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The Global Strategic Hub: How UK outsourcing must lead the way

by sourcingfocus.com

The event entitled ‘How UK outsourcing must lead the way’, part of the The Global Strategic Hub series of briefings, was created to provide a venue for the discussion and exchange of views, including detailed case studies, on how the UK has the opportunity to achieve global leadership in outsourcing.

The UK is a strategic hub for outsourcing deals, with IT and BPO outsourcing contracts accounting for $33.7 billion USD in the second quarter of 2012 with 12 percent of contracts in the UK. The session opened with an introduction from Adrian Quayle, NOA Board Member for the UK regions regarding recent developments in the UK outsourcing market.

The benefits of outsourcing to the UK were highlighted by Khawar Ali, Vice President of Europe for Aegis, who focused on the attractiveness of a developed infrastructure for businesses looking to outsource services to the UK from the perspective of a supplier. Mr Ali also detailed how the UK’s links with other European countries and the European Union had provided Aegis with strong links to business in markets that had been previously inaccessible within a European market worth $16.3 trillion. 

The UK has a long established history in the outsourcing industry with developed capabilities and a strong infrastructure, including the ability to scale, trusted contract legal frameworks, rapid time to market and a move to deliver corporate responsibility becoming common practice within the nation. The UK also offers an increasingly larger choice of service providers with global reach.

Recent UK infrastructure developments have included a governmental focus on broadband connectivity and speed, with Boris Johnson’s promise to give London ”the greatest 4G network in the world”, alongside a series of high-level investments in superfast broadband.

Along with a highly developed infrastructure, the UK offers other benefits that are common to a highly developed country including high levels of education leading to a talented sustainable employee pool. Kevin Devoy, Head of Procurement at British Gas described how the UK provided complex customer care and that areas including telemarketing had high performance from within the UK due to the workforce’s ability to handle complex calls. Back office services, HR and accounting services where public perception is not relevant and the local knowledge and highly educated contact centres of the UK are not required are provided in India.

The UK has a proven track record for contact centres with 25 percent of European centres based within the UK, with the last three years seeing significant development in this area including the establishment or growth of over 150 centres owned by international companies.
The government have moved to update subject curriculums to reflect the needs of businesses including the recently revamped IT GSCE curriculum. The development of skills in areas such as the contact centre industry has been supported by government recognized programs such as the ‘UK Contact Centre Career and Skills Framework’.

Capgemini are involved with a fresher’s course aimed at increasing the skill sets of UK students and moving the outsourcing industry forward. Speaker Anthony Belcher Fresher, Senior Capability Lead (SCL) for Capgemini’s Application Outsourcing (AO) division describing how the programme had resulted in increasing results after just 39 apprentices.

Stability has also been an attractive quality of outsourcing within the UK. Businesses enjoy a low risk stable environment with standardised regulation, which allows for increased ease of setup for new businesses. The UK’s position as a technology innovator and move to become a European leader are areas that have enhanced the nations outsourcing capabilities, with industries such as BPO heavily driven by technological innovation. Simon Gamlin and Rachel Ferguson of Eversheds LLP detailed how English contract law is popular in other counties globally such as Russia and the US.
In recent years the range of outsourced services has evolved with a re-focus in how they are delivered. Development of services has included a movement from customer satisfaction to customer experience, the use of technology as a driver rather than as a supporter and a customer centric approach rather than process centric. Mr Ali concluded that the UK could further enhance its position within the outsourcing market in attracting new business investment through the employment and development of low-cost locations. 

Kevin Devoy in discussing the outsourcing strategy of British Gas’ parent firm Centrica, stated that ideally the “perfect strategy would not to outsource anything”, and that Centrica’s current business model consisted of employing the services that they do best in house and employ specialists in areas that it did not.

The increasing challenges of regulation are becoming an obstacle in developing the UK to lead the way in outsourcing. Mr Devoy described how increasing regulation from the likes of the FSA and OFCOM had become a growing issue for businesses and represented a negative for those looking to outsource to the UK. Businesses need to be aware of the legal implications such as the enforcement of UK business law such as TUPE aside from the growing regulatory considerations.

The speaker focus group put forward ways in which the UK could increase its position as an outsourcing leader and attract further investment from those looking to outsource. Chris Halward Programmes Director for NOA Pathway, who is involved with the NOA in developing new standards, detailed how the UK needs to better publicise its skill set, increase standardisation levels further and educate businesses in the workings of the FSA. The panel discussed how customers were looking for fast and cheap services while Simon Gamlin and Rachel Ferguson of Eversheds LLP described how increasing offshore costs had increased the rate of inshoring with many 1st generation contracts. The UK has the opportunity to take advantage of the increasing costs of overseas outsourcing.


 

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