Bad Management affecting your business

Bad Management affecting your business

How to avoid hiring bad managers

Ineffective managers can drive productivity down and turnover up. Here are three ways to make sure the right people get hired or promoted

Several years ago, the catchphrase “people don’t leave companies, they leave bosses,” began to circulate. There is merit to it if we look at survey results.

In a 2015 Gallup poll of 7,272 adults, 50% of respondents said that they left their companies because of their bosses. Aware of this, human resource departments conduct exit interviews when employees leave, and many HR units keep a tally of employee resignations by manager so they can see where the potential management trouble spots are in their organisations.

Sometimes the managers quit on by the most employees have endeared themselves to the organisation as high level technical performers who have been promoted, but who lack people and management skills. Other times, especially in small companies, the culprits are the founder-owners of the business themselves, and there’s not much you can do. In still other cases, companies (and their HR departments) lack the time and resources to tackle attrition and problems with managers.

Just what should be done?

The most obvious step is to develop managers within the organisation who have the ability to not only run projects and departments, but to create a winning culture in their work teams.

These people tend to lead by example, to create open and clear communications, to work collaboratively and not as autocratic leaders, to be approachable, and to generate a sense of purpose in their staffs. Talents like these aren’t always easy to find, corroborated by the same Gallup poll mentioned above, which revealed that only three out of 10 bosses have the natural or coachable talent to become great at managing people.

To improve the odds of finding strong management talent, companies can vet candidates for management positions for their ability to lead and to manage, as well as for their expertise in the departments that they are being asked to lead. If companies can’t find suitable management talent internally, they should get it from the outside—even if there is initial resentment from someone who might be passed over.

A second step is to understand (and make sure that your managers understand) what it is that employees value most from their managers.

In a survey of 500 employees conducted by Korn/Ferry scholar in residence Terry Bacon for his book, What People Want, Bacon concludes that employees want managers who are honest, fair, trustworthy dependable, genuine, participative, responsive and collaborative. On the flip side, employees are less concerned if managers are friendly or chatty.

One way companies can improve management’s awareness of what is important to employees is to have HR conduct internal employee surveys to see what is meaningful for employees in their work environments, in how they do their work and in the work direction that they are getting from their managers. These surveys should be conducted with assurance of anonymity so that employees feel comfortable completing them. To help reassure employees that their answers are confidential, some HR departments elect to use independent outside consultants to conduct the surveys.

Another step that HR departments can take is to perform analytics on what departing employees tell them during their exit interviews. In most cases, HR does ask departing employees questions about the work environment, about their managers and the work direction they received, etc., but all too often this information remains in files and is forgotten. Especially if a company has a serious employee retention problem, it is important for HR to enter the data from these reports into an analytics software that can probe the information and assist in coming up with actionable recommendations.

A third step is to develop metrics that help to reveal where there are disconnects between managers and staffs in the organisation.

One way to do this is by looking at company attrition. If there is a standout department where attrition is inordinately high, this could point to a manager who isn’t connecting well with his or her staff. Departments with troubled management also tend to show reduced rates of productivity (e.g., a finance department with a troubled manager-staff relationship might begin to take four days instead of two to perform the month-end close).

When I was a senior executive at a bank, we looked at attrition rates across the organisation and found that turnover was over 50% in the teller lines at our branches. We initially identified the problem to our compensation package, which was less than what our local competitors were offering, so we fixed that. However, the higher attrition rates continued to occur. When we looked at the situation more closely, we realised that we had managers in the field who stayed in their offices and gave little direction to staff members.

We eventually replaced these managers with individuals who were more collaborative, and also superior communicators. We succeeded in reducing the attrition rate.

It is not always easy to understand why some departments underperform and others don’t—but how managers manage is a definite factor.

“To avoid losing your best and brightest, I suggest a strategy that is aligned with a culture of recognising employees as far more than just function roles, making sure to reward more than we have seen since the 2008 financial collapse”, states Craig Ashmole, Founding Director of London based IT consulting firm CCServe.

Contibutions by Mary Shacklett from Techrepublic

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Is Interim Management Dead

Is Interim Management Dead

Is the market changing the way that we engage and work with the use of Interim Management?

In short, the answer is no, Interim Consulting is not dead!

In fact, perhaps the question we should be asking instead is: “are we all interims now anyway?”

Permanent contracts are still dominant in businesses – and it is set to stay that way for the foreseeable future. But does a senior level “permanent” position really exist in this day and age? How beneficial could it be for us all to adopt an interim mind set – regardless of our actual position?

In an age of business disruption, where there are no certainties – as macro forces combine to place intense pressure on organisations across the spectrum – there is a necessity to be agile. Business leaders have to be prepared to change course at a moment’s notice and progress is often tracked project-by-project, rather than year-by-year.

To survive in this new environment and to create competitive advantage for our businesses, we may all find ourselves needing to take more of an interim approach to leadership.

Amid technological disruption and now Brexit, we are in the thick of a revolution in the business world. This is not necessarily a bad thing, but it can be difficult to adjust to. Even the most gifted of business leaders can find themselves feeling slightly rootless as they face unprecedented changes within and outside their organisation.

So should we all be embracing an interim approach to work?

According to the Institute of Interim Management (IIM): “Interim managers bring well-qualified skills and expertise to bear at short notice, without the overheads and shackles associated with employment. They consult, plan, advise, implement, and embed the lessons, then exit, handling a range of key strategic and tactical interventions. As businesses in their own right, they offer independent expertise, free of company politics, and take responsibility for delivering results, not just offering advice.”

Without doubt, this is an approach that we can all learn from. With higher expectations of pace and impact, reliance on networking and an independent view – an individual working on an interim basis faces intense pressures. They have to make quick, but well-thought-through, decisions within a set timeframe, in order to bring about the desired outcomes. In many ways, this is leadership intensified.

Therefore, interims need to boast specific attributes and these differentiating “hallmarks” of professional interim managers and executives from other types of temporary or fixed-term contract resources are:

  • High-impact: interim managers are practiced at making a significant difference quickly, assessing and working with the company culture and often with little in the way of a formal “brief”. They do not need time to warm up or to settle in, but focus quickly on the work in hand.
  • Independent: they remain outside of company politics and so are able to address issues from a position of neutrality. This can be particularly useful when difficult and unpopular decisions have to be taken. They also act as trusted advisors who tell it as it is.
  • Professional: interim managers are micro-businesses in their own right, usually operating as limited companies. They trade with the hallmarks of business, not employment, such as professional indemnity insurance, business email and, often, their own business website.
  • Senior: operating at board or near-board level, interim managers are managers and executives, who have gravitas and credibility. They are used to leading businesses, functions, and departments. Suitably well qualified, they advise then deliver effective solutions.
  • Transformational: interim management is often focused on activities related to change, transition, business improvement, crisis management and turnaround. Even when their assignment addresses a gap or shortage, they add value and energise the workplace.
  • Wide expertise: with a strong track record of completing a variety of assignments, interim managers typically combine depth and breadth of expertise in their chosen sectors and disciplines. Their agility gives them the wide reaching expertise to deliver results quickly.
  • Time focused: interim managers are available at short notice. Once engaged, they will focus on providing significant value within the agreed fixed-term time parameters, seeing the assignment through and for not longer than needed, to a conclusion.

Source: Guide to interim management (IIM)

“As a relative newbie to some, around 6 years in interim engagement, I very much use the interim mind set in terms of thinking: What does the business need to achieve this quarter? How am I going to get impact on transformation? What are my quick wins? How am I going to get permanent employees to move things forward with me?” states Craig Ashmole, Founding Director of London based CCServe Interim Consulting.

So aren’t these attributes applicable for achieving competitive advantage for a business, regardless of our employment contract?

Teri Ellison from BIE explains: “The interim spell definitely honed my leadership skills faster than would have been the case in a permanent role. To suddenly lead a team of people who don’t look at you as a permanent employee or their manager and to have them follow you to build teams really challenges the way you lead.”

“At the same time, you’re learning to act as a genuine business partner to the client, helping them to think about where they’re growing their business, how they are driving their business and what impact you can have on their success.”
As disruption continues to make its presence felt, the ability to flex and adapt is crucial. What can we all do more of, regardless of our employment terms? Looking to the world of interims for inspiration could be just the tonic business leaders require.

So interim management is very much alive and well – in fact, it’s thriving. As the business world continues to turn on new axes, the skills and mind set of the interim manager can help leaders to adapt to new challenges and flourish. Whether your organisation hires an interim or simply employs their attributes within their working culture, business can all benefit from what the interim consultant brings to the table.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Request For Proposal

Request For Proposal

CIOs Seeking Innovation – Should the RFP process be replaced by the innovative RFS?

There’s an innovative way to build and drive the RFP process as CIOs look to expand service capability and innovation but should the RFP be replaced with the RFS (Request For Solutions).

Many CIOs are tasked with replacing aging legacy systems and implementing efficient IT infrastructures and effective applications that can deliver an edge in a highly competitive business environment. Innovative IT outsourcing initiatives can address this challenge, but many businesses have failed to integrate supplier expertise and achieve real value or fresh ideas from their outsourced or technology relationships.

Rather than leveraging the skills and capabilities of third parties, CIOs find that their sourcing initiatives are often limited to staff augmentation, with suppliers essentially filling the role of pure order-takers and very little innovative ideas being brought to the table. For those corporations that are able to bring in relevant or specific or unique domain expertise, either through a third party or a captive operation, they are then faced with managing price which becomes an issue of unique skills value.

“For their part, outsourcers offer technical expertise but often lack the understanding of actual client business issues needed to offer a compelling solution that addresses a client’s hot buttons.” Comments Craig Ashmole, Founding Partner of London based IT Consulting CCServe. “This is largely due to a lack of understanding the business that their client sits in and looking to be a differentiator to new clients. There’s too much replication of services being provided, to utilise economies of scale.”

Ultimately, clients struggle to articulate their requirements and providers struggle to articulate their value proposition – the result is a lose/lose proposition. The art of really differentiating services is being muddied in the waters.
Part of the problem may also lie in the manner in which CIOs define their objectives and select service providers. In a traditional RFP, clients articulate a specific set of requirements, and vendors respond by filling in the prescribed blanks. Increasingly, all parties are finding that this approach can stifle innovation, as it essentially defines the solution to the problem rather than soliciting new ideas.

An emerging alternative – the “Request for Solution” – takes a more open-ended approach and invites providers to show their creativity. Consider this analogy: A CIO requires the cost of utility services like his BPO admin be outsourced to reduce costs. This is the basic dynamic that characterises the traditional RFP process.

Alternatively, a CIO provides a list of capabilities that need to be addressed with a set of broad criteria: Administration, HR, Recruitment, Payroll, Training and Disciplinary process review for a budget not exceeding x amount of dollars. In this scenario, the Vendor/Outsourcer has the leeway to be creative and offer a variety of solutions and even introduce innovation technology that could reduce staffing levels. This approach more closely resembles the RFS (Request For Solutions) process.

A similar re-think is taking place with regard to contracting. Rather than a highly detailed, voluminous document that take months to prepare, review and complete, clients are seeking more flexible approaches that allow both parties to test the waters and develop the relationship further if it’s of mutual benefit. In describing this concept of “Evolutionary Contracting,” ISG’s Tom Young, challenges the industry bromide that outsourcing relationships are like marriage, and that both require commitment over the long term. Tom argues that, rather than viewing their service provider contracts as wedding vows, clients should think of outsourcing as more of a dating game.

We are by no means suggesting that traditional outsourcing RFPs and contracts are becoming irrelevant. Indeed, they remain essential to initiatives aimed at optimising existing operational models. But we are seeing more and more situations where clients have transformational requirements and face problems that have more than one right answer. Many CIOs struggle to make the most of opportunities presented by mobility, big data and other emerging technologies.

Perhaps it’s time to give the RFS and Evolutionary Contracting a closer look.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Outsourcing and As-A-Service

Outsourcing and As-A-Service

Outsourcing is on life support, with many BPO providers failing to invest in As-a-Service

It has been hard to change processes, drive common standards across clients, build a utility model that can be scaled and made cost-efficient, for the Outsource vendors when you’re really just moving work around the world with the goal of getting it done cheaper. Think As-A-Service!

Scouting round the Industry experts on BPO and Outsourcing I came across a very interesting article from Horses for Sources (HfS) which made me just realise how slow some of the larger ‘dinosaur’ vendor players are missing an opportunity to address their clients real business issues, and that’s SERVICE.

“We have seen the Outsource market come back into fashion late 2014 and pick up throughout 2015 but as we close in on the beginning of the new 2016 procurement cycle many outsource firms are still not looking at agility and being able to do a deep dive on their clients real operational needs.” Comments Craig Ashmole, Founding Partner of London-based IT Consulting CCServe. “Customers are crying out for proper service focused delivery models and not just looking at bottom line cost savings.”

The following article from HfS below encapsulates what the Outsourcing market should be looking out for:

HfS analyst Phil Fersht stated, If I have to hear another advisor, lawyer or provider sales executive whining about their lack of business, I am just going to tell them straight – “You’re a dinosaur, you are selling a capability from a bygone era. The reason clients don’t call you anymore is because you are not offering them what they really need – or at least educating them on what they need to haul their legacy back ends out of the dark ages.”

The narrative simply has to change. Today’s enterprise world is littered with literally hundreds of legacy outsourcing relationships where the service providers are unwilling (and many just plain incapable) of making any genuine productivity improvements.

What’s more, the leadership in their clients is quickly wizening up to what’s going on and simply does not trust them to invest in their delivery capability, or share risks with them to find new thresholds of value. Close to half (47%) the enterprise leadership we spoke to in our recent As-a-Service study view their service provider’s unwillingness to cannibalize their existing revenue model as a highly significant obstacle to make the As-a-Service shift, and a similar number (44%) view their provider’s lack of support to share any risk as a key issue:

Providers-unwilling-to-change-the-model

The outsourcing industry is stuck in a legacy holding pattern and is in real danger of decline

This may well be the opportunity for Global In-house Centres (where they exist) move up the value chain, build the competency, and keep the skills developed internally but leverage the economies of the HR and personal hire through the outsource players to create more effective hybrid models.

This would help take the burden off the business by working with its parent as well as leveraging service providers from a commodity service and time for parent organisations to give up the controlling mind set of captives, treat them as partners, and build a better risk-management.

The problem we have, today, is that the leadership within many enterprise “buyer” clients is under huge pressure to take their operations to the next level, but most of their middle and lower management clearly only care about keeping the current status quo. In a nutshell, our industry is suffering from hundreds of stagnating outsourcing relationships, where the service provider has zero incentive to do anything much beyond keeping the margins consistent, while the middle management on the buy side has a similarly lethargic ambition not to do anything much… bar keeping the lights on.

However, when we anonymously polled 60 outsourcing services buyers in a private focus group last year, 43% said that giving more responsibility to their service provider would be the most important factor to improve the quality and outcomes of their outsourcing initiatives. Clearly we have reached a paradoxical situation:

Trust-to-give-providers-more

The Bottom-line: Here’s the great modern-day outsourcing paradox – many enterprises want to give up more to their service providers, but many of the providers are just not interested in investing in As-a-Service capabilities

The reality today is that senior buyer executives want to progress the operating model towards As-a-Service, while their counterpart service provider leaders are talking a big game about delivering Digital and As-a-Service capabilities to their clients, which can spread the wealth generated by better automation, actionable analytics and a multi-tenant model. Hmmm… reminds me a bit of outsourcing 1.0, where the leaderships in many enterprises dove into outsourcing fuelled primarily by lower cost labour, forcing the situation on their underlings. Now a similar pattern in emerging, with the difference being the “tangible” productivity factor is automation, while access to better, more actionable data to make business decisions the ultimate desired outcome.

The challenge today, quite simply, is less of an appetite from the sell side to absorb the risk. Making savings through automation is a lot more “risky” for many providers than the ease of swapping out bodies. However, taking these risks, and investing in the talent and technology to de-risk these situations, is what is key to survival.

Most service providers, while talking a big game, are not convincing their clients they are really prepared to share risk and make genuine investments to build out a true multi-tenant As-a-Service delivery capability. That’s probably because they only really care about making their quarterly numbers, not having a sustainable, well-planned long-term strategy.

This situation spells a near-certain recipe for failure for the outsourcing industry, where the decision-making layers claim they want to shift the gears, but the existing relationships are clearly stuck in a depressing holding pattern. In fact, from many client discussions we are having today, execution from certain providers (you know who you are) is deteriorating further, as they simply cannot say no to the increasingly complex needs of their clients, but are too stingy (or should I say cannibalistic) to invest in better talent and capabilities to up their game. It’s a situation that is going to end in outsourcing failure for many, if steps are not taken to arrest this decline in delivery quality, and investments made in future capability – most notably robotic process automation, real time analytics solutions and a roadmap for self-learning and artificial intelligence.

Those providers with these capabilities can break this cycle by building multi-tenant solutions for the future – and will be the winners. I believe this could happen in barely a couple of years, when you look at the current pace of change and mood in the market. The key is to pick off the next 15-20 deals they can win at lower margins in order to invest in common automation, common analytics, common SaaS underpinnings and common service skills – hence a more competitive, more scalable multi-tenant As-a-Service delivery model.

It’s easy to point fingers at certain service providers for preserving the legacy FTE labour model, but the stark reality is that many of them simply don’t have leadership prepared to invest in the depth of talent, or technology capability to drive genuine advancements. So – let’s face facts here – we’re at an impasse. There are tremendous opportunities to create genuine productivity advancements through robotic process automation, smarter analytics and the onset of cognitive computing, but much of the present service provider bunch are not going to be the ones to take true advantage of them. I predict a few will break out, but the next winners will be from a new breed of As-a-Service provider, many of whom many not even have been formed yet.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

IDC 2015 Contact Centre Leaders

IDC 2015 Contact Centre Leaders

2015 IDC Worldwide Contact Centre CCaaS Vendor Assessment matrix

The IDC MarketScape study examines the key players in the worldwide contact center infrastructure and software (CCIS) market, analyzing  current capabilities as well as longer-term strategies

The CCIS market includes voice and digital media contact distribution, management, and agent-software clients, as well as self-service solutions for voice, web, and mobile devices used to offer customer service solutions as part of a customer experience strategy. IDC also examine the ecosystem and cloud (public/private) deployment, customer experience solutions, and mobile customer care solutions, as well as go-to-market models used by vendors to achieve these.

Key criteria that contribute to a successful CCIS offering include:

  • The ability to present a strategy that comprises key technologies that focus on the 3rd Platform of IT, including cloud (public and private), Big Data and business analytics, mobility, and social business functionality.
  • Vendors that present innovative strategies around partner management, pricing, and product packaging.
  • Vendors that can provide flexible delivery options for partners and customers as part of their video portfolios (on-premises, managed, hosted, cloud).
  • Business partnerships and sales channels that open up new markets for the vendor’s offering, yet still maintain a high level of support and customer care.

Twelve of the leading worldwide contact center infrastructure and software vendors profiled in the report are:-

  • ALE (formerly Alcatel–Lucent Enterprise)
  • Avaya
  • Cisco
  • Genesys
  • Interactive Intelligence
  • Intelecom
  • Loxysoft
  • Mitel
  • NEC
  • SAP
  • ShoreTel
  • Unify

Some of the key challenges for customers investing in contact center infrastructure and software are the identification of technologies, features, and applications that are most appropriate for their organisations, and more importantly, which source(s) they should turn to for deployment and expertise.

CCaaS leaders 2015

“Although there were 12 key vendors evaluated it is my opinion that the leader of the pack – Genesys – showed more diversification with regard to capabilities and ability to move with market demands, so this report has focused on the overall capability of Genesys.” stated Craig Ashmole, Founding Partner of London-based IT Consulting CCServe.

The three primary sources of CCIS functionality are:

  1. IP PBX/unified communications and collaboration (UC&C) vendor solutions and the enterprise network, such as Cisco, Avaya, ShoreTel, Unify, ALU Enterprise/Huaxin, NEC, Mitel, and Huawei.
  2. Standalone contact center solution environments from vendors such as Genesys, Interactive Intelligence, and SAP.
  3. Hosted/managed and cloud service provider solutions offered by facilities-based providers such as Genesys, inContact, Verizon, and 8x8.

Since there is no one-size-fits-all solution for contact center solutions, customers can choose from an assortment of features from these sources, which may require a little, or a lot, of integration to make the solution run on customers’ network infrastructure and/or within the bounds of their existing services/carrier contracts.

  • Many organisations find CCIS solutions complex and are not sure how they would go about managing and maintaining the environment. Therefore, having a solution managed by a third-party provider would help remove the complexity for them and alleviate the need to make internal investments in hiring appropriately skilled IT staff to manage and maintain it.
  • Businesses are looking at ways to reduce the amount of real estate to lessen operational costs and lower their carbon footprint generated by existing premises-based equipment. As a result, businesses are reducing the amount of hardware equipment they have on-premises.
  • Cloud environments can provide greater levels of automation, orchestration, provisioning, and deployment. Transitioning to the cloud can help organisations reduce operating costs, improve application performance, and better allocate their resources. However, contact centers are generally more strategic than, for example, unified communications (UC) solutions so the transition is slower and the ability for customisation can be less than a system on-premises or hosted by a service provider.
  • Businesses reliant on high levels of security will be more inclined to move existing solutions to hosted and private cloud deployments. In addition, many providers still need to do more work in terms of updating or bringing inadequate security policies to reassure companies that the transition to a cloud-based environment will provide them with the proper level of security.

In Summary:

“The CCIS market includes functionality that runs on standards-based equipment or purpose-built systems such as PBX. It has revived itself over the past three years with vendors active in several acquisitions, divestments, and partnerships,” said Jason Andersson, program director, IDC Nordics. “The movement to cloud is clear as investments in both hosted solutions and cloud solutions are beginning to make global headway.”

IDC expects 9.4% revenue growth in worldwide CCIS in 2015. Although premises-based solutions have garnered high attention in recent years, enterprise evaluations, trials, and ultimately adoption of hosted solutions (single-tenant) and cloud (multitenant) CCIS solutions will contribute significant growth predicted for the global market this year. Revenue growth will be driven by enterprises looking to retain capital, reduce costs, and improve customer experience, as well as by service providers refining their contact center strategies and product portfolios.

The full report covering all the vendors can be found on the IDC website but should you want to see the deep dive on Genesys covering their premise-based platform as well as the Cloud-based Contact Centre offering then you can read that report here.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Cloud Cover takes over Europe

Cloud Cover takes over Europe

Now’s the time to consider Cloud applications & Contact Centre Services in the Cloud

Cloud providers coming into Europe in their droves as the demand rises

In a research report from Computer Weekly nine months ago they stated that cloud providers like IBM, Microsoft and Salesforce.com were building datacentres in Europe in response to in-country data protection concerns effectively moving the Cloud into Europe. Microsoft also continues to successfully embrace the cloud and mobile by decoupling Office365 from its Windows desktop platform.

More recently we are seeing major Cloud providers such as Amazon, Microsoft, Google and VMware all building datacentres in the European Union (EU) as locally based enterprises insist their cloud data stays in the region. One such cloud provider, IBM, also announced the opening of a SoftLayer datacentre in Paris by the end of 2014.

This was IBM’s third cloud-focused facility in Europe, after its Amsterdam datacentre and the more recent UK facility in Chessington. The Parisian datacentre will be part of IBM’s $1.2bn overall plan to build 15 datacentres across Europe.

Other vendors such as Genesys, a major player in Contact Centre software solutions is now leading the way forward with Contact Centre Cloud services installing their software in data centres across the UK and the European region.

Genesys have also focussed heavily on the other well-spoken subject of security and as such their Cloud has PCI Level 1 certification, SOC 2 certifications and HIPAA compliance. Their data centres have ISAE 3402 and ISO 27001 certifications and their virtualisation architecture ensures separation and security of customer-specific data. This is driving the Contact Centre in the Cloud and bringing more flexibility and commercial attractiveness to users.

Another Contact Centre player, Interactive Intelligence, has announced that it has been named one of four Market Leaders in Ovum’s MultiChannel Cloud Contact Centre Report with the most flexible cloud deployment options being one of the key contributors to its leadership position. Interactive Intelligence has been an early adopter deploying cloud based solutions well ahead of others and as a result sees more than 50% of its new customers deploying in the Cloud.

The European Commission has highlighted three main areas of focus in its digital single market strategy.

  1. Making it easier to access digital services online
  2. Investing in digital networking infrastructure, and
  3. Create a European digital economy

Barriers such as geo-blocking, lack of cross-border delivery initiatives and other technical issues currently prevent many citizens from using cross-border digital services, such as online shopping or sharing digital goods.

The commission aims to review current telecoms and media rules to promote growth of digital services and networks. This will also encourage investment in infrastructure, faster rollout of 4G and data protection development. This strategy has been observed over the British 2015 summer with the marketing campaigns from the mobile operators attempting to remove the cross border roaming changes we are all so familiar with when using mobile data abroad.

“For those Cloud sceptics out there, I think the race is on and the proof is in the eating”, states Craig Ashmole, Founding Partner of London based IT Consulting CCServe Ltd. “The CIO community should be taking note and if not using cloud in earnest then they should be seriously considering some elements of non-core application usage to ensure their IT departments are able to skill up and test for robustness.”

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Outsourcing in Europe 2015

Outsourcing in Europe 2015

Outsourcing hits record levels in Europe – Summer 2015

Outsourcing activity in Europe recovers after the lull in the lead up to the UK general election, with more contracts negotiated than ever before

The value of outsourcing contracts in the UK increased by 150% in the three-month period to the end of June 2015, as Europe saw a record number of contracts awarded.

In its latest index of IT and business process outsourcing contracts, Information Services Group (ISG) recorded 169 deals valued at €4m or more, with a total value of €2.2m.

This is welcome news for the outsourcing sector in Europe, which suffered a 25% fall in spending in the first three months of the year. ISG blamed this on caution in the run up to the UK general election.

In EMEA – the world’s largest outsourcing market – there were 128 contracts signed, valued at $2.4bn, according to the latest figures from ISG. Both these were 25% lower than the same period in 2014.

A drop in outsourcing in the UK – which dominates the area’s outsourcing market – had a big impact on the EMEA and global figures. “The drop was due mainly to a drop in sourcing business in the UK, due to the election,” said ISG.
Global outsourcing slowed as contract value reduced in a price war among suppliers, said ISG.

ISG’s Outsourcing Index – which measures commercial outsourcing contracts with annual contract value (ACV) of $5m or more – show first-quarter contract value fell 18%, to $5.1bn, well below the average for first quarters since 2006 of $6bn.

The number of contracts for the second quarter of 2015 was the highest ever, but the total value was 12% lower than the same period a year ago, with only two mega-deals worth €80m or more signed.

The financial services and energy sectors recorded a lot of activity in the period, while there was a decline in contract activity in the manufacturing, transportation and telecoms sectors.

ISG Europe partner and President John Keppel said the outsourcing industry is seeing an increase in smaller deals. “More deals than ever are being signed at much lower contract values, driven by increased use of multi-sourcing and the impact of digital strategies. The ever-increasing activity levels in Europe, the Middle East and Africa indicate that outsourcing is more popular than ever,” he said.

Keppel said of multi-sourcing, where buyers seek shorter and smaller contracts with niche providers, is driving this.

“Digital disruption is also having a significant impact, with buyers avoiding larger, longer-term contracts as they plan their digital strategies amid a wave of new technologies and operating model,” he said.

In the UK both the value and the number of contracts increased by 150%.

Keppel said ISG is bullish in the short-term and expects the next quarter to record growth compared with 2014. “Longer term, it will be interesting to see how the trend toward a higher number of lower value contracts plays out in the second half of 2015,” he said.

But what about the Financial Services sector?

Since the start of Q2 2015 there is expected to be an increase in the use of IT outsourcing in the global banking sector for the next 12 months, but the use of expensive consultants [The Big5] will drop, according to research by Finextra.

The CSC-sponsored research, which surveyed more than 50 global banks at the end of 2014, showed banks are cautious over what they spend on IT.

It also revealed that 49% of banks plan to increase the use of IT outsourcing over the next 12 months, while only 9% of the banks said they will reduce IT outsourcing.

Some 42% said they will reduce their use of consultants, while 22% are set to increase their use. Contractors will be increasingly used by 40% of banks, but 37% will reduce the number they use. The research also showed that internal IT headcounts will increase at 35% of banks, but reduce at 32%.

The numbers suggest banks are eager to develop IT but are conscious of the need to keep costs down, with Big5 consultants’ notoriously expensive resources.

“More often than not the Big5 – consultants are twice the daily rate compared to independent interim IT contractors, so moving to the smaller bespoke interim consulting market it’s a quick way to shed costs,” states Craig Ashmole, Founding Partner at London based IT Consulting CCServe. “The report indicates more judicious usage of consultants mainly for advisory and design activity, leaving the implementation to the organisation themselves. Interim consultants being a useful source of reliable skills.” he said.

Outsourced IT is the fastest growing resource. The flexibility and cost advantages of suppliers that can tap resources in low-cost regions are increasingly popular for banks. “A wide range of flexible models incorporating outsourcing, offshoring and even insource-offshoring deals are being pursued,” said the report.

Allied Irish Bank and ABM Amro are examples of banks that have recently increased IT outsourcing but banks may be taking risks by outsourcing and offshoring some of their legacy operations, as well as their security.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Cloud Affecting India Outsourcing

Cloud Affecting India Outsourcing

Cloud Computing Is Going To Rain on India’s Outsourcing Parade

There are dark clouds on the horizon of India’s information technology and outsourcing industry.

AstraZeneca PLC is sharply scaling back the business it gives to the Indian outsourcing companies that it has long relied on for tech help. David Smoley, AstraZeneca’s technology chief, said he expects to cut in half the $750 million the drug maker used to spend annually on outsourcing over the next two years. He said the number of people working on information technology also would drop by 50%.

The changes at AstraZeneca are part of a major shift toward cloud computing, which is starting to bite into the revenue and profits as well as hiring in India’s critical outsourcing industry and poses an existential threat to the players that fail to adapt.

Outsourcing executives are bracing for a big disruption. “It’s like what happened when Amazon arrived,” said C.P. Gurnani, chief executive of Tech Mahindra Ltd., a large Pune-based outsourcer that specializes in work for telecommunications companies. U.S. bookstore chain Borders closed and Barnes & Noble had to reinvent itself, Mr. Gurnani said.

Mritunjay Singh, operating chief of outsourcer Persistent Systems, predicts a “bloodbath” in which only nimbler companies will survive.

Outsourcing accounts for around 20% of all of India’s exports of goods and services. The industry employs millions of Indians and has become an important route into the middle class in the world’s second-most populous country.

The impact of the move to cloud computing — where servers and software are accessed via the Internet rather than on local networks or personal computers — is being amplified by other trends, from automated code-writing to increased competition and falling corporate information-technology budgets.

There are dark clouds on the horizon of India’s information technology and outsourcing industry. Profit growth at even India’s most successful and sophisticated software companies could be doused as companies, governments and consumers around the world do an increasing amount of their computing on the cloud, says outsourcing services advisory firm ISG Inc.

Companies that have traditionally used in-house servers running on custom-made applications are putting more of their business on external servers and using off-the-shelf software. Using the cloud often means using fewer people so Indian software companies—once dubbed “body shops” because they could supply as many computer engineers as a project needed—are going to suffer as they lose much of their competitive advantage.

“It is only going to get cheaper and easier for companies to switch to the cloud, outsource providers need to get ready for the storm and modify their business models and move with the digital times”, said Craig Ashmole, Founding Partner of London based IT Consulting CCServe Ltd.

This means, developing software that allows businesses to (interact) faster and more efficiently with their external stakeholders – customers and suppliers, rather than focus on changes to the internal workings of a client.

Around one in four of the deals ISG helped advise involved cloud computing last year. That’s more than three times more than the percentage of cloud deals it saw three years earlier.

India’s software and outsourcing companies are still too reliant on the business model that uses lots of relatively inexpensive Indian engineers and sends them to client sites to build software and fix problems, ISG and other analysts say.

Cloud providers use external servers, sophisticated technology and automation to manage clients’ data using fewer employees. Where a traditional service provider deploys one employee to monitor up to 200 servers, cloud players can use one employee to monitor up to 10,000 servers, ISG estimates.

The cloud infrastructure players are drastically cutting down prices and starting to create pricing pressure on service providers in India and elsewhere who continue to set contracts based on the number of engineers deployed in a project.

Cloud infrastructure providers such as Amazon Web Services, Red Hat, Rackspace Hosting and others are emerging as a formidable threat to Indian outsourcers and other traditional service providers and consultants including IBM and Accenture that earn revenues from managing the technology infrastructure of clients.

Traditional service providers now have to strive to get more cloud contracts–where they help clients shift data to cloud infrastructure providers–rather than focusing on creating their own clouds, ISG said.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe