Industry news

Large global enterprises are losing £12 billion annually through failures in the sourcing and management of their telecom services.

The losses occur because 80 percent of all telecoms sourcing projects are inefficient, according to a joint study from Forrester Consulting and Hudson & Yorke.

Further findings from the report included:

o While CIOs are spending up to 20 per cent of IT budgets on telecom services, they are committing under one fifth of team time to managing their telecom strategy, sourcing and governance, resulting in financial loss

o While nearly three quarters of respondents (74 per cent) had considered their total cost of ownership in detail, only half that number felt they had thoroughly defined their telecoms sourcing strategy,

o At the end of a major sourcing project, one in five of respondents felt they were not satisfied that they had met the objectives set out in the original business case

Harry McDermott, CEO at Hudson & Yorke, comments, “CIOs are increasingly expected by their CEOs and CFOs to deliver more services and improved quality at less cost. There is clearly a significant discrepancy between what large organisations hope to achieve with a major telecoms sourcing project, and the reality of what is currently being delivered with limited experience and resources.”

The independent study surveyed 81 multinational corporations from 12 countries across a variety of industries.

TeleTech is providing 42 of its service delivery centers and 5,000 employees from around the globe for a telethon to aid the victims of the Haiti disaster.

The outsourcing service provider is participating with a coalition of global media, entertainers and businesses who will be supporting the "Hope for Haiti Now: A Global Benefit for Earthquake Relief" telethon.

"Hope for Haiti Now" will air on Friday, January 22, 2010 at 8:00 p.m. ET/PT. The company is offering 42 of its existing service delivery centers located in the U.S., Canada, Mexico, Argentina, Australia, Philippines, South Africa, and Costa Rica to for the cause.

Kenneth Tuchman, TeleTech's chairman and chief executive officer, commented: "I'm proud and honored to announce that TeleTech will play a role in this important fundraising event. It is highly rewarding to be able to repurpose our global infrastructure, technology, and human capital to aid others during a crisis and I am overwhelmed by our employees' consistent drive to help others in a time of crisis and their generosity to give of their time and resources."

There is something uniquely bonding in the experience of complaining about the cashier’s glum face at our local supermarket or the perverse grin on the bus drivers face as he watches you race to catch the bus, and promptly closes the door in your sweaty breathless face. Customer service - it is something we as customers feel very strongly about and quite rightly too. Is it too much to ask that you get a chirpy smile with your weekly shop or that bus drivers actually want you to catch the bus? It came as no surprise then, that when a report was released this week suggesting UK customers were not 100 per cent satisfied with the services offered by their credit card provider, it caught the sourcingfocus.com news team’s attention.

The report revealed that a huge two million UK customers were disatisfied with the customer service offered by companies such as American Express which had fallen in customer satisfaction charts. 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. Why can’t they get it right? It seems all we ever hear about is retail banks and their downfalls (Not to mention their botched outsourcing deals).

The major UK banks may not have used outsourcing wisely in the past but their relatives across the pond seem to be utilising its advantages. US Universities are showing increased interest in outsourcing. A survey revealed that IT decision makers are facing challenges that include the need to effectively balance the provision of resources for their constituencies against their focus on strategic initiatives.

Apparently 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.

Sounds like good news for ITO, however, news released by Wipro would suggest otherwise. The technology giant disclosed planes to cut 85 jobs in Finland. It seems that the industry is still experiencing the aftershocks of the recent economic downturn. At the same time TPI claimed in its fourth-quarter and full-year 2009 data that the global outsourcing market has had its best performance in the last six quarters. Hopefully we will not be hearing about any further job losses, then.

To summarise this week, UK banks are still crap and outsourcing both on the up and the down at the same time. I think that says it all.

IBM has paired up with IT and management consultancy firm the National Interest Security Company in a bid to expand the organisation’s capabilities.

IBM hope the acquisition will expand the company’s capabilities with federal, state and local government entities, particularly in the fast-growing areas of defense, healthcare, energy, logistics and security.

Andrew Maner, chief executive officer of NISC said: “NISC’s high-end, differentiated approach combined with IBM’s Analytics Center will help federal agencies improve current mission effectiveness and create new capabilities.”

The NISC is based in Virginia, America and specialises in the defense, healthcare, energy, logistics and security sectors.

TPI and Information Services Group have today released fourth-quarter and full-year 2009 data indicating the global outsourcing market has had its best performance in the last six quarters.

The 4Q09 Global TPI Index, measuring commercial outsourcing contracts was valued at greater than $25 million, showing the market's total contract value at $24.7 billion, an increase of 47 per cent successively and 8 per cent year-over-year.

The main outsourcing sector driving the market forward is recognised as IT outsourcing (ITO), surging in Europe, the Middle East and Africa.

"As we anticipated, 2009 marked a low point in outsourcing because of the recession in the general economy," whilst "the global market bottomed in the first half of the year it now shows signs of recovering slowly and steadily, with the outlook for building on its second-half momentum positive,” said Mark Mayo, partner and president, Global Operations, TPI.

A major US intelligence agency has awarded a cyber security contract to CSC, the US outsourcing giant.

Under the $27 million contract CSC will work to secure the agency against cyber attack.

The outsourcer will provide vulnerability analysis to identify potential computer and network threats and penetration testing to evaluate overall network security.

The ‘task order’ is for an initial one year but may be extended up to five depending on performance. The contract was awarded in Q4 last year

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.