Industry news

More than half of outsourcing end-users are more confident in the use of outsourcing to support their business objectives than they were in 2009, according to the National Outsourcing Association’s (NOA) quarterly Outsourcing Confidence Index released today.

While the financial services sector was found to be the most positive about the use of outsourcing in 2010 and beyond, the services sector also showed high confidence with 61 per cent followed by the retail sector which was marginally less confident with 55 per cent.

The research also found 60 per cent of users intended to outsource services not previously outsourced this year, whilst 56 per cent of those already outsourcing planned to increase the scope of existing contracts.

The concentrated focus on cost reduction has also led-to a greater interest in offshoring, with 100 per cent of respondents planning on increasing offshoring by the end of 2010 and 88 per cent of respondents placing high importance on multi-shoring. However according to the report 78 per cent of respondents believe supplier outsourcing capability has not improved over the past 12 months.

Martyn Hart, Chairman of the NOA, said, “Outsourcing has traditionally been seen as a cost saving mechanism for business, so during the torrid 2009, it is not surprising that interest in outsourcing is continuing to grow. However, continued focus on cost above everything else, means that many are pushing through higher volume low cost contracts, over shorter time frames. This short-termism can be dangerous and these kinds of contracts frequently fail.”

He continues, “That said it looks like suppliers still have some work to do to ensure they’re fully catering for what users want in 2010. This is likely to be an ongoing issue as users continue to seek new cost savings from less mature providers and locations around the world.”

BT will close its Fort William contact centre resulting in forty redundancies.

The telecoms giant took the decision following a review to consolidate its activities into a smaller number of centres.

According to BT the Manpower-managed centre will close during the 2010/11 financial year.

A BT spokesperson told the BBC, "We will agree a closure date within the next few weeks and will communicate to the team in early May.

"Our priority now, with the assistance of Manpower, is to be able to clearly communicate to the team what our exit strategy is and to give them a timeframe for this to be completed.

"We will also be working closely with Manpower to help people find alternative work within the community."

BT said its contact centres in Alness and Thurso would remain open

The Labour party has announced that, if reelected, they will ensure migrant workers pass English language tests if they want to work within the public sector, according to Call Centre Focus.

Launched today, the proposal comes as part of the party’s manifesto ahead of May’s general election. Under current rules, enforced English language skill requirements only cover teachers, doctors and police officers from outside the European Union. However, the Labour party intends on widening this further across public sector roles, covering call centre agents, nurses, social workers and police community support officers.

Worldwide IT spending is predicted to reach $3.4 trillion during 2010, a 5.3 per cent increase on 2009 figures. The IT industry is expected to show continued steady growth, with 2011 spending projected to surpass $3.5 trillion, an increase of 4.2 per cent from 2010, according to Gartner.

The IT services industry is forecast to rise 5.7 per cent from 2009 with spending estimated to hit $821 billion in 2010. This and 2009’s reported growth in outsourcing revenue, comes as an encouraging sign for outsourcing service providers, something which Gartner analysts believe will extend to consulting and system integration in 2010.

Joanne Correia, managing vice president at Gartner, said, "Cost optimisation, and the shifts in spending form mega suites to the automation of processes will continue to benefit alternative software acquisition models as organisations will look for ways to shift spending from capital expenditures to operating expenditures. Because of this, vendors offering software as a service (SaaS), IT asset management, virtualisation capabilities and that have a good open-source strategy will continue to benefit. We also see mobile-device support or applications, as well as cloud services driving new opportunities."

By Dr Roger Newman, head of UK manufacturing and digital convergence relationship management at Mahindra Satyam

With the Winter Olympics now over, and many a football fan counting down the weeks to the 2010 World Cup, it is perhaps a timely opportunity to reflect on the transformations that technology is making to the world of sport.

We are now entering a new generation of ‘sport as entertainment’, and our culture demands coverage of sporting events delivered when we want, where we want and on whichever device we want. IT is revolutionising the way in which spectators experience live games and the means through which we ‘consume’ sport, from TV to mobile devices and PC’s . We are now also entering the era of 3D sporting events designed to bring us to the heart of the on-pitch action, without having to leave our homes. Earlier this year, the game between Arsenal and Manchester United became the first sporting event to be broadcast live to a public audience in 3D.

In the same way, IT can be transformational in the way in which global sporting events are set up, organised and delivered. Outsourcing has, of course, played a large part in the delivery of such events providing organisers with the ability to ramp up and down their resources quickly, and giving access to a global workforce with specialised skills. This is particularly important when the major sporting events tend to operate on four year cycles. The challenge for both the outsourcer and the sporting body is how the IT platform and business processes can be reused between and across events. At Mahindra Satyam we are now in the final stages of preparation for the FIFA World Cup in South Africa. We have certainly learnt a few lessons in the development of the software for this event that were given a trial run at the Confederation Cup last year. We know that behind the scenes, IT applications enable organisers to streamline operations and build efficiencies at every stage of the event from volunteer registration and management to material planning as well as creating communications platforms for fans.

Most of the applications used in sport for managing such events are designed from the ground up, or are core application modules which are tailored to the needs of events. Developing bespoke applications on diverse platforms which need to be developed and supported, can, of course, be time consuming and cost intensive.

The time is perhaps now ripe for a new model to emerge which can offer cost savings and greater flexibility for the management of events. Hosted, on-demand event management solutions would deliver timely commissioning, enable the fast ramp up / ramp down scalability of resources, limit fixed costs and enable customers to access continuously improving services and solutions. As the data is maintained in one place, the client could also benefit from reusing some of the data across various events, such as venue, fan or accreditation information.

As we enter a new era of sports viewing perhaps we also need to consider the way in which IT is delivered to support the management of such events. In fact the IT footprint now extends well beyond the actual event and into the whole experience before, during and after the event. A new way of developing and deploying applications for organisers that minimises resources and reduces costs has got to be a ‘win-win’ for the client and outsourcing provider.

Northamptonshire and Cambridgeshire County Councils plan to sign a four-year shared services deal for a joint IT platform worth up to £70.5 million.

The councils are partners in a Local Government Shared Services (LGSS) scheme, which is looking to appoint a supplier for a software as a service ERP, enhancement and optimisation and operational transition support. The councils are reportedly also looking for support for other functions such as HR, procurement, finance and legal.

According to a contract notice, the framework agreement will be made available to other councils around the country, including Chichester District Council, City of London, Cornwall Council, Herefordshire Council and North Yorkshire County Council.

Telefonica has opened a new outsourced IT delivery centre built by Accenture to serve the applications and development needs of the Group’s Latin American and European operations.

Under the terms of the contract, Accenture is managing the development and maintenance of applications related to consumer systems, billing and collections, across 17 markets in Latin America and Europe.

The company behind the notorious comparethemeerkat marketing campaign, BGL, has signed a three-year outsourcing agreement with Sabio to manage its contact centre for three years.

Under the agreement, Sabio will support Insurance group, BGL’s voice and data networks, helping to ensure the company’s virtualised Avaya contact centre successfully operates across five major UK sites as well as BGL’s customer service centre in South Africa. Sabio's Intelligent Support operation will also provide 24 hour support monitoring, helping to cater to the company’s two million customers.

Dean Freed, senior manager, IT, at BGL Group, said, "We are committed to providing a high quality, streamlined service to the 2.2 million customers BGL Group looks after, so it is imperative that our customer service infrastructure is always available to support internet and contact centre activities. “

Telekomunikacja Polska Group (TP Group), Poland’s leading telecoms provider, has signed a three year IT outsourcing contract with CGI Group Inc.

CGI will assume responsibility for application support and services whilst working to consolidate its current multi application, multi vendor environment. The group hopes to agreement will improve overall time to market and total cost of ownership.

“TP Group is going through a major re-engineering of its IT services and is looking to the strategic CGI partnership for the leadership, skills, resources, experience as well as the delivery framework to improve productivity and quality in our products and services in the Polish market,” said Piotr Muszynski, COO of TP Group.

Nordic financial services group, Nordea, has appointed Accenture in a five-year application outsourcing contract.

Under the agreement Accenture will help Nordea improve customer service and increase cost efficiencies by developing and maintaining applications that will support the bank’s customer websites.

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The contract will be delivered from Accenture’s centres in Denmark and via its Global Delivery Network in Bangalore, India. Collaborating with Avanade, the outsourcing provider will support the bank’s 30 websites and seven million monthly visitors.

Henrik Korch, chief information officer for marketing at Nordea, said, “This agreement gives us access to skilled resources and the benefits of international expertise in web application development and maintenance, helping to ensure we have the flexibility to ramp up and down according to our demand and changing business needs.”