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The Staff reductions in Capita started in the last 2 quarters in 2023 and continued in the first quarter in 2024. The main reductions are in 2024. This means that the real benefits will apply in 2024. As JL stated figures are as expected I think that Capita will deliver what they promised, with an increase in margin to apply in 2024! The cyber incident was sorted as promised and further attacks on other organisations showed that Capita did a decent job. The Capita share price has been controlled by the village clowns but this is likely to change. My expectations are steady progress with better communications. I expect some changes as Adolfo brings in his own team. Hopefully a small Divi at the end of 2024 based on increased margin!
Its been a very long wait!
History. The Chancellor of the Exchequer George Osborne announced what he termed the "National Living Wage" at the end of his budget speech on 8 July 2015, a new national minimum wage rate only for people over the age of 25. The National Living Wage is implemented via an amendment to National Minimum Wage Act 1998.
There are several large projects where upgrades have been delayed by covid. These have already been costed, it does not matter which Party wins! Savings and improved services is a must. Labours record on technology deployments is not good , think NHS!!!
Who ever gets in needs to save money as there is no scope to raises taxes! With Brexit the number of Civil service staff levels increased. Private industry is already cutting headcount the UK Gov has to follow!
The writing is on the wall!
DYOR the countdown has already started!
Will it be bumpy on the way. Yip , is it easy No!
But when you are in the basement your exit point has to be upwards!
Part of the problem is when the living wage is introduced into fixed priced contracts! The rest of the staff suffer as contact increases are limited. Something has to give. Body shopping only gives a limited return. Larger profits are generated by using automation!
Capita is exiting services where competition is tough and low margin, that also makes sense. The government needs to reduce the size of the state and become more efficient hence automation.
DYOR its all there!
In fairness Capita set aside a certain percentage for payrises each year. This included the real living wage. Those on the real wage got payrises of around 10% whilst the majority of staff got pay-rises of around 1-2%. As you can imagine the majority of staff have had virtually no payrise in the last 5 years. It simply was not sustainable another one of Jons bright ideas!
Lets all be happy he has gone!
I would say he has a lot of ground to cover between now and March. Some of the changes already have been positive. I dont think anything he would say would make a difference to the market clowns.
Time to watch and wait!
Capita always pays minimum redundancy terms except for those on TUPE. So redundancy layoffs will be at the minimum cost to the business. Staff in Capita have not had a proper pay rise in at least 5 years except those on minimum wage!
Biggest savings will be made by undoing the JL management team and replacing them by people who know what they are doing, plus finally having a board that can make the right decisions.
You may have noticed the new partnership between Vodafone and Microsoft. See attached link which shows the new partnership between Vodafone and Capita (DCC)
This now links Microsoft, Capita and Vodafone together working on AI and IoT.
Technology such as 4G/5G/ LoRA WAN
The potential for this is huge
Starting to see the upswing? You will soon!
AI is a mixture of toolsets with-advanced decision making process. Capita and Microsoft are two sides of the same coin. Between them they make the solution. I covered this before in an earlier post. You need extensive datasets to make AI efficient.
Once you understand this you understand why the relationship is so powerful!
Been through this so many times; it depends what is in the contract. With so many customers wanting things that are not in the contract. With outsourcing if it is not in the contract it costs extra. If you run your own service it still costs extra.
There are always genuine reasons to insource, just plan it properly. There is no guarantee that your staff will want to come back to you. What will you do then?
Agree it is difficult to take staff back in house. Staff will leave if they are forced. The best way to insource is slowly taking parts of the service back piece by piece. This is also expensive and in the short term will not save money. However what happens in 5 years time when things change again!
This conversation is going round in circles is it not?
The assumption is that AI is easy to deploy and that processes can be easily modified to suit business requirements. Good luck with that one. Your argument shows a lack of experience in this area. Thats exactly the problem that Oracle faced with Birmingham. Its a common theme around IT failures.
Process, automation, and large scale deployment how many staff within council IT staff have this experience. Simply if you have this experience why would you be working for the council in the first place.
There will always be room for both options on outsourcing, it is a two way street. However it is a process that requires patience and a workable plan. The view that huge sums of money can be saved is misleading it actually depends on requirements. The number of councils that have failed is increasing. Its not about saving money its all about power in the council. If you look at the maths in Birmingham the costs involved show that saving money was going to be a very hard ask.
As always the reason for change must be based on modernisation, service improvement and cost savings.
After a long history working in IT. IT can and should make a difference when it is done right!
The focus should always be the end customer.
IMHO of course!
There is a bigger story than that. Birmingham migrated from a successful outsourced solution, and went in house. The Oracle solution as you say was a disaster.
Birmingham City Council (BCC) sank £46.5 million ($58 million) into a “disastrous” attempt to implement Oracle’s financial reporting system.
The BCC intended to replace SAP with Oracle’s Fusion Cloud ERP (Enterprise Resource Planning) system.
There are other examples
IMHO very few public sector orgs have the skills to manage such a large project. They are complex and the risk factor is very high. As this is a public forum one needs to be careful in expressing opinions, being right does not always protect you.
Do your own research! It is there if you look for it!
Customers who decide to go it alone and use AI. There are several large councils that tried DIY and are now bankrupt!
Easier said than done. I also remember one large NHS trust tried that and also ended up in trouble.
It takes a long time to design and plan a solution. These skills are hard to find and very expensive to deploy.
Best to find a good supplier and detail your problems vs solution in the contract!
But this is just common sense imho!
AI is about automation, that is what outsourcing is all about. AI is just a different set of toolsets. Its the decision making process and access to data that makes the difference. Thats why Microsoft has teamed up with Capita. Microsoft have the toolsets whilst Capita have access to the data.
We are in an area of huge technology changes, Networks, automation etc.
The government needs to save money and automation is one way to reduce costs. The underperformance of Government services, strike action and civil service pensions. The perfect storm. Something has to give.
Does not matter which party wins, automation is the only way forward.
When you are sitting at the poker table with a winning hand ( Technology, understanding process, access to the data, political connections, the right business partner).
Then you understand the true potential!
IMO of course!
The change in Capita leadership takes place next week. Jon has sold if the family silver, and the remaining business units will form the foundations of the new Capita. Its been a revolving door for Certain Capita management as they exit the business. Adolfo will bring in his own team. I don't expect a full announcement until March but I do expect a drip feed of announcements between then. As the business units start to morph then staff reductions will start with new hires to build the new teams. The change from ugly duckling to a beautiful Swan will commence. The opportunities for new contracts in the UK is good based on the reduction in the number of Gov UK employees.
It does not matter if the Gov is red or blue changes are coming!