How Is Outsourcing Being Redefined For The Future?

by IBA Group for IBA Group
Posted on December 4, 2017

IBA Group
Mark Hillary

Outsourcing has changed so much in the past decade. When my first book about outsourcing appeared in 2004 the emphasis was largely on the cost of delivering a service. Outsourcing was a strategy used mostly to reduce the cost of doing business.

That changed over time with flexibility and access to skills becoming as important, if not more, than the cost of service. But beyond this outsourcing has changed dramatically in the past decade. The way that companies work with each other, charge for services, and the way that services are delivered – it’s all dramatically different now compared to the last decade.

Yet, when I browse the news I still run into articles like this. Here there is a comparison between nearshoring to Eastern Europe and offshoring to India. There are differences between Europe and India, but the arguments in this articles don’t really explore anything beyond saying that the IT companies in Europe are better, closer, and more reliable. It’s the same argument that has been made in favour of nearshoring for about 20 years.

Now think about these three trends that are redefining how outsourcing really works:

1.    Delivery options; are you delivering services via the cloud? Are you creating an app? Are you using Agile to create frequent upgrades?
2.    Payment options; are you offering a freemium model where the client only pays for upgrades from a basic service? Are you offering a pay as you go model where the client can ramp up and down as they choose?
3.    Partnership; the client is becoming the user and this changes the relationship from one with a master and servant to a much more equal need for partnership.

These are just three key areas of change, but they are important. The delivery model, the payment model, and the relationship between client and supplier are all dramatically changing from the types of outsourcing being described in the article I mentioned. Most IT suppliers are changing fast. They have seen this change taking place in the market and they are working with their clients to deliver services using new methods. It’s a shame that many in the trade and business press seem to still be talking about outsourcing as a way to save money, rather than a way to run your business.

Where Will The Cloud Go In 2018?

by IBA Group for IBA Group
Posted on November 8, 2017

IBA Group
Mark Hillary

I have said for a long time that our ideas around outsourcing and partnership with expert companies needs to change. Most of the time when commentators talk about IT outsourcing there remains this idea of the powerful client and weak supplier, hoping to get a contract at any price.

This dated view has largely been modified by two changes in the way that companies consume IT services:

  • Complexity; many services today are so complex that only experts can perform them well. For example, it’s not possible to internally manage the technology needed to create a great customer service platform for most organisations. So suppliers have become more important because they are the experts with the answers across all areas of business.
  • Software As A Service; the way companies purchase their IT has dramatically changed thanks to the cloud and app store concepts. Now managers may buy software solutions without even asking the CIO because they are just buying a subscription to a service that sits on the cloud. Security is guaranteed and all they need is a connection to the Internet.

It’s noticeable that many trade associations and journals have been changing name recently. There is a strong move to disassociate their connection to outsourcing as a business strategy as this environment has become more complex – the new emphasis is just on sourcing. But nothing stands still, even the use of cloud-based systems is evolving.  A recent report in ZDNet advises three areas to watch in 2018 for those with an interest in the development of the cloud:

  • The Cloud Backlash; many companies will make mistakes when moving services to the cloud. Issues of control or compliance may cause a backlash so look for examples of companies who are further down the road when seeking case studies and examples of success.
  • The Hybrid Cloud; you don’t need all your infrastructure to be in the cloud. Explore what might be essential to keep close and what can be moved, for example important data might be safer if stored internally.
  • The CyberSecurity Impact; cloud services are generally more secure than in-house systems, but if you have a chain of different partners then this can be a source of weakness – is your system secure at all points?

I strongly agree with this analysis. It’s clear that buying IT services from cloud-based systems is the future (at least for now) but there is still plenty of scope for companies to get it wrong.

IBA Group
Mark Hillary

The industry analyst firm Gartner has just published their view on technology trends to watch in 2018 and it makes for some interesting reading. Their research summarises the trends into three main groups: intelligent, digital, and mesh.

Scanning across all the trends it is interesting to see how many are now very influential on customer experience (CX). Companies used to engage with their customers mostly through customer service functions – often just contact centres accepting calls and emails. Now there is a much more complex environment where customers expect intelligent interactions across many different immersive environments – technology is required to support all of this.

Consider these trends, all from the top 10 Gartner predict as important for 2018:

  • Conversational Platforms; Google Home, Amazon Alexa, Apple Siri. People are getting much more comfortable just speaking to computers and expecting them to respond intelligently. Google has even demonstrated their Pixel Bud headphones that can translate 40 different languages in real-time, allowing a user to have a conversation with a person speaking another language.
  • Immersive Experiences; both Augmented Reality and Virtual Reality are really taking off as people get used to immersion into a new world. The success of the Pokémon GO game in 2016 boosted AR and VR is seeing a huge boost as the power of the new Sony Playstation and Microsoft Xbox mean that millions of people have VR systems at home.
  • AI Foundation; companies are finding that they can use AI to help with real problems. In particular a common machine learning and AI solution now is to capture every customer interaction – what problem the customer has and how it was solved – creating a smart system that over time learns how to answer almost any problem. The system knows about every question every customer has ever asked, and how the problem was resolved in the past.
  • Intelligent Things; the Internet of Things (IoT) means that many more devices will be connected and online. Often this is talked about as a way to ensure your fridge never runs low on milk, but the real story is that your devices will all be talking to their manufacturer all the time, diagnosing problems and fixing themselves or upgrading – without your involvement at all. Imagine if your car can just check itself and get advice from the manufacturer automatically?
  • Blockchain; Crypto-currencies are still a niche pursuit, but many big organisations are taking them seriously. If a large network such as Alibaba, Facebook, or Google started taking the idea of non-sovereign online currencies seriously then we could see big changes ahead in many industries – retail and banking first.

What is fascinating to see now is how many technology trends are becoming ubiquitous and consumer-focused. We are no longer talking about business-focused issues such as network strategy or cloud computing. Many of these changes are driven by technology, but are being demanded by the end customers. The divide between enterprise and consumer technology is becoming very narrow indeed. As we now enter the final quarter of 2017 I’m going to think a little more about this in some future blogs – where should the IT industry be focused next year?

Which 2017 Outsourcing Predictions Actually Happened?

by IBA Group for IBA Group
Posted on October 12, 2017

IBA Group
Mark Hillary

Where did 2017 go? We have just entered Q4 and the budgets for 2018 will now be in progress – or possibly already be ready. What were the analysts predicting for outsourcing in 2017 and were they right?

I took a look back at a good list created by Stephanie Overby in CIO magazine. This was focused on ten key predictions for the year ahead in IT outsourcing, rather than BPO or more general non-tech predictions, however because most services are now delivered using technology the line is becoming far more blurred. IT outsourcing is no longer just focused on software development – it covers a wide range of technology-enabled services.

So let’s consider 3 of the 10 points that really did hit the target, especially when considering the European nearshoring market:

  • Security is top of mind; this is especially important in Europe now because GDPR enforcement will commence in less than a year. This is a huge change to data privacy across Europe and will affect how many companies do business.
  • Suppliers will pivot; suppliers that focused on a single area, such as software, are creating complete solutions and even branding solutions differently to emphasise that this is something new. Solutions not individual services is the answer now.
  • Cloud as normal; this has been a game-changer. Companies no longer need convincing that cloud-based services are the way forward, they are seeking out services that need no infrastructure and can be paid for only as they are used.

But the list also mentioned that call centres will fade into obscurity as automation and artificial intelligence replaces the need for human agents. This has not happened – yet. In fact the way that most companies appear to be using AI for contact centres is to enhance the performance of agents – so the agents are still integral to the call centre experience. I do expect that as voice recognition improves, we will see many more customer service calls answered directly by the AI, but it requires a very natural interaction to work well and we all know that our present-day conversations with Siri are not there yet.

In addition, I would add that a major outsourcing trend that has been developing over the past couple of years was not mentioned at all. That is the focus on partnership. Partnership used to be one of those terms thrown around by sales teams and forgotten about once a contract was signed, but times are changing.

Many of the services offered by IT suppliers today are incredibly complex. There is no question of comparing in-house against outsourcing because outsourcing to experts is the only way to deliver many solutions today. One analogy would be to ask, if you had more free time then would you service your own car? Almost certainly the answer would be no, because you don’t have the tools or expertise to do the job well. This is now the case in many areas of IT – it’s just not possible to deliver solutions without calling the experts and that is a big change from just a few years ago.

Essential Expansion of MS Power BI for On-Premise Environment

by IBA Group for IBA Group
Posted on October 10, 2017

Šimon KvíčalaŠimon Kvíčala
The author of the article is Solution Architect of IBA CZ. The article was published in the BI supplement of IT Systems 9/217.

BI is an integral part of managerial decision-making. Šimon Kvíčala, Solution Architect at IBA CZ, writes about the benefits of a newly released component.

On September 5, 2017, Microsoft released an essential component of its Business Intelligence Infrastructure – the Power BI Report Server – that enables the Power BI to run On-Premise. The company expanded its portfolio to allow its customers to obtain all the benefits of interactive work with web and mobile devices without using Power BI cloud services and therefore without leaving sensitive data from internal company systems.

What is Power BI Report Server?

The Power BI Report Server offers a significant amount of Power BI features, namely:

  • Generation of reports using Power BI Desktop
    • Connection to data models of Analysis Services (spreadsheet or multidimensional)
    • Data visualization using built-in or custom visualization components
    • Creation of custom visualization components, which is an important difference from SQL Server Mobile Reports
    • Display and interaction with reports through a web browser
    • Export of report data to CSV
    • Print report pages
    • Display and interaction with reports in Power BI Mobile.

Please see the full information, documentation, and guidelines for users and developers on the Microsoft website.

License model of Power BI Report Server

The license model of Power BI Report Server offers two options.

The first option is for existing users of SQL Server 2008 R2 and higher Enterprise editions with active Software Assurance where it is possible to use the existing licensed kernels for Power BI Report Server. In addition, Power BI Report Server expands the existing portal environment of SQL Server Reporting Services, so there is no need to run two separate solutions (for paged reports and for web and mobile views).

The second option is to license Power BI Premium with Power BI Report Server. Power BI Premium delivers a dedicated cloud capacity and higher performance than Power BI Pro while not requiring individual user access licensing and includes Power BI Report Server for On-Premise reporting.

A common feature for both variants is that every author who hands over his/her reports for further processing to other users should also have the Power BI Pro license.

Alignment of Power BI Report Server with the Microsoft BI presentation tools

Alignment of Power BI Report Server with the Microsoft BI presentation tools

IBA Supports Sick Children

by IBA Group for IBA Group
Posted on October 2, 2017

This year, the Belarusian children newspaper Polosataya Gazeta (Striped Newspaper) organized a charity event to support children who spent the summer in medical institutions. The list of institutions included the Republican Burn Center, Republican Scientific and Practical Centre for Traumatology and Orthopedics, and Republican Scientific and Practical Centre for Pediatric Oncology, Hematology, and Immunology, as well as long-stay patients of children’s hospitals in the Belarusian cities of Grodno, Gomel, Brest, Vitebsk, Mogilev, Minsk, Bobruisk, Orsha, and Mozyr.

IBA Group took part in the event, buying all 1170 new issues of Polosataya Gazeta, and sending the newspaper to the children’s hospitals. In addition, IBA employees wrote warm messages for little patients.

Anna Granovskaya, editor-in-chief at Polosataya Gazeta, said that the children received the messages and were touched by the kind words in them. She thanked IBA Group for the help. Anna also highlighted the importance of those messages, saying that parents were thankful for them, as the messages brought joy for their children in such difficult times.

IBA Group strives to contribute to the sustainable development of the communities in which it operates, improving the quality and well–being of these communities. This provides a source of pride in the company for our employees and a focus for their involvement in community life. You can learn about IBA’s CSR endeavors on our website.

We would like to say thank you to everyone who participates in our charity events. It is always a pleasure to work with such caring and kind people.

IBA Group employees send warm wishes to sick childrenIBA Group employees send warm wishes to sick children

Outsourcing Is Business As Usual

by IBA Group for IBA Group
Posted on September 21, 2017

IBA Group
Mark Hillary

I was looking at the agenda for the Shared Services Outsourcing Network (SSON) Eastern European conference, which is taking place next month, and I noticed how one of the opening sessions is focused on business transformation. In particular, the session is exploring the Global Business Services model that is now so familiar to any executive familiar with outsourcing as a business strategy.

The conference looks interesting, but in my opinion the focus on outsourcing and the idea of global business services as anything other than business as usual feels a bit dated. Look at the rebranding of Professional Outsourcing magazine into Intelligent Sourcing for an example of what I mean. There is no longer anything special in deploying a global network of services or in the use of specialist suppliers. Sourcing expertise really is now just business as usual.

A decade ago things were rather different. Outsourcing was a strategy that demanded attention and endless books were published. I even wrote several of them myself. But if a major conference is devoting a 40-minute opening keynote session to talking about global business services then surely it must be important?

Forget business and think about your personal life. Have you ever questioned where Waze came from? Or Angry Birds? Or Skype? When we use software or tools in our personal life we don’t think about it as global services, yet these systems originated from Israel, Finland, and Estonia.

Tablets and phones from all over the world use software and applications from everywhere. The App store allows anyone to create tools and to make them available to a global audience. However, we rarely stop to think about this as a triumph of global services.

So why do we need to be talking about it at a business conference? If I need a partner with CRM expertise I will find the best company regardless of where they are based. Companies today are structured very differently to those of twenty, or even ten, years ago. Many people may be located in the same office, working together to the same targets, but receiving pay from different organisations depending on their expertise and role in the team.

What has really changed in the past decade is this concept of the edge of the organisation – in-house employees and contractors. Today it is far more fluid. You don’t work for the company or work for an outsourcing contractor. You all work together.

Most managers that need to lead teams already understand this. We don’t need a conference keynote to explain the obvious.

Using Automation To Protect Information On Your Network

by IBA Group for IBA Group
Posted on August 22, 2017

IBA Group
Mark Hillary

Companies across all industries face a wave of almost constant change as digital technologies redefine old industries and create new services we never even knew we needed. Think of any industry and it’s clear that digital transformation is creating a period of industrial flux that has no end in sight.

This does not help to create a secure business environment. Ideally your data and systems would be locked down and controlled, but as the recent global WannaCry attack proved, many systems are much more vulnerable than expected. In addition, many security experts are now advising that this type of chaotic information attack is something we should get used to.

So if your industry is chaotic and hackers are adopting chaotic methods of constantly attacking system vulnerabilities then how can you make sense of the chaos so your data can be protected?

This blog suggests several steps for executives worried about the threat chaos can bring to their business, but the main focus is on automating your network management and accepting that manually managing a network leaves it open to attack. Just one open port is enough for WannaCry – or similar – to get in and cause havoc inside your company.

Automated network segmentation is a reaction to the complexity of today’s enterprise networks. With many different platforms, systems, contractors, and a mix of a physical network and cloud the challenge of managing modern networks is huge. Add the potential for human error and the face pace of change and the threat is obvious.

Automating segmentation allows the system to look after itself. The network breaks into several different secure zones limiting the exposure any hacker would have. Even if a hacker gets into your business, by automatically creating these secure zones you can limit any damage.

Automation is often talked about in terms of productivity – allowing more to be done in less time, but when it comes to information security only automation of network security can really provide protection in a chaotic business environment.

How Insecure Are Your Passwords?

by IBA Group for IBA Group
Posted on August 10, 2017

IBA Group
Mark Hillary

Creating a secure environment for your information requires investment in technology and processes, but no matter how much you spend on systems it is your people that are the weakest link. Planning a secure information security strategy needs to include measures that fight social engineering and other methods used to steal data.

The most basic problem that occurs in every company is password security. According to research published in Inc magazine, each valid email address has around 130 password-protected services associated with it. That’s a huge problem if each one of us has to remember hundreds of different passwords.

The biggest problems are that people don’t change their password frequently and they often use the same password for many systems. The danger is obvious, but what should be done to make systems more secure when the real problem here is just user behaviour?

Inc has five recommendations for better password security:
1.    Update passwords regularly; apply operating system settings that force your team to regularly change passwords and also enforce a change if you suspect that a system has been breached.
2.    Never reuse passwords; it’s a common mistake, but this practice creates system vulnerabilities.
3.    Use passphrases; long phrases are much more secure than a short password and often are easier to remember – use a favourite line from a book or movie for example.
4.    Multifactor security; for sensitive systems don’t rely on a single password – use a system that creates a temporary password or uses biometrics to add a second level of security.
5.    Never store passwords in plain text; files can be copied and unencrypted files full of passwords are easy to spot. Use a secure password storage system if you really cannot remember every password you need to use.

This is good solid advice, but reality is that if each person has hundreds of passwords then they will almost certainly repeat them across systems. To really enforce information security inside a real company without ‘perfect’ people requires planning. I would advise the use of an enterprise-wide secure password management system so everyone is encouraged to use different passwords, but with the system to support them.

In addition, biometric systems are not expensive and are now very common – look at how the Apple iPhone allows a user to unlock the phone using their fingerprint. Consider protecting your most important systems, those using customer data for example, with multiple layers of security and not just a password.

A good password policy sounds simple, but enforcing good behaviour on users can be difficult. Use pragmatism and support your team so they can work securely.

IBA Group
Mark Hillary

Last year the Ponemon Institute published research analysing the cost of information security breaches – the result of a business being hacked or attacked by ransomware or even just incompetence leading to data being exposed. The average figure for a data breach was found to be over $4m – that’s right, four million dollars. Some other estimates suggest an average of over $7m. Each customer record that you lose or expose costs around $158 to clean up according to this research.

That’s serious money and therefore this is clearly now a major issue. For small businesses a multi-million dollar clean-up operation could close the business. For larger businesses the expense may in fact be far higher than this average. Information security is now essential in an environment where ransomware and hacking attacks by criminals (and even state actors) are becoming more common.

But there are still several myths around information security that cause executives to invest poorly in protecting their business. It’s an issue that affects everyone in the business and needs to be treated just as seriously as the physical security of your office premises. These are the most common issues and mistakes companies make:

1. Not dealing with human error; human error causes 33% of data breaches and 36% are just because people don’t understand the need for information security. Everyone in the company needs to understand information security, why it matters, and what protocols must be followed. This is not just an IT problem.
2. Ignorance; ignoring your legal need to follow compliance regulations over the way that data is used will lead to major fines in addition to the lost business you may suffer as a result of the data breach.
3. Trusting brands online; just because an email with a link features the logo of a trusted brand, if you did not expect to receive contact from this brand, don’t click the link. Criminals are using highly sophisticated phishing techniques to install their software and just one infected computer can give access to your network.
4. Personal devices; allowing employees to use personal devices to access work email or work systems can promote efficiency, but even password-protected phones can be hacked. If a phone is lost or stolen and it was being used to access office systems then unless the device was encrypted you now have a criminal with access to your network.
5. Papers; paper is old fashioned right? But most offices are still filled with desks covered in printed reports and spreadsheets. Detailed information is left in the open allowing any contractor with access to your office access to all that information. Even your paper recycling bin can be raided so you should really have a clean desk and shred all trash policy in place – even better discourage the printing of any documents in the office.
These sound simple, but many organisations still don’t appreciate the need for information security to the extent that they are training every staff member. Data breaches can be extremely expensive so it pays to think about your systems, your people, and your processes. Where is your business vulnerable to attack?

How WannaCry Changed The Information Security Landscape

by IBA Group for IBA Group
Posted on July 10, 2017

IBA Group
Mark Hillary

Last month one of the biggest information security conferences in the world took place in London. InfoSec attracted 13,500 information security experts for 3 days focused on the latest security issues, but one topic dominated the conference – WannaCry.

The recent WannaCry ransomware attack hit hundreds of thousands of victims in over 150 countries. Users of infected computers found their systems locked and a demand for a ransom payment if the user wants to use their computer again – hence the term ransomware.

WannaCry is possibly the largest simultaneous attack on global computer systems and is a real wake-up call for executives with a focus on information security. Companies are extracting more and more data from their customers defining payments, preferences, and future plans – more detailed information is available for hackers to steal from corporate systems. This month the AA motoring organisation in the UK has been criticised as they accidentally made the personal details of over 100,000 customers visible on their website and when they realised their error they failed to inform customers that their card details may have been made public.

But users of devices in the home are just as vulnerable to ransomware attacks. Homes are now largely wifi-enabled and have many connected devices such as laptops, phones, Kindles, and home control systems like the Amazon Echo or Google Home. Ransom attacks demanding a fee of $1000 to access your home systems again will be paid by many people because losing access to all your personal devices would be even more expensive – not only in replacement value, but because of the data we store on our devices.

The InfoSec conference delegates discussed WannaCry at length and the top tips cited for avoiding these attacks were:

1. Multilayered information security defence; in the office, ensure at least three levels of information security by managing everyday risk, compliance risk, and external risks in a coordinated way, but with different teams able to focus on each area.
2. Stay updated; at home or at work ensure that all software is up to date with automatic patching of updates. Apply a good anti-virus system and ensure it automatically updates itself. Ensure your data is not stored locally or is regularly backed up so you can recover if systems are lost.
3. Staff awareness; train all staff in the risks to the business, not just your IT team. Everyone uses IT in their function today and therefore anyone can be the access point to your business.

Data breaches and ransom attacks are now a serious threat to business and need to be treated as such. Information security no longer means running a virus check once a week, this is a complex environment that can create an existential threat to your business if you become a victim to an attack.

Brexit And Trump: Outsourcing In An Uncertain World

by IBA Group for IBA Group
Posted on June 28, 2017

IBA Group
Mark Hillary

We live in a world of political uncertainty. The British are heading for Brexit regardless of their recent general election and the American President surprises everyone on an almost daily basis with his early morning tweets. Does outsourcing continue to work as a business strategy in such an uncertain environment?

John Buyers from legal experts Osborne Clarke recently wrote a feature in Computer Weekly breaking down all the various international risks and his conclusion is that there is more stability than might be obvious at first. The analysis explore five key areas related to the present use of outsourcing as a strategy:

1. Brexit; IT spending continues to rise in the UK so there is confidence in the outsourcing market despite Brexit and the election, but it’s worth monitoring the British approach to migration. Preventing skilled labour from reaching the UK might have a negative or positive impact on how outsourcing is used – at present it is unclear.
2. Europe; The Macron victory in France appears to have halted the decline of Europe into instability that might threaten smaller economies and the viability of the Euro currency. Germany is the next big election to watch for, although there is less fear of extreme parties in Germany, compared to what happened in France.
3. Trump; The Trump dogma is focused on local jobs and big international sourcing giants will need to create more local US jobs if they want to avoid being frozen out of the American market. However, who knows how long he can last in office when so many problems are circling him after just a few months in the job.
4. India; Especially with regard to the British market, some commentators are suggesting that the tried and tested outsourcing to India model might be more popular when business with Europe becomes more expensive. Personally I doubt that any tariffs involved in EU business will outweigh the costs of doing business with India.
5. Data; Tough new data protection rules (GDPR) come into force in Europe in 2018 and this means that British companies will need to follow the rules regardless of Brexit – the earliest the UK can leave the EU is 2019. Pricing and tax of outsourcing contracts in Europe may need to take all these new procedures into account.

I certainly agree with the analysis. These five key issues could be expanded once you consider industry verticals – look at the enormous changes happening with European open banking regulations in 2018 for example – however as a summary of where outsourcing managers should be looking it is a good start. For Europeans doing any business with the UK Brexit will be a key challenge of the next two years. Companies are still investing in outsourcing partnerships so confidence remains and that’s still more important than anything the politicians say or do.

IBA Group
Mark Hillary

Use of the word outsourcing has declined in recent years. In fact, if you compare searches on Google now to five years ago then there has been a 100% decline in how often people search for the word. However, this doesn’t mean that it has gone away.

In fact, although organisations like the National Outsourcing Association and Professional Outsourcing magazine have all rebranded to focus on partnership and sourcing in their names, there is really nothing new about what companies are doing when they work together.

A recent feature in The Next Web suggested the companies – especially smaller ones – shouldn’t fear the word outsourcing for a number of important reasons:

1. Brings familiarity to the unfamiliar; bringing in large experts in specific areas, such as IT, can be reassuring for your business. You might not understand how to deliver a global Big Data solution, but they have done it for many other clients and know exactly what to do.
2. Lowers the burden of bureaucracy; buying expertise as you need it with a service contract is much easier than hiring a large number of new recruits.
3. It keeps you local; dealing with multiple countries and multiple languages in a market like Europe can be difficult, but a partner with a multilingual workforce can make your business feel very local to your customers.
4. It impacts your bottom line; this improvement to your business will impact on revenue and profits – almost certainly!
5. Access to talent; accessing the best people where are when they are needed is possibly the single most important reason to use outsourcing as a strategy.
6. Staying lean; you can focus your own team on core competencies and buy in the additional expertise you need – important for staying focused on what is important for your business.

It’s true that many organisations have started dropping the term outsourcing in favour or partnership and there is a reason for this. Many new outsourcing contracts really are much more about corporate partnership, rather than just a client and supplier. There is still a client, but they really need their expert supplier. The supplier needs clients, but now they are working much closer to clients and creating innovative solutions now just agreeing a specification on day one and delivering the same thing forever.

I like this exploration of outsourcing in The Next Web. It’s a title that usually explores innovation and start-up culture so to see that they accept outsourcing as a part of the start-up environment and managerial toolkit is interesting and reassuring.

IBA Group
Mark Hillary

I saw some research published on IT Pro Portal that compared the pros and cons of British companies outsourcing IT processes to India and Eastern Europe. As might be expected, the arguments are generally around the cost of doing business in each location and the available skills, but it was interesting to see some references to the AT Kearney 2016 Global Location Index.

This research focuses in detail on the best locations, focusing on cities and clusters of cities rather than just comparing one country with another. At a broad level the Eastern Europe destinations do extremely well when compared to all other locations globally. Five out of the top twenty best locations globally for IT services are located in Eastern Europe.

In my opinion this underlines an important point. Many journalists writing these comparison stories focus on cost, particularly when they explore the cost of doing business in Asia. However, as the AT Kearney research demonstrates there are many more reasons that these locations in Europe excel in IT services – to reduce everything to cost alone is far too simplistic.

At present I can’t see an update to the AT Kearney research for 2017, but I’m sure it’s coming soon. When I look at the data for 2016 though I can see three stories emerging:

1.    Companies are using outsourcing as a strategic tool specifically to access skills, not to reduce costs.
2.    Companies are using outsourcing and partnership with IT experts because they need to explore automation and industrial developments such as Robotic Process Automation (RPA).
3.    Companies are finding that they need to offer cloud-based services that are charged as they are used and this requires extensive IT expertise to deliver successfully.

The India vs Europe comparisons don’t generally appreciate that the way business is delivered has changed dramatically in the past decade. Working with IT experts today is essential if companies are going to be able to deliver successful digital transformation programmes – skills and expertise are driving outsourcing programmes today.

IBA Group
Mark Hillary

Although outsourcing as a business term has generally been replaced by strategic partnership, there can be no denying that it is being used more and more by European companies. Recent research from the UK shows that companies are exploring IT outsourcing as a business strategy more than they have been for at least five years.

In fact, the latest data on UK spending on IT outsourcing shows that British companies spent £1.74bn ($2.26bn) in the first quarter of this year. 68% of this spending was on launching new IT projects.

The strong data is encouraging, especially with such a large proportion of new project launches. The Brexit process in the UK has caused uncertainty for any businesses that need to interact with European partners, but this data shows that at present there is still a clear appetite for technology improvement.

If Business Process Outsourcing and Customer Experience outsourcing is added into the picture then there is an even stronger message of growth coming from the UK. Q1 featured £2.73bn ($3.55bn) of overall spending on outsourcing of IT and services enabled by IT. That’s growth of 13% on the previous year demonstrating that businesses in the UK are investing heavily in IT and the services that IT supports.

The UK general election will take place in June, but it is generally assumed by most analysts that the incumbent Conservative party will continue to lead with their focus on delivering Brexit by 2019.

Although British politics appears to be confusing at present, with an election and the process of leaving the European Union all filling the headlines, it cannot be denied that executives are investing in technology. This implies that there is some confidence in the UK economy over the next few years and with growth at around the 13% mark that looks good for IT specialist partners all over Europe.

How Are The Predicted Tech Trends of 2017 Working Out?

by IBA Group for IBA Group
Posted on May 3, 2017

IBA Group
Mark Hillary

We are already in Q2 of the year so is it possible to observe how any of the predicted technology trends for 2017 are playing out? At the start of the year Gartner predicted a global IT spend of £3.5 trillion so there is a lot at stake.

Gartner predicted a move away from hardware spending as more companies source services from cloud-based solutions. This is bad news for the companies building servers, but great news for companies trying to quickly get new solutions up and running. This is one predicted trend that is observable in almost every IT project I see. Nobody is interested in managing their own infrastructure today, which creates a great opportunity for service companies to offer cloud solutions.

Business Insider published their own long list of predictions, from which I think that three are particularly worth mentioning:

  • Internet of Things; long talked about as a smart fridge, but now it is clear that all electronic objects can connect online and be more useful. I talked at a conference last month about how auto manufacturers are planning to create cars that can self-diagnose problems – an audience member told me that Chevrolet is already doing this. It’s happening right now.
  • Virtual Reality; I have long talked about VR as a tech that just needs people to have access to it at home. Now this is finally happening. In the past few months the new Sony Playstation and Microsoft Xbox have both been released with support for VR. Tens of millions of homes will be VR-ready by the end of this year.
  • Blockchain; it’s clear that Facebook has enjoyed some success over the past year with their Messenger cash transfer service, but it’s clear to me that they will take it further and create a global currency that can be used on Facebook. The Chinese WeChat service is already used for payments so I believe Facebook will need to make a quantum leap beyond just connecting a credit card to your account and this will be by taking the experience of BitCoin and making it easy to use virtual currencies. Blockchain will underpin the experience, but the user base of over 1bn people will ensure that when Facebook seriously gets into finance it will rock the industry.

What is particularly interesting is that several of these technologies have lurked around for years without much adoption – look at Augmented Reality for a great example. However there is a wave of enthusiasm for many of these nascent technologies now because companies are finding real business solutions and consumers are demanding better services.

Which of the predicted technology trends do you think will become the biggest later this year?

5 Tips For Increased Outsourcing in Europe

by IBA Group for IBA Group
Posted on April 26, 2017

IBA Group
Mark Hillary

The Netherlands Foreign Ministry funds an organisation called The Centre for the Promotion of Imports from Developing Countries – or CBI for the short name. CBI facilitates trade between Europe and developing countries as a way of stimulating those economies. It’s the old argument of ‘trade not aid’, but now as government policy.

CBI recently published research on the outsourcing market in Europe and how attractive it is for companies to work within at present. It’s interesting because they are focusing mainly on demand – are more companies likely to outsourcing inside Europe and if so, how would they do this?

They identified five key factors. This is advice to supplier companies who want to win business from customers inside Europe. They are quite insightful comments and especially when this is a government research project – not private sector companies already involved in outsourcing.

1.    Innovation; I was surprised to see this in a government report, however they are correct that the client and supplier relationship has moved on. Companies are not looking to just outsource business-as-usual, they want a partner who knows their processes inside-out and can offer new ideas and ways of improving those processes.
2.    Focus on Verticals; don’t claim you can offer solutions to any business. Choose the verticals you know and focus on marketing in these areas. Service providers are now expected to know far more about the business than ever before – you need to be suggesting better ways your client could be working.
3.    Open Standards; use very open publicly available delivery methods such as the app store and cloud-based systems. This makes it extremely easy for your clients to find solutions and install them – without the need for complex installation and maintenance.
4.    Smaller customers; it is not only big companies looking to outsource today. Actively targeting smaller companies with automated solutions can be a great way to tap into new business.
5.    Output based pricing; don’t charge by the number of employees you put on a project. Charge the client based on outcomes. Their success is your success.

CBI noted that nearshoring is a much more popular strategy than outsourcing across a long distance. There is a lot of opportunity for companies to engage more in Europe and this advice really demonstrates some good ideas about how to improve the client and supplier relationship. You can read the entire report here.

What Are The Biggest Trends in Outsourcing Today?

by IBA Group for IBA Group
Posted on March 28, 2017

IBA Group
Mark Hillary

A recent Raconteur report explored some of the key trends driving outsourcing today. The six key trends identified are:

1. BPM not BPO; Business Process Management means taking over entire services for clients and working as partners, not like a supplier.
2. New Frontiers; many new markets are offering services, particularly in African countries that have not engaged much with global IT in the past.
3. Local Government; a wave of global austerity is forcing governments globally to explore outsourcing.
4. Changing Contracts; the long-term 20-year deals are over.
5. Cyber Security; Companies need more help than ever protecting their information and their supply chain.
6. Transformation; more than ever, outsourcing is being used to completely change companies and to help them explore new business models.

These are good observations, although it is not mentioned that both IT outsourcing and Business Process Outsourcing have been dramatically changed by innovations such as cloud based services and the app store culture. Delivering IT services today is far closer to offering products to customers than it used to be – bespoke development still exists, but is far less common.

However, the problem I really have with the six trends is that the report appears to give them equal weight. They are all listed with an appearance of the same importance, whereas I believe that the first point is entirely reshaping the outsourcing market.

Many technology services are so complex today that large companies will almost certainly not have expertise in-house. Think about complex Big Data analysis as a good example. Designing and building the database systems is hard enough, but to make sense of it you need data scientists. Most companies don’t have any of these skills just sitting around waiting to be used.

The Customer Service marketplace is another good example. Customer Service used to mean managing a contact centre. It was quite a dull and repetitive process and could easily be managed in-house or could be outsourced to a service provider that could provide the service at a lower cost. Now there is an enormous amount of technology involved in managing customer relationships – ERP for supply chains, CRM for managing interactions, Big Data for analysing trends and social interactions. Managing customer relationships now is far too complex for almost any company – other than the biggest – to handle without going to an expert.

Outsourcing is becoming an essential strategy for this reason. Companies need to hire expertise. These clients really need the expertise of the supplier to help build their strategy. The days of lining up three similar suppliers and then asking which one will offer a service at the lowest price are largely over. Supplier relationships now are far closer to partnerships where both companies want the business to succeed.

We all know this from our personal life. You know that there might be a cheaper plumber or a cheaper car insurance company out there, but you also know that if you go for the cheapest then the service will not be good. This thought process has now entered into the enterprise outsourcing space. In fact, the term outsourcing no longer really reflects the partnership nature of these corporate relationships today.

Perhaps it’s time to say that outsourcing is dead, but partnership is alive and well?

Can We Really Rely 100% On The Cloud?

by IBA Group for IBA Group
Posted on March 16, 2017

IBA Group
Mark Hillary

Companies across the world will recall February 28th 2017 as a bad day. It was a day when their patience was tested beyond anything most executives can remember in years. It was the day that the Amazon Cloud went down.

The Amazon Web Services (AWS) Simple Storage Service (S3) service now accounts for an enormous amount of Internet traffic. There are many major players in Cloud services, such as Microsoft, Google, and IBM, but AWS is the biggest. In fact, AWS is so big that their cloud revenue is about twice the total of those three other companies.

Forrester Research predicts that the cloud marketplace will be worth $236bn by 2020 – that’s up from around $95bn in 2016. So it is clear that this is an important market. It’s growing fast and it has changed the nature of IT services and IT outsourcing. Companies are now keen to buy end to end services that can be delivered over the cloud, rather than requiring infrastructure and software on site.

However, the AWS service failure in February shows that some companies have become complacent about the cloud. It was a simple human error by an engineer at AWS that took the service down for over 4 hours and affected millions of people. Why were so many companies taken by surprise and why did nobody have a backup plan?

This feature in Database magazine asks all these questions and suggests a few pointers for executives who want to mitigate against a similar disaster in future.

In general, cloud services are more reliable than setting up infrastructure inside your own office. Companies like Amazon invest enormous amounts to ensure that network and power outages are avoided. However, as we have seen, problems can happen and if your service needs to be available to customers 100% of the time, how can you offer your own guarantee when you can never be 100% sure that your own infrastructure providers will deliver?

In my opinion, the three best tips from the Database feature are:

1. Monitor services yourself – don’t just rely on your supplier. You might notice service issues before the cloud supplier ever tells you something is wrong.
2. Have an alternative provider ready – it’s expensive to duplicate, but if you really cannot afford any outage then mirroring may be required.
3. Communicate – make sure that you tell customers you have a problem so they can come back later or otherwise delay their interaction with you. By saying nothing, customers will expect a normal level of service.

IT services has been transformed by cloud based services and because it generally improves the reliability of services executives have often been blinded into believing these services can always be relied on. Mostly they can, but it’s worth remembering that even the biggest and best planned networks can fail. What would that mean for your business?

IBA Group
Mark Hillary

If there is one thing that global business hates, it’s uncertainty and with all the political changes of the past half year there is plenty to go around. President Donald Trump is making endless policy pronouncements on Twitter, the UK plan for Brexit appears to be a process that will take years to resolve, and with several major European elections this year we may see even more populist leaders emerging.

One thing for sure is that the global IT and IT outsourcing business involves the movement of skilled people to places where contracts are operating and the movement of projects to people. For years there has been a constant flow of both. Sometimes the work itself can flow from a client to supplier in a remote location. Sometimes the IT supplier needs to send teams to the client. There has been a two-way flow of skills and work for many years that has created a global industry with several international clusters of expertise.

The approach President Trump is taking in the USA may give an indication of how many countries want to operate in future – with a drastically reduced inflow of people, no matter how skilled they are or how required those skills are.

In the first instance this appears to be a big concern for the Indian IT companies who account for over 70% of all H-1B visas in the US. The H-1B visa is used to allow highly skilled workers to temporarily work legally in the US. 85,000 visas are available each year and 230,000 applications are made. At present they are randomly allocated, as all valid applications are from highly skilled people anyway. Trump plans to make it much harder for companies to get the H-1B, although the exact criteria change remains undefined.

Similar fears exist for companies operating in the United Kingdom. It is clear that the free movement of EU nationals will end as Brexit is agreed, but it remains unclear how EU nationals already living in the UK will be treated. Will they be allowed to stay in return for the right of UK nationals living inside the EU to stay there? At present nobody knows and it is this uncertainty that is bothering many inside industries such as IT, that are used to a steady flow of skills across borders.

There could well be an upside for companies that specialise in nearshore IT services, if the Indian IT players find that they are going to start being seen as too far away from their customers, but for now the future remains uncertain. What is clear is that some of the largest companies in the world depend on sourcing IT expertise globally, yet some of the biggest governments in the world don’t appear to be listening to the companies that create the jobs.

The Biggest Trends in IT Outsourcing in 2017

by IBA Group for IBA Group
Posted on February 13, 2017

IBA Group
Mark Hillary

CIO magazine is usually a good place to explore future trends that will affect the global IT industry and right at the end of 2016 they published a good list of issues affecting IT outsourcing. We are already a month or so into 2017, but it’s still worth taking a look at this list of ten key trends that anyone in the IT outsourcing area needs to be aware of.

From the ten, the three that really stood out for me were:

1.    Security; more than ever, security is a major concern. Companies can fail because of security breaches and with links between companies under scrutiny this requires a strategy that explores people, processes, and technology.
2.    Automation; more services are being delivered automatically and more customers will expect to see IT costs reduced with an increased delivery because of automation.
3.    Cloud; it’s about far more than just raw power and storage. Entire critical services are now cloud-based and it’s becoming unusual for companies to want anything other than a cloud-based solution now.

The CIO list also suggested that IT suppliers will pivot and start offering additional services, such as consulting, but I would suggest that this is just part of a wider change taking place.

We are moving on from a traditional client and supplier type outsourcing arrangement to partnership or co-sourcing. I know that suppliers have talked for years about partnership, but I mean genuine partnership where the contract between companies is not strictly about what can be delivered, it includes provisions for how to innovate and how to make the deliveries better. If the two companies start working together, rather than one just selling a service to the other, then we are no longer talking about pivoting services, there is the potential to build new products and services together – as if the two companies are functioning as one.

That’s going to be one of the biggest changes in IT outsourcing in 2017 and I’ll comment more on how this might work in one of my next blogs.

Aleš Hojka: We can offer a solution for any company

by IBA Group for IBA Group
Posted on January 31, 2017

Aleš HojkaIn an interview to the TTG magazine, Aleš Hojka, CEO of IBA CZ and IBA Slovakia, speaks about solutions and services that any company can benefit from.
When I look at your business card, IBA strongly resembles IBM, doesn’t it?
You are right. Originally, IBA was founded in Minsk in 1993 as a joint venture with IBM. The brand and logos of the company are deliberately similar and as IBA was growing, it shifted to a direction different from IBM. New branches emerged, the first one was created in the Czech Republic, and the product portfolio has changed considerably. Although today IBM does not own any of the IBA Group branches, a very close cooperation continues.
For IBM, we implement both internal projects, for example one of the most remarkable is the Learning Portal, as well as other within our core expertise in portals and mainframe. In cooperation with IBM, we work for the end customers and bring them the best of both companies. Anyway, now we operate as two separate entities in the Czech Republic being even competitors to some extent.
Worldwide, IBA has over 2,500 employees with about 120 in the Czech Republic and still expanding. We have our own development centers in Prague, Brno, and Ostrava. The entire IBA Group is headquartered in Prague and now has offices in 11 countries, including the United States and South Africa, with IBA Slovakia among the youngest.
So what is the crucial area of your activity?
We dominate in portals, document management, mobile applications, and more. Most often, we use Java and .NET, though not avoiding enterprise and open source solutions, but mainly listen to our customers and assist them while providing deployment and maintenance of our solutions in their environment.
Whom do you mostly supply the solutions and what can we expect from them?
Our customers are large financial institutions, telecom operators, and government institutions, as well as manufacturers and distribution companies. Primarily due to our own development, we can offer advanced solutions for a company of any size.
For example, for Česká pojišťovna, we have developed a part of a mobile application that helps people deal quicker with car accidents. To be more specific, it finds the nearest service station, facilitates provision of all data that the insurance company may need, and etc. For T-Mobile, we have created an intelligent contact form with a prompter that allows for self-servicing in most cases. As soon as the user has finished typing a request, an answer is suggested, as well as other information that might be of interest. With our solution, T-Mobile receives roughly by 30% of emails less, which is a huge number and great cost savings on their call center operations. For the Generali insurance company, we provided a secure online consolidation of insurance with suggestions throughout the process. For Moneta, we created a fully responsive loyalty portal Bene +. The content adapts to the screen size of a device, either a mobile, tablet or desktop, with no need of development for each platform separately.
And what is your activity in the tourism sector? Do you have any customers in this area?
Not yet, though indirectly, we actually operate there as well, for example, within the projects for the regional authorities or the National Heritage Institute. But as I say, we are capable of meeting the requirements of any customer. Document management is used almost everywhere. Let’s say, a solution intended for invoice workflow covers the whole lifecycle from scanning a document to the data entry via processing, approval only after payment, and archiving, with all the stages automated and transparent.
Or the so-called Big Data, which is the processing of large volumes of data and keeping track of customer behavior. When a user logs into a social network where there’s a lot of personal data and then visits some other website, these tools recognize the user and offer him or her an advertisement of related products, for example, on news portals. For travel agencies and rental companies, we can offer the integration of their systems into a large retrieval system like Booking.com or TripAdvisor. Identity Management may also be of great necessity, thus providing security system and preventing unauthorized user access.
This system facilitates the work of administrators and also makes personal client data safe from leakage.
For the customers engaged in tourism, we can offer the services where we are truly the market leaders. From simpler websites and intranets with e.g. a review of attendance through complex client loyalty portals where each user sees different data, to the solutions like an anti-corruption subportal that we have created for the Department of Defense and that guarantees absolute anonymity. A portal may also serve as a planner of human resources, which could be useful especially for companies with a large or frequently changing number of permanent or temporary employees.
Integration with social networks may also be of interest. Our expertise on how to use the information that people make available on a variety of networks for targeted advertising may be useful everywhere, including the tourist sector.

 

How Is Nearshoring Changing?

by IBA Group for IBA Group
Posted on January 27, 2017

IBA Group
Mark Hillary

The British technology magazine Computer Weekly recently published analysis by Professor Ilan Oshri of Loughborough university on how the European nearshoring market is adjusting to a more mature environment. In particular how different markets are aiming to distinguish themselves from the pack.

I wrote about this research from Loughborough university last month, but the constant push to regionalisation rather than globalisation – as I mentioned in my last blog – made me find this research again. In the context of the political activity in Europe and the USA, this is worth visiting again as it is taking on increased importance.

Anyone who has attended a nearshoring or outsourcing conference in Europe knows how the various regions promote themselves. PowerPoint slides are loaded full of statistics demonstrating government support, a steady flow of graduates, great local companies, and a low cost of doing business. In most cases though, the consistently positive messages from one presentation could be used by another country without anyone noticing that the message had changed – because the message in each pitch is largely the same.

Professor Oshri suggests that we should take it as read on the basic measure. Most European countries have good airports and a supply of graduates, so anyone considering nearshoring will be looking at other factors – the companies and trade bodies in those regions should appeal to these factors:

– Higher Value; what higher value can working in your region offer? What sets your companies or country apart? Are there particular industries you excel in or skills that are hard to find?

– Ability to partner; suppliers today need to move on from the traditional client-supplier relationship and become a part of the value chain. They need to be true partners, not just hired help.

– Innovation; many companies today are looking to their suppliers for advice on innovation. Innovating throughout the supply chain is becoming much more common – are you able to innovate for your clients?

In short, Professor Oshri is suggesting that when companies look to nearshoring regions they are looking for much more than just a low cost place to do business. If you are still marketing your region as low cost with a great airport then you might be losing business just because you are not looking ahead to the type of relationship companies really want.

In an environment where managers are thinking in detail about how to ensure processes are closer to home, this is more important than ever.

Try thinking of how your location is different. What differentiates you from the others? Focus on this, even if it is a niche difference. It will make all the difference in a nearshoring market that is growing fast as companies focus more on developing regional partners rather than long distance offshoring.

Regionalisation Beats Globalisation After Election Surprises

by IBA Group for IBA Group
Posted on January 16, 2017

IBA Group
Mark Hillary

There was an interesting analysis of the trend towards regionalisation published in business magazine Forbes just before the recent holiday season. It explored how the Brexit vote in the UK and the election of Donald Trump as the US president might change business behaviour.

Politics went through something of a shock in 2016 and 2017 may hold further surprises in Europe with elections in the Netherlands, France, Norway, the Czech Republic, and Germany all coming soon…

But what does Forbes mean about a change in business attitudes and how does it affect those in the IT business?

The answer lies in the growing nationalism seen in the USA and many European countries. There is a growing desire to show that jobs are being created and managed close to home, or at least closer to home than before.

In European technology circles this is likely to manifest itself with less trust in technology suppliers from Asia – particularly China and India. Many of these companies are highly professional leaders in their industry, but as consumers start becoming more wary of strategies such as outsourcing and offshoring, it is likely that managers buying IT services will look closer to home. As Forbes suggests, the trend will be towards European regionalisation, not globalisation.

It is unlikely that markets such as the UK or Germany will create enough new technology professionals to ensure all work can be performed locally – and the cost would be prohibitive for most organisations anyway – but these consumer attitudes will favour technology companies in Eastern Europe.

The Central and Eastern Europe (CEE) region has long marketed itself as a European alternative to China and India. Allowing European companies to work with partners that are close enough for a day trip to be possible. Now they will have an additional advantage, the growing political and social unrest about long distance offshoring.

It’s good news for European technology companies as Europe remains close – organisations in Europe buy 69% of their goods from other European companies. The USA may be a more complex scenario as President-elect Trump has already talked about scaling back drastically on the H1B visa that most foreign IT professionals use when working in the US.

Whatever happens with the politicians, the direction of travel is clearly towards nearshoring as a preferable solution. The era of the world being completely flat appears to be over. Welcome to an era of regionalisation.