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SMARTSOURCING: DON’T MAKE THE SAME OLD MISTAKES

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SMARTSOURCING: DON’T MAKE THE SAME OLD MISTAKES

By Andy Soanes, CTO, Bell Integration

Technology change has helped move financial IT away from the traditional, monolithic approach to outsourcing. Instead, advances such as the cloud have made smartsourcing a reality: using small, flexible contracts for discreet services to cover specific IT needs quickly and effectively, rather than providing a mass alternative to in-house IT for the banking and finance world. We’re already seeing enthusiastic adoption: for example, the Government’s G-Cloud digital services allow public sector bodies to pick and choose the services they need at any particular time.

However, smartsourcing is not a magic pill that will fix all of an enterprise’s outsourcing issues. On its own smartsourcing is simply a method of working, with all the potential to be as ineffective and inefficient as any other method an organisation might choose. Without effective management it will offer no benefit over a traditional, large-scale outsourcing project, and may even represent a step back. For instance, if outsourcing becomes a number of smaller, temporary contracts then it can be very easy to set up contracts and, worse still, forget about them. This can leave the business spending money on services it no longer needs and that the IT department has no visibility or control over.

Getting smart part one: planning

Andy Soanes

Andy Soanes

Smartsourcing is like any other IT strategy: its success will be decided long before any technology is involved. Effective smartsourcing means effective planning and preparation. To begin with, an IT department needs to know both its business’ strategic needs and the IT capabilities required to support them. This will identify any immediate black spots in an organisation’s IT set-up where smartsourcing might help. The next step for the IT department is to determine what the business’ needs will be in the future. For instance, if growth is a core part of the business strategy, it will need the IT infrastructure and services that can support it. Similarly, a short-term project might put extra demands on the department for a number of weeks or months.

Once the IT department has identified the business’ current and future needs, and how equipped it is to meet those, it can make the next crucial decision – whether IT growth will happen in-house or come from external providers. This will depend on the precise needs involved. If IT needs to support ongoing growth, then keeping expanded IT services in-house makes sense. If a short-term project will increase demands for a few weeks or months, sourcing the expertise and resources needed externally will make more sense than hiring permanent or contract workers at great expense who will be surplus to requirements when the project is finished. And if there is an immediate hole in IT capability, external services can provide an immediate fix, while the department works to expand its internal IT capabilities as a more long-term solution.

Getting smart part two: action

Assuming you have gone through the process above, and have decided that smartsourcing is the best route to take, you can then determine exactly what it is that the business needs. This might be extra skills to support an IT project or fill an existing gap; new services to support a wider business project; or infrastructure that can adapt to meet expanding and contracting demand, e.g. from seasonal changes. This gives you a detailed specification of the smartsourcing service you desire which can be used to pick the best service provider.

There is a whole other article that could be written about identifying the best possible choice and negotiating for the best deal when choosing service providers, but the three key considerations that should always be addressed are:

  • Ensuring the provider can definitely offer what they claim at the agreed price. This will involve due diligence; speaking to other customers and performing thorough background research to ensure that, once the contract is signed, there won’t be any unpleasant surprises.
  • Being aware of what control you will have over the services, skills or infrastructure that the provider adds to the business. Ultimately the buck will always stop with the IT department, so the department must ensure it has full visibility and final say over everything that is done in its name.
  • Having an exit strategy. As we know from “traditional” outsourcing, the greatest costs come when a business wants to remove itself from a failed or unprofitable deal. The IT department should always know how it can end a contract, ideally ensuring that any break can be done on its own terms and at short notice.

Smartsourcing might not automatically solve all of a business’ outsourcing woes. But if IT departments know their needs, understand what’s on offer, and choose wisely, they can become smartsourcing success stories rather than a cautionary tale for the business pages.

Business

Online retailers to accelerate growth plans to combat the COVID-19 crisis

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Online retailers to accelerate growth plans to combat the COVID-19 crisis 1

New Paysafe study reveals that despite the impact of COVID-19, businesses are still innovating to maintain plans for future growth

Three quarters (75%) of online UK businesses are experiencing a negative impact on their business due to COVID-19 and even in the long term, the number that say the pandemic will have a negative effect on them (45%) outweighs those that believe it will have a positive impact on their business (31%). That’s according to new research out today from specialist payments platform Paysafe as part of its ‘Lost in Transaction’ report series, in which 1,100 small to medium sized businesses (SMBs) globally which operate online were asked about the effects of COVID-19 on their business. 

However, despite the negative forecasting, overall more businesses remain optimistic about opportunities as a result of changes to their business model following the pandemic. 30% of businesses have seen an increase in profit margin (versus 26% which saw a decrease), 36% have seen an uptick in customers (versus 27% which saw a decline), and just over a quarter (26%) believe they are better positioned to enter new geographical markets, as opposed to 20% which say they aren’t.

Businesses have had no choice but to welcome change with over a third (36%) suggesting that COVID-19 has increased their ability to innovate. Around 84% of organisations have had to alter their operations to appeal to a broader target market with adapting digital strategies forming a core part of this. Of the businesses that made changes, 78% specifically diversified their payment offerings and as a direct result, 66% saw an increase in sales.

The importance of a seamless online checkout has been reinforced with the introduction of new consumer payment preferences. Some 37% of online brands have already integrated at least one new payment method into the checkout whereas 55% plan to introduce at least one more in the near future. With an increase in the variety of different payment methods used by consumers since the outbreak of COVID-19 — 37% of businesses have noticed an increase in the percentage of consumers using digital wallets and 20% have observed customers using crypto more often —  over half of businesses (57%) now view their payment offerings as a priority.

As with all shifts, consumers are also thinking differently about how they make payments and what they use them for. Over a quarter of businesses surveyed (32%) think consumers are using new methods to track their spending more accurately, while 27% believe consumers are re-evaluating the role technology plays in their lives. As people are becoming more familiar with digital payments, according to businesses almost a third (29%) of consumers are valuing a more seamless experience online.

Paulette Rowe, CEO, Integrated and E-commerce Solutions, Paysafe Group, comments: “The shift to online has forced retailers to take a fresh look at the checkout experience and assess whether it is user friendly as well as secure. Though many SMBs believe the future is less than positive, there is still hope, as we have seen that some of the simplest innovations can spark growth. Now that customers are more willing to use different payment methods there is an opportunity to innovate at the checkout. Creating a seamless digital experience will help eCommerce services appeal to all generations and give businesses that all-important competitive edge.”

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Online networking is crucial to the future of small business growth

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Online networking is crucial to the future of small business growth 2

By Trudy Simmons, business and clarity coach

We have all had to find a lot of new ways of being effective and efficient to continue to grow our businesses in this “new normal” we find ourselves in. As a business coach and organiser of networking events, I have watched businesses embrace some new ways of working and fight against others. Some businesses have claimed: “this won’t work” and said: “I will wait for things to get back to normal,” while others have jumped at the chance to embrace new practices in their working lives.

We must accept, we are where we are right now in this point in time, and business growth waits for no-one, so we must work with what we have, rather than waiting, wishing and wanting for what was.

It would seem that many smaller businesses have been able to adapt quickly. Across my networks, businesses have changed direction or launched new products or provided services to new markets, all while working from home, attending online meetings, speaking to clients and for some, dealing with home-schooling.

One of the ways I have seen smaller businesses change their practices, is in networking.

Networking with other businesses and potential clients is a pivotal part of having a small business. Before the pandemic lockdown, the typical networking activity would be face-to-face events or meetings. There was some networking on social media platforms, but this would tend to focus on transactional activity rather than a conversation.

However, that has completely changed and now networking includes being active in communities on many more social media platforms other than Facebook or LinkedIn as well holding events and conferences on platforms such as Zoom.

Very quickly, I changed all my in-person networking events, to being online, when lockdown took hold. Thankfully, I was already using the right software and already had an engaged audience that didn’t want to go back to feeling isolated. So, the change didn’t take much to achieve, however it took a lot to convince people that the experience of online networking would be as good.

Many were frustrated with not being able to go to a different location and many felt they would not receive the same empathy or support from people in an on-screen meeting as opposed to a face-to face meeting. This is understandable.

We have all had to make decisions in the last few months that we never thought we would need to, and this is a mental health decision, as much as a business decision.

Why do I say that?  In the networking that I arrange, we make sure to have fun whilst meeting old friends, new friends and talking about our businesses. Why is this an important part of where we are right now?  Most of us in small businesses are sat at home behind a computer working incredibly hard and it can feel isolating and like no one else understands. When you take yourself out of your comfort zone and meet new people, it is a safe environment to engage with people who want to hear from you.

The many benefits of online networking should not be ignored. Here are five reasons to shift and include online networking into your week or month.

  1. Meeting new people – in a room of people (in-person), we tend to gravitate towards people that we already know. In an online networking event you might meet people that you don’t know. This has been one of the biggest pieces of feedback that I have been hearing; that people are loving meeting people they may not have otherwise met. Networking is a chance to take yourself out of your comfort zone and meet and talk to new people in a safe environment.
  2. Business growth – time and location will often limit business owners from attending in-person networking events. There are hundreds of online networking events which will not take up as much time – you never know who will be there, or who they might know that needs your services or products. Turn up, show up and be ready to talk about what you do. This will lead to more opportunities for business growth.
  3. Mind expansion – one of the challenges of running your own business is becoming stuck in a rut or feeling directionless. This happens to us all at some point. Online networking can shift your mindset and help you to take that next step. Sometimes, it is someone else’s throw-away comment that can be just the thing that you need to hear.
  4. New relationships – building business relationships takes time, but networking allows you to start on an even playing field with other attendees and one step ahead of people who aren’t doing it. Use this starting point to build trust with new people.
  5. Why not? – With the current situation we all find ourselves in, why not give online networking a go? Businesses have very little to lose in trying it. There are so many opportunities to find a group that works for you. Take those opportunities, approach it with a growth mindset and a willingness to try something different and see what happens. As with anything, you get out what you put in – come prepared to talk and be heard.
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Reconnecting the retail brain: learning from the octopus

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Reconnecting the retail brain: learning from the octopus 3

By John Malpass, Retail Consultancy Practice Lead at Teradata

An octopus has nine brains: one for each tentacle and plus one at the centre. Each tentacle can react super-fast to local stimuli to grab opportunity, hide or defend itself and the wider body. Many of these reactions are instinctive. But the central brain is essential, monitoring and analysing information from across the organism, and taking crucial decisions that ensure survival.  It controls the whole body, makes strategic decisions, and ensures coordinated action by all the tentacles. The octopus’ seemingly miraculous speed, shape-shifting and camouflage capabilities, controlled by its central brain, are themselves a useful analogy for the future of retail.

Retailers need to adopt a similar approach leveraging enterprise-wide data and analytics not only to react fast at the edge, sensing and responding to changing customer behaviours and local market dynamics in each individual store, whilst also constantly informing strategic and future-focused decision-making.

As we’ve seen, for too many retailers brain and body have become separate, with data informing discrete projects and engagements but not used to transform entire business processes. Disconnects, friction and manual interventions in processes have all been highlighted in the current crisis, but they have been slowing things down and constraining value delivery for decades. To survive, the retailer of the future will have to become agile and able to respond to rapid and constant change. Just like the octopus, some responses will be automated; analytically enabled, managed and executed, while the central brain co-ordinates activities, thinks ahead, constantly learning and adapting to its environment.

The octopus has evolved over millions of years to develop and adapt its highly sensitive response capability. Retailers have had a few weeks to discover the benefits of a similar approach. Siloed solutions and manual processes cannot cope with the speed and scale needed to survive. As many will have experienced over the last few weeks, simply reporting what has happened can involve huge effort for little reward. Data is an asset, but it must be leveraged to deliver business advantage if it is to be valued. In later blogs I’ll demonstrate how data adds value to specific functions within retail, but for now I’ll share one example of how data can transform a process to create value on the shop floor.

In store bakeries are popular with customers, driving traffic, sales and margin and larger customer baskets. But margin can quickly disappear if too many or too few croissants are baked. One major supermarket, with over 400 in-store bakeries, found it had over 400 different ways of deciding how many items to bake during the day! To reduce waste and increase availability the retailer’s ‘central brain’ built a predictive model using data collected from across the organisation. Running the algorithm for each bakery with local, real-time data on current trading conditions automatically calculates exactly how many croissants bakers should make in each store and when to bake them.  This one algorithm has delivered over 10% in additional sales.

This is the sort of transformation that retailers must embrace – not only knowing what customers in each store want but acting on that knowledge by innovating a way to better meet their needs. Growth-orientated retailers tell us they have three strategic priorities: a hyper-personalised, frictionless  customer experience across all channels; more relevant localised and personalised Customer value propositions; and agile, cost efficient operations that respond to the demands of the modern digital economy. All demand reliable, trusted and real-time data at every point. The retailer of the future will run more than 50 million queries per day. That scale of data: every product in every store, every customer through every channel, 24/7, 365 days a year, means that automation is the only way to act at the speed needed to compete.

Automating the routine, while managing exceptions and alerts, creates time and space for more strategic analysis so retailers can switch from firefighting to scenario planning and simulation. This literal mind-shift opens the door to more strategic and forward-looking analytics and the use of big data to create new added value activities. Using data to define tomorrow’s opportunities and strategise the best next steps will build an agile business capable of responding to the demands of the modern digital market.

The global pandemic has been a harsh wake-up call for many in retail. Creaking systems, siloed and hard to reach data, and intensive manual processes have all been strained to breaking point. Those that were already set up and using enterprise-wide analytics will have fared better, but even those who have not taken the first steps should now see the urgent need to use data to transform their businesses. Luckily, evolution in retail does not need millions of years, and in the next few weeks I’ll outline how individual roles and functions can rapidly use data to change the way they do business. And you don’t need nine brains to do it.

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