companies looking to migrate from Notes."

The CIMtrek application, developed by a team of developers working for Pyke in the UK, will identify business processes and data dependencies in existing Lotus Notes installations. Using a proprietary schema, based on the XML standard, it will then transpose those process flows and dependencies to a hosted platform, such as Amazon, Azure or Google.

The CIMtrek tool will start by discovering what Notes users are actually using the tool for in the enterprise, then go through an analysis and categorisation phase before enabling migration to another platform. It is able to take the key ingredients of an existing IBM Lotus Notes installation and 'squirt' that in an XML-like format to another platform that is hosted. "It will save 70- to 80% of the existing cost of maintenance just by doing that," Pyke claimed.

Finally, the technology enables up to all of those previous functions that were handled in a client-server Lotus Notes environment to be developed and executed in the cloud, in the CIMtrek execution environment.

Pyke suggested that the technology will be offered on a subscription basis according to the number of clients being migrated and the complexity of the discovery phase. While the company plans to start with the migration of IBM Lotus Notes users, Pyke said that there is no technical reason the same technology could not be used to help migrate the likes of Microsoft's Groupwise or SharePoint, Siebel CRM applications and more.