Industry news

The National Policing Improvement Agency (NPIA) has awarded Logica, a leading IT and business services company, a £75.6 million contract over seven years to design, build and operate the Police National Database (PND).

The PND is a highly secure information sharing system that will enable the Police Service in England, Wales, Scotland, Northern Ireland and other government organisations to electronically share local intelligence and operational information nationally.

The PND will be developed as part of the IMPACT Programme, which was established in response to the Bichard Inquiry (printed in 2004) and its recommendation for the creation of intelligence sharing systems as ‘a national priority’. The initial phase, scheduled to be rolled out in 2010, will see Logica bring together data from five operational areas of policing into one central system. It will provide forces with immediate access to up-to-date information from across the Service, overcoming artificial geographical and jurisdictional boundaries. Ultimately the PND will assist forces to improve their operational effectiveness.

The first phase will focus on safeguarding children and vulnerable adults, countering terrorism and assisting major crime investigations.

Logica’s partners in the development of the PND include Northgate Information Solutions (NIS) and SunGard Public Sector (SPS) working with Logica on the application development and business change services aspect. Cable and Wireless (C&W) will provide the hosting and communications services for the overall solution.

Chief Constable Peter Neyroud, Chief Executive of the NPIA commented, “This is a significant milestone for the NPIA, for policing and, ultimately, for the public. Currently, police forces are unable to search or access intelligence or other information that is held on another force’s local systems. The Police National Database will enable this by making available nationally copies of locally held information on suspects and criminals; making the public safer by improving the ability of the Police Service to share operational information and helping the police to stay one step ahead of the criminal population.“

renna, the Middle East’s first mobile reseller, has signed an agreement for Convergys to provide prepaid services, obtained from its acquisition of Intervoice, to mobile subscribers in Oman.

Niklas Nielsen, renna Chief Executive Officer, commented, “We partnered with Convergys, a world leader in relationship management, because it shares our vision for the telecommunications industry in the Sultanate.”

Jim Boyce, Convergys President of Global Business Units, commented, “MVNOs like renna look to differentiate themselves from the competition by offering innovative services that define their brand and drive customer loyalty.”

No financial details were released.

Vivarte, a leading footwear and apparel retailer, and Atos Origin, a leading ITO provider, have extended their managed IT operations partnership for an additional five years.

The extended contract will see Atos Origin continue to hold responsibility for all Vivarte’s information systems. The partnership covers the supply and operation of the mainframe information system, management of 135 distributed servers and 1,000 workstations, plus user support and administration of the Local Area Network linking three Vivarte sites. Atos Origin also manages 2,400 POS terminals for the various Group banners, providing hotline assistance and support for cash register systems.

“This contract extension confirms the value delivered by seven years of fruitful collaboration, that have enabled us to consolidate our IT resources while efficiently meeting increasingly demanding business and quality objectives,” explained Hilda Coppin Finkelstein, Vivarte Chief Information Officer. “Today, with the migration to the Atos Origin data center in Germany, we know that our IT system can seamlessly accommodate growing transaction volumes without requiring any increase in processing power. What’s more, the responsiveness of our Disaster Recovery Plan (DRP) has been cut to just four hours, compared with 24 hours in the previous agreement.”

I admit it, I spoke too soon…

After wishing everyone in the UK a great weekend in the sun, the British weather has come back to haunt me. So to lift the gloom that miserable British weather can inspire I thought I would start this week’s round-up with a warming piece from the beautiful Caribbean.

Caribbean-based BPO provider, e-Services Group International, has been acquired by Affiliated Computer Services for US $85 million.

The US-based BP/ITO provider, ACS, has netted an additional 4,000 English-speaking staff based in Jamaica and St. Lucia. The company also hopes the deal will enhance ACS’s ability to handle complex business functions from a location convenient to the Americas and Europe. Just writing the words Jamaica and St. Lucia brings a ray of sunshine into the sourcingfocus.com news room.

From the slightly less tropical world of Gartner, has arrived a serious chunk of research on IT services outsourcing. No doom and gloom in this study thankfully - at least for end users. Gartner has anticipated a fall in IT service prices of around 5 percent down to 20 percent during 2009 and 2010. The analyst house said IT outsourcing prices are likely to decrease during the next two years due to the uncertain economic climate, IT budget constraints and general market consciousness.

They claim that cost-focused buying behaviors in the current economic phase will be a key factor behind the reductions for IT infrastructure outsourcing services, with a great variability based on each single deal.

Another IT related union has come in the unlikely form of North Somerset Council and Kainos. Best known for its wool and cheeses, the rural district of Somerset is not associated with high-tech, fast paced, city life.

However, this week saw Kainos, an IT consultancy, win a contract with North Somerset Council to implement its electronic document and records management system (EDRMS). Things are looking up for Somerset.

Kainos was awarded the contract following a market tender which attracted a number of supplier responses. The deal was sealed after North Somerset Council held reference discussions with Havant Council, another user of Kainos’ services.

To finish off, despite the gloom things are looking up at BT. Executives at the telecommunications giant will no doubt be toasting themselves with a few beers after landing a sizeable $120m deal with SABMiller, one of the world’s largest brewers.

SABMiller have brewing interests and distribution agreements across six continents. BT will deliver network and telecommunications services for the brewing giant, across the Latin American and European regions.

BT will provide and manage the company’s communications and networked IT Services needs in Latin America as well as global connectivity services into North America, South Africa, and Hong Kong. And I thought BT struggled to manage telecommunications in just one country.

While the weather’s looked increasingly bad, the week’s actually been fairly positive for outsourcing. Since when has a bit of rain stopped us? Have a good weekend.

This week sees the launch of the long awaited Op2i report into the outsourcing industry. Op2i, a Business Improvement Firm Specialising in Outsourcing, has looked into a perceived shift from outsourcing 1.0 towards outsourcing 2.0. That despite the economic downturn, outsourcers are still looking to climb the value chain and end users still want this.

The first good news for vendors is that interest in outsouring appears to have risen, with 51 percent of report respondents seeing increased interest in the discipline. This finding mirrors a recent report from EquaTerra finding that nine percent planned to instigate new outsourcing deals this year.

But what of outsourcing 2.0? The report describes the concept as “moving from a pure transactional, tactical approach to a more strategic partnership approach”. This sounds expensive and a difficult sell in times of financial hardship. One would expect a jump in outsourcing interest to be driven by simple cost necessities rather than strategic needs at a time like this.

Richard Nicholas of Browne Jacobson LLP, a law firm to the outsourcing industry, disagrees, “We have seen considerable demand for "added value" services. A good example would be call centres that do more than process information but which build up a rapport and can cross sell services better than an in house function.”

The report mirrors this view with 41 percent saying outsourcing ‘positively helps in terms of productivity and efficiency’. When asked about the impact outsourcing has on the economy an astounding 83 percent also thought that outsourcing ‘helps the domestic economy compete with the emerging countries’ and ‘gives access to new skills and labour’ - a ringing endorsement indeed.

So the view of outsourcing as a value-adding device is clearly increasing. However, accounts of companies actually outsourcing more extensive functions and higher value processes was not highly prevalent.

“Marketing, media management, IT security and virtual PA functions are the least likely activities to be outsourced – all representing critical organisational knowledge, or brand identity activities, which are typically central core competencies of an organisation,” the report said.

So what is behind outsourcers seeking to climb the value chain and is it in end user’s interests to relinquish so much control to an outsourced provider? Howard Sarna, CEO of Oceans Connect, an outsourcing provider, sees the possibility for creating relationships that both drive down costs whilst adding value at the same time.

“We initially engaged with a retail client [of ours] in a traditional 1.0 relationship with basic call-handling. Over the last couple of years, we've been able to expand the relationship through re-engineering processes with Six Sigma experts to proactively identify and up-selling opportunities. The expanded relationship also allowed us to introduce email back-office with increasing automation for the client.”

The opportunities for creating these kinds of relationships are clearly increasing. And as outsourcers become more finely attuned to their individual disciplines, end users could be set to benefit. However, Mr Nicolas sounds a word of caution,

“I have acted for clients who have, despite being outsourced providers, become indispensable to the customer because they know much more about the customer's needs than the customer. Whilst of great benefit to the provider I'm not convinced that this is the healthiest position for the customer, since they no longer have a view of their overall needs.”

Indeed, the question of how far a company should go down the outsourcing 2.0 route is a valid one. The potential for losing core competencies and IP is great whilst the transfer process could also become difficult as a vendor becomes more valuable. This is obviously a good thing for the vendor but leaves questions open for the end user as to the direction they want to take their business.

“The tender, transition and exit process is a painful one for all concerned. By adopting a more co-operative approach the provider has a better chance of being retained longer,” commented Mr Nicholas.

In the wake of the report the onus is clearly on the end user to weigh up the benefits and risks involved with making outsourced vendors more integral parts of the business. The decision on whether to do so rests on which side tips the balance.

sourcingfocus.com readers can access the full report by visiting oP2i’s website and requesting a copy: Outsourcing Survey Report 2008

All organisations are reining in their expenditure and focusing on the bottom line. During the current economic climate, the public sector is particularly prone to hefty cutbacks and ambitious saving targets. The UK Government announced in the autumn of last year that the public sector needed to make £35bn of savings by 2011. This created a mammoth task for those organisations. How can public bodies, such as the NHS, deliver services, as well as meet their savings targets?

Shared services has been a streamlining strategy implemented by the private sector for some time. It is a relatively simple concept. Essentially, you take away non-core functions and wrap them up into a single specialist service. This service can then be used by a group of organisations, rather than each organisation having their own in-house team. The bodies involved can benefit from economies of scale, greater efficiency and cost savings. Many would agree that streamlining repetitive back office processes, such as invoice processing and purchase orders, in order to release funds for core activity, is a wise business strategy.

This strategy is now being put into effect within public sector organisations. The NHS, in particular, has wholly embraced the concept and as a result partnered with service provider, Steria, to form the NHS Shared Business Services. sourcingfocus.com spoke with John Nielsen, Managing Director of NHS Shared Business services (SBS), to get an idea of how the initiative works.

Mr Nielsen summarised the aim of the NHS SBS, “The NHS Shared Business Services is a unique 50-50 joint venture between Steria and the Department of Health and aims to deliver savings and value so that more can be invested into frontline services.”

A venture that aims to save money must come as welcome news after growing concern over the way the NHS seems to continuously leak vast sums of money. In fact, the NAO predicts that this shared services strategy will reap savings of £250 million over 11 years.

The NHS strategy focuses primarily on providing financial and accounting support and, more recently, payroll. These processes have been traditionally done in-house at each individual NHS trust, creating a vast duplication of roles throughout the organisation. The costs associated with training and maintaining each F&A team would have been extensive. By buying in a service, the various trusts would be benefiting from long-term cost savings and, as Mr Nielson points out, expertise and technology. “It is not just about direct [cash] savings; we are able to provide better technology and expertise. Over the last three years, we have had 86% of our clients recommend us. We process, on average, 4 million invoices a year and have handled over £26bn in payments on behalf of the NHS.”

So, not only are there cost savings associated with sharing services, but perhaps more importantly, there are real benefits to service. It appears that shared services could be the NHS’ savior; however, there have been some recent chinks in the shiny shared services armor within other areas of the public sector.

The Department for Transport was accused of “stupendous incompetence” by the House of Commons Public Accounts Committee (PAC) for its HR shared service centre in Swansea. The service centre was rushed through to completion in order to meet deadlines and, as a result, experienced severe systems failure. This systems failure led to huge delays in services, as the IT needed reworking, which resulted in a bill of £81m, £24m above the projected savings the centre would have brought in the first place.

What is the key ingredient that makes the NHS SBS successful and avoid catastrophes such as the one mentioned above? Mr Nielson puts a large proportion of the success down to the “high quality group of people” that make up the SBS board. Consisting of senior representatives from NHS Trusts, Department of Health, and Steria, the board obviously has a wealth of experience and knowledge, which has resulted in an effective entity. The NHS SBS also benefits from the “rigor of a commercial company” (it is set up as a standalone profit-making entity), which will also push those involved to ensure client recommendations and a high quality of service. As it has no financial support from the government, if NHS SBS does not provide adequate services then they wont be able to survive, the NHS Trusts will simply not use them.

So what next for shared services in the public sector? Mr Nielson believes that the NHS SBS model can be replicated over a variety of other public sector services, the police and councils to name a couple. Of course, with the massive duplication of roles throughout the public sector, it is easy to see why shared services strategies would be of benefit.

What lies ahead for the NHS SBS? Mr Nielson summarises, “We want to expand our service line, incorporating more back office processes and ultimately provide a bigger impact.” If the NHS SBS continues to be successful, expands its range of services and delivers substantial savings, as well as enhancing processes, then it would not be far-fetched to think that, in a few years, we will find private organisations purchasing services from NHS SBS or other public sector shared services providers.

Research released by the University of Strathclyde has revealed gaps in Scottish contact centre data security. The research, published in the International Journal of Electronic Security and Digital Forensics, found that agents at such centres commonly receive suspicious phone calls while others report having been offered money in exchange for private customer information.

The survey, conducted by a student at the university, across 45 workers in call centres throughout Glasgow, found numerous possible outlets for sensitive data. Some of the findings included:

11 per cent of employees allowed customers access to accounts without covering appropriate security questions.

22 per cent worked with people they thought were suspicious.

6 per cent of employees had been offered money in exchange for information.

However, commenting on the security question statistic one respondent added, “Oh it’s [the percentage] higher than that – definitely. It sounds really daft but sometimes you forget to ask the security questions… everybody’s done it; it’s human nature to forget these things.”

The report also found failings in computer policies, such as log-ins being given out of staff that have previously left and lax password security. Physical security was also questioned with breaches being reported in the use of pen and paper and mobile phones within the contact centres.

Dr George Weir, who oversaw the study spoke to sourcingfocus.com and said he was surprised by the call centre failings but did not think it was just a Scottish problem.

“I was surprised by the results, perhaps naively. However, I don’t think these results are specific failings within Scotland; problems like these could occur across any call centres.”

He added, “Unfortunately, many contact centre agents are unaware of the risks and are untrained in how to deal with them. There are also usually processes in place but not always a big focus on following them.”

However, in the wake of the report the UK's Call Centre Association, which aims to promote standards of practice in customer call centres, has now added a section to its "Global Standard" on the issue of fraud prevention. The researchers also point out that the Scottish Business Crime Centre has published a Good Practice Guide on fraud prevention in contact centres.

Banco Santander has chosen Accenture to support the bank’s global operations in a two year deal worth 100m Euros.

In the first phase of the operation, Accenture will provide systems integration services to support Santander’s acquisition of Banco Real in Brazil; Royal Bank of Scotland’s European consumer finance unit; and the integration of Abbey National and Alliance & Leicester (A&L) into Santander Group in the United Kingdom. As part of its engagement in the United Kingdom, Accenture is also overseeing change management.

Mr. José Mª Fuster, general technology and operations manager of Grupo Santander, commented, “Thanks to this agreement, we can significantly strengthen our execution capabilities to continue implementing our strategic systems vision, which has made us the most efficient global bank in the world.”

Affiliated Computer Services, the US-based BP/ITO provider, has acquired Caribbean-based BPO provider, e-Services Group International, for US $85 million, including the assumption of the company’s existing liabilities.

The acquisition nets ACS and its clients an additional 4,000 English-speaking staff based in Jamaica and St. Lucia. The company also hopes the deal will enhance ACS’s ability to handle complex business functions from a location convenient to the Americas and Europe.

Tom Blodgett, Executive VP and Group President of ACS Business Process Solutions, “The veteran management and talented employees of e-Services will continue to provide high quality service to e-Services’ global customers. The acquisition also allows ACS to expand in a location that gives clients access to cost competitive customer care and BPO services.”

Thalys International, a major European rail company, has extended its contract with Atos Worldline, part of Atos Origin Group, to continue the development of its multi-channel customer services system, the Cybelys loyalty program. Under the terms of the agreement Atos will work to extend ticketless ticketing to all Thalys rail customers.

As global prime contractor for the project, Atos Worldline developed and now operates the Cybelys prgramme. The ticketless system works by employing dedicated wireless PDA and anti-fraud technologies. Conductors are equipped with on-train PDAs to check passenger identity and travel data against information in the reservations system. The paperless ticketing information is transmitted via contact or contactless identity cards and partner cards.

The ticketless system enables travel to any Thalys destination without a paper ticket. Travelers also receive email and SMS alerts in the event of disruptions in the train service schedule. The system enables Thalys International to address emerging sustainable development issues, while increasing customer satisfaction.

“Following the tremendous success of our first paperless tickets, we decided to partner again with Atos Worldline to take this strategic initiative to a new level,” commented Laurent Lenoir of Thalys. “The solutions developed by Atos Worldline further sharpen the image of Thalys as an innovator and trailblazer.”

Introduced in 2003, the Cybelys loyalty program supported trials of the first paperless rail transport service in Europe.