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Using skills to respond to the external environment

ENVIRONMENT

Introduction For example, Logica has provided:

• the automated ticketing system for London Underground
Businesses do not operate in isolation. They are constantly faced • the outsourcing of IT and technical applications for Taylor
with internal and external factors that impact on the dynamics of Wimpey, the UK house building business
their operations. Monitoring the external environment is vital to • business applications for the Ministry of Justice’s Courts,
identify changes that could affect the business operations. Being Tribunals and offices
able to address and adapt to these changes ensures the longer • the design of electronic security services for the UK’s
term survival of the business. Department of Defence
• the system for generating Premium Bonds (ERNIE).
Logica is an innovative IT services organisation that brings people,
business and technologies together. Logica employs more than Logica therefore requires highly skilled employees who are able to
41,000 people and has clients around the world in a variety of adapt and deal with a range of challenges. The work of Logica is not
industries including automotive, oil and gas and manufacturing. just about developing technology. It is about getting business benefits
Logica’s services aim to add value for clients through, for example, from the technology available. It is also about enabling clients to
improving efficiency and productivity or reducing waste. reduce environmental impacts. Logica’s experts increasingly provide
sustainable and long-term solutions for its customers. For example, it
works with governments and automotive companies to develop and
promote sustainable methods of transport.

Political
influences

This case study illustrates how Logica monitors its external

environment using PEST analysis. This is a structured business
Technological Economic
tool that looks at the political, economic, social and technological influences Business influences
influences affecting a business. By auditing and monitoring these
influences, Logica can be proactive in ensuring it remains
competitive by adapting its own business and by generating
innovative and unique solutions for its clients.
Social
influences
For businesses to stay ahead of their competitors, they have to
deliver innovative products and services. Logica works with
customers to aid business development.

Curriculum topics covered: • Political factors • Economic factors

• Social factors • Technological factors
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Also, in 2007 Logica launched a three-year sponsored degree

programme with the University of Winchester. The degree
programmes BA (Hons) Business Management and BA (Hons)
Business Management with IT attract applications from students
throughout the UK. These degrees allow students to combine
academic study with on-the-job learning. Students spend one day
a week studying on campus and four days a week working at
Logica. Logica pays the course fees as well as offering students
an attractive salary from day one. Upon graduation they can
further develop their professional career within Logica.

As part of its sustainable focus, Logica has also responded

quickly to government initiatives on climate change and reducing
emissions. For example, it has been involved in the government’s
new Cycle Hire Scheme in London. It secured the contract for the
major IT components with Serco, the contractor responsible for
Political factors designing, building and operating the system. Logica’s role is
central and focuses on the design and build of the simple-to-use
Business decisions may be influenced by political factors. For
payment system. This is supported by a back office function.
example, recent public sector budget cuts by the UK government
and increased university fees are affecting the education sector.
Economic factors
For students this has meant making key decisions about how they
intend to pursue their careers. This in turn has meant that Economic factors change rapidly and are sometimes difficult to
academic providers need to review how they will meet the predict. The global economic recession has affected how most
challenges of generating income. firms conduct business, perhaps by looking for cost-savings or
reducing waste. As businesses focus on areas where efficiencies
Logica identified that these changes in the educational landscape can be made, some might choose to outsource functions to
could have an impact on the number of potential employees with reduce costs, rather than employing people with specialist skills.
the skills and competencies that it requires. For example, it had to This has created increased demand for outsourced services such
consider the affordability of higher education for students and how as those Logica offers. Logica’s employees have the specialist IT
this could influence long-term development opportunities within skills required to offer businesses of all types efficient and effective
the company. The increasing cost of becoming a student may ways to manage systems and processes.
restrict the social mobility of talented individuals and they may
then need to consider alternative routes to gaining qualifications
and experience.

Logica has therefore reviewed its workforce planning. It has now

engaged in strategies to ensure it has enough workers with the
right skills both now and in the future. To address the changes in
the educational landscape, Logica has introduced apprenticeships
and enhanced its graduate scheme. Logica has embraced the
strategy of direct training as it provides the company with a new
pool of talent, with the focus on individuals who have decided to
specialise in IT or Computer Science. This is why Logica has
embarked on creating Level 3 Apprenticeships in 2012. This
widens the range of talented young people that Logica needs and
supports the organisation’s long-term commitment to career
development of its employees.

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The make-up of society is also changing. The UK has an older

and more diverse society with people from many different
backgrounds and cultures. A diverse workforce brings together
people with different skills and competencies. Diversity is therefore
a focus of Logica’s HR strategy. Logica competes with many other
firms for a limited pool of highly talented individuals with good IT
and numerical skills. To increase this pool of talent, Logica aims to
increase the number of females in its workforce. Within the IT
industry, females only account for an average of 16% of the
graduates in Computer Science/IT.

Logica understands that increasing the number of females in its

workforce will bring different strengths. Logica has been heavily
Logica was selected by BAE Systems, the global defence and involved in driving equality within the workplace. It has supported
security company, to provide a Human Resources outsourcing the Women’s Empowerment Principles (WEPs). This is a
service for its employees within the UK. Logica works with BAE partnership initiative of the United Nations. It has joined 267
to increase the effectiveness of its systems and to enhance the nations across the world in order to improve gender equality. This
efficiency of its operations. This improves how BAE engages with has helped to empower women within the workplace and the
its employees to maximise their potential. This also helps BAE community. To do this they have created a Women’s Mentoring
to reduce its costs and focus on growth. Programme aimed at supporting women in their career
development. This will ensure that more women rise through the
The recession in the UK has also heightened the need for the ranks into positions of senior management.
government to cut spending. One example of this is the
government’s commitment to achieving savings through the better Another way that Logica is addressing this issue is by supporting
use of its technologies. As a result Logica has been awarded a IT clubs in local schools near Logica’s offices across the UK.
10-year outsourcing contract with the Serious Organised Crime These clubs promote the importance of IT and demonstrate the
Agency. During this contract Logica will manage the Agency’s variety of exciting career opportunities available within the industry,
information and communication technologies and related services. particularly for young women.
This creates efficiencies by bringing together data centres and
networks, whilst helping the Agency to exploit intelligence and By offering a range of different routes into the business and
case management more effectively through an integrated system. making education more affordable, Logica is able to provide an
exciting and desirable option for career development.
Similarly, Logica’s services have helped Transport Scotland to put
together the largest ticketing scheme in the world. This has
involved the installation of new electronic ticket machines on 7,000
buses and 200 bus operator sites. The system processes over
12 million journeys every month and delivers cost-savings in terms
of employee time.

Social factors
Social factors reflect the constant change in society’s interests,
beliefs and actions. There are now different working patterns
available which allow men and women to balance work and life
commitments better. New technology is driving faster and more
integrated forms of communication - 25 years ago the mobile
phone was just an evolving concept; the personal computer and
internet were just starting to make an impact.

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www.logica.co.uk

Logica’s technology supports its clients in many ways but to do

this it needs to be able to offer a dynamic and innovative working
environment for its highly skilled employees from diverse
backgrounds. Logica’s people are key to the technologies that it
provides, as employees need to have both the IT skills and an
innovative mindset. As an example, graduates within the business
may be involved in any part of the organisation, from business
consultancy, systems design and development and
implementation, to testing the support of new technologies,
training or applications management.

Conclusion

Technological factors The external environment in which businesses operate changes

very quickly. Political, economic, social and technological changes
The speed of technological advances means that existing electronic all put pressure on organisations. Logica is a global business that
equipment, IT processes and systems will quickly become dated. To provides innovative solutions in data and systems management for
remain competitive a business must ensure that its processes and its clients, helping their organisations to respond to external
systems support innovation and creativity for itself and its factors. The nature of the work that Logica can offer an employee
customers. Logica has embraced recent advances in technology to is both challenging and stimulating.
offer its clients the most advanced and sustainable services
possible. An example of this is the use of ‘cloud’ technology. Cloud By monitoring and auditing its own external environment, Logica
technology allows companies to access and buy into data storage has also been able to adapt its business to maximise efficiency
or software ‘on demand’ through the internet. It enables companies and exploit opportunities. This has been done through adjusting
to access a shared infrastructure. This eliminates the need for firms its service offering to utilise advancements in technology and drive
to buy software for every staff member or support a server to store improvements to IT services for clients.
company data and pay for staff to maintain it. This in turn reduces
waste in terms of both time and money and can help a business to In addition, Logica has been proactive in dealing with the political
become more competitive by unlocking capital. This capital can and social influences that have affected the educational landscape.
then be invested in other areas. It now offers a variety of entry routes into the business, such as
apprenticeships, sponsored degrees and graduate programmes.
Logica has also worked with the UK police force to develop the The business has created long-term career development
Police National Database. This is the most secure national police opportunities for young people. Logica is also actively addressing
system developed to date and only authorised and vetted users the shortage of females within IT. 28% of its recent intake of
will have access to the system. It will make a big difference to graduates were female. This is a significant improvement on the
policing in the UK as all police forces will now have easy access to industry average of just 16%. Logica hopes to increase this further
key information from forces around the country. The system will through its IT clubs in schools, which further promote the exciting
make a real difference in protecting people in society. and varied career opportunities available within the industry.

Technology can also help businesses to meet the issues of

1. Describe the four elements of a PEST analysis. (2 marks)
sustainability. Sustainability is now a high priority and businesses
Exam-style questions

2. Give four examples of other external factors not featured

are keen to reduce waste and be more energy-efficient. Using
in the case study. (4 marks)
more efficient IT systems can help reduce waste, recycle more or
3. Analyse how social influences have changed the
cut carbon emissions. For example Logica has created innovative
attitudes and approaches of employers towards
software for Ford which monitors vehicle emissions. If drivers
employees. (6 marks)
behave in an environmentally efficient way, they may benefit from
4. Evaluate how the external environment influences the
fuel discounts. Systems like this help businesses save money
decisions that businesses make. (8 marks)
through reduced fuel consumption whilst also reducing emissions.

Logica | Using skills to respond to the external environment