Industry news

This week, Fletcher Allen Health Care announced the successful implementation of the first phase of electronic health record (EHR) system and patient record and information systems management (PRISM) by CSC.

This first phase was conducted over a 15-month period and PRISM is now operational in the hospital's inpatient areas as well as the Emergency Department, Walk-In Care Centre, and inpatient pharmacy. Fletcher Allen is now positioned to meet the regulatory requirements of the American Recovery and Reinvestment Act (ARRA) of 2009. Under ARRA, hospitals will receive monetary incentives if they demonstrate "meaningful use" of EHRs by 2011.

The EHR system has benefits that include improved viewing of all patient information in one place; accessibility of patient information from remote locations; ability for multiple parties to concurrently check patient information; and instant access to medical orders. To date, Fletcher Allen's providers are entering 92 percent of all medical orders electronically (and 96 percent of all medication orders), reducing the turnaround time for receiving medications and tests and enhancing the accuracy of clinical documentation.

As part of the project, CSC provided clinical transformation consulting services and IT design, building, testing and activation support. CSC continues to offer technology support services to Fletcher Allen, as the hospital prepares to conduct phases two and three of the project due to be completed by the end of 2010.

Sandra Dalton, senior vice president of Patient Care Services and chief nursing officer at Fletcher Allen, commented: "We adopted an electronic health record to improve safety and quality of care for patients. With CSC's healthcare expertise and track record in clinical systems implementation and improvement, we have succeeded in completing the first phase of our project on budget, on schedule and in just 15 months. We hope other hospitals are encouraged by our achievement."

It is a widely-held and understood belief that sourcing disciplines provide techniques that can fine-tune the running of an organisation. However, developing and rolling out a full strategic sourcing plan will not secure you significant cost benefits in the short term – as cost benefits typically appear in the mid-term.

Counter-intuitively therefore, the most effective course of action is actually to simply make the best of the sourcing structure already in place. However, this should go far beyond squeezing the best value out of the various suppliers. Through ‘good housekeeping’, you may discover areas where you can reduce the costs of your sourcing arrangements to:

• Reduce or eliminate demand – address false demand, created by a lack of knowledge, rework or customer error. You may find that you are paying for services you are not using, or even effectively paying for the same service twice.

• Revisit all changes – review all changes made since starting the service and, where the price has increased as a result of the change, understand whether you can revert to the original approach. At the same time, assess the current service levels and understand whether you really do need the targets you have agreed with the provider.

• Expand scope – look for simple opportunities to develop the scope of services that your sourcing arrangements provide, taking further cost out of the wider organisation. For instance, consider moving higher knowledge-based processes and tasks into your arrangement, such as market research, analytics and data management.

• Extend reach – pull in the organisational outposts that originally declined to take up the services, often for obscure reasons on how they are different. Standardising operating models across all territories and divisions allows for a much greater return on a shared service investment.

• Simplify and standardise – Many organisations have historically managed sourcing at an individual business level, resulting in multiple arrangements with multiple providers. Instead, explore the rationalisation of your provider base, and consider the removal of service overlaps for further economies of scale.

• Review your governance processes – check that your governance approach is delivering the value and benefits you expected. Could controls be tightened to prevent value leaking from your arrangement?

• Ask for a discount – many of our larger clients are actively reviewing their existing sourcing contracts, often accompanied by a request for a discount or a change in the phasing of payments. If approached in the right way it can be successful. But remember your service provider exists in the same cash-constrained environment, so there will be limits of what they can feasibly offer. In exchange, consider whether there is anything that you have that they value, such as references, assets or additional scope.

This blog is an extract of PA Consulting Group’s new book, ‘Surviving and thriving in the economic crisis: The sourcing opportunity’, and is available free of charge. To request a copy of the book, please visit http://www.paconsulting.com/sourcingopportunity

In his personal travelogue, Following the Equator, Mark Twain made the following observation about the tiny nation of Mauritius: "You gather the idea that Mauritius was made first, and then heaven, and that heaven was copied after Mauritius."

Maybe so, but how does this island paradise stack up against other countries in attracting outsourcing business to its shores? The answer seems to be, pretty well. It currently ranks 25th on AT Kearney's Global Services Location Index (GSLI). And a KPMG report earlier this year outlined some of the generous financial incentives offered by the government of Mauritius to encourage foreign IT/BPO companies to the country. These include corporate tax exemption (either 0% in the first year and 15% thereafter, or 5% in perpetuity); zero customs duty on ICT equipment; fifty per cent tax relief on personal income tax for foreign IT specialists; and refunds of up to 75 per cent of training costs.

Last week, I exchanged emails with the Honourable Mohammed Asraf Ally Dulull, the Mauritian Minister of Information and Communication Technology, to find out a little more about how the government in Mauritius is working to promote the country as an outsourcing/offshoring destination.

Q. How developed is the outsourcing industry in Mauritius at this point and what targets have been set?

A. Mauritius welcomed its first outsourcing operator, a call centre, in 1995. Fourteen years later, there are over 260 companies operating in this field, employing around 11,000 people. It is interesting to note that only four to five years ago, the number of people employed was just 3,500. There has been a significant increase in the level of employment in the outsourcing industry. At present, this contributes 4% of GDP (excluding telecommunications). The ICT and IT-Enabled industry is expected to employ 25, 000 people in 2013, contributing to around 12% of GDP, at par with the financial services sector.

Q. And what international companies are already being served by Mauritius-based outsourcers?

A. Service providers in Mauritius are successfully delivering a wide-array of services to offshore clients, which include Fortune 100 and Fortune 500 companies from the financial services sector, as well as airlines, hotel chains and telecom companies. The BPO landscape is characterised by some global suppliers that include Accenture, Ceridian, Intelenet, Infosys, and offshore captives such as Deutsche Bank, DHL, Huawei, Orange Business Services and TNT Document Services, among others.

Q. What challenges do you face - economically, politically, culturally?

A. The main challenge faced by Mauritius is in terms of its limited size and people. The Mauritian population consists of 1.2 million people. However, the limited labour is highly qualified and skilled. The government has also been encouraging more training initiatives and specific incentives are also given to companies to engage in training programs to keep pace with technology and also with market demand. Furthermore, a project to set up an ICT Academy in Mauritius is also in the pipeline, which would make available a larger number of qualified people to better serve the global outsourcing market.

Q. And what other actions is the government taking to ensure Mauritius can offer a favourable environment for outsourcing?

A. The government has brought in considerable reforms in order to open up the economy to foreigners. This includes improved regulatory framework for the obtention of work permits and occupation permits and establishment of foreign legal firms in Mauritius, amongst others. For instance, to facilitate the technological transfer for expert coming from other part of the world, the government has put a fast-track system for work permit for qualified IT personnel. All this will also help in the transfer of knowledge and skills.

In a few weeks' time, Mr Dulull will be opening the Mauritius International Outsourcing Forum in the country's capital city, Port Louis. While I was kindly invited to attend, family commitments have forced me to decline, but I hope very much to have another opportunity to visit in future.

Dell and Perot Systems have entered a definitive agreement for Dell to acquire Perot Systems in a transaction valued at approximately $3.9 billion. Terms of the agreement were approved early this week by the boards of directors of both companies.

Dell’s customer base spans large corporations, government agencies, health-care providers, educational institutions, and small and medium enterprises (SME). The company’s existing services include expertise in infrastructure consulting and software-as-a-service.

Perot Systems provides services including, applications, technology, infrastructure, business processes and consulting. The company has clients in health-care, government and other commercial segments, from SMEs to the largest global institutions. Perot Systems has a large and growing base of customers and service-delivery capabilities in North America; Europe, the Middle East and Africa; and Asia.

Over the past four quarters Dell and Perot Systems had a combined $16 billion in enterprise-hardware and IT-services revenue, with about $8 billion from enhanced services and support.

The transaction, which is subject to customary government approvals and the satisfaction of other customary conditions, is expected to close in Dell’s November-January fiscal quarter.

Once the acquisition is complete, Perot Systems will become Dell’s services unit and be led from Plano by Peter Altabef, the current Perot Systems chief executive officer. At the same time, Dell directors are expected to consider Ross Perot Jr., Perot Systems’ chairman of the board, for appointment to the Dell board. Based on current estimates, the transaction is expected to be accretive to Dell’s GAAP earnings in its fiscal 2012.

Ross Perot Jr. commented: “This transaction represents a great opportunity for our company and our associates. When my father founded Perot Systems he envisioned a global information-technology leader. The new, larger Dell builds on that promise and its own successes by taking Perot Systems’ expertise to more customers than ever.”

Convergys Corporation, a global leader in relationship management, announced it is expanding its U.S. home agent program to the United Kingdom. Convergys currently has home agents in 29 U.S. states and six Canadian Provinces in North America.

Convergys has begun seeking UK clients to support the home agent rollout and is targeting clients who need UK-based agents or support in multiple languages.

The home agents receive calls ranging from billing and informational service to technical assistance from customers of Convergys clients in a variety of industries. The initiative is a response to the growing need for workers to have more flexible working hours and the option to work from home. Employees can work full time or part time from their homes in urban, suburban, or rural areas, depending on their Internet connectivity. Work-at-home also contributes towards the governments 2010 Carbon Reduction Commitment as such programmes can reduce energy consumption and contribute to a greener environment by avoiding a potentially long commute to work each day.

Brad Krinhop, the vice president of operations for the global home agent program, commented: “...the elimination of a daily commute will allow them (workers) to save money on fuel, auto maintenance, parking, clothing, and meals. The program provides an ideal opportunity for students facing high tuition costs, stay-at-home parents needing a second income to help pay bills, or retirees who wish to augment their retirement savings.”

The hiring process is also remote in its nature. It can be completed from an individual’s home desktop from application through training and employment. Candidates will still require a quiet place to work inside their home, a PC that meets Convergys’ minimum standards, cable or DSL high-speed Internet access, and a noise-cancelling headset.

The Bonduelle group, an international processor of vegetable produce, has renewed the contract to manage the bulk of its computer infrastructure with Steria. The European IT services company has managed the contract since 2004 and will now continue to manage the central computer system and decentralised servers, as well as the global Help Desk, office IT and support functions for the group.

The Bonduelle information system requires just-in-time management of each step in the supply chain, from reception of the raw materials, to taking of orders, adjustment of production and delivery to the final customer, in compliance with current standards for preserving products. Steria will continue to manage the systems that coordinate these processes and ensures their stability.

Steria will deliver its service from the group's on-shore and near-shore centres, making it possible to share resources to improve cost control. The management and technical offices set up by Steria are located in Lille, close to the Bonduelle IT Department. The local teams which are mainly present at the headquarters of Bonduelle in Villeneuve d'Ascq (Nord), also cover the factories located throughout France and Benelux. Shared administration of servers is carried out in Sophia-Antipolis, at Steria's shared administration centre. The help desk and management services are provided by Steria's platform in Katowice in Poland.

BHP Limited, major shareholders in a Chilean mining project has signed an outsourcing agreement with CSC. CSC will take responsibility for the management of information systems and service infrastructure for Escondida, the world’s largest producing copper mine.

The agreement, worth US $19 million, is an extension of CSC’s existing outsourcing agreement with BHP Limited.

Last May, CSC signed a seven-year, US $470 million agreement with BHP to provide a full range of information technology (IT) services. The extension runs concurrently with the existing outsourcing agreement.

“Escondida views itself as a leader in the use of technology in the copper industry,” added Bruce Turner, president of Minera Escondida Limitada. “I believe that with CSC we have selected the right partner to enhance and strengthen our leadership position in this critical support area.”

As part of the agreement, 28 employees from MEL have transferred to CSC. CSC is providing the full range of IT services, including applications, midrange, networks, desktop, helpdesk and communications support to MEL.

Energy Future Holdings Corp (EFH), a Texas-based energy company, has entered into a five year IT infrastructure management agreement with HCL Technologies Ltd. (HCL), an IT services provider.

HCL will be responsible for managing EFH's IT infrastructure, comprising of a host of services including data centres and voice networks. HCL's service desk will also provide desk-side support to EFH end users.

Linda Jojo, SVP and CIO for Energy Future Holdings, commented, "We are delighted to extend our relationship to HCL with this new engagement. We look forward to a long and mutually beneficial partnership.”

R Srikrishna, Senior Vice President & Head of Global Sales at HCL's Infrastructure Services Division, added, "This engagement re-iterates our focus on the Texas region where we continue to invest aggressively”.

sourcingfocus.com will be bringing you the latest news from the NOA Offshoring Day. We will be sending out regular Twitter updates and blogging live from the event. Please keep a look out for the NOA Offshoring Day's own hashtag #noaoff

London stock market-listed property investors, Raven Russia, has signed a £1 million outsourced IT management services contract with IT infrastructure provider Fifosys.

Under the terms of the agreement Fifosys will provide secure IT infrastructure management across all of Raven’s geographies. Fifosys will work to centralise all of the company’s data in the UK to reduce vulnerability while still providing secure, high speed and immediate access to all of its senior executives and management.

Mark Sinclair, Chief Financial Officer of Raven Russia comments, “With all of our developments in Eastern Europe we were clear from the outset that we would keep our data within the UK. Fifosys understood our requirements immediately and were very quick to come up with an effective IT solution to suit our business needs whilst meeting all the various risk mitigations that we require. As a result Fifosys designed our highly secure networks to be accessible from anywhere in the world but so that they can be instantly locked down if circumstances dictate.”