Outsource Issue 22 - (Page 82)

the wood for the trees? Gareth Davies of Veredus reports on a recent roundtable where representatives from across the UK sourcing space looked at the bigger picture… Gareth Davies, Veredus UK Gareth is Director, UK Lead Outsourcing & Business Services at Veredus UK, a Capita company. He has worked in talent acquisition for over a decade. C an’t see the wood for the trees?” was the theme of the recent breakfast event hosted by the outsourcing practice of my organisation, executive search firm Veredus, held, appropriately, in the Forest Room of the Hospital Club in Covent Garden. A dozen senior representatives from the outsourcing industry gathered with a couple from client-side and leaders from the Veredus practice, while others contributed prior to the event through insight interviews. The conversation kicked off with: “There is more opportunity for the outsourcing industry than ever before …. or is there?” The discussion took place against a background of tightening public sector spending, and the impact of the government seeking reduced costs at the same time as accepting that outsourcing still presented an opportunity for it to reduce its expenditure. The general opinion was that interest in outsourced solutions is as strong as ever – especially in sectors such as finance and insurance – but that overall conversion- times are a challenge, and that the public sector might be moving towards greater focus on ‘payment by results’ deals which will significantly change the risk profile of some opportunities. Examples discussed highlighting the risk of this included Welfare to Work programmes and areas associated with reducing re-offending. Les Mara, Head of Business Process Outsourcing EMEA at HP Enterprise Services, stressed that the market “has to provide sustainable economics” while Jeremy Oates, MD, UK and Ireland Technology group at Accenture added that “government assumes the private sector will invest (by bidding for work) but this isn’t necessarily the case if the requirement continues to drive greater upfront investment, lower margins, shorter contracts and higher risk profiles.” At the mention of risk, the pace of conversation picked up – there were obviously a number of raw nerves in the room and shared concerns about the risk profile of deals. One way in which this will impact the outsourcing community is through the greater tendency towards service integration. Mike Gordon, SVP & Managing Director of RR Donnelley, highlighted that “one of the complications of this style of arrangement is in negotiating complex service agreements and the need for ensuring that all the commercial terms flow down to the sub-contractors. This principle is normally understood and accepted but it can present a real issue to some smaller sub-contractors, who perhaps can’t afford to take on the liabilities of the contract.” It was generally accepted by the group that niche players can bring flexibility and leading-edge solutions to their customers, but that in any multi-supplier situation the customer will be looking for proper cover for their risk. As Bob Scott, Head of Business Development in Global Testing for Capgemini, said: “We recognise that it’s impossible for large organisations like Capgemini to be the best at everything a client needs and that there will be niche suppliers that can provide valuable services to our clients in areas that are not core to our “I’d rather have a lot of talent and a little experience than a lot of experience and a little talent.” – John Wooden 82 www.outsourcemagazine.co.uk ● ● ●  http://www.outsourcemagazine.co.uk

Table of Contents for the Digital Edition of Outsource Issue 22

Outsource Issue 22
Table of Contents
Shutting the Door?
Q&A: Deborah Kops
Colombia
LPO
Editorial Board Roundtable
Head-to-Head
HR Trends
Long Live AMS!
The Provider Perspective
Platforms Make Sense in the Cloud!
NOA Pathway
Case Study: King’s College Hospital
Egypt
Silver Lining
Roundtable Write-Up
Case Study: Nokia & Hyphen
Alan Leaman
Leah Cooper
Kay Formanek
Paul Awcock
News & Comment
The Legal View
NOA Roundup
Online Roundup
Letter to the CEO
Letters to the Editor
Sourcebites
Inside Source
The Last Word

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