Industry news

Océ, an international leader in digital document management, has outsourced the IT support for its European sales companies to Atos Origin in a new seven year agreement. Under the contract terms 65 Océ staff will transfer to Atos Origin but another 20 jobs will be lost at the company.

Atos Origin will be responsible for the management of over 6,000 workplaces and all local applications in Océ’s sales companies across Europe. Other services that Atos Origin will provide include network, server and LAN management, and the management of Océ’s telephone network in Europe.

Effective 1 November 2008, Atos Origin will contribute significantly to Océ’s transition to a central European IT organisation, which will make it easier and less expensive to provide support to its operating companies and result in greater flexibility at lower cost.

“Outsourcing the IT support for our European sales companies helps us improve our operational processes. The move is part of our previously announced cost savings program, in which 950 job positions are being eliminated. In so doing we will realize € 130 million in savings in 2008 and 2009,” said Jan Dix, member of the Océ Board of Executive Directors, responsible for IT.

Financial services institutions must focus on IT innovation for radical change or hibernate to minimise cost and prepare for later action to survive the economic downturn, according to analyst house, Gartner. Organisations that choose the middle ground risk wasting their IT budget on incremental modernisation for little gain.

“Far from being fast followers, companies in-between the two options will be ditherers or laggards who waste their IT budget on incremental modernisation, which will have little or no consequence for their business,” said Alistair Newton, research vice president at Gartner.

Mr Newton provided an outlook on how financial services organisations can innovate during Gartner Symposium/ITxpo 2008, which is taking place in Cannes through November 3-7.

Organisations that hibernate are making a conscious decision to prepare for survival by avoiding IT change until absolutely necessary. They take a short- to medium-term approach, keeping their systems running for the absolute minimum cost while building up a war-chest of savings for later use on , smart, innovative activities as and when market conditions improve.

Gartner defines companies that innovate as at the leading edge of technology and embrace the big bang approach. They develop accurate cost-benefit models that link IT changes to business metrics so that they can quantify benefits and justify the radical transformations they encourage.

Mr Newton added: “Financial Services companies need to continually assess the external market, especially in today’s current turbulent market. Many new competitors – including non-banks looking to enter the financial services market - see the confusion and uncertainty generated by the current problems as the ideal opportunity to attack the banks and steal their customers. Banks need to be aware of this threat and adopt the appropriate response, taking into account their own capabilities and desires to defend their customers from acquisitive aggressors.”

Mr Newton outlined four examples of how companies can embed innovation in their corporate culture and agenda:

o Re-design branches to sell and advise – Banks must re-learn how to engage customers after pushing many away from branches through telephone and internet banking. With the help of branch automation and solid multi-channel integration banks can engage customers for transactions that add value to the relationship and make the purchase of new products and services streamlined.

Extreme but not complex innovation – Use technology to deliver a new level of personalisation for the customer. For example, one Spanish bank allows its customers to calculate exactly how much the bank profits from their custom and enables them to donate a portion of those profits to a designated charity. In India, another bank provides easy access to a ‘Do Not Call’ register on the front page of its internet banking home page.

Treat customers as innovators via social networks – Customers can answer most of what organisations want to know about them, whether it’s where they shop, how they feel and what and when they want to purchase. Some new financial services entrants such as the social networking start-ups, are trying to leverage customers more effectively using this technology and customers’ increasing acceptance and use of it. The next innovation step will be to bridge the gap between pure social networks and financial social networks (FSNs). FSNs are leveraging social networks to initiate a new form of financial transaction, allowing members to not only share information but to actually start lending and borrowing to each other, cutting out the middle man – in this case the bank.

Innovation in payments – Financial services companies are gradually recognising the role they need to take to transform their approach to payments if they are to maintain a payments franchise, as well as the role that payments can play in their customer propositions. Some of the innovations around payments are focused at the payment applications themselves and result in the deployment of multi-application cards and the use of loyalty applications. However, many innovations in payments will be invisible to customers, focusing instead on the more effective use of payment data and the re-architecting of bank payment infrastructures to support the deployment of organisation-wide payment hubs

CSC has revealed plans to open a new IT services delivery centre in Tianjin, China, to better serve existing multinational and local customers and increase CSC’s presence in the region. The announcement was made during a ceremonial event involving CSC Chairman, President and Chief Executive Officer Michael W. Laphen, local CSC executives and senior Chinese officials at the Tianjin Guest House.

The new centre, which will be located in the Tianjin Airport Industrial Park, will open in early spring 2009. It will initially house approximately 200 employees. The company anticipates that number will grow to 500 within three years. CSC will begin delivering services from a temporary location in the same area starting Nov. 1, 2008.

The company also plans to construct a data centre facility in or near Tianjin to address global demand for technology hosting and managed services within the region. The efficient and cost-effective modular design will allow CSC to meet customer needs for several years and grow in 200-square-meter increments as required. Construction of the data centre is scheduled for completion in mid-2010.

“We are pleased to announce the establishment of our new China Delivery Center,” commented Laphen. “Strengthening our global delivery framework and expanding our presence in Asia are key elements of our multi-year growth strategy. China is an important location for us, and we’re committed to developing and expanding our capabilities here. We look forward to our grand opening early next year and to establishing Tianjin as a fully operational center in our World Sourcing Services global network.”

Stora Enso, a leading forest products company, has entered into a multi-year transformational BPO agreement with Capgemini Outsourcing Services to provide global financial and accounting processing services.

Under the agreement, beginning in 2009, Capgemini BPO teams will provide financial and accounting services, such as vendor invoice handling, from Capgemini ‘Rightshore’ BPO delivery centers located in India, Poland and Brazil. In addition, Capgemini will support Stora Enso to establish its centralized shared service centre in Kotka, Finland, leaving only few finance functions remaining in the main operating countries.

Markus Rauramo, Chief Financial Officer of Stora Enso, stated: “This decision is consistent with Stora Enso's strategy to seek efficiencies in its ways of working by reducing complexity and leveraging the scale and best practices of outsourcing providers. Transferring our accounting activities to Capgemini will enable us to streamline our administration in line with its more focused business. Capgemini has a proven track record in accounting BPO services”.

Welwyn Hatfield Borough Council, responsible for a population of approximately 106,500 constituents in central Hertfordshire, has signed a £31 million deal with Steria to provide ICT, council tax, benefits, customer contact centre, reception and switchboard services. The partnership, which will go live in January 2009, aims to improve efficiencies at the council, provide better services for Welwyn Hatfield's citizens and ensure a projected saving of £500,000 per annum.

Working from a ‘centre of excellence’ in Welwyn Hatfield, Steria aims tol improve the quality and efficiency of the council's service delivery, helping to free up staff and resources for investment into frontline services. By employing Steria to implement new business processes and software, the Council hopes to provide customers with more choice, greater accessibility and quicker response times.

The partnership is an industry first for Steria, establishing its first revenues and benefits BPO contract in local Government. A total of 68 staff in the customer contact centre, ICT, revenues and benefits departments will transfer to Steria to deliver the programme. Steria intends to use the Welwyn Hatfield Council centre of excellence as a hub for a future shared service involving other local authorities in Hertfordshire and beyond.

"The council's key aim is to deliver high quality, value for money services", commented Bob Jewell, chief resources officer at Welwyn Hatfield Council. "Steria has a wealth of experience in the sector and really understands the specific needs of a borough council. We're glad to be working with them to ensure we continue to provide excellent quality of services for our citizens."

Wipro has set up a BPO centre at Curitiba in Brazil to provide shared services to AmBev, the largest brewery in Latin America. The company will provide BPO for finance and accounting, order management, customer care and HR human resource activity spanning AmBevs operations across Latin America.

Ashutosh Vaidya, Wipro’s Head of BPO, commented: “We have expertise in delivering process specific solutions in finance and accounting, procurement, HR services, loyalty services and knowledge services. Our capability to transform processes, implement SAP and provide world class service delivery is a strength unmatched by competition.”

AmBev is the biggest brewery serving South America with leading brands like Brahma, Becks, Stella and Antarctica.

Redcats Group, a leader in home shopping for fashion and home furnishings, has extended its ITO contract with Atos Origin for another three years.

According to Atos Origin, the decision reflects “the two partners’ shared commitment to further leveraging their industrial-scale data processing capabilities to optimize the multi-channel home shopping experience.”

As part of the continued contract Atos will provide back-office services via its service centers across Europe. Also, all orders made with Redcats, whether taken online, via telephone or by mail, will also transit through systems operated by Atos Origin.

Patrick Terrier, VP Corporate Operations for Redcats Group, commented: “During the latest phase in our outsourcing agreement. Atos Origin successfully consolidated our IT resources and led a transformation plan aligned with the challenges that our businesses must address in terms of flexibility, cost-savings and quality. It is this ability that we’ve recognized by renewing our agreement.”

In the US, where I am for a few days, business and financial stories have been shunted out of the limelight as senators McCain and Obama vie for the popular vote. Channel after channel devotes almost twenty-four hours of coverage to every grandstanding speech, broken only by adverts – mainly from the candidates, but occasionally for headache pills – and, on the West Coast where I am, by competing messages about local policy amendments.

On the one hand, it's inspiring that American politics speaks so directly to American people and seeks to engage and motivate them about every policy nuance, but as the presidential campaign nears its conclusion, the two hopefuls' messages have merged into one: “American companies, American jobs, American people”. The rest of the world... who are they?

One candidate (I forget which) even went so far as to say that outsourcing was part of the impetus for the Wall Street collapse – neglecting to mention that both candidates have outsourced their campaigns for voter registration. Each candidate, of course, has wasted no time accusing the other's outsourcing partner of corruption.

The insularity of the US is something to behold at first hand: I was in the US a month ago, in the eye of the Wall Street storm, and even then the election was the only show in town, as the Down Jones tanked 800 points one day, and 500 on another.

Perhaps the side effects of a decade of living on credit are simply accepted in America: like those painkiller TV ads I mentioned, which, by law, have to list all of the possible side effects of swallowing one: may induce nausea, dizzy spells, dementia, memory loss and liver damage. Just like buying a house, or a shopping spree on your store card.

In the UK, the financial crisis has been a bigger story than in the US where it originated, while government is usually in the spotlight only to demonstrate its incompetence.

Yes, another day, another memory stick lost: this time outsourcing provider Atos Origin is being blamed by the Department of Work and Pensions after a memory stick containing passwords and security details for the Gateway website was found in a pub car park. As I write, the website is down for security testing, so people are unable to submit tax information online.

The Prime Minister has finally admitted the obvious – the Government cannot guarantee data security – but still has trouble with the underlying message: it's not about technology, it's about policy and good management.

Also in the UK there is further unease in the services sector, as BT announces that its Global Services division is underperforming and dragging down the group's overall profits.

This is a worry: unlike the US, whose economy relies on Main Street shoppers, the post-Thatcherite UK is built on services: that sector the Government is so keen to blame for its own ills.

In the US, if you can inspire the people you can rebuild the economy. In the UK, if we talk down the services sector we are talking ourselves into a slump.

But we'll be right back after this break....

Despite the fact that organisations worldwide are deferring capital expenditures, outsourcing continues to be the number one tool chosen to drive organisational change, according to EquaTerra’s 3rd Quarter Pulse.

The report also showed a positive growth in outsourcing, with 40 percent of market sectors citing increased demand levels. Interestingly, the results show that the focus in outsourcing is shifting from longer-term initiatives, aimed at improving end-to-end business processes, toward efforts that deliver quick return on investment (ROI) and/or facilitate short-term business objectives.

A summary of the report can be found at: http://www.equaterra.com/EquaTerraRelease10_28_08.htm

The results of the 5th annual National Outsourcing Association (NOA) Awards (NOAAs) were announced this week at a special ceremony in central London.

Over the last five years, the “NOAAs” have become a landmark in the acceptance of outsourcing as a legitimate business practice and recognise the efforts of companies or people who have shown excellence in the field of outsourcing.

Martyn Hart, chairman of the NOA commented: “The downturn in the economy has made it a very challenging and interesting year for all industries. Despite this, outsourcing has still retained steady growth and has seen significant positive performance. With outsourcing being such a fundamental part of the business landscape we feel it’s critical to raise awareness of how important best practice in all aspects of outsourcing is and these awards have become an essential part of that.”

The 16 categories, which encompass every area of outsourcing, attracted hundreds of applications and were judged by a panel of outsourcing experts. The winners of this year’s NOAAs are as follows:

• BPO Project of the Year sponsored by Steria

WINNER: The Co-operative Financial Services & Capita

• IT Outsourcing Project of the Year sponsored by Financial Sector Technology magazine

WINNER: Lloyds TSB

• Financial Services Outsourcing Project of the Year Sponsored by Homeloan Management Ltd

WINNER: CSC & Zurich Financial Services

• Public Sector Outsourcing Project of the Year sponsored by NelsonHall

WINNER: Capgemini UK & Welsh Assembly Government

• Utilities, High Tech and Telecommunications Outsourcing Project of the Year, sponsored by sourcingfocus.com

WINNER: Luxoft & Aepona

• Offshoring Operation of the Year sponsored by Buffalo Communications

WINNER: Exigent Group Ltd

• Outsourcing Professional of the Year sponsored by Outsource magazine

WINNER: Barry Matthews, Head of ITO, Alsbridge plc

• Outsourcing Service Provider of the Year sponsored by Invest Northern Ireland

WINNER: bss

• Outsourcing Contact Centre of the Year, sponsored by Invest Northern Ireland

WINNER: bss

• Outsourcing Advisor of the Year sponsored by Capita HR & Payroll Services

WINNER: Eversheds Ltd

• Offshoring Destination of the Year sponsored by Cognizant

WINNER: Egypt (ITIDA)

• Outsourcing End User of the Year, sponsored by The OUT group

WINNER: The Co-operative Financial Services & Capita

• Award for Innovation in Outsourcing sponsored by Capgemini

WINNER: VocaLink & The BankGiroCentralen

• Award for Best Practice in Outsourcing, sponsored by ITIDA

WINNER: OPAL & HBOS

• Best Academic Achievement, sponsored by NOA Qualification Pathway

WINNER: Matthew McNeil

• Lifetime Achievement Award, an NOA award

WIINNER: Roger Barber, Senior Consultant, Equaterra

• Special award for consistent excellence for outsourcing practice across all disciplines, an NOA award

WINNER: Infosys