Talking outsourcing- a blog from computing.co.uk

Thursday, 11 March 2010

Keeping up with the boys - and girls - from Brazil

I’ve recently been blogging about globalisation and young people for the British government Department for Children, Schools, and Families, because of their FutureStory project.

Yesterday this took me down to Southampton, where I met Catherine Gilmour, assistant headteacher of Westgate School in Slough. Catherine has recently visited Brazil to see how young people are facing up to a future where jobs can whizz all over the world because of the internet and outsourcing.

Catherine explained to me: “I was amazed by the can-do attitude of the people in Brazil and in particular the business people who are focused on constantly learning new skills.”

Then she went on to explain about the difference in attitude between many young people in the UK and Brazil: “The young people have very high aspirations there. It doesn’t matter where they live; there is no limit to their aspirations. Our young people just don’t work hard enough. It’s not that the labour is cheaper over there, the skills and the talent and the willingness to learn is there.”

Catherine was painting with a broad brush of course. I’m sure there are many young people at her school who think that they are working pretty hard, but her point was that the Brazilians can see beyond their own border, they are already awake to the fact that they will need to compete with others to grasp at future jobs.

It was particularly interesting for me as I was talking today to the man who promotes the Brazilian hi-tech industry to the world, Robert Janssen, of government agency Brazil IT and advisory firm Outsource Brazil.

I asked Robert for his views on young people and their attitudes to work, particularly in the hi-tech sector. He told me: “I’m half American and half Brazilian so I have experienced life in a rich country and also life in a country that was really considered third world until perhaps 20 years ago. That’s really the reason for the hunger you can see in those young people.”

Robert went on to talk about a very famous globalisation book – not one of mine though: “The Thomas Friedman book ‘The World is Flat’ mentions the reasons why this is happening. Firstly there is globalisation and secondly there is the internet. Both of these are levelling the playing field. Many British people may just be going about their business day after day without ever changing, but the Brazilians have the same information and the same access – anytime and anywhere. They are going to jump on this and use these tools to achieve their personal goals.”

What’s the moral of this tale? Well, both the business leader and the school teacher can see that globalisation is not just a question of sending off services to the cheapest possible location. If the people in countries such as Brazil are studying harder and are hungrier for new opportunities, then where will British teenagers be a decade from now?

Click here to hear the full conversation with Robert Janssen in the Talking Outsourcing podcast.

Posted at 02:38 PM in internet, offshore outsourcing, skills, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Tuesday, 09 March 2010

Measure the combined influence of tweets on your company

The lobby of the Metropolitan hotel in Mayfair is packed full of impossibly beautiful people, even early in the morning. I know this because I sat drinking coffee yesterday morning with PV Kannan, CEO of 24/7 Customer, the India-based business process outsourcing firm.

PV was talking to me about the iLab – a team 24/7 Customer has focused on innovation. Now, this is something that many service suppliers talk about – the endless need for innovation and even the labs they have set up all over the world. Though in this case, it does seem rather different because the team has been asked to develop products and they are not restricted to the present focus of the company. It sounds more like a genuine skunkworks full of boffins.

I first noticed this because they have developed a tool called ‘247tweetview’, which is freely available (freemium pricing model) and helps companies to analyse the online debate about their brand in Twitter.

PV explained to me that for more than a year, his team has been archiving tweets about several hundred companies. Now, when they go in to pitch for some business that has absolutely nothing to do with social media, they can show the potential client what the online community has been saying about that firm in great detail and for more than the past year. That sounds like a very powerful sales tool.

And given that 24/7 Customer comes at this from the angle of trying to improve customer services, it’s only right that they are exploring these new areas of customer interaction.

How long are we going to keep talking about ‘call centres’ when a lot of customer interaction is becoming automated of going online? Customer services is getting more complex, so innovations that make it easier to analyse the soup of online debate are most welcome.

Posted at 10:16 AM in innovation, internet, outsourcing | Permalink | Comments (0) | TrackBack (0)

Wednesday, 03 March 2010

Inside story of how TCS won flagship government contract

Indian technology giant Tata Consultancy Services (TCS) has won another British government contract. This time it’s to build and service the next generation government pension scheme, formally titled the National Employment Savings Trust (NEST).

Most of the online comment today seems to be little more than the information on the press release, so I thought I would ask TCS for a comment – only to find that they are keeping quiet for the moment and letting the client do the talking. So I got in touch with Tim Jones, Chief Executive of the Personal Accounts Delivery Authority (PADA) – the government agency charged with making NEST a reality.

What’s interesting about this contract win is that TCS stuck it out, even after all other players decided the margins on the new government pensions would be too slim to make any decent returns. Additionally, this is a central government project that is commissioning offshore IT, admin, and processing.

I met government CIO John Suffolk last month and one point he made was that the British government will not shy away from offshoring, they will take each tender and supplier on their merits.

Clearly that’s the case with this hybrid delivery model planned for the new pension scheme.

This blog is a bit longer than usual, because I want to ensure I quote all of Tim’s answers to my questions:

MKH: Could you briefly introduce NEST? What is it and why do we need a new pension system?

TJ: The Government is implementing an integrated package of reforms to help millions more people save for retirement, in particular those on low-to-moderate incomes. The package includes changes to the state pension to make it fairer, and increases to state retirement age.

But it’s not just the state pension that is changing. The Government is also reforming workplace pensions. Under the Pensions Act 2008, employers will be required to enrol workers into a workplace pension scheme that meets certain criteria and make a minimum contribution to their workers’ retirement pots.

Currently around 750,000 employers in the UK’s private sector offer no pension to their workers. While a further 280,000 offer some provision, these employers’ contributions to their workers’ pensions are less than 3 per cent. The government estimates that approximately 7 million people are not saving enough for their retirement – in particular those on low to moderate incomes. For example, more than half of workers earning between £5,000 and £25,000 do not contribute to a pension at all.

The introduction of auto-enrolment means workers can eventually expect a total minimum pension contribution of 8 per cent on qualifying earnings. This will be made up of a minimum 3 per cent employer contribution added to tax relief and the worker’s own contribution. Both employers and workers can contribute more than the minimum if they wish.

An essential part of these reforms is the introduction of NEST (National Employment Savings Trust) - an occupational pension scheme being designed specifically for people on low-to-moderate earnings who currently don’t have access to a workplace pension.

Importantly, NEST will have a public service obligation to be open to any employer that wants to use it to meet their new duties for any of their jobholders. This is significant because there are groups of employers and workers that the existing pensions industry struggles to service. Business that can be less attractive to private pension providers includes small and micro employers, particularly where workers are transient and on low-to-moderate incomes.

NEST is being introduced alongside existing provision to meet the needs of just these types of employers and their workers, complementing the existing provision. Which qualifying workplace pension scheme or combination of schemes they use will be their choice. Providing the scheme they choose meets the criteria set out by the government, employers can fulfil their new duties either by using their existing workplace pension scheme, setting up a new private provider scheme or by using NEST.

MKH: What were the attributes that meant TCS won the contract?

TJ: This has been a complex procurement so we are very pleased to be able to report that this has been completed ahead of schedule and we have found a great supplier that can deliver the services we need at a good price.

All of the bidders involved with this exercise have been impressive – we enjoyed working with them over the past year and benefited from their input throughout the dialogue process. TCS progressively demonstrated its ability to meet PADA’s requirements and emerged as a very strong bidder. This has been confirmed by a rigorous evaluation of its final bid.

MKH: Many in the industry have said that every possible supplier dropped out of the tender leaving TCS as the only bidder.

TJ: Competitive dialogue is an expensive process – it’s only right that we should give feedback to bidders throughout the process so they can take appropriate decisions, and to enable us to run an efficient process.

In a complex procurement such as this it is not unusual for bidders to re-assess their position as competitive dialogue continues. TCS final bid has been formally evaluated against PADA’s evaluation criteria.

As with any competition where a strong single remaining bidder emerges, there may be concerns about whether the final bid still offers value for money. TCS’s final offer showed little variance with their bid from the early stages of the competition, so we can be sure that the contract does provide value for money.

MKH: Is this for onshore/offshore/mixed delivery (noting that TCS is an Indian supplier)?

TJ: The public-facing elements of service provision – such as call centres and all data storage – will be in the UK. Resources in India will be used to deliver the IT solution and to perform back office administration and processing functions.

MKH: The government is clearly no longer afraid of the Indian hi-tech sector. Is there an official policy to widen the net beyond the more traditional suppliers?

TJ: This is not a question for us. Best to contact the DWP [Department for Work & Pensions, the government department where PADA is located].

Posted at 03:50 PM in government, innovation, internet, management, offshore outsourcing, outsourcing, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Wednesday, 10 February 2010

The future of customer service harks back to the past

I met a couple of interesting executives from Firstsource at the NASSCOM conference in Mumbai yesterday. Firstsource is well known as an Indian-based services company that has hired extensively in the UK, particularly Northern Ireland. They focus on banking services and telecoms, and I managed to sit down to talk with both Santanu Nandi, the head of telecoms and media, and Sanjeev Sinha, head of banking and financial services.

We had a chat about the market in general – most people at the NASSCOM conference are feeling good about where the industry is headed – and I asked a few questions about how the industry is changing. One thing I asked was about cloud computing and how service companies are reacting to the challenges of delivering across the cloud. Firstsource is surprisingly upbeat.

Sanjeev explained: “We never waited for our competitors or clients to talk about virtualisation and the cloud. We are already doing that. We have more than 20 delivery centres using cloud-based infrastructure to allow us to deliver services. Can you imagine trying to manage 20,000 desktops? We have virtualised all of that so our own internal systems are structured this way.”

Some might argue that the cloud is more about delivering services rather than virtualising your own delivery capabilities, but the problem is that the term "cloud" itself has so many definitions. I asked government CIO John Suffolk how he defined the cloud and he replied that he had heard at least 22 definitions and the British government was planning to use definition number 23.

But the Firstsource virtualisation is interesting because it shows how quickly they can roll out a new delivery centre, tapping into centralised services.

I asked Santanu about how customer services in telecoms are changing. We know the call centres are getting more complex, but many operators are now moving into social media support too. He told me: “We are already starting new service lines in this area. There are many changes and the emergence of new product segments. Look at the sim-only contracts in the UK for example. They can’t afford to offer the same level of customer service so we have designed a support forum where customers can support each other. It’s a community forum for those specific customers – C2C solution.”

The C2C concept is something I remember from back before the internet was popular. If you remember the Netware networking software, it was possible to go to a Compuserve online forum for help, rather than calling a helpline. The forum was moderated by Netware, but essentially was a group of users helping each other. It looks like some of the old ideas are the best, and now they are being produced on an industrial scale.

Posted at 10:30 AM in government, innovation, internet, outsourcing | Permalink | Comments (3) | TrackBack (0)

Wednesday, 25 November 2009

Recognition from the opposition

I’d never usually mention Computing archrival Computer Weekly in this blog, but there is something happening today that’s rather interesting.

This blog, yes this blog in Computing, is shortlisted for the best consultant or analyst blog at the Computer Weekly IT Blog Awards 2009. The awards dinner is tonight so if you are going to be there then why not send a message to me on Twitter so we can say hello in person?

I don’t hold out much hope of actually winning an award. I never even knew I was on the shortlist until I went to vote for the awards myself and noticed my own name among the potential winners. That meant I didn’t have much time to formulate a "vote for me" campaign across all the internet sites I might have some influence on.

And in any case, it would be strange for archrivals to be giving each other awards. A bit like that Paul McCartney song "Pipes of Peace" where the German and English soldiers come out of the trenches to play a game of football on Christmas day during World War One.

However, it’s an honour to be nominated and I hope it shows that there are a lot of people out there in the industry who appreciate that a personal view on what is happening in the sourcing market can be a really effective way of cutting through the news agenda.

Thanks for reading, and voting, and normal service will be resumed on the blog once I stop telling you about these awards!

Posted at 04:14 PM in internet, Weblogs | Permalink | Comments (5) | TrackBack (0)

Tuesday, 17 November 2009

Don't get bitter, Twitter

I was at the Philippines business forum yesterday, and I was thinking last night about some of the issues raised by the visiting companies.

One of the key messages I found from the event actually came out in discussions over lunch, rather than at the event itself. The small and medium six businesses from the Philippines are all trying to reach out and find an audience that is interested in their services, yet they find it hard to get people to listen.

Without meaning to be ungrateful to the organisers of the event yesterday, I said to them that some free coffee at the Sheraton hotel on a Monday morning is unlikely to change anything. Which small company boss is going to give up a day to come out and listen to firms who are actively trying to sell?

Then, I found myself today in a quite different environment, the O2 arena in London’s docklands at the 140 characters conference. The conference was focused on Twitter and how it is being used.

And of course, after the obligatory chat from celebrity Twitter users such as Stephen Fry, the event was stuffed full of people demonstrating that companies can use a medium like Twitter for engaging with customers, commentators, advisers, and analysts. It’s clearly going to force some companies to wake up to the real-time conversation that people expect these days, in addition to providing a way for some organisations to finally get noticed.

Kodak is one great example of a company that has reinvented itself for the digital age and Jeffrey Hayzlett, Chief Marketing Officer of Kodak, gave a very emotional talk about how he sees customer engagement changing.

Hazlett said: “Engagement is the new ROI. A lot of people in business still refer to ROI as Return On Investment. We think about it as Return On Ignoring – not watching, not playing, and not interacting with the customer.”

Hazlett went on to explain that Kodak is now actively creating staff positions around the online space: “We have a chief blogger, and we are now hiring a chief listener to just listen to what is going on out there and to ensure messages are directed immediately to the right people within the company.”

Kodak representatives were handing out copies of their social media strategy as a favour to other companies who might not have the resources to construct a policy.

It’s interesting stuff and listening clearly works well for a large brand such as Kodak, but how about the small suppliers trying to demonstrate their capabilities?

Well, imagine this. If there is a way of jumping into conversations about IT, services, and business in general, with journalists, analysts, customers, and commentators, then why are these small companies taking part in government-sponsored trade missions and not engaging in the online debate that would clearly help them to increase visibility?

If it works for Kodak, it can work for the little guy too.

Posted at 02:46 PM in innovation, internet, offshore outsourcing, strategy, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, 13 November 2009

Vote for me!

Arch rival to Computing, Computer Weekly, has shortlisted this blog for the IT consultant and analyst blog of the year award. Perhaps it’s just a vote of sympathy, getting a blog from a rival magazine on their shortlist, or perhaps they will engage in some Simon Cowell-like skulduggery to ensure I can’t win. But either way, I’m shortlisted for the blogger award so I hope that you – dear reader – can help me win! I need your vote.

I would note that my editor, Bryan Glick, finishes work at Computing at the end of this week and is moving to be the boss at Computer Weekly so I would dearly like to see myself voted to win an award from his new magazine while I am writing for his former title!

You can vote for me now by clicking here. It only takes a moment and is entirely pain free so click now…

Posted at 11:26 AM in internet, Web/Tech, Weblogs | Permalink | Comments (2) | TrackBack (0)

Tuesday, 10 November 2009

It's not all doom and gloom in the banking sector

Lloyds banking group just announced 5,000 more jobs will be slashed before the end of 2010. This comes just after the news that 4,000 or so jobs will be going at the Royal Bank of Scotland.

It’s worth noting that the areas most affected are IT, collections and payments – typical areas where outsourcing can be used.

I’m not suggesting that Lloyds is creating job losses because of outsourcing, but take a step back and look at what’s happening in UK retail banking at present. The government is selling off their stake in Lloyds and RBS, the money pumped in to save these banks that eventually meant they became public property. That’s meant to encourage more competition on the high street.

And it will. Within the next five years, there will probably be at least three new names on the market – new national bank chains that never existed before, with Tesco as frontrunner, but how are they going to ramp up so quickly?

All these new banks will need to create the infrastructure needed for a national bank almost overnight. That means they will assemble the best-of-breed systems and connect the dots – it’s going to be outsourcing heaven for retail banking analysts in the UK.

But in any case, one thing is sure and it happened about one year ago. Tesco hired Sandeep Dhar to head up their back office in India, and Dhar has a background in retail banking at Citigroup and ABN AMRO. Is Tesco one step ahead of the game again?

Posted at 06:06 PM in innovation, internet, offshore outsourcing, outsourcing | Permalink | Comments (1) | TrackBack (0)

Thursday, 08 October 2009

Social and mobile media are essential for modern business

I had a chat on the phone recently with Paul Smith, executive chairman outsourcing for recruitment specialist Harvey Nash. We discussed a number of subjects, especially focused on offshoring and the recession, the market in Vietnam, and the customer services call centre backlash. You can hear the entire conversation on the podcast by searching for ‘Talking Outsourcing’ on iTunes or by using this link.

At the end of our conversation, I asked Paul about social networking. I wanted to understand if the “traditional” contact centres are now being asked to provide online support for Facebook and Twitter. Smith said: “I do have a personal view on this – ignore social media at your peril whether you are talking B2C or B2B. It’s amazing how many major companies are not making their web sites readable by the iPhone. Twitter is becoming a really valuable viral marketing media. Companies should open their minds and get their own people using these tools.”

Smith believes that a mix of social and mobile media is essential for a modern business, with Harvey Nash already working in this way. He said: “We were the first recruitment firm that offered a service for the iPhone and I believe we are still leading in that area. We use Twitter and text messages and all manner of ways to communicate with candidates.”

Smith added a point that I often mention in my presentations, that people entering the workforce today have different expectations of how a company should operate – as an employee and as a consumer: “There is this big issue that we are now working with the digital generation – generation Y. These people have grown up in a new environment where they have immediate needs and the tools are now there to offer immediate services.”

Smith offers an interesting insight into the mixed world of new media and outsourcing, something I’m experiencing myself more frequently now as companies ask where new business is coming from.

Posted at 10:46 AM in innovation, internet, outsourcing, strategy | Permalink | Comments (2) | TrackBack (0)

Wednesday, 16 September 2009

Outsourcing gets social

I was at the Groucho club in Soho for breakfast yesterday, for an event on social media, rather than any champagne with the stars.

Kenyan IT and business process outsourcing firm KenCall were the hosts for the day, and it was interesting to see how social media is entering into the regular world of IT and business services.

Kencall founder Nik Nesbitt talked about how communities on Cell Fish are run by his team in Nairobi, using a combination of chat and forum management – almost anything but the traditional voice-based contact centre.

So this is starting to get interesting. Not just because KenCall is from Africa, but also because firms are starting to outsource their online social presence. During the discussion, there was a consensus that the way large firms are doing social media at present cannot be sustained. I have my own example; when I tweeted a complaint about my BT broadband line at home, BT were all over the problem and had it resolved super-fast, because they have people monitoring Twitter. That’s going to be hard to scale up.

But I’m really interested in the merger now between the social world and the closed shop of outsourcing suppliers. They are going to have to operate in new, unusual, transparent ways and they are not all going to like it.

Posted at 10:26 AM in innovation, internet, outsourcing | Permalink | Comments (0) | TrackBack (0)