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When is an outsourcing contract not a contract? July 23, 2012

Posted by Mark Hillary in Current Affairs, Government, IT Services, Outsourcing.
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The Olympic games is almost with us and as the sport has yet to being the media is trawling through every negative angle they can find. The latest is the failure of security firm G4S to supply enough guards on time – leading to the need for the games organising committee to use more police and army personnel than ever expected.

The Chief Executive of G4S has apologised profusely and admitted that the situation is a shambles – in his own words, but was his company really to blame?

When outsourcing goes wrong it is not always the supplier at fault. The London Organising Committee (LOCOG) for the games originally specified that 2,000 guards would be required. This is what G4S had always been planning for.

Only a couple of months ago this figure changed to around 10,000 guards – plus all the volunteers and other military personnel that were expected to also help. So the scope of the contract changed by at least 500% with a very short lead-time.

Nobody wants to explore this in too much detail right now – the games are upon us this week so the post-mortems will take place once it is all over, but it looks like a classic outsourcing dilemma. The client suddenly needs to ramp up and will offer an enormous bonus to the service provider, but if the provider felt any doubt about their ability to scale up so quickly then the honourable thing to do would have been to refuse the change in the scope of the contract.

All will be revealed once the games are over…

Wenlock

Phoot by Ken Jon Bro licensed under Creative Commons

 

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Is outsourcing coming of age? December 19, 2011

Posted by Mark Hillary in Current Affairs, IT Services, Outsourcing.
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As we head into 2012, it’s worth taking a moment to consider just how much the entire outsourcing market has changed. This is the year that the cloud really shifted from being an entirely separate concept to being intrinsically linked to the process of outsourcing.

A senior manager who made budget decisions always led the traditional market in services. It might be the CIO or the business line head – like the HR head for example – but it would always be a senior figure with a well-planned objective for the future state of the company.

This led to the traditional outsource, where an entire business process would be analysed, passed to the third party, and delivered by a service company – whether on site or remotely.

But ever since the growth of tools such as salesforce.com the model has been changing. Salesforce turned everything around by being a system that could be used over the web, with no need for any additional software, and paid for by user by the month… simple, clear, and without the need for big plans, vendor comparisons, or training programmes.

Salesforce is used by sales teams who buy it themselves on their own budget. They don’t ask a CIO to buy the system and then have maintenance teams install it.

So are cloud products like this really outsourcing? I believe so. If sales teams are trusting a third party with their information and using those tools as a part of what they do then it is just the same as if the CIO had outsourced CRM to a partner.

But it is a much more disparate world in which individual business line staff are making decisions about the tools they use to get the job done, making the job of those trying to control all of this much harder than before.

Outsourcing is not dead, it has just embraced the cloud and it now changing into something new.

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Time travel with Facebook December 13, 2011

Posted by Mark Hillary in Current Affairs, IT Services, Software.
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Facebook has launched their new Timeline feature to the world this week. Much attention has focused on the improved look and feel of the user interface, particularly the large cover photo that now dominates a Facebook profile.

But much less attention has been paid to the more interesting aspect of the Timeline – the ability to move back in time to any point and see what the user was doing at that time. In effect, Facebook has created an open diary because you can go back in time on your friend’s profile to see what they were posting on the system last year – or even on a specific date.

This is an interesting development, not least for those interested in privacy. It used to be that you updated your Facebook and as the update dropped off the screen because new ones replaced it, that would then be lost forever. Now users can move back and forth in time examining every little post you made.

Many web watchers have already warned avid social networkers about the danger that they will arrive at a job interview only to find the interviewer has found some compromising photos online. But with the ability to move back and forth in time scanning the entire online history of a person, this danger just became a whole lot more real.

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Sharing services May 27, 2011

Posted by Mark Hillary in Government, IT Services, Outsourcing.
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I have recently commented in this blog on the opportunities for sharing services that overlap, particularly in the public sector. Most organisations have similar support functions that can be shared with others, providing the right procedures around data security and ease of use are addressed.

This has not been questioned in the private sector because it is essential for survival. The private sector has had a rough ride in most developed economies since the downturn in 2008, and the UK is no exception. It could be argued that with growth still within the margin for error, the UK has yet to really recover.

So nobody has to convince private sector companies of the benefits for sharing HR, or payroll, or finance and accounting services, either through outsourcing or by reducing a multiplication of effort by several divisions within the same organisation. It seems that many in the public sector still need convincing though.

A new report from the analyst firm Ovum suggests that half of all European public sector CIOs don’t think that the savings are worth the upheaval. Changing software, systems, retraining staff, migrating data – it’s a complex process to venture into a shared service arrangement with no guarantee of success. But as the story in Computer Weekly notes, the NHS is doing it, police services are doing it, councils are doing it.

Is it time for the bar to be lowered on how much needs to be saved to make sharing worthwhile?

Who is the customer? February 24, 2011

Posted by Mark Hillary in IT Services, Outsourcing.
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Possibly the most important discussion I had at the Nasscom event in India recently was around the changing role of the CIO, and how this changes the whole relationship between the client and the service supplier.

The CIO is an evolving role. It is becoming more strategically significant and is focusing more purely on information use and flow – which means that there is less emphasis on the purchase of IT systems.

At the same time, services are getting easier to buy. Companies are offering complete solutions that can be delivered using a web browser so absolutely no infrastructure or software is required – beyond Internet access.

So business heads are getting far more involved in specifying what they need and even going to the market and purchasing it without any involvement from the IT department. In fact, if there is no IT infrastructure requirement then why would the IT department need to know what is being purchased or used by the business?

This has always been the case in BPO. The person buying a new HR system was the HR director – not the CIO. They might purchase a system in communication with the CIO, but ultimately the decision was that of the business line head.

Now the same is applicable for a wider variety of systems – even technical systems that would previously have needed agreement from the CIO.

Does it make the CIO redundant as a function? I don’t think so as there still needs to be a strategy around infrastructure and security, but this does signal a complete change in the way companies use IT. The business user not only has the budget, but the power to buy, install, and maintain their own systems without any IT department interference.