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Zahid Jiwa

Written by Zahid Jiwa, VP UK&I, OutSystems

Recent research by Deloitte shows a growing reversal of the outsourcing trend. In its 2012 Global Outsourcing and Insourcing survey released in March 2013, 48% of respondents said that they had terminated an outsourcing agreement early, either for cause or convenience. While the majority of those businesses subsequently chose to move their outsourcing contract to a different service provider, 34% said they decided to bring the work back in-house. According to Deloitte, the three main drivers were to improve customer service, to gain greater control over functions that were previously outsourced, and ironically perhaps, to reduce costs.

Zahid Jiwa

Zahid Jiwa

So what has precipitated this shift?  Fifteen years ago the market was very different.  To start with, labour was in short supply and employment was high. It therefore made absolute sense to outsource and at the time it was pretty price competitive to do so.  Today’s world is very different and there are four key reasons why companies should look to in-source and take control off their IT systems, bringing this back in-house:

  • Today companies need to constantly innovate in order to remain relevant
  • Many IT services can now be automated, which reduces the requirement to outsource
  • Speed of change is phenomenal and challenging. In this environment, it is hard for outsourcers to deliver a competitive rate that keeps paces with the demands of the business
  • Achieving efficiencies and cost savings is difficult when you have an inflexible fixed cost, long-term, service level agreement

When a company outsources the main problem it faces is that the internal knowledge and understanding of its products or processes naturally fades over time. As a result companies face a loss of control.  Organisations quickly realise that they are completely reliant on the outsourcer who built their applications, own their code, and can charge a premium for any maintenance or enhancements that need to be made.  Going back to the Deloitte report, 77% of the survey respondents indicated that a key factor for insourcing was to get that control back, particularly over the strategic direction of IT. A loss of control means that many organisations lose the ability to innovate and or be productive.

As a result businesses are now much more cautious about outsourcing and with good reasons and those that do are being far more selective about what they outsource.  Many organisations are now looking to retain the people and the resources that are differentiating them in the market. This enables them to innovate and provide competitive advantage.  Enlightened organisations are looking to hold onto the ‘brain side’ of IT and only continue to outsource commodity IT. Don’t get me wrong, organisations should use external resources to fulfil their commodity IT where it makes sense.  Here using the cloud for non-mission-critical functions is a good route and a very viable option.

Although it may sound counter intuitive, cost reduction was another key factor cited by 77% of survey respondents.  Many stated that there was an increase in service delivery through scope ‘creep’ and excessive charge orders. The pace of change for organisations is now phenomenal and today technology is more complex, fast paced and challenging.  Many IT departments are therefore being hit daily with either new application requests or change requests from the business.  The cost/productivity benefits for an outsourcer to provide such services starts to become prohibitive and customers are finding that they need better economies of scale – particularly better cost and touch points around such projects.  Additionally, in an outsourcing relationship, often costs and service levels are agreed over long-term contracts, which then make it hard to retrospectively change these to fit with new business demands.

So what’s the alternative?  The good news is that technology has moved on so much that many of these processes previously outsourced can now be delivered and managed internally through automation. In fact I would go as far to say that there are many cost effective and productive alternate technologies that will deliver many of the IT programmes an organisation might have previously outsourced, at a fraction of the cost. Today smart organisations are looking to automate wherever possible and they are seeking out more effective, agile and rapid ways to develop applications and bring projects to market faster. Automating processes, services and certain technology functions negates the need for the client to buy costly man-days from an IT outsourcer.  This is where our high performance application development platform can really help by delivering web and mobile applications that are not only ‘built for change’ but create high productivity environments.

The ability to change applications quickly and easily without breaking anything is an imperative for any modern business.  As is making sure you retain knowledge of your systems and processes internally so that you don’t become hostage to any outsourced relationship.  If you lose control around this knowledge, you risk losing the ability to innovate.  As we start to move out of recession, companies that cannot innovate, will certainly hamper their growth prospects and as a result won’t steal a march on their competitors. They may even be in danger of becoming irrelevant – don’t let that happen to you – think carefully about what you need and whether automating various functions is a more cost effective and productive way to deliver what the business needs.


Subscription boom: Lockdown subscribers to boost long-term customer retention, new study reveals



Subscription boom: Lockdown subscribers to boost long-term customer retention, new study reveals 1
  • 37% British adults signed up to at least one new subscription service in lockdown
  • 3 out of 4 consumers intend to continue their subscriptions post-lockdown
  • Five key audiences identified for subscription brands

New research by independent media agency The Kite Factory and YouGov finds almost 2 in 5 (37 percent) UK consumers signed up to at least one new subscription service during lockdown (since 23rd March 2020). And the prolonged lockdown measures are driving consumer loyalty with nearly three quarters of new subscribers (72%) likely to continue. According to YouGov, consumers who are signed up to physical subscription boxes jumped from 7.9m to 8.2m (+3.3%) from Feb to Oct 2020. The largest growth was in those over 55 up 74% from 590k to 1 million. The nationally representative survey of 2,141 consumers revealed that video streaming services were most popular across all demographics with three in five consumers signing-up to a new video streaming service since lockdown.

Noticeable differences in purchasing behaviours were identified between generations with 18-24s the most likely to sign up to a music streaming service (41 percent) and 25-34s twice as likely to sign up to fitness, health and wellbeing services. Newspapers and magazines proved most popular with over 55s. Those who signed up to magazines and music streaming services were much more likely to continue subscribing than those that signed up to services such as food & drink boxes or education services such as online language schools. And pet owners who love the newfound convenience of pet food subscription services resulted in none of them (0%) saying they would be very likely to cancel in the next six months.

James Smith, Managing Director, The Kite Factory said: “These findings are hugely encouraging for brands already offering subscription services and may offer hope to those that are considering it. The second lockdown will be another huge challenge for the retail and hospitality sectors but offering a subscription service could help mitigate losses by tapping into these audiences engaging in subscription culture. Our new insight into the different subscriber attitudes will help brands looking to dip their toe into subscription services better identify how best to reach them.”

The study identified five key subscription audiences:

Tech Savvy researchers:

Consisting of late millennials and early Gen-X, 46 percent are between 25 to 44 and over index for women aged 35-44. This group see technology as a benefit to the way they live and are often early adopters of new technology services and apps.

  • 11 percent signed up to an education service in lockdown and 61 percent signed up to an online video streaming service, both possibly linked to children staying home from school.
  • 42 percent say it is very likely they will continue subscribing in the next six months.

Subscription stackers:

A younger, male audience aged 25-44, over indexing for males aged 25-34. Many are pre-family (70 percent without children) and household incomes average at around £40,000 a year. Two thirds prefer to buy things online rather than in-store and two in five are willing to pay more for luxury brands. This group are more into gaming and technology than sports. Many admit struggling to manage their personal finances and are likely to buy things on impulse. They’re comfortable living in minor debt. Many added one or two subscription services to their existing list with self-improvement on their agenda.

  • Eight percent signed up to educational and self-help services.
  • 40 percent say it is very likely they will keep subscribing over the next six months.

Subscription switchers:

A female audience living in middle income households predominantly outside of city centres. They value meaningful brands over luxury, and many signed up to several subscriptions in lockdown.

  • One in ten signed up to pet subscription products
  • 22 percent signed up to a new magazine subscription
  • This demographic is the most likely to say they will remain subscribed to their lockdown subscription for the next six months.

Financial Trackers:

The oldest demographic with 44 percent over 55 and 29 percent currently retired (although there are also a portion of full-time students that fall into this attitudinal segment). Most consider themselves financially secure and nearly all have a wary outlook on fraud – 97 percent regularly check their bank and credit card statements for suspicious activity. This group will switch brands for speed and convenience, and they are happy to pay more for good quality. They trialled food and drink boxes during lockdown and one in five signed up to a new magazine subscription.

  • The least loyal audience, six percent have already cancelled their lockdown subscription and a further five percent say it is very unlikely they will continue subscribing over the next six months.

Offer seekers:

This audience are looking for a short-term offer and will cancel any ongoing payments at full price. Made up of individuals with lower household incomes including students and low-income families, this audience is most likely to sign up to food and drink boxes such as Oddbox or Naked wines, music streaming, beauty, or grooming products. This audience signed up to the greatest number of subscriptions of all audiences and are hard to avoid for brands promoting free trials or discounts as they pride themselves on their ability to seek out offers online.

  • Two in three (68 percent said they would continue subscribing to their lockdown subscription over the next six months.
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Accurate forecasting is vital for supply chains in the COVID-19 era and beyond



Accurate forecasting is vital for supply chains in the COVID-19 era and beyond 2

By Andrew Butt, co-founder and CEO of Enable,  a modern, cloud-based software solution for B2B rebate management.

All companies have to know how to prepare for an uncertain future – from shifts in the market and consumer behavior to the possibility of reduced revenue or increased overhead, it’s often necessary to adapt to changing circumstances as quickly as possible. This is particularly true when companies are attempting to navigate the economic consequences of a once-in-a-lifetime pandemic. If a company doesn’t have robust forecasting tools, it will continually be forced to respond to new developments and crises in a reactive instead of proactive way.

Forecasting is especially important for the management of rebate contracts, which are typically negotiated on the basis of last year’s performance and expected growth. This presents a significant problem for companies that aren’t capable of accurately predicting supply and demand or how other shifts in economic conditions will affect their business. This problem is even more serious in the COVID-19 era, which has thrown existing projections about consumer spending patterns and the state of the economy into disarray.

COVID-19 has been a stark reminder that rigorous forecasting is vital for negotiating rebates, facilitating alignment between manufacturers and distributors, and planning for the future in many other ways. However, despite the existence of increasingly powerful and accessible digital forecasting resources, many companies are still relying on antiquated methods to anticipate and prepare for the future.

The forecasting status quo isn’t working for many companies

Consumer behavior drives supply chains – when distributors submit an order to manufacturers, they do so based upon predictions about what volume of products and materials they need to satisfy demand. This is why it’s striking that, according to survey data from EY, only 20 percent of consumer products companies are “confident they can rapidly align their supply chain activity with changes in demand.”

At a time when 94 percent of Fortune 1,000 companies are experiencing supply chain disruptions due to the economic consequences of COVID-19, the ability to identify which adjustments are necessary to avoid costly inefficiencies and missed opportunities is paramount. However, too many companies are trying to make predictions with a limited set of tools. They’re using simple linear extrapolations which don’t take into account seasonality and other fluctuations (much less the effects of a crisis like COVID-19); many of their forecasting efforts are manual, which means they’re subject to human error (they also use up valuable human capital); and they’re not updated with the latest industry data or other relevant information.

But all these problems are solvable. Companies have never had more access to digital platforms that can help them collect and analyze the data necessary to generate detailed forecasts and align their production and distribution processes with the market.

Why forecasting is necessary for rebate negotiations

When a merchant or other distributor purchases products from a supplier, it’s important to determine which goods will be required in which locations and quantities. Rebates are retrospective payments that help buyers and sellers align their transactions with each others’ objectives – i.e., if a buyer purchases the seller’s target quantity, the seller can provide additional rebate as a bonus. This incentivizes continued trading with a partner and ensures that neither party is wasting resources.

Andrew Butt

Andrew Butt

While this may sound like a simple concept, rebate negotiation and management can actually be quite complex. For example, some rebates are based on year-to-year revenue growth, in which certain forms of purchases are eligible and others aren’t. Other rebates are contingent on an array of other elements, such as product-specific incentives and the maintenance of certain margins, promotions, etc. In these cases, forecasting is essential to account for many different variables over time, which will allow buyers and sellers to sign agreements underpinned by accurate pricing calculations.

When rebate forecasting is systematized and data-driven, the chances of a dispute are much lower. And if a dispute does arise, there’s an audit trail that allows companies to resolve it more quickly and fairly. The ability to predict which rebate structures and pricing make the most sense doesn’t just strengthen relationships between suppliers and distributors – it increases margins and cash flow, allows companies to allocate human capital more productively, and ultimately leads to stronger and more sustainable growth.

Accurate forecasting in the COVID-19 era

As economies around the world saw massive contractions amid COVID-19, supply and demand across many industries and sectors swung wildly. An analysis from the U.S. Federal Reserve pointed out that the “massive lockdown of the economy represents a large negative demand shock” while “supply chains in a number of industries have been affected not only internationally, with international trade in general greatly reduced, but also domestically, resulting in price increases for many goods and services.”

It’s extremely difficult to negotiate and manage rebates amid this economic uncertainty, which makes it much likelier that anticipated rebate thresholds (and the attendant pricing tiers) won’t be met. This could lead to a lack of motivation from buyers, which would result in lost profits all around. For some product categories, however, the recovery will be surprisingly fast, which means sales will quickly outpace their thresholds and pricing tiers (thereby eliminating the incentive to make rebate deals in the first place).

To address these issues, suppliers and distributors should renegotiate their rebate agreements after considering several potential scenarios for the next few months (and for 2021 more broadly). This is where technology comes in – digital rebate management platforms don’t just provide the ability to compare multiple forecasts, but they also make the process of renegotiation (and adherence to the terms of a new deal) more streamlined.

COVID-19 has demonstrated how important it is for supply chains to become as data-driven and flexible as possible, and forecasting is an integral part of that process. We’ll never know exactly what the future holds, but we can come closer to predicting it than ever before.

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EU Commission sets out new intellectual property action plan affecting SEPs, patent pooling and EU design protection



EU Commission sets out new intellectual property action plan affecting SEPs, patent pooling and EU design protection 3

By Andrew White, Partner and UK & European patent attorney at intellectual property firm, Mathys & Squire

The EU Commission published a new intellectual property action plan.  The action plan, touted as “an intellectual property action plan to support the EU’s recovery and resilience” outlines possible future moves, noting that intangible assets are “the cornerstone of today’s economy”, with IPR-intensive industries generating 29.2% (63 million) of all jobs in the EU during the period 2014-2016, and contributing 45% of the total economic activity (GDP) in the EU worth €6 trillion.

The action plan also notes that the quality of patents granted in Europe is among the highest in the world, and that European innovators are frontrunners in green technologies, and leaders in specific digital technologies, such as connectivity technologies.  That being said, the action plan notes that while smart intellectual property (IP) strategies can act as a catalyst for growth, European innovators and creators often fail to grasp the benefits of IP.

The action plan indicates that the Commission is willing to take stronger measures to protect European IP, to increase IP protection amongst European SMEs and to help European companies capitalise on their inventions and creations.

Ambitiously, the action plan also notes that the EU aspires “to be a norm-setter, not a norm-taker” and is keen to seek ambitious IP chapters with high standards of protection in the context of Free Trade Agreements, to help promote a global level playing field.

Some of the key takeaways are noted below.

Unified Patent (UP)

The implementation of the Unified Patent is seen as a priority in the action plan, indicating that it will reduce fragmentation and complexity, and will reduce costs for participants, as well as bridging “the gap between the cost of patent protection in Europe when compared with the US, Japan and other countries”. The action plan also indicates that it will “foster investment in R&D and facilitate the transfer of knowledge across the Single Market”.

SEP licensing

With the introduction of 5G and beyond, the number of standard essential patents (SEPs), as well as the number of SEP holders and implementers, is increasing (for instance, there are over 95,000 unique patents and patent applications supporting 5G).  The action plan notes that many of the new players are not familiar with SEP licensing, but will need to enter into SEP arrangements, and that this is particularly challenging for smaller businesses.

One area that has garnered a lot of press attention recently relating to the licensing of SEPs, and in particular to businesses that are perhaps not as familiar with SEP licensing, is that of the automotive sector.  The action plan acknowledges this and notes that “although currently the biggest disputes seem to occur in the automotive sector, they may extend further as SEP licensing is relevant also in the health, energy, smart manufacturing, digital and electronics ecosystems.”

To this end, the Commission is considering reforms to further “clarify and improve” the framework governing the declaration, licensing and enforcement of SEPs.  This includes potentially creating an independent system of third-party essentiality checks, and follows off the back of a pilot study for essentiality assessments of Standards Essential Patents and a landscape study of potentially essential patents disclosed to ETSI also published alongside the action plan.

Modernising EU design protection

The Commission has indicated that it wants to “modernise” EU design protection “to better reflect the important role design-intensive industries play in the EU economy”.  At present, the Commission is asking for stakeholder feedback on the options for future reform. Recent results of an EU evaluation show that the current legislation works well overall and is still broadly fit for purpose. However, the evaluation has also revealed a number of shortcomings, including the fact that design protection is not yet fully “adapted to the digital age” and lacks clarity and robustness in terms of eligible subject matter, scope of rights conferred and their limitations. The Commission also considers that it further involves partly outdated or overly complicated procedures, inappropriate fee levels and fee structure, lack of coherence of the procedural rules at Union and national level, and an incomplete single market for spare parts.

Updating the SPC system

While the Commission notes that, following an evaluation, the Supplementary Protection Certificate (SPC) framework finds that the EU SPC Regulations “appear to effectively support research on new active ingredient, and thus remain largely fit for purpose”, it believes the EU SPC regime could be strengthened to reduce red tape, improve legal certainty and reduce costs for business.  One option being touted is to introduce a centralised (‘unified’) grant procedure, under which a single application would be subjected to a single examination that, if positive, would result in the granting of national SPCs for each of the Member States designated in the application. The creation of a unitary SPC, complementing the future unitary patent, is listed as another option.

Patent pooling in times of crisis

The EU Commission notes how the pandemic has highlighted the importance of effective IP rules and tools to boost innovation and secure fast deployment of critical innovations and technologies, both in Europe and across the globe, but that it sees a need to improve the tools in place to cope with crisis situations. To this end, the action plan includes proposals to introduce possible mechanisms for rapid voluntary IP pooling and better coordination if compulsory licensing is to be used.

Increasing access for SMEs to IP protection and the introduction of an “IP voucher”

Andrew White

Andrew White

The action plan notes that only 9% of EU SMEs have registered IP rights.  It aims to help SMEs better manage their IP and improve their competitiveness by giving EU SMEs easier access to information and advice on IP. Through the EU’s public funding programmes and further rolled-out at a national level, EU SMEs will get financial aid to finance so-called IP scans (comprehensive, initial, strategic and professional advice on the added value of IP for the individual SME’s business), as well as certain costs related to IP filings.

This will happen through the implementation of an “IP voucher”, which is made available in co-operation with the EUIPO, providing co-funding of up to €1,500 for:

  • IP Scans: up to 75% of the cost and/or
  • registration of trade marks and design rights in the EU and its Member States: up to 50% of the application fees.

SMEs will be able to apply as of mid-January for the IP voucher, through a dedicated website. We understand that the voucher will be provided on a “first come first served” basis.

The action plan also indicates the EU Commission’s intention to make it easier for SMEs to leverage their IP when trying to get access to finance, and that this may be done for example through the use of IP valuations.

EU toolbox against counterfeiting

The EU commission notes that counterfeiting is still a major problem for European businesses and proposes that an “EU toolbox” is set up to set out a co-ordinated European approach on counterfeiting.  The goal of this EU toolbox should be to specify principles for how rights holders, intermediaries and law enforcement authorities should act, co-operate and share data.

AI and blockchain technologies

The action plan notes that in the current digital revolution, there needs to be a reflection on how and what is to be protected – perhaps a nod to the recent litigation we have seen regarding whether an AI can be considered as an inventor.  The action plan in particular notes that questions need to be answered as to whether, and what protection should be given to, products created with the help of AI technologies.  A distinction is made between inventions and creations generated with the help of AI and the ones solely created by AI.  The action plan notes that the EU Commission’s view is that AI systems should not be treated as authors or inventors, which is the approach taken by the EPO, but that harmonisation gaps and room for improvement remain and the EU Commission has indicated that it intends to engage in stakeholder discussions in this respect.


There is much to take in from the action plan, and we will closely monitor developments in all of the above areas to see what will be implemented and when.

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