Focus On Fujitsu

Focus On Leading the implementation and evolution of cloud-based solutions

sourcingfocus.com speaks to Nick Parnaby, Vice President of Extended Enterprise Solutions at GXS about the implementation of cloud-based solutions and his predictions for the evolution of cloud-based technology.

Nick has spent over 16 years helping businesses to improve their supply chain, procurement and B2B processes. In 2005 he co-founded RollStream™, the first cloud-based technology platform specifically designed to manage trading partner communities, inspired by Web 2.0 user experience and usability seen in consumer-oriented social software. Nick has implemented cloud-based solutions in B2B for managing process and information management at some of the world’s largest corporations and brands, and is regarded by industry analysts as a subject matter expert in supply base management, B2B community management, sourcing and procurement and supply chain optimisation.

Can you tell us more about some of the GXS partnerships and collaborations that you have been involved in?

Certainly - Our second customer at GXS was Tesco in the UK and they came to us because they had an issue wherein they had thousands of suppliers that they needed to reach for rolling out a new Oracle system in 2006. Their challenge was they had about 12,800 suppliers on their Goods not for Resale catalog which was not as optimised as their Goods for Resale side of the business, and there were maybe four or five thousand active suppliers placing purchase orders at any given time, but they just didn’t have the visibility of information on the site.

Tesco UK approached us, having already spoken to Oracle and Microsoft who had quoted around £1.5 million just to get it started, and wanted to know about more cost-effective and Software-as-a-Service options. We completely revamped their supplier registration process, automated it from the point where a buyer makes the decision to work with a supplier onwards and streamlined the entire work flow. We created a profile in the cloud, like LinkedIn if you will, just for the Goods not for resale side – so they got a complete overview of the process in the cloud, and visibility of not only the master data, but everything from documentation, the legal and regulatory stuff, corporate social responsibility risk checks.

It was great for them because it cut their process down by about 60%. We also worked with a multi-national pharmaceutical company. They had a big issue with supply chain risk, and they had a huge programme called Responsible Procurement. They were looking a 450 procurement people across the business, 48,000 suppliers – it’s a giant community. We came in as a community management tool for their Biologics Division, and could deliver very measured, surgical communications, and make a risk assessment of the supply chain using simple secure survey tools or financial health relatedinformation collected from suppliers, and from that they could come up with and execute a strategy of mitigation based on the level of risk. We were probably the first to market using community management for supply chain.

From your experience of SaaS, how do you envisage cloud evolving?

I think there are all sorts of things happening. Number one – a lot of companies have embraced it. At GXS I find myself working a lot with banks and financial institutions and they look at it differently. They’re still very concerned with security, so I see a lot of hybrid solutions emerging in the cloud, where the data is behind a firewall. Every time we deal with customers who are concerned about the sensitive nature of their data they are very worried about the safety of the cloud. There are a lot of potential customers who shy away from the cloud, almost once bitten twice shy, because in the past we haven’t been able to offer what they need, and there are some businesses who I suspect will never be ready for the cloud but I do see a hybrid approach emerging over time.
Following on from cloud, what do you see as the top three topics or outsourcing trends at the moment?
I think one of them is the space that GXS sits squarely in the middle of, which is managed services for Business Process Outsourcing around B2B. We’ve seen a huge shift in our revenue moving away from traditional tools. I’ve also seen some Salesforce automation that has been outsourced, some customer service operations, the States are outsourcing lead generation and the front end of the sales process. I’ve also seen classic BPO for purchasing re-emerge where organisations on the indirect end of the business outsource almost their entire spend.

Can you give me some examples of best practice of GXS in B2B collaboration?

We spend a lot of time obsessing about community management, and technology is just one side of the equation. We sell it as Software-as-a-Service-as-a-Service because you can’t just leave a piece of technology in somebody’s hand and expect them to adopt it and get mass adoption across the board. Recently we did a big roll out with a big supermarket chain. They came to us and said “we really want to do this but we’re worried about how to create this massive community of 5,700+ suppliers and be able to reach people systematically.”

We advised that it is imperative to use best practice and call every single one of them. An analysis of the contact information shows that contact numbers are often fax numbers, incomplete emails, generic mailboxes, and we found that about a fifth of the contact information is irrelevant. You have to put services up front and contact the initial point of contact and establish a relationship with them. It sounds so basic, but if you don’t do it, you won’t reach the people you need to. The other thing we’ve found is that in sourcing procurement when you’re rolling out legal and regulatory compliance it’s not like marketing when you’re happy with a 45% response, you want 100% or near enough. We find you need four or five reminders to get around a 70% response rate. We spend a lot of time coaching the procurement professionals and the support teams underneath them to go the distance. For GXS best practice is really managed services on B2B.

What does the future hold for GXS, what do you have in the pipeline?

I also see a move towards buying more SaaS applications on top of the network, for example a lot of people are using tools which afford them visibility into all their transactions in order to provide better customer service, or for better compliance because they want to grow their business into multiple countries. A lot of people come to GXS because they want to grow but struggle to get over the invoices going back and forth and dealing with different compliance regulations between the countries. We’re going to ramp up our services side with all of the tools in a managed services package. We’re already global but there is opportunity for us to make inroads into China.

Focus On SSON Talks

SSON Talks is a collection of outsourcing professionals sharing their remarkable stories and inspiring journeys. Listen, view and read before the flagship 2012 SSON Week in Amsterdam 14 - 16th May.

Jacek Levernes talks on global business services. Jacke’s most improved metric in an SSO was a 45% cost reduction from standardisation and process improvement (efficiency).

Patrik Forsstrom talks on verticalisation: “I’m very happy for us that we were able to establish our captive center in Estonia moving Accounts Payable, Accounts Receivable and Payments maintaining high top management and customer satisfaction within a short timeframe. 1Q2012 new processes to be transitioned from Finland to our center in Estonia.”

Eric Simonson talks on shared services impact on global markets. Eric’s industry prediction is an increasing drive for industry-centric global services strategies and solutions. Much of the growth in global services has come by leveraging lessons that apply across most industries. With the rapid maturation of the market, an increasing openness to consider more “core” activities

Juan Manuel Garcia Moreno talks on collections optimisation: on time & ahead of target.

For more information please visit the SSON Website

Focus On Evolution of Happiest Minds Ltd. - Part 2

Ashok Soota began his career in 1965 with the Shriram Group of Industries in India. In 1978, he became CEO of Shriram Refrigeration, a company which was unprofitable for four consecutive years. He went on to become the President of Wipro Infotech from 1984 to 1999. Under his leadership, Wipro’s IT business grew from US$2 million in 1984 to US$500 million run-rate in 1999.

In 1999 Ashok co-founded MindTree which in a span of 11 years became a global entity with revenue run rate of US$350 million, with over 9000 people and offices in multiple cities in the U.S., Europe and Asia. Happiest Minds (a next gen IT solutions & Services Company) was launched in August, 2011 by Ashok Soota and a team of industry experts, with the mission to create Happiest People and Happiest Customers.

Ashok is an industry leader. He was President of Confederation of Indian Industry (CII), India’s largest Industry association and also President of Manufacturers’ Association of Information Technology. He has served on the Prime Minister’s Task Force for IT and on the Advisory Council for the World Intellectual Property Organization, Geneva. He was recognised as ‘IT Man of the Year’ twice and as ‘Electronics Man of the Year’.

Can you give me some examples of how a business can conduct true transformational change through something like business analytics or cloud?(Puneet Jetli, Co-CEO of Happiest Minds Technologies) I think that what has happened is that for a long period of time organisations and enterprises have invested in actually trying to decipher insights from data and they found 2 problems that they have actually ended up as reporting tools, and when you are looking at reports they only tell you about the past. But in economies of today where growth is not a given, you have to be able to predict the future, and if you can predict it as accurately as possible it will give you a competitive advantage. The true way of doing it is to get into the world of analytics. The second thing that organisations have realised is that there is x amount of structured data, there is literally 10 times of that which is unstructured within the organisation as well as outside of it. If you now want to get into meaningful insights and take decisions, you can’t ignore this qualitative data. So that is where we believe the need of the enterprise is likely to be, and that it marries very well with our focus area of social media, getting social analytics marrying it with structured data, making it predictive so that you can then take the right bets and then reach out with the right offers, right products, right services to the consumers when they are likely to need it. In doing so, do it with the medium which is likely to be the most effective – if you can reach out with a discount coupon, based on past purchasing behaviour of a consumer or a set of consumers, to the shopper as he or she is entering the store you are most likely to make the impact, and that can only come if you look at some of these pieces of technology and integrate it in a holistic way. It requires understanding of social insights and understanding of analytics and purchasing behaviour, it requires creating a proposition and delivering on the mobile at real time to the consumer, and that’s what we believe most enterprises would be tempted to adopt in the years ahead.

So, in essence, business analytics can replace the need of invention and that the computer becomes the inventor and predicts a new product people are going to want.
Either a product or an opportunity, absolutely. That is where innovation is going to happen, you’d be surprised how many enterprises are figuring out that they are reinventing their businesses, to enable that you need insight and analytics.
(Ashok Soota) You used an interesting word then, ‘replaces’. Because in my mind it facilitates and expands that invention because you need it all the time, but it is one more new powerful tool that is giving you new thoughts and new ideas because of the analysis of that data and connoting that into intelligence.

Where is outsourcing going in 2012?
That’s a big question! There are one or two things to consider when answering a question like that. The first one is the environment. The convention would be to look at the economy, it’s in trouble, it’s a bad time also for the IT industry, but in reality it’s in times like this that people really need Information Technology, particularly with the new transformational technologies you are not talking of just cost reduction, you are really talking of enlarging markets, of opening new channels that didn’t exist in the past through technology. You will also notice that the IT intensity of the world is increasing by the day, industry by industry is becoming an internet company, what I’d call the creation of web 2.0 companies which are purely internet based. So IT still remains at the core of change. The need for outsourcing is increasing because people cannot capture all the expertise within their own system, there is so much to be integrated. As the speed of change increases, the complexity of the technology increases, and how can anyone, even the largest companies, incorporate all of the skills that they are going to require to implement this change, therefore the need for outsourcing increases exponentially. I would make a distinction here between outsourcing and offshoring. We don’t just want to be seen as an offshoring company, we see ourselves as working as partners to our customers, and we want to bring the best of both worlds to our customers. Here in the UK we have actually hired a considerable number of local citizens.

Speaking of hiring people locally, there was an article recently about Rackspace experiencing problems with hiring people that had cloud experience – is this a problem you’ve experienced in the UK?
(Ganesh Narasimhaiya Vice President & Country Head of Happiest Minds Technologies)
Cloud is a new technology so there is not an abundance of people but there are people chartered at around 10-12 months in the market and the focus we have on the next generation and the area of opportunity we are able to attract the right talents.
(Ashok) I mentioned about how our message resonated with customers, it has obviously resonated with people also. So we have demonstrated at an early age our ability to attract talent. There is the excitement of working in a start-up, there is the fact that people know that this is a company that focusses on these areas, and there is also the message of the company.

What about the term outsourcing, we’ve been seeing that companies want to move away from being associated with the word itself. Is this something you agree with?
I can understand and appreciate that. For a start I think we’d all like to be seen as partners and we’d be open to having that reflected in the business model. There could be the other approach of how do you go about co-creation with your customers.

What do you think will be the next big thing in outsourcing?
Hopefully the term itself will become less prevalent and less used and there will be a different name. I think you’ll see new business models evolving, more partnering, more outcome-based, more procreation and sharing of intellectual property.
(Puneet Jetli) We believe that a lot of that will be influenced by cloud. Cloud will not just be a medium to offer to our customers to reduce cost, but also look at bringing innovation to the market and I think it would mean a lot even for service providers like us to embrace cloud to provide services to our customers in a very different way to what we have traditionally been used to.

What particular innovations do you think will be in cloud?
I think we have to move away from the mind-set of looking at pure services to looking for solutions, where you are essentially looking at a business opportunity but backwards, you are essentially trying to assess a business problem. When you are creating a solution by yourself or co-creating it along with your customer then how do you manage end-to-end delivery of that. That is why we are not only in IT services, but also infrastructure management and security, because you have to give a holistic solution as a package on a software-as-a-service model if required for customers to really appreciate and benefit from the range of technology.

Focus On Evolution of Happiest Minds Ltd.

Why did you start Happiest Minds?

We believe that new technologies and transformational technologies really represent an opportunity for a new entrant to come in. It provides your entry strategy, it provides a basis for transformation and it gives you an opportunity to come in and say “look, none of the incumbents have really got any solid experience which puts them at an advantage; we’re all experimenting with some case studies here and there”. On top of that, we have no legacy to protect. Therefore we are straight away going to provide you with the richest, most logical solution which favours and helps you build the newest technologies. So I think it is a basic entry strategy that we saw, we see that the message has resonated well enough – 12 customers across the world in the space of just 6 months after starting is quite something given the lead times in this business. Interestingly enough, none of those customers are customers from our previous business, they were all new recruits. They met us as well as meeting with larger players, and then decided “hey look these guys know what they’re talking about, they’re a seasoned and experienced team, and they’re working at the leading end of where they’ve got expertise.” The second reason is linked back to the name, where we are saying we do want to create a company, where I would say it is truly a unique culture which enables, and focusses on happiness.

So, you said that your mission is encapsulated in the word smile. How does that work?

Research shows that the happiest moments in anybody’s life are the ones that they were giving, not the ones that they were taking. It resonates when you say straight away “how do we inculcate that?” We do this in little ways, for example, we will celebrate every milestone with an act of giving. So when we launched the company we gave away a finite number of meals for the government’s food for schools programme, so we were helping those kids access their one big meal a day. We will do some act of giving at each and every stage, every milestone. If I were to talk about some of the other aspects, I think the word ‘mindful’ is a very unusual word. You won’t find it anywhere else. It is a very rich word, it carries a lot of meaning in it, apart from being thoughtful, attentive, caring, seeing what’s likely to come ahead, literally you are thinking of the other person. I think that in itself is very closely linked to our approach. I should mention that it is not just the values alone which encapsulate our theme of happiness, its actually reflected in everything right from the name obviously, the mission statement is ‘happiest people, happiest customers’, the values as I’ve just described lend themselves to the acronym ‘SMILES’. We have developed a happiness framework for people as well as for customers, in our 5 year vision statement it says that we want to be the happiness evangelists for our people, and our customers. We want to be part of a global happiness movement, so we work in the IT environment but we also work in a global environment with people saying “what can we do to maximise happiness?”

You touched on your Corporate Social Responsibility programme, something that we’ve noticed has taken a back seat for some organisations in recent years, but you’re clearly making a big feature of it. Can you tell us about your activities in that area?

As part of our 5 year vision statement we actually articulated it and defined a set of measurements with criteria behind it so that it doesn’t remain pie in the sky. If you see our 5 year vision statement it says to be a leader in CSR initiatives with our core business operations, is an interesting approach to social responsibility. We are saying we are bringing a certain core confidence, if we can integrate some of that capability with our core business operations then we can deliver more value. So how do we take our own expertise to help make a difference in the lives of other people? For each of the divisions we have defined measurement criteria. The first we have decided is that we want to establish volunteering and community involvement as a core part of our Global People practice, and we encourage our people to get involved in that. I’ve already mentioned our celebration of milestones with an act of giving; we want to be able to establish processes to leverage our own capabilities for socially relevant causes. We want also to be able to say ‘how do we engage with our own clients and partners?’ to make a difference to society and to the environment. Finally, as we become profitable we will launch the Happiness Minds Foundation with its own focus mission. But that doesn’t mean we are going to wait until that time, we are going to do all of the activities I mentioned to you earlier.

(Puneet Jetli, Co-CEO of Happiest Minds Technologies) The holiday season was 3 months into our existence and there is normally the practice of a Secret friend or a Secret Santa, and the motivation was not only to find a secret friend but to establish contact, communicate and collaborate, and it would accrue a certain act of giving. The more people who go out and find a secret friend, the more people are sponsoring meals for underprivileged children. The idea is that every little act can become a force for giving.

Focus On 25 Years of the NOA

This year sees the 25th anniversary of the birth of what is now the National Outsourcing Association. During that time they have grown from a spark of an idea to being the pre-eminent promoter of outsourcing. Chairman Martyn Hart recalls the beginning, the last 25 years and thoughts for the future.

The seeds of the NOA

In May 1987 there was a meeting in the Telecom Tower, where a radical idea was floated: British Rail should outsource its telecommunications to British Telecom. John Welsby, BR Chairman at the time, agreed. So a Board level committee was set up to explore the idea with Nick Kane from British Telecom, and Board Member David Rayner, as the senior British Rail representative.
BR managers wanted some reassurance that outsourcing worked and a body of evidence had to be built to prove that this “new” idea was possible. In the end, the deal didn’t come off, as political winds were blowing and BR was heading towards imminent privatisation.

However, the outsourcing idea wasn’t lost, and some of the people from whom the body of evidence was built from (GEC, Unilever, Trafalgar House, France Telecom, etc.) got together and held regular meetings as a forum for the exchange of ideas, and often, simply comparing notes on their experiences. Out of these meetings, the association was finally formalised in April 1993.

This foundation for the NOA as we know it today was a response to a growing need for both outsourcing customers and suppliers to share ideas, review successes and failures, stop re-inventing wheels, and in doing so create a body of ‘expertise and best practice’ that could carry the industry forward. It was via this wider vision that the NOA soon became more firmly rooted.
The NOA was formally incorporated as a company limited by guarantee in 1995.

The NOA today

Currently we have over 350 fee-paying members. These comprise a majority of blue-chip user organisations - some managing the largest European outsource deals - as well as premier suppliers, leading consultants and legal advisors in the field.

Today it had been recognised that organisations look towards outsourcing to obtain strategic business step changes, which were not possible organically or by simple acquisition. Outsourcing inherently is generic and the association had recognised that it was the organisational business objectives that were important and makes major contributions to Business Technology and Business Process Outsourcing.

The NOA has been designed to be a tight ship and we have successfully navigated through many recessions especially the Dot Com bubble and burst. During this time we have managed to grow the services we offer such as professional qualifications (with the NOA Pathway), developed numerous prestige events (such as the best practice awards) and we have also created successful spin offs such as sourcingfocus.com, the leading portal for outsourcers (with 14,000 members as friends of the NOA), the NOA’s Outsourcing Yearbook and the creation of the EOA. We have also started Parliamentary involvement through the All Party Group on Outsourcing & Shared Services.

How outsourcing has changed

In 1987 outsourcing was limited to on-shore, mainly in telecommunications. Only when the telecommunications markets were liberalised from the early 1990s onwards could concepts like remote working be made possible. Coupled with the rise and rise of computing power and application software it was possible to achieve significant cost savings, quality and rapid deployment benefits by outsourcing. However, the contracting vehicles were not very sophisticated and many customers and suppliers found themselves in contracting muddles leading to dissatisfaction, issues which are being progressively addressed to this day.

The next 25 years

For the next 25 years, outsourcing will be progressively accepted at all levels of business. Organisations will make decisions on where to source their resources to give them the maximum return. The way outsourcing relationships are set up will take the market and the business requirement changes of both customer and supplier into account and there will be less problems contractually for the “normal” outsourcing services like ITO and BPO.

However, there will always be a frontier where organisations may outsource areas where “others fear to tread”, which will bring “interesting” problems to those constructing the relationships. However every organisation will have parts of it that for one reason or another it will (or it should) never outsource or commit to a shared service: understanding where; will become a key competitive advantage for those that get it right.

As our Chairman Martyn Hart says: “if you want something done you can only do it three ways; do it yourself (in-sourcing), with a friend (shared service) or get someone else to do it for you (outsource)” The only thing that separates the first two from the later is the legal contract but in the future those first two services will be progressively constructed on outsourcing lines and viewed the same as an external services provider.

Focus On Cognizant’s Satisfaction Model

Cognizant recently topped the customer satisfaction and recommendation rankings in the four-country region (Finland, Norway, Denmark, Sweden) in KPMG’s Outsourcing 2012 study of service provider performance in the Nordic region.

sourcingfocus.com spoke to Jayajyoti Sengupta, Cognizant’s Country Manager for the Nordics to find out about how Cognizant ensure customer satisfaction.

Please can you elaborate further on this: “Our high-touch relationship model, deep domain expertise and consulting skills, unique reinvestment philosophy, and our ability to build strong multicultural teams around the globe have helped our customers navigate structural changes in the economy and their industries, enabling them to stay efficient, effective, and innovative.”

Clients across industries—financial services, healthcare, pharmaceutical, retail, media and entertainment—are going through structural shifts driven by globalization, virtualization, digitization, regulatory changes, consumerization and new technology architectures (such as social, mobile, analytics and cloud). This has led to clients seeking dual mandates of cost agility (efficiency and effectiveness) and innovation (business transformation).

While clients IT budgets have largely been flat to modestly up, they expect to achieve much more from less. This calls for working with a partner who can address the dual challenges of cost agility and innovation off one platform within the available budget.

That’s where a company like Cognizant excels because of its years of managing its target operating margins lower than comparable peers but reinvesting the excess back into the business for high levels of customer relationship management, technology excellence, multi-cultural and domain expertise. Today, Cognizant has over 1,000 client partners and account managers who are responsible for the high-touch relationship architecture, over 3,000 pure-play consultants and dozens of technology centers of excellence, and 1 MBA for every 25 software professionals, globally.

These investments help clients drive cost down on existing infrastructure and applications and helps clients to use the freed up dollar to invest in growth and innovation, thereby addressing both the bottom-line and topline needs of clients.

How does the high-touch relationship model differ from traditional governance?

We have seen two traditional models depending on the starting points of companies and how they evolved. With global system integrators who started off in the US or Europe, the center of gravity was in the US or Europe and their offshore/global delivery locations were started as extensions. It’s more of a passing-the-baton or throw it over the wall model. While for Indian companies their expansion to the rest of the world was with the view that expansion to other parts of the world was a necessary sales and marketing activity. The centre of gravity of these organisations was in Mumbai, Bangalore, Hyderabad, etc. For many people who went to work for these companies in geographies outside India, it created a very difficult environment to be successful as an executive or as an individual because the centre of gravity was in India.

In our model—what we call the two-in-a-box model—the centre of gravity is not geographic but vested in a group of people. Through the two-in-a-box model—at an account level, at a customer level—the centre of gravity rests with two individuals, the Delivery Director and the Client Partner.

Does having named leaders offshore effect delivery?

It makes no difference that the Delivery Manager is delivering from India or China, or that the Client Partner is engaging with the client in the US or Europe. Each one individually and jointly feels accountable, empowered and responsible for the success of the client. In the two-in-a-box model, they together define the success of the client along the same terms—a sort of soft concept, but that’s how it really works on the ground.

We believe the two-in-a-box model is superior to the passing-the-baton or throw it over the wall models of other companies because there is no opportunity for loss or dilution anywhere in our model. In the passing-the-baton model, you need to align two sets of people in two separate stages.

Ours is more of a relationship model and the execution is good because there is alignment of all stakeholders from the start.

Focus On Leading the PSN charge with Staffordshire CIO

sourcingfocus.com speaks to Sander Kristel, the CIO of Staffordshire County Council about the benefits they have seen from implementing one the country’s first Public Services Networks.

Kcom were selected by Staffordshire County Council to deliver one of the country’s first public services networks (PSN). Can you give an overview of the PSN and how it will be used by Staffordshire County Council?

The public services network gives the ability to any public sector organisation in or around Staffordshire for broadband connectivity, for any sort of telephone solution and for contact centre solutions as well. The partners can then choose under the contract which services they want to buy, and how they want to implement them. For instance some partners might want a fully managed service, and others might want to manage parts of the services themselves. For the County Council as the lead body in this agreement, it’s a broadband service that we deliver to all our County Council sites and also to the vast majority of our schools. Other partners that have joined up until now are all South Staffordshire Health Partners, Lichfield District Council, and we also provide the education network for Wolverhampton City Council as well.

How is the PSN benefiting the residents of Staffordshire?

Well, it’s in a number of levels. First of all, it’s really important for a PSN that it’s cheaper for the partners than going out and getting connectivity themselves. Clearly there is a saving for the taxpayer; at the start we estimated the saving to be at least £1 million, but actually we can see now that that saving will increase over time. More important than the technology itself and the direct savings, it’s all about shared working and shared services that we provide because the public sector can be quite a complex environment for a customer to manoeuvre. So for us to be able to provide end to end services and work more closely together we need to share more information securely and appropriately, we need to share buildings etc. To do that you really need to write plumbing underneath it to underpin it all and to make it easy to do, and that’s exactly what our PSN does.

On that theme of shared working, can you tell me more about Staffordshire’s integration of public services in general?

As an example, we are the first in the country to have a significant amount of our social workers move into an integrated health trust. For example, a social worker could arrive at someone’s home in the morning and do an assessment of what the needs of that client are. A nurse could be there in the afternoon and do exactly the same, and neither knowing the other was carrying out the same task, which is obviously very inefficient, and annoying for our residents. By moving our social workers into the integrated health trust we avoid a lot of duplication and we hope to improve and enhance the services for our customers, as well as reducing costs.

Which examples of best practice would you like to highlight from the implementation of the PSN from Kcom?

I think what was really important for me was to be completely transparent to all of your partners. For us, this is not something we want to make a profit on; we have been completely transparent with regards to costs, to rollout – and that’s where you could run into some problems with your rollout, you have to be completely transparent for your partners because trust in a relationship like this is incredibly important. Furthermore it was really important that the solution and the contract have flexibility, as mentioned earlier, some partners still want to manage aspects of their contract. If you don’t accommodate for that they will turn around and say “this is not for me, and I don’t want to join this.”

Can you give me some examples of how you maintain transparency throughout that period?

If you look at the procurement, we ran it as a competitive dialogue process and we invited partners even though they hadn’t signed up to the PSN on day one, and they had the opportunity to hear what the suppliers were saying, see the costs, and have conversations with the suppliers. As long as you keep that consistent throughout the process it’s a really good way for partners to get some trust in you and show that you’re not trying to fleece them.

Could you tell me more about the initial procurement exercise and why Staffordshire decided to partner with Kcom?

Obviously in the public sector the procurement processes that we run are very stringent, they can be quite cumbersome at times. We chose a competitive dialogue process because at the time that we did it the Public Services Network framework hadn’t been awarded yet so we had to do it ourselves. We chose the competitive dialogue process because it allows transparency, you can invite partners in, but also because we weren’t entirely sure what it was exactly that we wanted. We knew we wanted something that was shared, and we really wanted to get the expert input from the supplier to help define what it was that we wanted.

Now throughout that process it was clear to us that to be more flexible, more cost effective etc. that we could still achieve the same outcomes but by incorporating other technologies into the solution as well. That is where Kcom were very strong with the flexibility of their solution as well as the price.

What do you see as the up and coming trends in shared services and shared working in general, how do you see it developing and evolving across other counties?

I think, like the county council is doing now, a lot more councils, particularly county councils, will become commissioning organisations so they won’t necessarily deliver all those services themselves, but they will commission them. So shared working will be a lot more evident in the public sector and more important in future, as well as more shared work with other public sector organisations because we have to provide more end to end services for the public. But also shared working with the private sector and looking at more innovative vehicles like joint ventures and social enterprises, which will definitely develop and grow.

Focus On Tony Morgan, NOA Board member and Chief Innovation Officer for IBM UK & Ireland - Getting Outsourced

Tony Morgan looks back on his career so far in outsourcing – which kicked off when he himself was outsourced.

There can be great opportunities for people transferring from end user organisations to service providers, particularly when functions being outsourced are not core business functions for the end users. The challenge for end users, service providers and employees is to focus on creating the best possible outcomes for all concerned.

I worked for an employer which decided to outsource parts of its IT department. The rationale was that these functions weren’t core to the business and could be more efficiently delivered by a service provider.

During my career to that point, I had gone through a progression of junior, senior and lead technical specialist roles. I had already begun to wonder what options were available for further career development within my employer. With this new development, I wanted to find out as quickly as possible what was going to happen to me, what would happen to my role and who my new employer would be.

In 1998 I transferred into IBM, a major provider of technology based products, solutions and services.

After transfer, my first role was leading the technical aspects of the project to move my previous employer’s data centre to an IBM location, a project which ran to time and budget. My role transitioned into a support team but I wanted to find out what wider opportunities were open to me.

With some help, and some personal pro-activity, I successfully applied for a technical solution design role on new outsourcing bids and large projects for existing clients. I was on a learning curve. Working for a service provider was a mindset change from working in an end user organisation. This role was the making of me. It was my first real stretch. I moved quickly out of my comfort zone but also quickly built confidence.

I was provided with a formal mentor who gave me career and professional advice. It was at this stage I discovered much more about IBM’s professions structure. Options included Specialist, Architect, Project Manager, Consultant and Sales. I opted for Architect.

I found myself within a profession of my choice with a career path and options. Did I want to be a technology architect, an enterprise or perhaps a data architect? There were tools and methods I could use to develop my experience and deliver my role. Crucially, there was a supporting documented education path.

The professions model pioneered within IBM is now being developed much more widely and is externally recognised. My current IBM senior certified Architect position qualifies me at the Distinguished IT Architect certification level with The Open Group. The NOA of course also has its own qualifications and outsourcing profession Pathway education programme.

Aligned with the IBM career model, I took the next steps on my journey with Chief Architect roles on outsourcing client engagements. I was identified as a potential future technical leader and allocated to the technical leadership programme.

I was building a longer term career plan I couldn’t have dreamed of in my previous organisations. I became a mentor myself, providing support for people who had come through similar client to service provider outsourcing journeys as my own. I’ve seen a number of my mentees receive their own Architect accreditations and certifications which has been hugely satisfying.

My thirteen years in IBM have been in the outsourcing business. There have been many changes in this time but some things haven’t changed that much. I see people come into IBM and develop their careers in a similar way to myself. There is high demand for good people with positive and pro-active outlook in my area of the business and elsewhere.

My advice to end user organisations looking to outsource is help and encourage employees going through the process to be pro-activein finding out what is on offer for them with their new employer. Good service providers understand that transferred staff can be a great benefit to their organisations and clients. Services providers who actively develop the careers of their new staff reap the benefits. In my view staff from outsourcing, and acquisitions keep a workforce vital and innovative and deliver a wide breadth of expertise back to the clients they work with. Long may this continue in IBM and beyond.

sourcingfocus.com catches up with outsourcing guru David Smith, Global Chief Innovation & Technology Officer at Fujitsu and learns a little Japanese along with the way..

WHAT IS FUJITSU’S STANCE ON INNOVATION IN OUTSOURCING? HOW DO YOU DEFINE IT, AND HOW DO YOU MAKE IT HAPPEN?

Innovation is about creating incremental business value by doing something differently. Innovation in the context of outsourcing can be a number of things: a new offering adding value, a compelling solution delivered for a customer, or it could be a particularly innovative commercial approach. The fundamental premise of our approach to innovation is that it is collaborative, with our customers, with our partners and by delivering the collective power of Fujitsu’s people. We launched an Open Innovation service last year in the UK and have run a number of crowdsourcing events both internally amongst our people and externally with customers and third parties. Working closely with our customers enables us always to focus on delivering business value, often enabled by technology though we do not restrict our thinking to that.

REGARDING YOUR FIVE YEAR DEAL WITH MCDONALDS, CAN YOU EXPLAIN FURTHER THE CONCEPT OF “USER EXCHANGABLE PARTS”?

The users are the McDonalds restaurant employees who are being trained so they can swap faulty parts in the company’s EPoS retail IT system for new ones instead of relying on engineers to fix relatively straightforward problems. The benefit is that problems are solved with greater speed and at a reduced cost, which is great for our customer.

HOW DO YOU SEE DAVID CAMERON’S VISION FOR THE BIG SOCIETY AND OPEN SERVICES AFFECTING LARGE OUTSOURCING PROVIDERS SUCH AS FUJITSU?

The Government’s aspirations for the Big Society involve the creation of “mutual” organisations which are constructed along a partnership model. We think there are likely to be hybrid organisations forming, including mutuals, which retain a government stake (to protect assets and benefit from future buy-outs or uplifts) and involve the private sector as a joint venture partner. This could provide the blend of commercial know-how and the public sector service ethos to deliver a winning combination for both citizens and taxpayers. Fujitsu’s existing partnerships with government departments and schemes such as HMRC, LGSS (Cambs and Northants Local Government Shared Service) and Northern Ireland Civil Service illustrate how some public-private partnerships can deliver a positive outcome. The flexibility of relationships is vital, and we have learned to ensure a pragmatic balance between our commercial and business-critical priorities, which we know our customers value.

Large outsourcing providers like Fujitsu, through their role as a systems integrator, can also extend the option of involvement in a part-mutualised public body to SMEs. In this context SMEs have traditionally been smaller technology companies, but this approach could easily be extended to local community-based organisations who would struggle to tender for local services in their own right.

HOW JAPANESE IS THE BUSINESS CULTURE AT FUJITSU?

We aim to bring the best of our Japanese heritage and its focus on quality, continuous improvement, and Lean thinking and marry it with the local cultural alignment of our operations around the world. We have a clear and relentless focus on the needs of our customers. We always focus on how we can enable them to achieve their business objectives and maximise the value they deliver to their own customers. Many management techniques taking their inspiration from Japan, such as Genchi Genbutsu (go and see for yourself), and Heijunka (workload levelling), pervade the way we approach business, both in working with customers and in our back office activities. In addition, Fujitsu globally takes a long term view: in building assets and capabilities, in entering new markets and most importantly in investing in customer relationships. Our customers tell us that this culture makes for fruitful and lasting partnerships.

CAN YOU TELL US MORE ABOUT FUJITSU K AND ITS UPCOMING ROLE IN THE JAPANESE GOVERNMENT?

The K supercomputer which Fujitsu developed in partnership with RIKEN * is famous for being the fastest computer in the world with a computing capacity of 8.162 quadrillion times per second. However, in achieving that performance, it also demonstrates facets of the company’s focus on quality and engineering excellence. For example it has 70,000 CPUs working together at an efficiency rate of 93% which in that context is an outstanding achievement.

The Japanese government invested more than 100 billion yen (US$1.25 billion) in the K supercomputer project and its intent was to maintain Japan’s position as a leading force in this field. The supercomputers will be used to enable research to tackle a range of complex problems related to climate change and weather patterns. It will also enable Japanese industry to be more competitive globally by providing a powerful computational tool to develop breakthroughs in drugs, materials and new technologies. The link with RIKEN is also likely to provide impetus to the research into renewable energy, and research to protect people from natural disasters by predicting the impact from earthquakes and tsunami.

 * RIKEN is an independent administrative institution under the Japanese Ministry of Education, Culture, Sports, Science and Technology whose mission is to conduct comprehensive research in science and technology and to disseminate the results of its scientific research and technological developments. RIKEN carries out high level experimental and research work in a wide range of fields, including physics, chemistry, medical science, biology, and engineering

WHAT IS NEXT FOR OUTSOURCING? WHERE DO YOU SEE NEW OPPORTUNITIES / MARKETS ARISING? WHAT WILL BE OUTSOURCED THAT ISN’T CURRENTLY?

There are a number of key trends driving what the technology sector can deliver to the world. The “on demand” model that is inherent in the cloud computing wave with the “as a service” mantra is driving the evolution of the outsourcing market. There’s a concept often called the “Internet of Things” which references the new opportunities we have to harness the cost economics of cloud computing and to combine it with pervasive networking and ubiquitous devices/sensors. The result is to build technology even more into the fabric of our lives.

The way we describe this emerging opportunity at Fujitsu is that we have the potential to build a human centric intelligent society where technology is part of the fabric of life. Examples of these new types of service include: smart city initiatives; smart metering to drive the sustainability agenda; and telematics to transform how our transport systems operate. Finally more immediately the evolution of cloud computing and the dynamic I would label the “consumerisation of corporate IT” is showing signs of completely transforming how corporations purchase and operate technology based services. All these areas move us into a new form of outsourcing model.

About Fujitsu

Fujitsu is a leading provider of information and communication technology (ICT)-based business solutions for the global marketplace. With approximately 170,000 employees supporting customers in over 100 countries, Fujitsu combines a worldwide corps of systems and services experts with highly reliable computing and communications products and advanced microelectronics to deliver added value to customers. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.5 trillion yen (US$55 billion) for the fiscal year ended March 31, 2011. For more information, please see: www.fujitsu.com