Industry news

The Ministry of Defence (MoD) is said to be mulling over outsourcing the management of the Merchant Navy, which would potentially save the government tens of millions of pounds.

Groups including James Fisher, Maersk, Serco and the VT Group are all understood to be interested in managing the contract.

The British Library has paired with Capgemini UK in a bid to transform its IT systems.

The technology provider will design and implement a new request management and delivery system to “significantly improve” access to library resources by making searching, ordering and delivery processes “simpler, easier, faster and more efficient”.

Caroline Brazier, associate director of the British Library, said: “We were impressed by Capgemini’s genuine commitment to client collaboration, and by the quality of their people, proposals and track record.

“We are looking forward to working closely with them on this key project and to achieving our planned transformation in the service we deliver to our customers.”

The project forms a key part of the British Library’s aims to expand its user base among researchers from the UK higher education sector, the commercial world and individuals.

IBM has been named the best place to work for lesbian, gay and bisexual people for the second time in four years.

The news was revealed following a survey from Stonewall, the lesbian, gay and bisexual charity, which has published its Top 100 Employers 2010, showcasing Britain's best employers for gay staff.

In second place is Hampshire Constabulary and Ernst & Young comes third in the survey, based on a range of key indicators, with over 7,000 participants.

Gay staff working at the top 25 workplaces reported a satisfaction level almost ten per cent higher than workplaces outside the Top 100. Staff were also more likely to disclose their sexual orientation in monitoring exercises at the highest ranking organizations.

Brendon Riley, chief executive officer IBM UK & Ireland, commented: “IBM is extremely proud to accept this important accolade. At IBM, we pride ourselves on delivering a working environment which reflects equality of opportunity and experience for all. Diversity constitutes our character, our identity and ultimately our success – it is in our DNA.”

For the full results visit the website.

UK-based holiday centre Park Resorts has appointed Sitel to provide the company’s sales and service operations, following its 40 per cent sales increase over the last two summers as holiday-makers opt for money-saving staycations.

The decision was a difficult one however, according to the holiday company’s sales and marketing chief.

“It was not an easy decision to outsource our reservation centre but the positives will speak for themselves,” said Andy Edge, sales and marketing director at Park Resorts.

“I am very proud of the Park Resorts team,” he added.

Although previously delivered in-house, sales and service operations were given to Sitel in 2008 whilst they provided overflow support to company. After the success of the move, there was a transition to a full outsourced solution from its Stratford upon Avon centre in January 2009.

Schools could begin outsourcing their ICT following public sector budget cuts after the 2010 general election, a survey has indicated.

The study by Redshift Research on behalf of ICT provider The Stone Group found that budgetary restraint was the top concern for 84 per cent of schools this year.

Stone Group technical services manager Richard Stockdale told computing.co.uk that schools could be forced to look at outsourcing because they are increasingly run like businesses.

“There has historically been a reluctance to outsource IT in schools, but then they have never faced a situation like this one, where the funds available will be reduced,” he added.

The survey polled 200 ICT decision-makers in the UK education sector.

Barclays Bank has decided it will not renew its £400m outsourcing deal with Accenture following its expiration in June, it has been widely reported.

The news comes a month after the financial services giant announced it would bring the management of it s desktop systems back in house.

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, according to Computer Weekly.com.

A spokeswoman at Barclays said: "We will not be renewing this as we are bringing the resource in-house."

The change followed a strategic review to ensure it had "the most efficient model that supports our business".

The partnership included application development and management of the bank’s UK-based commercial and retail banking systems in a bid to cut costs.

Banks are predicted to move their customer service operations away from high street branches and towards call centres in the wave of an increasing trend.

The move comes as a result of the stiffer competition banks now face with main threats stemming from telecoms firms and high street retailers, according to industry analyst Gartner.

As the economy begins to move forward, banks need to plan for the "new world" emerging from the end of global recession, says Gartner.

“If they don’t, they will become uncompetitive and fall behind more-forward-thinking rivals," said Richard De Lotto, Gartner principal research analyst.

New and emerging outsourcing locations are beginning to chip away at India’s market dominance, according to a new survey

The survey of 514 outsourcing service providers in 50 countries, from Duke University's Offshoring Research Network and PricewaterhouseCoopers found that established providers are increasingly facing competition from upstarts in Latin America, Eastern Europe, and Asia.

Emerging economies are increasingly expanding their sector activities, including the Chinese government designating 20 cities as outsourcing hubs to attract more international investment.

However, according to the survey, only 16 per cent of Indian service providers see competitors from other emerging economies as a threat.

"Growing competition has transformed the outsourcing industry into a global race for market share," said PwC Managing Director Dr. Charles Aird.

“India's success as the world's back office has motivated other developing countries with well educated and under-employed populations to seek to duplicate their experience."

Other survey findings include:

• 70 per cent of outsourcing deals in 2008 were renewed at the expiration of the first contract, down from 72 per cent in 2007.

• Unrealistic client expectations and the lack of a client outsourcing strategy were the top reasons for contract terminations.

• "Nearshoring" has gained momentum among companies using or considering outsourcing services.

Department store chain House of Fraser is outsourcing its IT support to Capgemini UK in a seven-year contract set to take effect this month.

As part of the contract Capgemini will manage data centre services, applications support and development, service desk, desktop support and third party services.

It will also manage network services, which will be provided by Capgemini under a sub contract agreement.

House of Fraser says that its decision to outsource its entire IT operations will give it improved access to the wide range of IT skills and capabilities required to support its business plans, a more cost-effective IT support operation, and considerable IT procurement and financing benefits.

Let us pretend it’s not January 2010 – let us instead pretend it’s January 2009, and we are predicting what will happen in the year to follow.

I cannot conceive that many would have even considered the possibility that within six weeks of the new year, the Indian outsourcing industry would be in complete turmoil over the largest ever fraud – i.e. the Satyam situation.

How many could have realistically predicted that by May 2009, EDS, the bastion of the sourcing world, would be bought by HP for £13.9 billion, doubling its services business in one fell swoop? Who would have also thought that ACS would have been bought by Xerox, transforming their global proposition?

And how much of the trend reversal in the financial sector could have been predicted? Citibank and Aviva have proclaimed for years how important their captive offshoring operations were; how they formed a distinct competitive advantage and how they fundamentally disagreed with the prospect of outsourcing as a viable alternative – within six months of 2009, Citibank had sold its captive to Genpact, and Aviva had in turn sold its to WNS.

I don’t think many people really would have predicted that!

So, today, the dawning of 2010, what do we think we will be talking about this time next year? Will the ongoing expectation that one of the principal Indian outsourcing companies will buy a major European player eventually become reality? Will innovation come back into the forefront of the market’s thoughts as a renewed priority and not continue to be shunned in favour of basic cost reductions? Will cloud computing really start to mature, or will there be a horrific security disaster from using cloud-based technology in sourcing that delays its wider uptake, or worse, leads to ongoing distrust of the concept?

Will there be an unexpected, or even aggressive, merger of two or more of the major sourcing players?

Will multi-sourcing no longer be the flavour of the month as companies struggle to believe that multiple supplier relationships could be efficiently managed, when managing just one causes so many problems?

I certainly don’t know the answers to these speculations just yet, but hopefully during 2010 I will be able to keep you abreast of the latest rumours and happenings in the sourcing world.

So I trust you all had a Merry Christmas, and here’s wishing you a happy (but most likely unpredictable!) 2010!