Industry news

More than one in five (22 per cent) of UK small and medium enterprises (SMEs) are considering offshoring next year.

Additionally, a fifth of SMEs have increased their interest in offshoring as a direct result of the recession, according to research from Sri Lankan outsourcing body SLASSCOM.

The research also highlighted some concerns for SMEs considering offshoring, notably

fears about a loss of control (33 per cent) and data security issues (22 percent).

Another important concern was that of possible reputation damage associated with offshoring, with 21 per cent stating this as a worry.

Madu Ratnayake, general secretary of SLASSCOM said: “Interest in offshoring in the SME sector is both a symptom of the need to cut costs and a recognition that one country doesn’t always have all the skills needed for success.”

Martyn Hart, chairman of the National Outsourcing Association, added: “Many larger businesses have already reaped the benefits of offshoring business models and now it’s the turn of the SME. We expect a significant increase in cost-based and strategic sourcing across the SME sector.”

Pharmaceutical company Eli Lilly and Company has joined forces with data service provider HP Enterprise in a bid to improve the company’s collaboration with external partners.

HP will manage Lilly’s employee workplace computing and messaging environment across its global operations, following the deal, providing services including hosted messaging, service desk and site support services. It will also offer web hosting services and provide identity management services.

“At Lilly, our goal is to discover and develop innovative new medicines that produce improved outcomes for individual patients,” said Mike Heim, senior vice president and chief information officer, Eli Lilly and Company.

“This agreement with HP enables us to access cost-effective, market-based, global infrastructure services, allowing our internal resources to focus on value-added capabilities more directly aligned to our core business.”

The U.S. Department of the Interior's National Business Centre (NBC) has struck a deal with CSC to provide SAP system support.

The SAP system will support NBC's Financial Management line of business, which provides financial management systems and accounting services in support of federal agencies.

These services include SAP implementation, integration, operations and maintenance to help federal finance officers strengthen management systems, accountability and transparency.

Jim Beall, the National Business Centre's chief financial officer said: "By providing SAP as an additional choice to agencies, we can help our customers meet their federal financial management needs more effectively and efficiently."

Foreign workers in offshore contact centres face the “brunt of consumer hostility”, research has indicated.

Nearly two-thirds (65%) of customers said they found non-British accents in a call centre difficult to understand, according to a survey of over 2,000 customers by Nuance Communications.

The research also suggested that more than one in five (21 per cent) Brits are ashamed of the way they have spoken to call centre agents in the past.

Ian Turner, Nuance general manager for Northern EMEA said many call centres are overlooked and offshored instead of being seen as an important operation.

“Customer service is a differentiator in any competitive, resource-strapped economy. In a recession it's fundamental to survival and recovery. And yet, against better business judgement, many call centres are overlooked for investment or just offshored.”

“As the principle point of customer contact, call centres should be regarded as the company’s crown jewels. Contacting a company should be a positive experience, not one that exasperates and tests your limits.”

Lloyds Banking Group is looking to make further job cuts with the closure of its Sussex House contact centre

Lloyds, which merged with HBOS last October, confirmed it was planning to close the centre next May – and transfer work to other sites across the UK, it has been widely reported.

The bank said the change would affect around 535 jobs, of which 162 will be redeployed, leaving a reduction of 373 jobs.

David Nicholson, of Lloyds Banking Group's retail division told the Guardian: "As part of our integration process, we have reviewed our contact centre sites to ensure that we are operating in the best possible way. We recognise that this is difficult news for our affected colleagues.

"We are committed to working closely with them to help them look for other opportunities within the group and elsewhere between now and May next year."

Lloyds said it would try to achieve job losses through voluntary severance and making less use of contractors and agency staff, with compulsory redundancies a "last resort".

Equitable Life Assurance Society (Equitable Life) has signed a large service contract with HCL Technologies Ltd. (HCL), a global IT services provider. The contract starts in March 2011 and will see HCL managing core processes and support activities that are required to run Equitable Life's closed book of business.

As part of the contract HCL will be providing policy administration, finance, actuarial services, IT operational support and call centre services.

Chris Wiscarson, Chief Executive of Equitable Life commented: "This is one of the most important decisions in the Society's history. I want to help restore policyholders' savings and this is an important step in that direction."

As a result of the outsourcing contract Equitable Life expects to make cost savings of approximately £8 million in the first year. Future savings and predictability of costs also means Equitable Life can reduce its provision for future costs by an amount in excess of £100 million.

The NHS is set to begin a software supplier procurement process by the end of April 2010 to ensure no trusts are left without IT suppliers.

Southern trusts will choose from suppliers including Atos Origin, Logica, Siemens, Perot Systems, Tata Consultancy Services and Agfa Healthcare. Some trusts are also expected to run collaborative procurement, it was reported in E-Health Insider.

Many NHS trusts in the south of England were left without new patient administration systems following the departure of IT partner Fujitsu from the £12.7 billion National IT Programme in 2008.

The news comes as NHS IT suppliers, BT and CSC prove they have succeeded in implemented workable patient systems.

CSC has already implemented the iSoft Lorenzo system at Bury, and BT is also understood to be putting the final pieces into place at Kingston for the Cerner Millennium system.

The NHS has said it will work through a list of criteria that will examine the usability of the system and has commented that if there is a “clear failure”, then it will “consider a new plan for delivering health informatics”.

Mahindra Satyam, the new brand identity of Satyam Computer Services., the once-embattled IT services provider, announced today that it has selected Malaysia to kick off a new international expansion.

The newly rebranded company has announced it will enlarge its ‘Global Solution Centre’ (GSC) operations in Malaysia by moving more global software development and delivery operations to its 15-acre Cyberjaya facility, based in Malaysia’s prominent Info-Comm Technology corridor. The new GSC - which has 18 configurable offshore development centre blocks, 1,100-seat development block and a data centre to host 1,100 servers - will serve as Mahindra Satyam’s largest technology development and delivery facility outside of India.

Mahindra Satyam has said it will use the new capacity to focus on full range of both mainstream business and technology functions like ‘Remote Infrastructure Management Outsourcing’, Business Process Outsourcing, software services and some software testing.

The London School of Economics and Political Science (LSE) has decided to outsource its online presence, which it claims is the first deal of its kinds in the UK. Under the terms of the new contract, iomart Hosting will maintain a hardware platform that supports LSE’s website on secure servers located away from LSE’s London campus.

Stephen Emmott, head of web services in LSE’s communications department said: “Like most universities we have managed and hosted our institutional website on-site. In recent years we -including our colleagues in LSE’s IT Services- have come to the view that the level of service we require, particularly 24/7/365 availability, requires the services of an external supplier. We need to ensure that if there were any on-site problems, for instance with power, it wouldn’t affect the use of our website. It’s a good example of how the boundaries between academic institutions and the commercial sector can be developed into mutually beneficial relationships.”

The decision by LSE to outsource its web hosting has been made in hope of improved reliability and functionality, whilst increasing the scope and depth of information it can offer to both students and the wider population.

Budget constraints and ongoing restructure are set to be HR’s biggest challenges in 2010, according to a survey from recruitment process outsourcer Alexander Mann Solutions (AMS).

The Recruitment Barometer survey suggested that while the industry appears to be stabilising after the economic crisis with 66 per cent of budgets remaining unchanged and one fifth of budgets expected to increase in the coming year, HR departments will still have to manage with limited resources to achieve business objectives.

When HR managers were asked to identify their top priority for the coming year, the survey indicated the top four investment areas for 2010 were employee retention and engagement programmes, training and coaching candidate attraction programmes and recruitment and technology investment in HR.

These findings suggest HR departments are anticipating job movements amongst employees as the economic climate improves and are seeking to counteract this by boosting their retention and development strategies.

Tom Marsden, director of professional services at Alexander Mann Solutions said: “Although the restrictions of the recession aren’t over yet, companies are recognising that in 2010, they will need to take steps to retain their workforce.

“The fact that just 20% of HR departments are working with a single recruitment supplier indicates that there is significant room for greater efficiencies in this area, using numerous suppliers on an ad hoc basis makes each hire a significant budget drain as these agencies can be paid as much as 35 per cent of the hire’s salary,” he added.