Source Magazine – Issue 01

thE BUSInESS MAGAZInE FRoM EQUInItI

THE INVENTOR,

tHe FuturiSt,

thE EntREpREnEuRYo! entrepreneur Simon Woodroffe on sushi,

comics and reinventing the home

four for The fuTureoutSourcinG trendS You need to act on noW

iT on demandHoW cloud coMPutinG iS cHanGinG BuSineSS

mYTh BuSTinGForGet eVerYtHinG You tHinK You KnoW aBout outSourcinG

six oF the best

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08

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contents

Inside this issue4 tREnD SEttInG Equiniti CEO Wayne Story

outlines four emerging trends in outsourcing

7 oFFShoRE VS onShoRE Taking a closer look at the

pros and cons of outsourcing business functions overseas

8 DESIGnInG thE FutuRE Visionary entrepreneur Simon

Woodroff e on the need for constant innovation

12 SIX StEpS We take you through six

steps to handling complaints eff ectively

14 CRyStaL BaLL GaZInG How business is likely to

change over the course of the next 20 years

17 REXaM Managing a major return of

capital to shareholders

Acquisitions are big business and the following six takeovers are living proof. ACQUISITIONS

googleGoogle is no stranger to acquisitions and mergers. In the company’s 15-year history, it has been involved in more than 100 takeover deals, but none bigger than the £7.9 billion Google recently laid out in the purchase of Motorola Mobility. The takeover allowed Google to start developing phones and tablets for the first time, and as part of the deal, has not limited the use of the Android software to Google products alone.

FacebooKFacebook bought the photo sharing website Instagram in April 2012 for the princely sum of $1 billion. Not bad for a company that only appeared on the scene in October 2010. And it was great news for Instagram staff . The CEO and founder walked away with $400 million, whilst $100 million was shared with the remaining 13 members of staff . That’s what you call a good day at the off ice.

virgin moneyVirgin Money had been flirting with the notion of becoming a full-service bank for some time before its bid for Northern Rock was accepted. Virgin Money paid £747 million for the bank – roughly half the amount the taxpayer had paid for it in the previous year. Not only did this make good financial sense for Virgin Money, but the bank also inherited a ready-made portfolio of customers, helping it to stake its claim as a serious high-street bank.

18 Myth BuStInG An outsourcing expert helps

us dispel some common misconceptions

21 CaLL In thE EXpERtS One client solution from Hazell

Carr is tackling the fallout from the PPI mis-selling scandal

22 up In thE CLouDS Can cloud computing off er

it all – scale, savings and shorter contracts?

26 BEttER toGEthER The MyCSP mutual joint

venture is paving the way for more public and private sector collaborations

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$1 BILLION

$400m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

$7.7m

welcome

www.equiniti.com / 3

From the frontlineWelcome to the fi rst edition of Source magazine, a new business magazine brought to you by Equiniti with a strong focus on the rapidly growing and ever-evolving world of outsourcing.

Source has a simple mission statement: to inform and entertain while offering insight and analysis from the brightest and best informed in the outsourcing world from Equiniti and beyond.

At a time when more and more organisations are choosing to outsource complex and costly functions, it’s important to consider what your best approach is. We want Source to help you make the right decisions for your business.

We kick things off in our fi rst issue by outlining four key emerging trends in outsourcing and we also explore some common outsourcing myths with the help of National Outsourcing Association Chairman Martyn Hart. In our cover feature, entrepreneur Simon Woodroffe talks of his restless need to innovate, and Sam Halford, Operations Director at Equiniti tackles the pros and cons of offshoring and onshoring.

Please email your feedback on Source magazine to [email protected] and follow us on twitter (@MagSource). We would love to hear what you think. And if you want to ensure you receive all future issues please complete the subscription form on the back page of the magazine to request a free subscription. We look forward to hearing from you.

appleApple has an interesting history with acquisitions, not least where it concerns Steve Jobs. Jobs set up Apple Computer in 1976, before leaving the company in the mid-80s to concentrate on his new software venture, NeXT. In 1996, Apple bought NeXT for $429 million and Steve Jobs came with it, taking up the position of CEO. Under Jobs' lead, the company went on to become the largest publicly traded corporation in the world, with an estimated value of $626 billion.

disneyDisney and Pixar already had a working relationship before Disney bought Pixar for £4.1 billion in 2006. Disney – who released all of Pixar’s films – jumped at the opportunity to collaborate with Pixar when an expired distribution deal allowed Disney to step in. The real value in this for Disney lay in acquiring Pixar’s talent. Testament to this, Toy Story 3, a Disney Pixar production, is listed as one of 50 highest-grossing films of all time, pulling in more than $1 billion.

l’orÉalCosmetics giant L’Oréal, who already owns Lancôme, Biotherm, Shu Uemura, Kiehl’s and Giorgio Armani perfumes, added to its burgeoning portfolio with the acquisition of the beauty arm of Yves Saint Laurent for $1.8 billion dollars. With Yves Saint Laurent stocking the world’s best-selling beauty product and L’Oréal’s presence in the industry, Yves Saint Laurent has gone on to launch new products to great success.

The Equiniti Group: The following companies are registered in England and Wales. Registered O� ice: Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA: Equiniti Limited, no: 6226088; Equiniti Financial Services Limited, no: 6208699. Registered o� ice: Sutherland House, Russell Way, Crawley, West Sussex, RH10 1UH: Equiniti Services Limited, no: 756582; Claybrook Computing Limited, trading as Equiniti Claybrook, no: 1287205; Paymaster (1836) Limited, trading as Equiniti Paymaster and Hazell Carr, no: 3249700; Equiniti Solutions Limited, trading as Equiniti Paymaster and Hazell Carr, no: 3335560.

While every e� ort has been made to ensure that information is correct at the time of going to print, The Equiniti Group cannot be held responsible for the outcome of any action based on information contained in this publication. The Equiniti Group does not give any warranty for the completeness or accuracy for this publication’s content.

Source magazine is published on behalf of Equiniti by White Light Media.

Managing Director: Fraser Allen

Creative Director: Eric Campbell

Writers: Simon Lyle, Chiara Pannozzo, Christina McPherson, Fraser Allen, Victoria Masterson, Lisa Labarte, Nicola Collins

Design: Eric Campbell

Cover: Anthony Upton

www.whitelightmedia.co.uk. Members of the CMA & PPA

Source magazine has been printed on environmentally responsible paper, manufactured from well managed forests, controlled sources and recycled wood.

Kevin Mann, Editor

Contact me at [email protected]

@MagSource

4 / Source


he UK’s outsourcing market is estimated to be worth more than £100 billion and rising.

Public sector institutions and private businesses are turning to outsourced business process services, driven by a desire to focus on their core activities, reduce costs and encourage innovation.

It is a strong market with plenty of opportunities for businesses to benefit, if they choose to work with a BPS provider with the capabilities and experience to offer a flexible approach. New businesses, which are typically asset light, are looking for new platforms and ideas to enable them to expand quickly. More established businesses on the other hand are looking to lighten the load of legacy systems and processes to stay competitive. A BPS provider with the right scale, platforms and resources can help any business in the public and private sector grow and innovate.

Staying ahead of the curve is vital for provider and client alike. With this in mind, we have picked out four important emerging trends that businesses should consider now.

Which way now for outsourcing?

The drive To ‘Small GovernmenT’In the public sector the Government is re-drawing the line between core and non-core activities. With a large national deficit and a clear desire to reduce the size of government, the amount and type of work being outsourced to the private and charity sector is expanding. One of the new models being developed is the Joint Venture approach – taking existing Government activities and turning them into an enterprise, in which the Government maintains a share, alongside the private or third sector partner. Hundreds of these have already been created, and there are at least 100 more still to come.

There is also an emerging requirement for the Government not to be too reliant on a small number of large suppliers, opening the door to smaller niche suppliers. This has been achieved by creating supply chains which combine the capabilities of specialists with the scale of a large outsourcing provider. It effectively brings the SME market into the supply chain and creates a more level playing field. It also encourages innovation. An SME may have innovative solutions but may not be able to compete against the larger

Equiniti’s Chief Executive Officer Wayne Story outlines emerging trends in outsourcing for your business to act on now

T

emerging trends

PhotograPhy by: Anthony Upton

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players on the contracting side. If you put the two together, you should be able to get the optimum solution.

BuildinG BrandS in The privaTe SecTorAmid the impact of the recession, the PPI and Libor scandals and systems failures, organisations in the financial services sector are working closely with outsourcing providers to carefully consider how best to provide non-core activities without suffering further loss of confidence from customers.

As they try to re-build trust and brand reputations it is of particular importance that banks, and other financial services businesses, find not just a provider that can perform the task, but one which will also work to protect their brand.

There is nervousness in the financial services sector, which means they are more focused on ensuring there is a strong customer experience and they must be selective about how they use outsourcing. At a time when it is increasingly easy for customers to switch supplier, some tasks must have a BPS operator which won’t jeopardise the relationship.

With activities deep in the back office, like reconciliation or fulfilment, banks continue to be happy to use an outsourcer with the right skills and capabilities.

The key questions are still, can someone else do this task cheaper, better and quicker, and what is my risk? But companies must also consider: ‘should we own this activity?’.

SmarTer conTracTinG To Build The riGhT SoluTionSBoth the public and private sectors are re-defining how they contract with service providers to fulfil outsourced tasks. There is a move away from old-style contracts which simply cover the task, the standards expected and the price, towards new models designed around agreed outcomes. These drive both organisations towards a common goal and motivate employees.

Whilst this is still in development, there is a noticeable increase in the levels of engagement from the Government, using tools such as market testing. Market testing is bringing suppliers together individually or collectively to discuss

what the clients are looking for and to develop solutions ahead of the contract negotiations. So it enables both parties to start to work together in a collaborative way. The suppliers are competing but you get the opportunity to engage and discuss what the art of the possible might be and what that might look like in the future. It allows you to bring in case studies and look at how you might transform.

ouTSourcinG To creaTe compeTiTive advanTaGeMany new entrants joining the market do not want to invest in the heavy operations which are weighing down their established competitors. They have the ideas but not necessarily the assets. They need to buy in these capabilities and therefore buy into the market quicker. The financial services

industry offers a good example where new market entrants are not dealing with product administration or investing heavily in their back office. They are choosing to focus on the customer and on product development. They are looking for partners who have already got the scale, capabilities and trained resources to deliver within their brand and their customer propositions.

These are effectively the same core products but are ‘skinned’ to reflect the different brands. Increasingly there will be processing centres sitting behind brands, with tasks being carried out by BPS providers like Equiniti, where the bank maintains the customer contact side of the business. They develop and maintain the skin or brand around these products, which reflects their values and their approach to market.

This model is also being adopted in the utilities and health sectors and will no doubt quickly spread to new areas. This is where the outsourcing model plays strongly.

“The key quesTions are sTill, can someone else

do This Task cheaper, beTTer and quicker, and whaT is my risk? buT companies musT

also consider: ‘should we own This acTiviTy?’”

emerging trends


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will get an even bigger mess in return. In my opinion, this can be another pitfall to offshoring. As a matter of quality control and general service manage-ment, it is essential that annual visits are planned for onshore staff to meet with the offshore operation to ensure all processes are aligned with both the business and clients’ expectations.

There are aspects of my business I wouldn’t consider offshoring. Telephony services is something I would always keep onshore, as the benefi ts of keeping it in Britain far outweigh the potential cost savings of sending this function abroad. Onshore really has a place when it comes to delivering a consistently high level of customer service.

When considering offshoring and onshoring, it’s important to always have a good grip on whether or not it’s benefi ting the business. A few years ago, Equiniti offshored some pensions processing. There were some diffi culties and a decision was made to return to an onshore service. It’s important to recognise when some-thing isn’t working and do something about it promptly.

Offshoring can be a good thing, but it has to be very carefully handled. It’s essential to make sure your contract is very tight, and you need to fully understand the implications of the contract if things go wrong. Long-term success is much more effective for business than the short-term fi nancial benefi ts that can be delivered through offshoring.

STAY HOME OR PLAY AWAY TACKLING THE OFFSHORING DEBATE

Cost is the principal reason businesses offshore certain processes – there are some real cost savings to be made.

Whilst cost reduction is extremely important, any contract should include targets for process improvement and innovation.

It is important to remember when offshoring that an element of processing should remain onshore; the 80/20 rule should apply wherever possible. Additionally, care should be taken on the processes targeted for offshoring. High-risk activity should never be considered. Complex processing in certain areas of business is best retained onshore. Quality is key in all that is done both onshore and offshore. Onshore must ensure offshore activity is delivering against quality targets.

Although cost savings are a real perk of offshor-ing, there are, of course, downsides. General attrition rates are higher than is desirable for any business – in India the norm is in advance of 20%. Prob-lems can also be encountered in the understanding of the language used in customer correspondence and UK address structures.

I would only ever recommend offshoring something that is working well onshore. If you export a mess, you

Sam Halford, Operations Director at Equiniti, considers the pros and cons of o� shoring and onshoring

“i Would only ever recommend oFFshoring

something that is WorKing Well onshore.

iF you eXport a mess, you Will get an even bigger

mess in return.”

aS I See It

☞ For more information contact [email protected]

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interview

Want to know what the future looks like? It’s easy, says Simon Woodroffe – simply pick up

a comic book and start turning the pages.

“When I was growing up, there were comic books about comput-ers, monorails and robots,” he explains. “It all came true. The future is invented in our minds. People dream up ideas first and then find ways to make them happen. There will be flying cars, there will be floating islands and there will be underwater living. All the things that you’ve read about in science fiction will happen, and then a few things will come along out of left field that you didn’t know about – such as the Internet.”

Woodroffe, who starred in the first series of the BBC series Dragons’ Den, is best known for Yo! Sushi, the restaurant chain he launched in 1997. He still retains a royalty stake and receives one penny for every pound that’s spent there. He subsequently launched the capsule hotel group Yotel, and experimented

with bars, spas, publishing and fashion. But now his main focus is on Yo! Home, a revolutionary approach to apartment construc-tion that uses moving parts to transform living space at the push of a button or flip of a lever.

A common thread throughout Woodroffe’s career has been his keen eye on the future and his love of design. He also puts his success down to a youth unclut-tered by negative influences or, as he puts it, “I didn’t have my imagination educated out of me.”

After dropping out of public school with two O-levels, Woodroffe got “busted” for drugs and spent three months in a deten-tion centre. Returning to live with his mother, he felt that his life was going horribly wrong. Looking back, however, he now regards this difficult time as an incubation period for his entrepreneurial thinking.

“When you are 14, 15, you have this incredible imagination and then for the next 10 years, the fear of God is put into you about financial insecurity. All those dreams that you had get swept away. There were other things

that shaped me. I didn’t have a TV for nearly 20 years and I’m not that big a reader so I lived in a world where I wasn’t very influenced. If I decided to do something, people would often say ‘oh that’s very risky’. But it didn’t seem risky to me, it just seemed obvious.”

Woodroffe’s life was turned around when he got a job at a theatre in London, which led to several stage manager roles. Always one to spot and seize an opportunity, he then began designing stage sets for rock bands (Rod Stewart and Ozzy Osbourne were clients). It was lucrative but he felt he hadn’t reached his potential.

One day, a Japanese friend told him he should launch “a conveyor belt sushi bar with girls in black PVC miniskirts”. He never did the miniskirts, but the rest is history. Launched with his £200,000 life savings and imaginatively sourced endorsements from Japanese brands, customers were soon queuing down Poland Street in Soho to secure a seat. Yo! Sushi is now a global brand, with coloured plates of raw

Simon ‘Yo’ Woodroffe made his name with sushi, and is now reinventing the city centre apartment with Yo! Home. From the deck of his Thames houseboat, he enthuses about the future – and “little bombs of change”

‘‘I could talk about the future

forever’’phoTography by: Anthony Upton


xxxxxx

Simon Woodroffe is convinced that his latest concept – Yo! Home – will be embroidered in the fabric of the future every bit as much as the flying cars and underwater living he also anticipates.

The idea is that an 800 sq ft inner city apartment can be transformed by simply pressing a few buttons or pulling a couple of levers. Within seconds, a bedroom can be turned into a kitchen, or a dining room, or a party room – there are 12 different types of space in all. “I suppose the ‘eureka’ moment was realising that we could use the mechanics of stage scenery to make a home and to use the space incredibly well,” he says. Woodroffe expects the idea to appeal initially to wealthy

business people wanting a flexible but compact city centre space that can be transformed for working in the evenings, staging a dinner party, relaxing, or even having the family over for a weekend. But he can

also see it developing a broader appeal.

“Whether millions of people will live in Yo! Homes I don’t know,” he says. “But will people have moving parts in their home? Absolutely – it’s obvious. When the Schreiber kitchen was first launched, some journalist probably said, ‘Do you really think everyone will want one of these?’ and the person with the vision said, ‘Yes – of course.’”

Woodroffe and his partners are now working on creating a properly costed working model. He is also looking at sites in Hong Kong, Manila, São Paulo and the States – both new builds and office conversions.

A great video that brings the Yo! Home concept to life, presented by Woodroffe, is available at yo.co.uk.

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inTerview

fish trundling around conveyor belts from Bahrain to Washington DC.

Woodroffe moved on from Yo! Sushi because he’s best at “having ideas and channelling the energy to set them up”. He adds: “A really simple lesson for life is to find out what you’re best at and then spend 90% of your time doing it. It sounds obvious but not that many people do it.”

It amuses Woodroffe that he is often described as a ‘maverick’. In his mind, his approach to life is normal. Yet he’s a colourful thinker in the grey world of business. He lives on a houseboat on the Thames, has a fondness for brightly coloured shoes and matching fedoras, and recorded an album a few years ago (as lead singer and lyri-cist) with Ian Dury’s former backing band The Blockheads.

They say travel broadens the mind and it’s a subject that repeatedly crops up when Woodroffe discusses the future. He thinks clothing will be a big focus of innovation, building on technology being developed for mountaineers. “In winter you’ll be able to go around with a shirt, trousers and a light jacket because it will all be heated,” he says. He also believes that clothes will be created with transformational qualities, and that washing and ironing will be hugely simplified. “On holiday, you might not even take a bag. I might just wear the same clothes for a week plus a couple of nice things for parties. Then the costs of the flights will go down because there won’t be anything like as much luggage.

“Even if it doesn’t feel like it, we’re living in a period of very fast change,” adds Woodroffe. “And it’s speeding up all the time. You will see more change than I do, and your children more so, and there will be quantum leaps. What’s really interesting for entrepre-neurial thinkers, be they big corporations or individuals, are the massive opportunities that will emerge as this happens.”

Simon even had his own headline for this article. It’s one that incorporates several key themes: the break–up of conventional retail and employment models, the shifting geog-raphy of global economics and the continued acceleration of technological change. “This is it,” he says. “‘Tesco bankrupt after cost of teleportation falls below one rupee’.

“I find this stuff fascinating,” he adds. “I am a complete and utter futurist.”

Key to capitalising on change, says Woodroffe, is being bold enough to think differently from the crowd. This has always been his approach to design. “Fashion dictates what everyone does,” he says. “Twenty years ago we went through this minimalist phase when every building was made of stainless

“give individuals

or small groups

‘freedoms’ or, as i call Them, ‘liTTle

bombs of change’. leT Them go away,

make a few misTakes and

see whaT happens.”

YO! HOme – It mOves!

Yo! home elevaTinG Bedroom.

now You See iT ... now You don’T


steel and glass, and now we’re going into a more decorative form with the likes of Philippe Starck. If you look at the design-ers who are top of the field, the ones where people stroke their beards and say, ‘What an amazing designer,’ in many cases all they are doing is making themselves look like everyone else. So my thing is always to try and do the opposite wherever I can. If you’re different, people notice you.”

Woodroffe would like to see UK PLC welcome more ‘different thinkers’ into the fold. Does he think that the push to increase boardroom diversity is a good thing?

“Shakespeare said: ‘There is nothing either good or bad but thinking makes it so.’ You can pontificate about diversity but you don’t change people through logical argument,” he says. “Change comes only through an emotional moment when someone has the opportunity to see things differently. The key to change is to be inspirational. I think that what will happen in boardrooms is that the status quo conservatism will loosen up and society will allow us to employ more ‘maverick’ people. The traditional route of boardroom decisions has limited impact. Far more effective is the way they do it in Silicon Valley – give individuals or small

groups ‘freedoms’ or, as I call them, ‘little bombs of change’. Let them go away, make a few mistakes and see what happens. When that works, the entire company of people will turn their heads and say, ‘Wow, that’s a really great idea.’ You don’t get those kinds of results from sitting down and writing a business paper.”

When Woodroffe was young, he was nick-named ‘the Steamroller’ because he would let nothing get in his way – and it wasn’t a compliment. What advice would he offer his 21-year-old self?

“Simon Woodroffe at the age of 21 was quite a difficult guy,” he smiles, ruefully. “You’d have had quite a difficult time getting him to listen in the first place. What I would say to him now is you’re not going to get anywhere until you start thinking a bit more about how you behave. To do anything difficult, you need to be a good leader because you need to raise money and encourage people to follow you. It’s an inside job, thinking about how you behave, how you come across to people. I was very much bashing my head against the wall trying to get things done. It was only in my 40s that I got thrown to my knees and really worried about where my life was going. When I got divorced, I did think

maybe, just maybe, some of my problems might have something to do with me.”

Much of this behaviour stemmed back to his problems at school and with the police. “I was lost,” he says. “I thought I had done wrong, I didn’t know how anything worked and I was scared of everything. So I covered it up with bravado, and spent 20 years putting an act on. And if you’re not being who you are, you do some serious damage to your soul.”

But the 60-year-old Simon Woodroffe who gazes calmly across the Thames from beneath his scarlet fedora is an optimist. “I could talk about the future forever,” he says. “I think people are getting better.”

Five trends worth tracking:

coachinGThe UK will follow the growing US trend for CEOs to take on personal coaches. “We describe all that kind of stuff as ‘very American’,” says Woodroffe. “But if you change people inside and give them the freedom to go off and do things differently, it can create unbelievable results.”

cloThinGBreakthroughs in fabric and heating technology will transform the way we dress – and travel.

BookSBooks will start getting pulped and used as insulation for walls. Then people will say, ‘Oh I wish I hadn’t thrown them away because they’re antiques.’

emploYmenTCompanies will employ fewer people on standard contracts, recruiting freelance experts instead. These people will work on the move and charge for their expertise rather than their time.

houSeSOne day, all homes will contain significant moving parts that transform living space at the flick of a switch or pull of a lever.

Yo! the future according to Simon

12 / Source

6 stePs

Six STepS To ...

EffEctivE complaint handling

Effective complaint handling relies on robust processes to deliver a fair result for the customer. To do this, regulated organisations follow a complaint handling process, which includes

thorough investigation, reporting, resolution and regular communication with the complainant.

A formal complaint handling process is also good practice for organisations that aren’t regulated. In doing this they will learn more about their customers’ needs and therefore improve the customer service experience.

Organisations in all sectors (regulated and unregulated) can adopt a number of principles that will allow them to benefit from the opportunities that effective complaint handling can offer to optimise their service and improve customer loyalty. To help you reap these benefits, Chris Manson, Complaint Handling Consultant at Equiniti takes you through his six steps to effective complaint handling.


Learn from mistakes

All other stages of complaint handling are futile if your organisation does not learn from its mistakes. You should share learnings in regular team meetings, discuss customer concerns and problems and agree on actions to prevent these reoccurring in the future. You should also address common root causes that have been identified. This will increase job satisfaction in your complaints team and give customers added assurance that their complaints will be dealt with.

6

Create the right culture for your complaint handlers

Invest in people, not compensation. Encourage your employees to embrace customer complaints as opportunities to help the customer, enhance the client relationship and gain valuable insights into issues with the products or services you provide. You should also consider staff incentives and targets – could these be aligned more closely with customer outcomes?

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Communicate clearly and often

For regulated organisations, guidelines exist around how communications with complainants should be handled. But – regulated or not – all organisations must take responsibility for making sure that this part of the process is valuable to both the customer and the organisation. You should be asking yourself a number of questions: are we really listening to our customers’ complaints? Are we showing them empathy? Are we providing assurance that their problem will be fixed? Are we properly investigating their complaint? Are we keeping them informed?

Invest in the right complaint management solution

For some organisations, the right approach to complaint handling may be to hand it over to an external provider who will be able to provide expert complaint management. The right provider will offer evidence of accreditations, first-class customer references and market-leading software that will capture, manage and record every stage of the complaints process. Support with specialist resources may also be available, providing peace of mind that the process will be handled competently, whilst allowing you to get on with core business activities.

Get to the root of the problem

Last year, new rules were introduced by the FSA obliging financial services firms to investigate the root causes of the complaints they receive. But good complaint handling – whatever sector your business operates in – should always involve finding out the true cause of the complaint. This is the only way of ensuring that the problem does not reoccur.

Make it easy for customers to complain

Setting up an accessible route for complaining will minimise the risk of further frustration on the part of the customer, whilst giving you the opportunity to deliver a positive customer experience from the beginning of the complaints process. It also gives you the chance to capture relatively minor issues that could otherwise escalate into more serious problems.

Use research and outbound communication to identify unexpressed complaints – these may be completely different to the ones that come into the company, so may not be resolved even if the complaints that are received are properly dealt with.

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14 / Source

the FUtUre

fortune-telling business

{ }The way we structure and

conduct business has changed dramatically in the last 20 years and is certain to do so again in

the coming decades. Author and futurist Richard Watson gazes

into a murky future and considers where next for business.


Richard Watson, a futurist with scenario planning consultancy Future’s House outlines five influential areas and how they could re-write the rules of business

and work.

TechnoloGical advanceS Developing technologies like telepresence will allow more and more digital and virtual working and we may find this will grow faster because of energy costs, emissions and traffic gridlock.

However, while some businesses will do away with a physical presence, I do not see this spelling the end for physical offices. There will always be jobs that have to be done on location, like some kinds of manufacturing, and jobs which will benefit from face-to-face interaction, like health and education.

Places like schools aren’t just about learning, they are about socialisation, and there are social aspects to work too – people like being around other people, interacting, and I strongly believe innovation is social. With increased connectivity, there is an emerging issue with

big data. There is too much information now and we must move from knowledge manage-ment to attention and retention management. There’s also an issue with how businesses manage employees’ access to information. With workers contactable 24/7, companies are discovering that having somebody perma-nently contactable isn’t very effective or good for people’s health.

We can also expect major changes with increasing machine capability, more auto-mation, robotics and artificial intelligence. Technically we will need fewer people and we are perhaps 10 or 20 years away from major white-collar unemployment. We will have to make moral decisions about whether these technologies are adopted and what the people who are no longer required can do.

workinG culTureThere will be a real shift towards flexibility and personalisation in how people work. There is already a move in power from employer to employee due to demographics and people are more likely to dictate how

While only a fool would confidently

predict even the near future in the current

economic climate, it is also true that

only a fool would not consider the direction

of travel and try to plan accordingly.

and when they work. The idea that we work Monday to Friday, 9–5, is mad in a knowledge economy. People work best in bursts and I think we’ll see more work taking place outside of company walls with informal networks permeating outside.

We have witnessed a general modular-isation of work and it’s going to fragment more. In the future there will be projects and people will pitch to work on them – more like a portfolio career. In many industries people will become freelance and project-based. This will be good for company profits but perhaps less good for job security.

The nature of leadership is changing too as we shift from a rigid, alpha-male structure model, which is quite military, to a much more open and fluid network, which is a bit more feminine – perhaps because there are more women in the workforce. Employers must think more about motivating people than giving orders. This depends on the economy though. In a boom, the power is with the employee. If it’s collapsing, it reverts to the employer.

A lot of people are beginning to question what a job is for and are rejecting that it’s just a question of making money. The ethical, social strategy of a company is important too and I see the John Lewis model of the cooperative as a future model.

The workplace environment is becoming increasingly stressful and employers need to think about how to manage employees’ stress. I think workplaces will become more touchy-feely, and motivating and incentiv-ising your people will be critical.

GloBaliSaTionCompetition will grow and grow as globali-sation continues. The key thing is that it will lead to more local, smart companies being set up, without the legacy costs of existing businesses. Africa is already interesting because it hasn’t invested in the infrastructure we have – in many cases they’re bypassing it. Chinese companies are building state-of-the-art factories from scratch meaning they don’t have to deal with the old factories or the liabilities of pensioners and can be a low-cost, more flexible operator.

To compete, UK companies will have to be the cheapest in the world or the best quality in the world or do something nobody else can do. Increasingly they are competing directly with people in Shanghai, and elsewhere

16 / Source

the FUtUre

Future-prOOFIngOutsourcing providers and administrators who can offer flexible and specialised services can help businesses tackle many of the emerging challenges they are likely to face.

If businesses must become increasingly specialised to thrive in a competitive global marketplace, then for many organisations the start of this process will be stripping away non-essential activities to allow a clearer focus on what they do best.

Companies are already allowing non-core and support service areas such as human resources and finance and accounts to be handled externally. In financial services, banks are currently divesting and selling areas of the business which are not adding value, such as derivatives, insurance and statutory administration like legacy credit cards.

The gathering speed of change in technology will

make it increasingly difficult and expensive for businesses to keep pace with the latest systems and equipment. By outsourcing IT or other technical areas to a specialist, businesses remove the cost and time of keeping pace with this change.

Equiniti Sales Director, Stuart Anderson says: “Why would a large global operation want to spend money on having major technology assets in-house any more? You put in your infrastructure and applications and within two years they may be out of date and no longer fit for purpose.”

Long-standing businesses will be competing with new entrants to their market who are unencumbered by an expensive and ageing infrastructure.

If the trend towards more project-based working does continue, then outsourcing services will help by providing a consumption-based model allowing organisations to use services as and when they need it.

Stuart says: “Companies dealing with seasonal work with massive peaks in volume and activity can rely on a specialist administrator with capability and multi-skilled staff to cope with this.”

Companies like Equiniti already have a bank of skilled white collar workers, to be called in when demand dictates, for example, during corporate actions. If an ageing population causes a shortage of staff in the future, these could be used to plug the skills gap.

“Why Would a large global operation Want to spend money on having major technology assets in-house any more?”Stuart anderSon, director equiniti SaleS

working in manufacturing and now in knowl-edge work too. It’s about finding your niche and this will result in hyper-specialisation.

ouTSourcinG The main reason businesses outsource is cost and that won’t go away, so outsourcing has a long way to run. But there may be politi-cal brakes on it, particularly sending work offshore. If things still aren’t looking good in the UK and Europe, there will be increasing pressure to bring back work. Another factor is that countries we are offshoring to, like China, are running out of labour and are looking to other contenders, such as Africa, to help fill the gap in the workforce.

Another reason to outsource is to allow a focus on what companies do best but busi-nesses are going to have to be smart about where they draw the line. If you outsource areas like research and development, you risk being left with only a brand and that’s a pretty fragile situation to be in. But economies of scale and reliance on fast-moving specialist technologies will still encourage outsourcing of areas like administration.

We will continue to live in a globalised world in a virtual sense but whether it is physically globalised, I have my doubts. Aspects of that are already unravelling because of economic and resource protectionism and even localism. One of the results is physical deglobalisation – banks are a very good example of this. They are going back to their local boundaries.

chanGinG demoGraphicSAn ageing society combined with declining fertility will put immense pressure on health care and pensions and we will see major skill shortages in many different parts of the world. Employers will have to reorganise their businesses to appeal to 55-year-olds, instead of 25-year-olds, and one of the questions we don’t know the answer to is will people who are 65 want to continue working in 10 or 20 years’ time? To attract them we will have to redesign offices and manufacturing places and we will have to reconsider pay, flexibility and conditions. That simple demographic will change business quite significantly.

Currently Europe is in the worst position but China is ageing very, very fast. Young people drive the economy and innovation, and pockets of southeast Asia and sub- Saharan Africa have the highest fertility rates. This could really turn the tables, and in 2030, we could be in the ironic situation where Africa is feeding Europe rather than the other way around.



xxxxxx


xxxxxx

caSe StudY


Disposing of large and complex divisions of a multinational FTSE 100-listed fi rm across several different territories

is, by necessity, a long and complicated process. But when the ink had dried on the sale of consumer packaging giant Rexam’s Cosmetics, Toiletries and Household Care Products (CTH) and High Barrier Foods businesses after 14 months’ work, Group General Counsel and Company Secretary David Gibson’s attention immediately turned to managing a £395m Return of Capital to shareholders.

The cash return, managed by Equiniti earlier this year, was handled by way of a B Share Scheme combined with a Share Capital Consolidation to maintain the share price at roughly the same level post cash return.

Shareholders received one B share worth 45 pence for every Ordinary Share held, and could choose to receive the 45 pence either as capital or as income for personal tax purposes, with some fl exibility on the timing of any capital payment.

Equiniti Corporate Actions worked closely with Rexam and its advisors to provide in-depth technical, operational and logistical knowledge of print and mail requirements, documentation design, timetabling of critical dates and the settlement mechanics to ensure the successful delivery of the new ordinary shares and £395m in accordance with the instructions of the shareholders.

David Gibson says: “Whilst the B Share Scheme brought more complexity than a special dividend or market purchase of shares, it gave the shareholders greater fl exibility. We had to issue and then redeem the B Shares and issue new Ordinary Shares, and shareholders had an election to make as to how they

would receive the cash. All of this creates additional administration.

“Our major concern was that there could be a lack of understanding of what the choices were. In the end it all went very smoothly and our fears were unfounded. Because the disposal process for our plastic pack-aging operations was complex and lengthy, we had the time necessary

to prepare clear and comprehensive documentation. I have worked with Rexam for 23 years and during this time we have seen numerous corporate actions, through which Lloyds and more recently Equiniti have supported us as registrars. This was our fi rst B Share Scheme since 1998 and our strong relationships with the Equiniti team were undoubtedly a benefi t. A great result for all involved.”

Jon McLean, one of Equiniti’s Corporate Advice Team, who managed this project, has worked on many similar schemes and understands the complex-ities involved.

He says: “By drawing on the extensive knowledge and experience of the corporate action team and expertise elsewhere within the business, we can help companies deliver the most effi cient and shareholder friendly event.

“With Rexam there were two months of planning and two months of operational work, during which I communicated with them or their advisors regularly and at critical times at least once a day.

“Equiniti Corporate Actions have a unique perspec-tive as they see the interaction of all the design elements and how it impacts on the shareholder experience while taking full account of the technical, market and settlement requirements associated with each individual transaction.”

Multinational consumer packaging company Rexam’s B Share Scheme corporate action required technical, operational and logistical know-how

EXPERTISE PAYS DIVIDENDS

major corporaTe acTionS reQuire

loGiSTical and Technical know-how

tIM BRaDLEy/GEtty IM

aGES

18 / Source

myth bUsting

outsourcing works. So,

what’s stopping

you?

For many owners and executives, allowing another organisation to take over the running of an important part of their business can be a scary prospect. Fears over control, costs, performance and security leave many businesses clinging on to every last task. Are their fears justified or are they missing a great opportunity to truly focus on what they do best? Chairman of the

National Outsourcing Association (NOA), Martyn Hart, addresses five of the most common barriers to outsourcing.

i will loSe conTrolWith so many processes, protocols and personal relationships to dovetail, allowing another organisation access to the inner workings of your business can be daunting. Loss of control can be a worry, especially if you are a first timer. The best way to assuage this worry is to focus on building a good relationship with your supplier, which is by far the most important success factor in outsourcing. Obviously Service-level Agreements (SLAs), Key Performance Indicators (KPIs) and contractual schedules will feature heavily, but if the relationship is unsatisfactory, clients can still be unhappy, even when all the boxes are being ticked and everything is on target. Make

sure both the contract and the people remain flexible – if the contract isn’t flexible enough to allow change, and a poor relationship means the contract is followed to the letter and often referred to, things can easily fall apart. But if all the people are flexible, the contract focuses on deliverable outcomes and change is considered normal, then, by relinquishing a little control in favour of expert input, you can get big results.

mY coSTS will eScalaTe You have to have a business driver, a bona fide reason to do it. It is still true that BPO services allow economies of scale and if your costs in a certain area are too high, therefore damaging your competitiveness, outsourcing will reduce those costs. Or if technology is moving so fast you don’t know what is going on, you need a BPO service to provide you with expertise and access to leading technologies, which will drive savings. Costs shouldn’t be a surprise if they have been properly determined at the contract stage. But you need to watch out when people are selling on commission. If you are dealing with an organisation where the sales guy sells then instantaneously moves onto the next sale, or the client-side relationship manager gets promoted and moves on, then the next generation relationship might not be as effective, and, as

Chairman of the national outsourCing assoCiation, martyn hart, taCkles some Common fears about outsourCing head on


outsourcing works.

anth

ony

upto

n

20 / Source

previously discussed, poor relationships mean poor outsourcing. Take the time to learn exactly who’ll be managing your contracts, and lock them into the deal. But first things first, talk to your own staff – they’ll be knowledgeable about your business and will offer ideas on how to save money on your internal processes. Consult internally before rushing into outsourcing, as it’s not always the answer.

i won’T Be aBle To analYSe performanceProblems generally come when a company doesn’t actually know what their own measurements are when commencing outsourcing. Only when embarking on outsourcing will they realise that they don’t actually have any internal benchmark. If you are organised from the outset, there is no reason why a BPO provider can’t analyse better than you could in-house. Because BPOs are set up to price from the outset, they will be better equipped to analyse performance. They will have better tools and be able to give you more accurate price breakdowns because they have to price for the job in the first place. Companies are not used to analysing or costing themselves, but they need to get used to it. So when thinking about outsourcing don’t just go for ordinary SLAs. Why not put the parameters you need for benchmarking? Then you can benchmark whenever you like.

mY informaTion will noT Be SecureOf course businesses need to take precautions. If you are in the European Union, then you should try and keep the data in the EU or a country that meets EU standards. A good provider will have the correct governance and risk procedures to manage your data, including accredited staff. But even more important is intellectual property. Rights to intellectual property and making sure that exit and transition between contracts works well is something that should be considered in detail before you sign the contract.

ouTSourcinG reSulTS in joB loSSeS This is a big, emotive, tabloid-friendly topic but outsourcing needn’t always reduce jobs. A company that supports its staff will try and help them, either by coupling outsourcing with some kind of expansion idea and moving people to help that or out-placement. Often part of the deal with the supplier is that those staff move there. Maybe not exactly the same job but at least a job under TUPE with the right conditions. But not all companies do that – some will just see it as collateral damage, part of the never-ending restructuring of the economy that the UK has been through many times before. It will always cause problems for individuals, but if it means growth in other areas, or companies surviving that would otherwise struggle, then it can only be for the greater good.


YOu’ve cOnvInced me. WHat’s mY next mOve?

if you are organised from The ouTseT, There is

no reason why a bpo provider

can’T analyse beTTer

Than you could

in-house.

A lot of companies fear the whole process of starting to outsource. We offer some pointers to those considering outsourcing for the first time

1 Start considering

your options now. Many companies outsource because there is already a crisis so they rush headlong into it and make mistakes.

2 Your own peer group

is a good place to start. If you are part of the Institute of Directors or a business federation, they can help.

3 To get independent

advice, businesses can talk to the NOA for the UK, or in Europe the European Outsourcing Association. By joining you can gain advice from other members in the same position.

4 Carefully consider your

business drivers. 5 Talk to an

expert, making sure they are properly qualified and accredited. They can help you plan what to outsource and how to do it and consider what is a core part of your business and what isn’t.

6 Talk to your employees

and see if they can achieve the objectives themselves.

7 Get the right team in place

to manage the project.

myth bUsting


LENDING A HAND

caSe StudY

The PPI mis-selling scandal continues to dominate the headlines. We find out more about an innovative solution that helped one bank tackle this issue.

sue Bartlett, Business Development Director at Hazell Carr, knows exactly what her clients need and how she can support them. She talked to Source

magazine about Hazell Carr’s involvement in two of the biggest issues currently affecting the industry: PPI complaints and attracting high quality resource.

What does Hazell Carr off er its clients?Hazell Carr is the Equiniti Group’s specialist outsourcer and resourcer. We work with our clients – who are generally regulated bodies – to support them with customer service, complaint handling and technical solutions. Hazell Carr currently has more than 1,000 consultants delivering projects across the UK. Our clients not only consider us as trusted partners, but also rely upon our expertise to deliver on a range of regulatory topics in a time-sensitive manner.

Have any of Hazell Carr’s clients been aff ected by the payment protection insurance (PPI) mis-selling scandal?Yes. Since we primarily deal with regulated bodies, a number of our clients are based in fi nancial services. As a result, they have had to increase the size of their complaint handling teams in an effort to address customers’ concerns. This has had a knock-on effect on resourcing, as in some instances clients have had to seek extra support to get them through this busy period.

How did Hazell Carr support its clients with the PPI scandal?One of our clients, a major bank and credit card provider, turned to us for assistance during this period. The real challenge for our client was that costs needed to be reduced,

whilst maintaining a high standard of customer service – complaints had to be resolved in both a timely and satisfactory manner, whilst making sure that all regulatory obligations were being met. To help our client do this, we introduced Hazell Carr’s Academy Solution.

Can you tell us more about the Academy Solution?It provides consultants who are capable and enthusiastic graduates looking to enter the world of work. Highly literate, numerate, conscientious and articulate, our graduate consultants embrace the opportunity that representing Hazell Carr gives them to demonstrate their skills and prove their professional worth.

What process do you follow when recruiting graduates?We know our clients have incredibly high standards and to meet those needs we have a rigorous vetting, screening and training programme in place. In terms of supporting our clients with PPI complaints, all selected consultants are provided with training on relevant regulatory areas and complaint handling processes prior to starting their roles.

Did the graduate consultants do a good job working on the PPI project?Yes, and in fact, they exceeded our client’s expectations. This was down to the preparation before our graduates started work – they had a strong understanding of the project, knew what was expected of them and had a strong support structure in place, which helped them to succeed.

Was the PPI project successful?Yes, and testament to this is that we are still working with that particular client and have now put several hundred graduates into positions with them. Our Academy Solution has been very successful, in that it has helped our client deal with an unprecedented number of complaints, whilst at the same time reducing the interim resourcing costs.

Our Academy Solution not only allows us to help clients, but it also allows us to support skilled graduates get that all important fi rst step on the career ladder.


22 / Source

cloUd comPUting

During the Cheltenham Festival – the most prestigious meeting in the National Hunt’s UK horse racing calendar – traffi c to the TV channel and website At The Races doubles.

In the past, managing these surges in demand was diffi cult and costly. Around 1.5 million racing fans regularly log on for racing information,

previews, news and other services. “We were worried that when there were

spikes in traffi c to the website – for example, during events such as Royal Ascot and the Cheltenham Festival – operating costs could

escalate with a traditional hosting platform,” explains Miguel García, Head of Technical for At The Races.

“Conversely, during quiet periods in the racing year, demand would fall.”

García said he had a ‘lightbulb moment’ at an event in Bradford when he found out about Microsoft’s cloud computing platform, Windows Azure. This allows Microsoft to build, deploy and manage a range of ‘on demand’ Internet-based applications and services through its global network of data centres.

“Because we pay for what we use, we’re now spending considerably less than we would

UP IN

THE CLOUDS

Is cloud computing the cover-all IT solution offering scale, savings and shorter contracts, all on demand? Or do data security concerns mean buyers should still be wary in this rapidly developing area? Victoria Masterson examines the case for the cloud.

illUstration by: eric cAmpBell


have with a traditional hosting solution,” García continues. “This in turn gives us the licence to experiment more because the costs involved are minimal.

“We no longer need to conduct weeks of planning before major events in the horse-racing calendar because we can organ-ise additional capacity at short notice – it can scale up in 10 minutes. This is particularly important for coverage of unpredictable events such as a big-breaking news story about a particular horse, event, or trainer.”

This ‘pay-as-you-go’ access to computing capacity and services via the cloud is trans-forming the way businesses work.

One of the key differences between traditional IT infrastructure and cloud computing is the shorter contracts, says Kate Craig-Wood, founder of Guild-ford-based IT hosting company Memset and a finalist in the 2013 FDM everywoman in Technology Awards – which celebrate women working in IT.

“The cloud is on demand so you can upgrade by the minute or the hour rather than by the day or month. Traditional IT outsourcing and system integration was based around big contracts with regular fees, large set–up costs and software licences. The cloud basically allows businesses to get away from all that and to use what they want, when they want it,” she says.

Craig-Wood believes cloud computing is ‘massively’ important to businesses because it allows them to be fl exible, scalable and mobile.

She adds: “This is changing the way busi-nesses think, because they realise that they don’t have to have their own data centre with hardlines back to the offi ce, but can outsource this infrastructure without having any capex or installation costs.”

Krishnan Subramanian is a leading thinker in cloud computing and principal analyst at US research fi rm Rishidot Research. He believes the biggest change from the cloud is the agility it brings into business innovation.

“Unlike any time in the past, the time from an idea to product is drastically reduced, leading to innovation which helps consumers, other businesses and governments,” he says. “We are a small research fi rm distributed across the USA. It has made collaboration easier for us and helped us get resources which were too expensive in the past. Combined with innovations in mobile, it has totally changed how we operate our business.”

For Norfolk-based artisanal bakery Bray’s Cottage, using cloud-based accountancy system KashFlow has freed up more time to grow the business and invent

new fi llings. The company makes pork pies in fl avours including onion marmalade, chilli jam and apple, and employs fi ve people across three locations – a manufacturing unit, bakery and offi ce.

“The fact that all of us can be working on different aspects of the accounts from different locations is really useful,”

24 / Source

cloUd comPUting

virtualisation – even the server is virtual – it is also an echo of the old mainframe days, when computer terminals saved data on a huge central machine.

“The reason we ended up with PCs on every desk in the early 1990s was because we simply didn’t have good enough connectivity to the mainframe to give users the access they needed,” Dryden adds.

“That has changed dramatically over the last decade and the bottleneck of connectivity is no more. Today’s high–speed links not only allow greater data bandwidth, but also deliver it at affordable prices.”

The cloud also offers spin-off ‘eco’ benefi ts. “Overall in the world, IT emits as much CO2 as the aerospace industry,” says Dr Patrik

explains owner Sarah Pettegree. “It means we could have someone in the offi ce raising an invoice and someone at the other end putting in receipts. If a customer has a question about how much they owe us, we can look it up right away. It can make us look a bit more slick and professional – as though we’ve got an offi ce of accountancy staff. It also frees up my time to focus on marketing, developing the products and coming up with more fi llings.”

Steve Salmon, a Principal at KPMG’s UK chief investment offi cer advisory practice, says the cloud allows small businesses to access big enterprise applications that might previously have been out of their reach, while large companies are using the cloud to increase the effi ciency of large functions such as human resources, fi nance or supply chain management.

“The question we’re being asked is, how can the cloud help us improve or automate these business processes? Often you fi nd the cloud is just one part of the mix, so it may be combined with some classic or legacy applications and some traditional outsourcing. What we’re seeing is the cloud element of that increasing.”

Despite advances in encryption technology, data security on the cloud remains a concern, particularly for businesses in highly regulated industries such as fi nancial services.

“We’re seeing customers pushing on cloud providers for increased transparency and that’s through independent assurance and attestation,” Salmon explains. “These IT providers come in all shapes and sizes and one of the big challenges around the cloud is the lack of standards and lack of interoperability between the different providers. IT has to somehow make all this work and integrate with existing systems to deliver what the business needs. That’s hard work and that’s the disruptive angle.”

Surveys show that uncertainty over information security is one of the biggest issues for larger organisations considering moving systems or data to the cloud. The economies of scale in cloud computing come from sharing resources and outsourcing IT responsibilities, and this can introduce new security risks for organisations.

Director, Equiniti Technology Solutions, Nigel Farr says: “Organisations in the public sector and regulated industries will have well-developed governance processes for risk management and can address the risks involved in cloud computing; however, it is still a developing area. At the minute there is a drive for many organisations in favour of private cloud solutions from providers like Equiniti or from shared service centres within government.

“With a private cloud solution the main benefi ts of cloud computing such as economies of scale and operational fl exibility can still be achieved, but the security risks are clearer and easier to manage. Organisations are typically able to tailor private cloud services to meet their individual requirements and incorporate them as part of a full outsourcing arrangement including business applications and support services.”

Rick Simmonds, Managing Partner at Alsbridge, a specialist IT sourcing advisory fi rm, adds that there is still a limited selection of cloud applications for large companies.

“As yet, the cloud has made little impact at the enterprise level, with a few major successes such as Salesforce.com (a popular online customer relationship management application) and some later entrants coming up fast on the tracks, such as Workday (the cloud-based human resources application). The cloud represents a fantastic opportunity to get more technology for less, but the risks are that for big, complex companies the standard software offerings might not be appropriate to their needs.”

Skyscanner, the global fl ight comparison website that receives 30m visits per month, uses a private cloud infrastructure model to give the business the fl exibility

and scalability it needs to manage visitor volumes to its website and mobile apps.

“We have huge fl uctuations in visitor numbers around the world at any time and we’re also growing the business and visitor numbers at a signifi cant rate,” explains Peter Sturrock, Skyscanner’s Director of Service Management.

“Our site needs to perform well at all times, regardless of how many other visitors we have on the site. Cloud computing helps us achieve this by giving the ability to add on additional capacity at peak times to handle bursts of traffi c, as well as making sure that any site downtime is at a bare minimum.”

At the University of Edinburgh Business School, Senior Lecturer in Information Management Dr Ashley Lloyd points out that the bigger the data centre, the more effi ciently they can share resources internally and smooth out peaks in demand.

“This is why cloud data centres are getting very big, with the latest commercial cloud data centre being built in China set to be as large as the Pentagon!” he continues. “With vendors getting this big, avoiding lock-in will be important for companies who want this relationship to fl ex both ways.”

John Dryden, Chief Technology Offi cer at IT support consultancy IT Lab, suggests that while cloud computing is the ultimate in


Kärrberg, Research Fellow and Research Programme Director at London School of Economics, Department of Management.

“If you’re using cloud computing, you’re generally more energy effi cient than running standalone computers or in–house server farms. There are also some accounting implications because if you’re renting cloud computing monthly, it’s a cost rather than an asset on the balance sheet that would be written off over time.

“If you’re an investor in a start-up company, you may see it as benefi cial to have a small fi xed monthly cost, rather than the large up-front expense of IT equipment, which may result in considerable capital cost at the outset.”

LeavIng It tO tHe expertsWith more than 25 years’ experience of providing IT outsourcing solutions, it’s no surprise that Equiniti is trusted by so many organisations to take care of their IT. “We have provided the share registration platforms for around 50% of FTSE 100 companies and complex case management implementations for a range of public sector bodies,” explains Nigel Farr, Director, Equiniti Technology Solutions. “We are now starting to implement Private Cloud solutions for customers who want to achieve the benefits of cloud computing without compromising their current

data security and compliance approaches,” he adds. When supporting a company with its IT function, Equiniti can provide a range of solutions to suit clients’ needs. “We fit in with what our clients want, and really help them to drive down costs,” Nigel says. “We have the capability to outsource a full IT infrastructure in terms of providing

servers, data centres, cloud solutions and all necessary software applications to fulfil a client’s IT needs. Similarly, we can deal with specific elements, so if an organisation wants to keep some of its IT in-house and outsource other aspects, we can provide a functional mix-and-match model.”

Equiniti is also an approved supplier for the government procurement services G-Cloud framework, a radical new initiative, which will transform the way the public sector procures IT. Software solutions can be procured and implemented in short timescales with minimal capital investment – the financial model is ‘pay as you go’, based on monthly service charging. The aim is to make government IT more agile and transform public services through the ‘Digital by Default’ agenda.

“We Fit in With What our

clients Want, and really help

them to drive doWn costs.”

niGel Farr, director equiniti tecHnoloGY

SolutionS

“This is why cloud daTa cenTres are geTTing very big, wiTh The laTesT

commercial cloud daTa

cenTre being builT in china seT To be as large as

The penTagon!”

26 / Source

collaboration

“This mutual joint venture broke new ground in terms of a business model,” says Nicky Hurst, CEO of My Civil Service Pension (MyCSP), which is a recent mutual joint venture (MJV) between Equiniti, government and MyCSP staff. “It was a new notion for govern-

ment, as it doesn’t tend to be a shareholder in joint ventures, and it was a new experience for the private sector too, as there are three shareholders, so nobody has overall control,” explains Nicky.

The first deal of its kind, the MJV came to fruition due to the need for an overhaul of the MyCSP systems and processes, which were in the hands of various government departments. The most logical way to do this was to seek both investment and expertise from the private sector. “Historically, the administration of MyCSP was expensive, disparate – it was split across a number of departments and organisations – and the level of customer service was variable,” Nicky says. “There was also significant investment needed in IT – using legacy IT systems was not conducive to running a modern business,” she adds.

As experts in the pensions administration field, becoming 40% owners of this MJV was too good an opportunity for Equiniti to miss: “MyCSP was right in Equiniti’s sweet spot. This was a really innovative way of doing its core business and as a forward-thinking

company, Equiniti was eager to get involved,” Nicky explains. “One of the reasons Equiniti was able to get involved with MyCSP was down to its size. Great big organisations are often suffocated by red tape and can miss opportunities. Equiniti’s flexibility allows it to move more quickly,” she says.

From a strategic perspective, it was a momentous occasion when Equiniti sealed the deal with the government over the part-ownership of MyCSP. “It gives Equiniti a

dominant position in the UK pensions market, especially around public sector pensions. And since this was the first deal of its kind, it really helped to raise its profile, not just as a pensions provider, but as an innovator in this field.”

Equiniti owns 40% of MyCSP; government has a 35% stake and staff have 25%. Aside from aligned priorities, if the business does well, all three shareholders will benefit from the increased share value. Have any other

benefits of being part of this new business model come to the fore? “Equiniti benefited from the high-profile nature of the deal, whilst creating the opportunity to forge a stronger relationship with government,” says Nicky. “From a government perspective, it gained much needed private

sector investment, which is transforming the MyCSP service. And in terms of the staff, as part-owners, they have a vested interest in the business, they feel part of the wider operation and their performance has a direct impact on the profits,” she adds.

Considering MyCSP in its current guise was only established in May 2012, the level of success has been admirable: “MyCSP has been so successful in the short

Mutual benefit

mycsp has been so successful in The shorT Term parTly because The inTeresT of all Three shareholders is aligned

Nicky Hurst, CEO of MyCSP, tells us how the public and private sectors can mutually benefit from working together

term partly because the interests of all three shareholders are aligned – all three parties will work together to achieve success, as we all benefit from it,” Nicky explains.

So has the success of the MyCSP MJV prompted government to consider other MJVs? “Yes, there are more in the pipeline, and it was nice to be the first, and to show the government that this business model can work,” Nicky says.

As an innovative business model, what are the plans to develop MyCSP further in the future? “At the moment, we are focused on transformation, which involves replacing networks, infrastructure, IT applications and pensions administration applications. Doing this will eventually reduce costs by 50% in comparison with the previous operation,” Nicky says. “On top of that, public sector pensions are currently undergoing a massive reform in their own right, so we are preparing for a new pension that will come into place in April 2015. And in addition to that, we have plans to do what any other business wants to do … grow!”

equiniti 40%

my cSp ownerShip model

government 35% staff 25%

PhotogrPahy by: chriS BUll


Our mission is simple – we’re here to help you be extraordinary. As trusted sidekick to the UK’s leading businesses and public sector institutions, we know what it takes to be the best support team in the world. And that’s what we do for around 2,000 clients, including 50% of the FTSE 100.

Our business process outsourcing solutions cover pensions, share registration and IT. Combining advanced technology and sheer talent, we help give you the edge. And with a dedication to excellence, rest assured when you need pensions experts, we’re here ready to pick up the phone.

Every superhero needs a great sidekick

We’re working behind the scenes, so you achieve “Wow” without any of the “Pow”.

Empowering our partners through business process services. Equiniti.com

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Source Magazine – Issue 01