Industry news

Saudi conglomerate Al Majdouie Group (AMG) has awarded global IT service provider HCL Technologies (HCL) a 7 year total IT outsourcing services contract.

The end-to-end IT services agreement undertaken by HCL will enable streamlined business processes and seamless integration across all group companies and points of presence of Al Majdouie Group.

The engagement involves HCL to blend all its outsourcing strengths - applications and infrastructure capabilities, industry knowledge and expertise to help Al Majdouie achieve fundamental transformation at the enterprise level.

The scope of this complex transformational engagement includes developing infrastructure, implementing Oracle e-business suite with 70+ modules, managing and running the IT infrastructure.

The agreement also includes commissioning and management of data centre and disaster recovery services.

This will be one of the largest projects for HCL to run on the MTaaS platform in Middle East.

Unilever has extended its outsourcing contract with BT, a deal worth around additional €173m.

The new deal will see BT accelerate technology innovation in services such as unified communications, messaging, supply chain, wireless technology and agile working in over 100 countries over the next four years.

BT currently supports services across Unilever’s three operating regions. The scope of the service includes the design, management and operation of a secure fully integrated end-to-end IT networking infrastructure.

BT is responsible for ensuring that the service helps enable Unilever to operate in all its markets, supporting its employees, consumers, customers, partners and suppliers. This service covers an increasingly integrated platform delivering data, voice, video and mobility services to around 1,000 sites.

The new contract emphasis will be on leveraging BT’s global innovation and development capabilities with practitioners sharing their knowledge of people, processes and developing technologies. The contract will also continue to help Unilever deliver its new supply chain applications.

The original contract, announced in November 2002 and worth around €1bn was the first comprehensive global telecommunications outsource contract ever undertaken by BT and is one of BT’s largest global deals.

When the original contract was signed it was one of the largest telecommunications outsourcing contract in UK corporate history.

The offshoring and outsourcing of business services from developed to developing countries is creating good jobs by local standards, but the industry still has to work on achieving full decent work, says the United Nations labour agency.

A new book by the International Labour Organization (ILO) provides the first in-depth study of the workplace in the Business Process Outsourcing (BPO) industry, using case studies in four major “destination” countries – Argentina, Brazil, India and the Philippines.

The BPO industry, which can broadly be divided into “voice” services, such as call/contact centres, and “back office” services, like finance and accounting, data processing and management, and human resource development, is a rapidly growing industry worth some $90 billion.

“A lot has been written about this phenomenon and its implications for economic growth and employment. However, very little is known about the working conditions in the BPO industry,” says Jon Messenger, Senior Researcher with the Conditions of Work and Employment Programme of the ILO and co-editor of the study with Naj Ghosheh.

The book, entitled “Offshoring and Working Conditions in Remote Work,” examines remote work, its impact on the labour market in general and the workforce in particular, and the possible implications for working and employment conditions in countries where the BPO industry is growing.

The ILO found a mixed picture of the working conditions in the four countries examined. “On the positive side, and unlike previous assumptions, remote work jobs are of a reasonable good quality by local standards,” Mr. Messenger notes.

For example, wages of Indian BPO workers are nearly double the average wages in other sectors of the Indian economy. In the Philippines, BPO employees earn 53 per cent more than workers of the same age in other industries.

At the same time, night work is common to serve customers in distant time zones in ‘real time’ and work is generally stressful. The BPO industry also has a high staff turnover rate, which in some companies can reach as high as 100 per cent or more annually.

“Back office” positions, meanwhile, tend to be of higher quality than call centre positions in terms of their wages and other working conditions. Workers serving outside markets also appear to have better quality jobs than those focused on domestic markets, mainly as a result of the higher skills required in international positions.

The book offers several suggestions for government policies and company practices that could further improve the quality of jobs in the BPO industry and increase productivity, including stronger measures to protect the health and safety of night workers, in line with the ILO Night Work Convention.

Norway’s SLF chooses Steria for application portfolio management contract

The Norwegian Agricultural Authority (Statens Landbruksforvaltning – SLF) has chosen Steria as its chief partner for applications maintenance, in an agreement worth €6m (NOK 50m) over the next four years.

Under the agreement, Steria assumes administrative responsibility for 18 applications for SLF; a team of eight Steria employees will relocate to SLF's premises.

Steria will also supply SLF with technological and architectural consultancy. The agreement includes assistance in connection with setting up central administration processes based on IT Infrastructure Library (ITIL) standards and flexible development, in addition to which the IT consultancy company will assist SLF in putting in place and implementing test regimes.

SLF chose Steria following stiff competition from Computas, Cap Gemini, Ergo and Sirius IT.

Global IT and BPO services provider Patni Computer Systems Ltd, announced today that it has appointed Avtar as its new head of delivery for the EMEA region.

Sangha will be based in Patni’s EMEA headquarters at Heathrow and will be accountable for the delivery of services to all clients in the EMEA region.

Avtar Sangha joins Patni from Tech Mahindra, where he was previously delivery director. He has spent the last 10 years delivering complex transformation programmes across the globe and managing large P&L budgets.

Sangha also has extensive experience working with third party suppliers and managing large offshore teams in a matrix environment.

Nowadays consumers have more choice than ever before and their expectations are higher than ever. Most of us agree that customer is king. However, when we consider the poor levels of customer service that we encounter on a daily basis, as consumers, many of us are left wondering whether many businesses subscribe to this mantra.

Organisations that introduce an exceptional level of customer service are differentiating themselves from the competition in an increasingly saturated marketplace. Which is why it is so surprising that many businesses are still failing to address the issue of customer service.

With such a diversity of channels to interact with customers, many suppliers are still missing a trick. It’s a dangerous game, particularly as the majority of dissatisfied customers won’t bother to complain, they will simply change their suppliers.

Technological advances continue to transform consumer attitudes and behaviour. Consumers are increasingly demanding and their expectations are increasingly higher. Technology exists to make our life easier and it’s heightened our expectations regarding waiting times. Consumers no longer believe it is up to them to invest their time and effort trying to communicate with customer services. Instead, they expect the customer service departments to proactively solve any queries or problems they may have, as a matter of utmost urgency.

Social media exemplifies this (r)evolution in customer services; empowering consumers further, however, could it not also give greater power customer service departments as well? .

Two-way communication with customers is vital in order for companies to understand and, therefore, be able to effectively meet their customers’ needs. Offering customers variety and a choice of channels including social media platforms to communicate by is a fundamental part of giving good service.

And the trend is likely to continue, in particular, due to advances in technology which in turn increases accessibility of consumers.

“Compared to only three years ago, when Yahoo! and Google attracted 95% of Internet users, today online destinations are broken into three, equal-size categories: Yahoo!/Google, YouTube, and social media channels. This is an indication of the role social media is playing in today’s world,” says Alex Dayon executive vice president service cloud product management at salesforce.com

A recent report produced by Morgan Stanley earlier this year illustrated that both in terms of number of users and time spent, social media has already surpassed email. Meanwhile, the same report projects that over the next five years the number of mobile users will surpass that of desktop Internet users.

“An informal live survey we conducted during a recent industry event showed that currently most brands rely on email (68%) and phone (66%) to attend to their costumer service needs. Self-service, social networks and online forums followed with 24%, 21% and 14% respectively,” commented Dayon.

He continues: “When asked what they thought would be the most important channels used in the future, results underline the transformation of the customer service space. At 57% the self-service channel dethroned email (50%) and phone (56%), while both social networks and online forums also gained in relevance.”

The transformation is affecting all industry sectors alike with perhaps a difference between B2C and the B2B models. While both models have the same collaboration needs, they differ when it comes to the issue of data security.

In the case of B2C, the availability of the information exchanged (determining the problem and resolving it) can be referenced by other consumers and succeed in deflecting the volume of queries received by customer service providers. In the case of B2B –including financial services sector – however, the issues surrounding the security of data transfer have prevented a more innovative use of social media.

“As a result of this evolution, brands are being projected into a world where conversations about their products are happening. From a customer service angle, a brand’s choice is whether to engage consumers by creating profiles in forums already in place or to create such spaces and drive traffic there.

“In the case of the latter, customer service can be initially provided by a community on a peer-to-peer basis –like Cisco has done – deflecting a significant volume of queries away from customer services.

“Alternatively, the brand may choose to create closed social networks allowing them to proactively engage the community as done by UK fashion retailer New Look,” noted Katie Streten, head of digital strategy at Imagination.

An example of this is what both Dayon and Streten have been highlighting can be illustrated with a recent example from the South African Tourism Board. In order to cope with the 300,000 plus visitors expected during the World Cup, the agency needed a channel that would be set up in a short period of time and reach a maximum of (potential) visitors.

The South African Tourism Board opted for Service Cloud 2 and within weeks it was live on multiple channels—phone, email, Web self-service, Twitter, and Facebook.

With its @GoToSouthAfrica account, the South African Tourism Board created a channel for visitors to tweet questions. Agents answer the questions and all of @GoToSouthAfrica followers gained access to the queries and responses. The strategy also comprised a smartphone application – necessary in a country where internet is not as widely accessible to the population as mobile phone access.

Prior to the Service Cloud 2 deployment, the South African Tourism Board managed customer service using an in-house system based on Excel. South African Tourism recognised that it needed a contact center solution to support the immense scale of the event and meet the modern travel needs of visitors.

Enterprise cloud computing was particularly attractive to South African Tourism because it enabled the organisation to rapidly ramp up for the games and provide the flexibility needed to ramp down after the tournament without the ongoing burden of costly software, hardware and infrastructure maintenance.

The world is moving from a paradigm where consumers seek out information to one where information is ‘fed’ to the consumer based on his/her established preferences.

“When it comes to using social media as a customer service tool, providers must listen to their customers and learn about their preferences and preferred methods for communicating. Then it is necessary that the channel’s alignment with the brand is clear so that the objectives of the strategy are met. Finally, the approach needs to be fully integrated into the brand’s internal systems,” concluded Streten.

Organisations ignoring social media as an effective multi-channel communication tool do so at their own peril. Not only are they alienating themselves from a growing customer market segment, they are also potentially forgoing significant cost-savings that social media offers over traditional forms of communication.

Last week, I set the scene by examining the importance of critical intangibles in maintaining sourcing relationships. In the next few weeks, I would like to consider some of these critical intangibles in more detail, and explain why they can have such a dramatic impact on a sourcing relationship and its success.

The first point of discussion is whether one should adopt a cooperative or competitive style in working with the supplier market. Looking across some of the organisations with mature sourcing arrangements, we can see they vary the style they use according to their requirement. For instance, if you are outsourcing a basic service, such as a desktop, one can adopt a competitive style. This is because with this type of service, price matters – there are plenty of suppliers that can provide much the same service, and so the cheaper the deal, the more likely the supplier is to win more business. If you are outsourcing something that is commodity, a competitive style is key, because you as a client have the power: The power to choose your supplier, and therefore the power to go somewhere else.

However, if one is outsourcing a strategic service, such as a major finance transformation, adopting a cooperative style is critical to success. Indeed, success will depend on sharing – equal sharing of the risk, upside and downside. Success will depend on ensuring that there is a joint understanding of the key deliverables and the key drivers. Success will depend on an understanding - of the culture of the supplier and of what is driving the team.

When it comes to choosing one style over the other, many clients aren’t necessarily adopting the correct strategy to fit the situation. For a desktop deal, adopting a cooperative style wouldn’t be disastrous, but you could waste a considerable amount of management effort. Conversely, by being more competitive in that same situation, you would be saving both time and energy. If however, you were to adopt a competitive style in a strategic situation, you could be risking the success of your sourcing relationship.

British Waterways has renewed its contract with communications services expert NextiraOne for a three-year period; it will continue to provide ongoing support and managed services across the nation-wide waterways network.

The contract covers the nationwide infrastructure, Local Area Networks and the Wide Area Network and including Alcatel-Lucent voice and Cisco data networking equipment via NextiraOne’s Welcome Centre. The Welcome Centre provides a single point of contact which manages the lifecycle of faults, from initial fault logging to resolution.

Under the agreement, NextiraOne will continue to provide managed services and nationwide support for the British Waterways communications network, ensuring the reliability and availability of voice and data communication services and the long-term health and stability of the infrastructure.

NextiraOne supports British Waterways’ communications infrastructure with a comprehensive managed services agreement and support contract that delivers end-to-end service.

British Waterways manages the canals and inland waterways of the UK, supporting over 2,200 miles of canals and rivers and a diverse range of leisure, sporting, commercial, industrial and residential activities.

In continental Europe, NextiraOne has been awarded the contract to build ICT Network for the National Stadium in Warsaw, a multi-functional facility which is being prepared for major events, including the UEFA European Football Championship, EURO 2012.

Under the contract, NextiraOne will deliver, install and commission network equipment together with security components, implement system and applications software for the new stadium’s network and conduct all necessary project and integration work. In addition, NextiraOne will provide training for system users together with ongoing support and maintenance.

According to the terms of the agreement, the new network for the National Stadium will be completed by mid February next year.

The Legal Ombudsman has selected systems integrator 2e2 to provide its critical business services over the next three years.

2e2 will provide business applications, on-premises services, on and off-premises service management, datacentre hosting, security, network services and end user training to the new body, which will be based in central Birmingham.

2e2 has been working on the project since March this year, and expects to complete the integration of its end-to-end IT services well before this date.

The Legal Ombudsman is a new body being established by the Office for Legal Complaints to ensure consumers of legal services have an independent and impartial way to resolve disputes involving their lawyer. It expects to be up and running by early October.

Times are tough, it goes without saying. The Cabinet Minister’s decision to meet with the Government’s biggest suppliers to ask them what they can do to help cut the cost of their services is just the most recent example.

When news broke that Cabinet Minister Francis Maude had requested the meeting with the likes of IBM, BT, Hewlett Packard, Serco, Capita, Capgemini and Steria the idea of contract re-negotiation started to loom in people’s minds.

The matter is not black and white. While the coverage has tended to look at the matter as though the Government were in a position of dominance, the reality is otherwise.

To begin with, it is unlikely that the Government wants to engage in litigation disputes and pay termination fees left, right, and centre. Also, suppliers may be being asked to revise their pricing but where they do, they will most certainly receive something in exchange like a contract extension for example.

But more importantly the Government needs to consider the reasons for which it has decided to outsource – which may include capacity along with cost.

"What the Government fails to understand is that the main benefit of an outsourcing relationship enables them to focus on the work that is core to their value proposition,” says Ferenc Szelenyi, Dell Services' VP EMEA, public sector services.

The relationship between the Government and its suppliers is a symbiotic one, but it is also one that evolves over time. Every private/public partnership is cemented on the belief that the work being outsourced is unique and must be managed uniquely.

“The Government expects its outsourcing service providers to maintain the complexity rather than to simplify and standardise the work processes. [For example, when] processes and people are moved to the provider in their existing state and are independently managed next to countless similar processes of other companies, the cost and service benefits of standardisation and simplification are lost," observes Szelenyi

Similarly, if we look at the existing relationships between various Government bodies and private suppliers (i.e. Capgemini’s handling of tax collection or more recently the award of a £415m contract by the Ministry of Justice to Serco to manage prisons), it is clear the Government cannot extirpate its relationships from suppliers. In the end is in the best interest of both parties to collaborate for mutually beneficial gain.

“Just as the Government seeks to save money, reduce risk, and/or enhance the quality of its operations, the service provider seeks to earn a profit, build on its service capabilities, and leverage its growing expertise for the future. The most successful outsourcing relationships are those that lead to long- term value creation for both parties. It is critical that the Government never loses sight of the fact that the relationship is a bilateral one,” concludes Szelenyi.