Industry news

NatWest workers have learned the bank’s Theale, Reading based call centre is due to close in September this year leading to job losses.

Consultations with staff were an ongoing part of the process, said RBS spokesperson Linda Harper.

“However as a result of our relocation from the centre in Theale, 141 roles in our UK operations business will be made surplus,” said Harper.

"In 2009 we announced that we would be cutting 4,500 roles in the UK over the next two years in our business services division and that we would work through a process with staff at all affected locations as we determined the local impact of this,” she added.

The job cuts come as RBS decided not to renew its lease when it expires in September. RBI has told some staff of possible relocation opportunities to either its Swindon or Farnborough offices.

Ericsson has signed a five year IT outsourcing contract with Tata Consultancy Services (TCS).

TCS will deliver application maintenance and development services for Ericssons internal IT operations as one of two strategic partners for the company.

Amit Bajaj, director, Nordic region, TCS, reportedly explained that Nordic companies are increasingly looking at service providers to deliver IT services and business solutions.

The contract points to the ongoing trend of Indian headquartered IT companies delivering projects in the Nordic region.

US Universities are showing increased interest in outsourcing. IT decision makers are looking to the discipline to help them meet important challenges and priority business initiatives, according to a survey from CDI IT Solutions.

According to the survey, the biggest challenge faced by higher education IT leaders is the need to effectively balance the provision of resources for their constituencies against their focus on strategic initiatives. Some other important challenges highlighted include: preparing for disaster recovery; the ability to testing systems; application development; security (threat of breaches) and IT staff retention.

"As their CIO counterparts in the private sector learned in past business cycles, IT leaders at colleges and universities are beginning to recognise the value of outsourcing services to stretch tight budgets while maintaining quality service delivery to faculty, students and administration," comments Andy Cvitanov, president of CDI IT Solutions.

Half of the survey respondents said they already outsource some IT services with the most common being those considered non-strategic, such as student email, laptop distribution, printer support and project management. Nearly all respondents said they thought outsourcing would be good for their institutions.

New data has suggested a huge two million UK customers are not 100 per cent satisfied with the services offered by their credit card provider.

uSwitch.com, Marks & Spencer and Tesco rose from third and fourth place respectively from last year to the top of the price customer satisfaction tables, with 89.4% of consumers saying they were content with service levels overall. Whilst American Express, which had taken the top slot in 2008 has dropped to third place.

Other traditional card providers, Halifax, Lloyds TSB and Natwest came bottom of the league tables, with only 64 per cent, 63 per cent and 62 per cent of shoppers respectively being satisfied.

Last year saw supermarkets over take in popularity polls, stealing the limelight from traditional financial institutions in the customer satisfaction stakes. Supported by the dissatisfaction found in the recent research this trend seems set to continue throughout 2010.

"It is disappointing that customer service is still letting the dedicated card companies down. With generous rewards such as loyalty points, gifts, air miles or money off your shopping bill, it’s easy to see why the supermarket credit cards are doing so well,” said Louise Bond, personal finance expert at uSwitch.com.

A recent survey has reported that businesses worldwide are more likely to increase their use of outsourced collection services to improve cash flow and increase liquidity. The survey revealed that Belgium and the Netherlands showed 44 per cent and 43 per cent increased use of outsourced collections services.

The survey was conducted by the 'Global Collections Review' and included over 3,500 companies across four continents by the credit management and collections specialist Atradius.

The Economic Times reported that companies will be outsourcing their collection work in order to recover business-to-business international and domestic trade debts.

The survey was conducted among 3,538 businesses across 20 countries including Austria, Belgium, Denmark, France, Italy, the Netherlands, Poland, Spain, Sweden, Switzerland, the United Kingdom, Australia, Canada, China, Hong Kong and the USA.

Microsoft has paired up with media and communications services provider arvato in a five-year deal.

The agreement sees Microsoft consolidating operational activities for several key business lines previously handled by multiple suppliers with one vendor.

The provider will handle several operations including software licensing and distribution, partner reward schemes, day-to-day invoice processes, technology deployment, technical support and customer services.

“Moving from many to a single vendor with such extensive international reach will not only be more efficient, but also help ensure global consistency in the way we do business,” said Matt Rossmeissl, Microsoft Vice President Commercial Operations.

Matthias Mierisch, Head of arvato’s Global BPO Unit for Microsoft and CEO of arvato UK & Ireland, said: “We will now be focusing on ensuring Microsoft realises the true benefits from this latest substantial investment in arvato.”

arvato will support this business globally from their operations based in Dublin, Singapore, Reno (Nevada), Fargo (North Dakota), Manila and Buenos Aires.

As cloud computing, the process of delivering and sharing applications online from a web browser, continues to grow in popularity, many service providers have been left wondering how it will impact on the traditional outsourcing model.

The concept of cloud computing has all the attributes to support a global outsourcing environment, eliminating hardware to lower infrastructure and energy costs, as well as offering the scalability to meet demand in an unpredictable global market.

We are experiencing a global delivery continuum, where many organisations are evolving from crude business process outsourcing (BPO) environments (a lot of lift and shift), to SaaS delivery, in order to optimise that environment, and deploy a cloud computing "plug-in" model.

Seeing through the clouds…

While outsourcing providers should be embracing the benefits of the cloud process, it’s worth noting that it is by no means a silver bullet to alleviate the challenges of all organisations. However, it does represent a tool that can be quickly added to the arsenal of IT solutions for many companies. Large organisations may have sufficient resources internally to accommodate routine business requirements, but should a need arise to quickly ramp up a business unit or product line, the cloud delivery model becomes a valuable tool, enabling agility. For companies of all sizes, that have a seasonal business or product line, accommodating peak demand periods without having in-house servers sitting idle at other times is crucial. Financial indications suggest that we'll start emerging from this economic slump in the coming months ahead, and companies need to be ready to scale-up their support infrastructures in a smart fashion to respond.

Cloudy competition…

Increasingly, buyers will reap the benefits of cloud delivery as more major providers enter the market. Many established providers with robust infrastructure, skilled staff and a legacy of delivering high quality services are finding their traditional markets saturated with competition. Cloud computing provides a logical emerging market that offers opportunities to grow their business. The scramble to offer more benefits at a lower price could well rival the marketing wars we see today in the automotive industry. This can only result in brighter prospects for organisations seeking cloud cover in an economic storm. Outsourcing for the sake of cheap labour will always generate some savings in the short-term, but these costs will soon return if you don't follow through with the improved processes and technology that allow for a global operating model. Simply shipping out your ‘mess’ for less is never going to make much of a difference to your bottom-line, and will often end up costing you more in the long haul. The bottom-line is that when an organisation moves into a global outsourcing model, it must transform the way its business deploys technology platforms and business processes if it is to generate real cost-efficiencies. Embracing the new developments in the cloud is a sure way to make an outsourcing experience work on a continual basis.

In summary, as the outsourcing industry goes through another transformation, driven by cloud computing, businesses will continue to depend upon the services of a skilled and trusted systems integrator partner. Experience really is invaluable when it comes to configuring the right computing environment that addresses unique business needs.

What a week Google has had. Putting its foot down on China’s demand to censor the search results on its Chinese service could see them pulling out of the country altogether. A multi-billion dollar business with ethics - who would have thought it?

Google were not the only company in the news this week who are being eulogised for their social awareness. It was revealed on Thursday that IBM has topped the Stonewall list of gay-friendly employers for the second time in four years.

Stonewall is a UK lesbian, gay and bisexual charity, and published its Top 100 Employers 2010 during the week. IBM has topped the list, being named the best place to work in the UK for lesbian, gay and bisexual people. It seems even outsourcers have a social conscience.

However, employees at Bosch may not be feeling as warmly about the outsourcing industry as the employees at IBM. On Friday, the German manufacturing company announced its plans to close a car plant in Wales and move the remaining production to an existing plant in Hungary, leading to significant job cuts.

The subsequent loss of 900 jobs in the UK is a result of an almost 50 per cent fall in demand for luxury vehicles. Looks like the sector can’t please all of the people, all of the time.

Also this week, in a total role reversal, Barclays has brought outsourced applications back in-house. The bank has decided it will not renew its £400m outsourcing deal with Accenture.

The move will see 230 out of the 900 technology staff who moved to Accenture when the deal was signed in 2004, return to Barclays. With the general consensus that outsourcing is on the up, this seems to be an interesting move by Barclays. Sourcingfocus.com will ensure you are kept updated on the progress.

Never a dull moment in the sourcing industry as this week of ups and downs demonstrates. But then, when does the course of business ever run smooth?

German manufacturing company Bosch is set to close a car plant factory in Wales, moving its remaining production to a sister plant in Hungary in 2011, it has been widely reported.

The move, which is expected to lead to a loss of 900 jobs, had been triggered by a 45 per cent fall in demand for alternators for luxury vehicles, according to FT.com.

A spokesperson from Bosch said the decision to close the plant in Miskin, near Cardiff, was due to wider difficulties in the industry.

Indian media company UTV Software Communications has signed a five-year deal with IBM to streamline its key provisions.

The technology giant will take over the company's finance and accounts, rights management, procurement, projects, material management and other key functions in a bid to provide a customer-centric operating environment. Included in the contract is India's first cloud-enabled email system, according to the company.

Rajeev Wagle, chief financial officer, UTV Software Communications Ltd. commented: "The market here is growing at a rapid pace and customers are increasingly becoming demanding, making it imperative for us to offer fresh delivery platforms and content diversity enabled by technology."