Industry news

Public sector and IT outsourcing: need to address the disconnect

“In many ways, there is complete disconnect, between what we want to do as the Department [of Work and Pensions] and what the outsourcers that come and see us want to do for us,” highlighted James Gartner, CTO at the Department of Work and Pensions during the NOA’s end-user event and summer party.

The Department for Work and Pensions (DWP) is one of the largest IT outsourcers in Europe, it spends £185bn in benefits and pensions delivery and with an aging population, the sum is only likely to grow.

During his brief presentation Gardner stressed that, “What [the DWP is] trying to do from a society perspective is bring people out of poverty. To find them new work outcomes to make sure they are not stuck in a poverty trap.”

Gardner indicated that the DWP spends a fraction (0.004%) of that £185bn in technology and that what he wants from suppliers is the innovation and the tools required to address the problems faced by a public sector faced with the deepest cuts in a generation.

Gardner was one of six speakers at the NOA end-user event and summer party, which took place at the HoganLovells offices last week. The other speakers included: Michael Stock from the BBC, Sarah Manning from BT, Kevin Devoy from Centrica, Ian McDonald from Symbian and Andy Beale from the Guardian Media Group.

To view James Gardner presentation here http://www.youtube.com/watch?v=7lJK0hf-90M.

Automobile manufacturer Ford has extended its IT outsourcing deal with business solutions and managed services provider CSC.

Under the agreement, CSC will continue to provide essential infrastructure and application management services for the Ford customer service division in Europe, operating across 19 European offices, including UK branches in the North West, West Midlands and Oxfordshire.

The partnership between Ford and CSC was established 15 years ago and it has evolved to include offshore services to its Europe and US operations.

When CSC acquired IT services company Covansys in 2007, the scope of work expanded to include the offshore IT services provided by Covansys to Ford of Europe and North America.

This follows CSC's announcement last week of a $580m deal with financial services giant UBS for networking services.

The National Outsourcing Association’s (NOA) Diploma in Strategic Global Outsourcing, accredited by Middlesex University, is now open for autumn registration.

Provided by the NOA’s professional development arm NOA Pathway and developed in association with True North, a leading UK learning and development company, the Diploma was specifically designed to raise industry standards by establishing an industry-wide benchmark for quality in outsourcing.

It is open to experienced candidates with a minimum of 10 years’ organisational experience and five years within outsourcing specifically.

Running in its second year, the Diploma was last month awarded to its first graduate, and is helping raise industry standards and drive outsourcing as a professionally recognised career.

The Diploma, which is a postgraduate level programme, is research-based, enabling candidates to select a specific area of study according to their particular area of interest or professional business needs.

By allowing participants to focus on their own organisational agenda, the programme will help them overcome specific outsourcing challenges, so they can effectively achieve their business goals and directly add value to their organisations.

The Diploma comprises three modules, each taking three months to complete. Each module features a one-day workshop which involves all participants to facilitate knowledge-sharing and group learning from a range of outsourcing experts.

All candidates undertaking the course will form learning sets to provide each other with support and contribute to each other’s learning. Each candidate will also have his/her own personal tutor to provide phone-based and online support throughout the nine-month course of study.

For further information or to register for he NOA Diploma programme please call 0845 130 5500, or email contact@noapathway.co.uk

Alex Blues, Head of IT Sourcing at PA Consulting Group continues his exploration of the 'critical intangibles' that can make or break an outsourcing relationship.

Throughout the next few weeks of this regular blog, I will be continuing to consider 'critical intangibles' in further detail. Those things that I believe can make the difference between success and failure in a sourcing relationship. Those details that may be overlooked by those only concerned with the pricing and the legal framework of a sourcing relationship.

Last week, I talked about the difference between a 'co-operative' and a 'competitive' approach to sourcing'. This week I would like to consider the difference between 'trust' and 'suspicion' as the basis for a working, sourcing relationship.

In fact, both attitudes - trust and suspicion - work at a corporate and at an individual level. However, mixing the two styles at either level can be disastrous.

Some organisations and people believe that the world is out to get them - typically characterised by strong rules and governance and an underlying philosophy that self interest is at the core of all actions. In situations like this, the contract never gathers dust - it is always being brandished and penalties are being considered or demanded.

Others believe that you can agree a set of outcomes and 'trust' both parties to achieve these results - in these cases the approach is typically underpinned by lighter governance and outcome-based rewards rather than contractual penalties, like service credits.

Once you have considered and accepted this, there is then the appreciation that suppliers and the contracting organisation fall into one or other camp - even though some may sit in the middle and some at the extremes of the trust or suspicion spectrum, they do all fit into this somewhere.

So, the key critical learning from this is to be honest about your own style corporately and individually, and to make sure that you only work with the supplier or organisation that matches the same style as your own.

If you take the time to assess these 'critical intangible' factors at the outset you could be making the difference between a successful and a failed sourcing relationship - it's not just about finances and contractual terms.

Global IT and BPO services provider Patni Computer Systems has appointed Sunil Chitale as executive vice president and chief strategy and marketing officer for the company.

In his new role, Chitale will lead Patni’s M&A, marketing and strategic planning functions.

Chitale began his career with Patni in 1985 and has managed large relationship portfolios, led the manufacturing vertical and led Patni's Enterprise Software business globally.

In addition, he also managed the Patni Academy for Competency Enhancement (PACE) and the Global Resources in Technology (GRiT) functions.

He has a Bachelor’s degree from the Institute of Technology - Banaras Hindu University.

Nippon Telegraph and Telephone Corporation (NTT), one of the largest global telecommunications service providers has made an all-cash offer for 100% of IT services and solutions specialist Dimension Data shares.

The ICT industry is about to enter a time of revolutionary change with the advent of cloud computing. As such the dominant ICT enterprises are attempting to integrate business domains beyond their existing framework and are trying to secure a leading position as a main player in ICT.

The agreement would see NTT acquire the entire ‘issued’ and ‘to be issued’ ordinary share capital of Dimension Data for approximately £2.1bn; a move unanimously recommended by both boards of directors.

The integration between NTT and Dimension Data will create a substantially expanded global business for corporate users.

NTT Group has developed its business globally with a central focus on managed network services, data centers, system integration and mobile services. Dimension Data however focuses on the development, operation and maintenance of IT infrastructure, including network devices and servers at the clients’ site.

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.