Every month we will be trawling the world's press to bring you the latest news and views on the technology issues that matter to you and your clients. Here we look at outsourcing and supply chain management.
Outsourcing
Computer services firm ZEDA demands the best quality staff to maintain its outsourcing contracts. But chairman John Mills stresses that a range of business skills – not just IT – are essential to the company’s success, and insists on good personal and communication skills from his employees.
ZEDA specialises in SmartOutsourcing (its own trademark), the remote management of IT which has been enabled by high-speed data communications.
Mail on Sunday, 27 December
Outsourcing isn’t new – companies don’t generate their own electricity, after all. But a new form of IT outsourcing based around the concept of “renting” applications is emerging, spearheaded by the ERP vendors and enabled by high-speed data communications and the Internet. The ERP specialists are keen to break into sub-$500m-a-year turnover firms, and by allowing clients to use data facilities and remote servers to run key applications like payroll and benefits processing on their own systems, are making serious headway. JD Edwards, Peoplesoft, IBM, Microsoft and a couple of start-ups are all offering services.
The Economist, 9 January
Outsourcing is much more than just an IT issue: a recent article in the Harvard Business Review highlights a small but growing trend for far-sighted managers to balance the work and private lives of their employees more effectively, generating a happier workforce and higher productivity.
As this trend grows, consultants and firms will emerge to handle these delicate and specialised programmes on an outsourcing basis for their client companies.
The Los Angeles Times, 17 January
The air freight business is fraught with difficult questions, not least whether or not to outsource services. Many shippers ditched their traditional logistics operations in an attempt to cut overheads, and forwarders are now looking to take this business on. But as in other areas, the question is whether the outsourcer is simply offering additional services to win new business – or whether there is a genuine benefit to all concerned by consolidating such operations in one place.
Traffic World, 18 January
Logistics certainly is ripe for consolidation, claims investment and research house Piper Jaffray. Outsourcing supply chain management, for example, to a third-party logistics firm can cut costs and drive profitability as economies of scale emerge during consolidation.
Lloyd’s List, 20 January
Auditors – accountancy firms – may have serious doubts about the long-term future of financial audit – so they’re looking instead to offer services like outsourcing to generate revenues and customer loyalty.
The Times, 21 January
Old-style consultancy companies aren’t too worried about whether demand for their services is increasing per se. In fact, with the growth of outsourcing and the identification of new problems, consultants can look forward to an ongoing renewal of the need for their services, albeit in new areas.
Chicago Tribune, 22 January
The Infoserver Editor’s Choice award for outsourcing relationship excellence 1998 were:
Best niche relationship: Compaq and ING Baring Securities
Most effective relationship: CSC and General Dynamics
Best aligned relationship: ENTEX Information Services and Microsoft
Most strategic relationship: IBM Global Services and Comdata
Best BPO relationship: PwC and BP
BusinessWire, 25 January
Supply Chain Management
Manugistics is looking for a buyer because it is a victim of its own success in the supply chain software business. But a strong customer base and sound product isn’t enough when the bad times come, and the cost of running the business in an increasingly competitive and fast-changing market is crippling. Investors should beware: many of the supply chain software firms are built on bullishness and they should find out exactly what their companies actually do.
Journal of Commerce, 12 January
Despite the claims that supply chain management and just-in-time policies had revolutionised Marks & Spencer’s business model, it seems basic supply problems helped cause the high street giant’s recent problems. So when predicted sales increases failed to materialise, only newer orders could cancelled, leaving the older stock in place for unhappy customers.
The Times, 15 January
The Information Technology Association of America reveals that only 55 percent of US companies point to supply chain management as a key component of IT – and particularly Y2K – contingency planning. Additionally, only 44 percent would cease to trade with non-Y2K compliant suppliers and a mere 33 percent would check out their suppliers for Y2K compliance.
BusinessWire, 20 January
Supply chain management guru Martin Christopher will be speaking at the World Class Logistics Conference in Belfast in May, to be hosted by the IBEC-CBI Joint Business Council. Effective logistics – and infrastructure – is essential to competitiveness, and a properly integrated supply chain is vital.
Belfast News Letter, 26 January
HOT TOPICS IN THE PRESS
The following statistics were taken from a search conducted through Reuters Business Briefing
1. Outsourcing: 491 mentions
2. ERP: 283
3. Supply Chain: 169
4. Groupware: 52
Companies
1. Microsoft: 2,226
2. IBM: 1,273
3. SAP: 294
4. Peoplesoft: 149
5. Baan: 66.