business pulse report 04sm

BUSINESS PULSE
MAY 2016
ILLUMINATING THE HEART OF THE SOUTH WEST
business pulse report 04.indd 1 15/04/2016 11:19:51

2016 | business pulse 01
We would like to take this
opportunity to thank the
panel of business owners,
CEOs and FDs who gave up
their time to respond and
give their views.
Representing a range of industries
across Bristol and the West of England,
these ambitious businesses are the
engine for much of the city and wider region’s growth.
Finally, we would like to thank Mayor George Ferguson, Colin
Skellett (former Chairman of the West of England Local Enterprise
Partnership), James Durie (Executive Director of Bristol Chamber at
Business West), Gavin Thompson (Assistant Editor (Business) Bristol
Post), and the group of business owners who helped set the agenda
for the survey.
This Steering Group demonstrates the resonance and influence that
the Business Pulse will continue to have moving forward.
Bristol’s landscape is
changing. There are cranes on
the skyline with offices, flats
and maybe soon an arena
coming up from the ground.
Businesses and buildings are
bought and sold.
Bristol, it appears, is booming.
But there are challenges too. Wider issues such as the EU
referendum and global slowdown create an uncertainty while our
transport infrastructure continues to struggle.
With your help, the Business Pulse aims to get to the heart of the
opportunities and obstacles you face.
The survey is read by the city’s leaders and key influencers. By
sharing your insight, you can help shape policy and practice to
ensure business has the right environment to make our city more
prosperous for all.
PAUL FALVEY
Tax Partner and Head of Manufacturing
BDO Bristol
GAVIN THOMPSON
Assistant Editor (Business)
Bristol post
We are pleased to present the second Business
Pulse report in conjunction with the Bristol Post
based on the results of the recent Business Pulse
survey.
The goal of the Business Pulse is to develop a strategic survey
initiative that provides a vital sounding board for ambitious, fast-
growth firms in Bristol.
Rather than a just simple statistical analysis, this survey identifies
how companies are really feeling and the obstacles that they see
obstructing their growth. It gives businesses ‘a voice’.
FOREWORD
BUSINESS PULSE SURVEY 2016
This report and accompanying case studies reflect the need for
this report to be at the heart of the Bristol and SW business
community and connected to the priorities facing them and we
are delighted to have worked in close collaboration with Bristol
Post to create this initiative.
The following pages provide a detailed summary of results
and discussions from the three key topics covered by the 2015
Business Pulse survey:
• Skills and recruitment
• Innovation and growth
• Changing nature of outsourcing

business pulse | 201602
SOUTH WEST COMPANIES PLAN
TO TAKE ON MORE STAFF IN THE
NEXT YEAR
The Office for National Statistics has confirmed
that weak construction and manufacturing figures
caused national income to expand by just 0.5%.
It would be easy to assume that companies would hardly be
optimistic about growth prospects over the coming months. Yet
three quarters of South West companies surveyed in the 2016
Business Pulse survey plan to increase the number of employees
over the next year, with none planning a reduction. This mirrors the
national picture, where unemployment levels have now reached pre-
crisis levels and wage growth remains healthy.
OVER THE NEXT YEAR, HOW
DO YOU EXPECT THE NUMBER
OF EMPLOYEES YOU HAVE TO
CHANGE?
EXPANSION AND SKILLS
Increase significantly
Increase slightly
Remain the same
Unsure
44%
26%
26%
2%

BUT COMPANIES WILL FIND IT DIFFICULT TO FILL THESE
POSITIONS
Whilst companies may be optimistic about swelling their payrolls
over the coming year, they may find it difficult to recruit the staff
they need.
The UK skills shortage is one which is gaining more and more media
coverage as the skilled workforce that gained their practical skills in
the 1960s, 1970s and 1980s rapidly approach retirement.
In order to build a robust and strong post-recession economy, it is
essential that greater balance is achieved to allow prosperity to flow
around the country. We need a ‘new economy’ that isn’t over-reliant
on London and the South East; we need a ‘new economy’ that lets
our regional economy and our workforce thrive.
Improving the skills of the UK workforce plays an important part in
that; it is a long-term challenge but must be addressed in an ever
globalising world.
The skills shortage is something which is a significant issue to local
businesses in the South West and, with companies competing for
the best talent; employee attrition is also an issue. Some 35% of
businesses surveyed claim attracting and retaining staff is a “very big
challenge” for them, whilst just 19% believe it is not an important
issue for them.
Ed Brown and Griff Holland of Friska agree, saying: “We are finding,
like many in the catering industry that there is a skill shortage,
especially skilled chefs and this is driving up wage rates.”
DO YOU FIND ATTRACTING
AND RETAINING STAFF IS
A CHALLENGE FOR YOUR
BUSINESS?
Yes a very big challenge
Yes a challenge but there
are other important
challenges
No not a great challenge
Not a challenge
35%
7%
12%
46%

TRAINING EXISTING STAFF REMAINS THE PREFERRED WAY
TO FILL THE SKILLS GAP
In a bid to fill the gap of a generation of untrained skilled staff, nearly
two-thirds of companies plan to train existing staff to meet their
requirements. Whilst this might help to meet some of the short-
term skills requirements, it will not be enough to help address the
gaping UK-wide skills gap. Furthermore, the number of companies
that plan to address their skills issues through hiring apprentices,
stands at just a third.
According to BDO’s Building a New Economy report, if England
as a whole caught up with the number of apprentices that exist
in comparable economies, an additional £4bn annually would be
contributed to UK GDP. For every 1,000 employees in England there
are just 11 apprenticeships, compared with 39 in Australia, 40 in
Germany and 43 in Switzerland.
SKILLED JOBS REMAIN THOSE WHICH ARE MOST DIFFICULT
TO FILL
Although those surveyed have stated that jobs within customer
service are the hardest to fill, it is the skilled professions which
companies are most worried about filling.
One in five companies are struggling to find skilled staff to take on
engineering positions, with the same number unable to find people
with the applicable qualifications to fill financial roles within their
companies.
With the Royal Academy of Engineering estimating the national
engineering and technician skills shortage alone will be one million
by 2020; it is little wonder that businesses are finding it difficult to
fill these roles.
WHAT EMPLOYEE SKILLS DO YOU FIND ARE IN SHORT SUPPLY
WHILE HIRING NEW STAFF?
HOW DO YOU INTEND TO ADDRESS ANY SKILL SHORTAGES YOU
HAVE?
Finance
Administration
Construction
Engineering
Logistics
None
Marketing
Customer service
0% 5% 10% 15% 20% 25%
Other
Science
IT
Semi-skilled
Attracting staff from
competitors
Working with higher education
to attract graduates
Working with schools and
colleges to attract school leavers
Apprenticeships
Up-skilling existing staff
Training unskilled new staff
0% 20% 40% 60%
Customer service
positions aside, skilled
jobs are still those
which employers
are finding the most
difficult to recruit for.
Engineers who entered
the industry in the
heyday of learning
practical skills on the
job are now nearing
retirement - without
the talent available to
fill their place.

Offering above average salaries
is only the sixth most important
incentive for employers. Training
and “soft incentives” such as
flexible working are seen as more
important for making employees
feel valued.
INCENTIVES ARE STILL NEEDED TO ATTRACT AND RETAIN
THE BEST STAFF
The continuing skills drought means that many companies are
fighting for the best talent and, in order to recruit and retain these
people, the onus again comes down to companies providing staff
with the most attractive incentives.
The majority of firms surveyed appear to be fully aware of the need
to provide incentives and, while offering the most competitive
salaries will go some way to attracting and retaining staff, businesses
are becoming increasing aware of the need to offer “soft” incentives.
Indeed, it is the “soft incentives” which local businesses appear to
be latching on to. A third of the companies surveyed admitted to
offering above average salaries to attract and retain staff, however
more emphasis was placed on incentives outside pay: half of
companies offer staff flexible working, whilst 44% provide funded
training. Financial incentive schemes were offered by 40% of
companies, with just over a third (37%) offered competitive bonus
schemes.
From these findings, it appears that South West companies
are suffering from the same recruitment tensions that are
endemic across the UK. Furthermore, given the higher proportion
of engineering companies within the region, these South West
companies are amongst those which are suffering most in the
current talent drought.
Andrea Bishop, Audit Partner and Head of BDO LLP in the South
West, agrees:
WHAT PACKAGES DO YOU OFFER TO ATTRACT AND RETAIN
STAFF?
Flexible working
Profit Share
None
Funded training
opportunities
Above average salaries
for the sector
Good pension provision
Additional employee
benefits
Other
Employee Incentive
programmes
0% 20% 40% 60%
Businesses do not yet seem to be taking apprenticeships
seriously. An increase in the number of high quality
apprenticeships on the scale needed is not going to
happen overnight. We need a long-term commitment
from both the Government and the private sector to bring
the new generation of talent into our workplaces to help
drive long-term, sustainable growth in the future.
Andrea Bishop, Audit Partner, Head of BDO LLP South West

CASE STUDY: FRISKA
LOVING WHAT WE DO, DOING IT WELL AND
THINKING IN THE RIGHT WAY.
Friska is a Healthy ‘Food on the Go’ Restaurant chain.
The first Friska
opened in Oct
2009, focusing on
providing good,
wholesome, fresh
food and good
service, primarily to
the breakfast and lunch market. The Friska idea was actually
first conceived much earlier in 1999. Co-founder Griff Holland
elaborates: “When I went on a house exchange to California I
came across loads of fresh and incredibly tasty ‘food on the go’
places and thought ‘wouldn’t it be great if we had something
like this back home.
After some time backpacking around India,Vietnam and
Thailand, which included a whole load of market research, I
decided to come back to the UK and crack on with this idea.”
Admittedly the first attempt failed before it even really started
but, as the old adage goes, every cloud has a silver lining and
after the first failure Griff bumped into Friska co-founder, Ed
Brown, at an event and they really hit it off.
At the time Ed was working on an internet start-up but soon
realised that he just wasn’t a computer guy in the technical
sense nor was he a millionaire who could employ a team to
help him.
Both had the same vision of what they thought a great
business should be all about; namely something to feel proud
of, something that people loved and something with a real
purpose over and above the financial side of things.
It must have a real social conscience, oh, and of course it had
to be a lot of fun.
Ed continues: “Within the first three years of Friska’s life we
went from working with three people, losing loads of money
and serving a few people a day, to working with over 40 people
and serving 1000’s of people a day. Now after six years we work
with a team of 70 people.”
We truly believe the region’s firms are some of the
best placed in the UK to deal with the skills crisis. There
are clearly some businesses which still need help and
guidance on how to thwart an impending recruitment
crisis, and these firms should seek advice from local bodies
such as Business West or the advisory community.
Andrea Bishop, Audit Partner, Head of BDO LLP in the South
West
The apparent lack of willingness to take on apprentices
is a real concern. It is a national problem that needs to
be tackled. However, it is encouraging to see the number
of companies in this Business Pulse survey who are
planning to work with local education establishments to
help fill the skills pipeline. This is the biggest challenge
we have and we need all businesses to take seriously the
opportunity of apprenticeships.
Colin Skellett, former chairman of the West of England Local
Enterprise Partnership
Whilst it’s encouraging to hear the positive signs on
recruitment and that many businesses are placing staff
development at the core of their company strategies, we
know that much more action is needed.
“Businesses increasingly tell us that skills is an issue
holding them back. This is set to potentially only worsen
with an economy seeking to grow and massive new
investments now taking place such as Hinkley Point
C. Businesses need to take control and drive their own
skills needs which range from engaging, recruiting and
retaining the people and skills they need. At a time of
potential devolution of budgets and responsibilities we are
pushing the Government hard to enable us to do this. We
encourage business of all types to take ownership of their
human capital needs now and into the future, and utilise
the support from organisations such as Business West and
the LEP to help them find the right solutions.
James Durie, Chief Executive of Bristol Chamber of Commerce &
Initiative (BCCI) and Business West & West of England LEP Board
member

The plan is to move Friska to Birmingham, Manchester and Leeds,
focusing mainly on the breakfast, lunch and coffee market in CBDs
(Central Business Districts).
However, Friska is finding, like many in the catering industry, that
there is a skill shortage, particularly of qualified chefs. Adding to
this, the industry is also renowned for being a difficult one in which
to retain staff. The reasons for this are that not only is catering a
physically demanding job often with long unsocial hours, but also
many catering staff can be transient and so will often change jobs,
go travelling or on to further education. These factors are driving up
wages, for example in London a good Sous Chef can earn upwards of
£50,000 pa.
Friska’s aim is to recruit and retain good staff and they consider it a
failure if a good member of staff moves to a competitor. Therefore,
Friska invests heavily in staff training. All new starters have two
weeks of training to bring them up to speed, then more training on
a matrix of skills as and when required. This means that all staff will
have been trained and are at the same level of attainment when
they start. At the moment, the majority of the kitchen training takes
place at the Victoria Street outlet with the front of house training
taking place at the Harbour side outlet.
The plan is to bring the training together more cohesively with the
recruitment of a central operations managerial resource, which will
reduce the contribution required from the individual sites.
Entry level to Friska is as a ‘Team Member’ in the kitchen. Friska
prefers to promote from within rather than recruit externally, as they
know that the individual will have the training and skills that they
need.
Whilst they would like to have succession plans, this is also not
always possible due to the transient nature of the work. It is very
hard to recruit front of house staff in the first place and therefore it is
better for the organisation to promote internally.
Friska engages with colleges, in particular City of Bristol, for training
needs.
As an ethical business, Friska is very proud to support the DEKI
partnership, a Bristol charity that funds micro loans to mainly sub
Saharan Africa (often to women).
They have a DEKI dish in each outlet every month, such as a
Vietnamese Pho, and donate 10p of every dish sold to the DEKI
partnership. In this way Friska can fund entrepreneurs and has
funded a beautician, a pharmacy and a restaurant; more than a
dozen businesses in total.
“Friska is finding, like many in the catering industry, that there is a skill shortage, especially of skilled chefs and this is driving up
wage rates.”
Griff Holand
FRISKA
friska ltd
Feel Good Food
www.friskafood.com

CASE STUDY: ALLCOOPER
A FAMILY BUSINESS SECURING ITS FUTURE
THROUGH INNOVATION AND APPRENTICES
Established by father
and sons, Gary, Gerard
and Roman Cooper
in the late eighties,
Allcooper is a growing family business specialising in security and
fire safety solutions. Striving to become the leading independent
company of its kind, Allcooper employs over 100 staff across
offices in Gloucester, Bristol, Birmingham and London. The
business looks after the needs of over 5,000 customers across
the UK and into Europe, including homeowners, SMEs, global
organisations and private clients.
Allcooper maintains a strong focus on technology and innovation,
and has invested over £1/2m on developing an unparalleled
bespoke monitoring system designed to watch over and protect
their customers’ operations. This system is called AC360 and
records all the data required to ensure that customers’ contracts
run smoothly. For example, Allcooper are responsible for the
security systems at Brighton and Sussex University Hospitals
(BSUH), where there are over 700 doors and 500 cameras to look
after.
They have recorded where all the doors are located with detailed
instructions, so if there is an issue, door locations can be quickly
found on the system. The AC360 system can also help to solve
problems in advance. For example, AC360 helped to identify
a problem with a batch of batteries from China. Various issues
arose which were recorded and the data analysis showed that the
commonality was the batteries. From this, Allcooper were able
to proactively replace all the faulty batteries before any issues
occurred for customers.
Because of this investment, Allcooper has expanded rapidly and
is able to support customers including a global entertainment
corporation with offices throughout Europe; Brighton and Sussex
University Hospitals; and the world-famous Royal Albert Hall.
roman cooper
Chief Executive

This course runs every year and is helping generate appropriately
skilled and qualified engineers, many of whom are currently
learning their trade with Allcooper and other security companies.
Roman is someone with undying appreciation for the benefits of
apprenticeships, and he has endeavoured to share these benefits for
almost three decades.
For these reasons, Roman is a highly regarded advocate for
apprenticeships in Gloucestershire. Roman says: “Employing, training
and developing apprentices has been a crucial part ofAllcooper’s
heritage since the company was founded.”
This work has been recognised, with the company receiving awards
in consecutive years from 2013 for its work with apprentices. This
included achieving the acclaimed ‘Outstanding Contribution to
Apprenticeships’ award at the 2015 Gloucestershire Apprenticeship
Awards.
Commenting on the company’s increasing customer portfolio, Chief
Executive, Roman Cooper explained: “Ever since our formation in
1987, we have embraced innovative technology and continued to
evolve our own software to answer the wide-ranging needs of our
customers.We have createdAC360 to safeguard our customers’
businesses.”This is echoed byAllcooper customer, Shaun Roberts,
Operations Manager at Gloucester Rugby Club, who says: “Every
day is different at Gloucester Rugby’s Kingsholm Stadium, so it’s
important to us that all the bases are covered, for any type of
situation.Allcooper’s complete understanding of our risks, and ability
to deliver theirAC360 solution for us across the board, really takes
the strain out of meeting our commercial fire safety obligations and
security needs.”
An underlying theme flowing throughout Allcooper since its
inception, has been the commitment to the apprenticeship scheme.
Having joined the family business as an apprentice himself, Roman
Cooper had grown increasingly frustrated at the lack of industry-
specific opportunities available to young people in the area. This
frustration prompted Roman to take things into his own hands.
The Security Systems Apprenticeship was introduced in February
2013 to give budding engineers the opportunity to become qualified
in the installation and maintenance of security systems. Roman
worked closely with the Gloucestershire College to implement this
apprenticeship, investing time and energy into helping secure the
funding and resources needed to introduce the new apprenticeship
framework.
allcooper ltd
Security and fire safety solutions
www.allcooper.com

According to the recent CBI and BDO LLP report
‘Stepping up: Fixing the funding ladder for
medium-sized businesses’, the mid-market makes a
disproportionate contribution to economic growth.
Representing just 1.8% of businesses, they generate
23% of private sector revenue and provide 16% of
total employment.
While they already punch above their weight, they have the
potential to do even more with 70% planning to grow in the
next year compared with 51% of smaller firms. It seems that
organisations in the Bristol and South West area have even more
ambitious plans to grow, with 92% of organisations taking part
in the Business Pulse Survey saying that they have invested in
improved technology or innovation processes over the last year to
18 months, with 51% investing significantly.
By far the greatest investment made has been in data and databases
with more than half (54%) of those surveyed investing in this area.
Digital technology, service innovation and process innovation were
also high with 41% of organisations surveyed investing.
DIGITAL INFRASTRUCTURE IS ESSENTIAL
According to BDO’s ‘Building a New Economy report’, digital
infrastructure is essential. High quality broadband connection is as
vital to businesses as a phone line and probably more important
than a postal service. But although Royal Mail and BT are obliged to
offer letter deliveries and phone lines to every property in the UK,
there is no such obligation for superfast broadband. Rolling this out
would encourage businesses to base themselves in new areas of the
country and link ambitious businesses based outside city centres to
new customers.
The Government has committed significant investment in superfast
broadband, however nearly a quarter of properties in the UK are
still without it. Interestingly, for every £1 the government invests in
broadband, the UK benefits by £20.
The BDO Building a New Economy report proposes two changes to
help focus that investment: firstly, the Government needs to give its
ambition for a universal service commitment for broadband teeth,
meaning that homes and businesses across the country should be
guaranteed to receive the services they need.
Secondly, the Government’s broadband connection vouchers
scheme was very successful, with more than 40,000 SMEs in towns
and cities across the UK signing up to receive grants to help them get
connected.
But there are still more businesses which would benefit from
better broadband links, especially in rural and suburban areas. As
the infrastructure needed for superfast broadband extends into
more remote areas, the Government should restart the voucher
programme, and extend eligibility to ensure that businesses outside
of cities are also well supported.
BRISTOL AND SOUTH WEST
ORGANISATIONS HAVE
AMBITIOUS PLANS TO GROW
INNOVATION AND GROWTH
IN THE LAST 1 YEAR TO 18
MONTHS HAVE YOU INVESTED
IN ANY NEW OR IMPROVED
TECHNOLOGY OR INNOVATION
PROCESSES IN YOUR BUSINESS?
Yes we have invested
significant resources
Yes we have invested
some resources
No we have not invested
7%
41% 51%

Premises
New manufacturing
methods
Data / Databases
Product
Process
innovation
Service
innovation
Supply chain
innovation
Plant and
machinery
Marketing
Digital
technology
Finance
Sustainable energy
technology
INVESTMENTS IN TECHNOLOGY AND PROCESS
IMPROVEMENTS HAVE INCREASED PROFITS AND
TURNOVER
Investments made in new technology and process improvements
have proved worthwhile for the organisations surveyed as 68%
report that this investment has increased profits and turnover.
HAS INTRODUCING NEW
TECHNOLOGY IMPROVED YOUR
BUSINESS, AND PROFITS OR
TURNOVER?
Yes
No
32%
68%
WHAT TYPES OF INVESTMENT IN IMPROVED TECHNOLOGY OR
INNOVATION HAVE YOU MADE?
0% 20% 40% 60%

The investments made in innovation and technology improvements
have resulted in efficiency improvements in the vast majority of
cases and for a third has also reduced costs.
There is welcome government backing for UK’s innovation agency,
Innovate UK, a public body, sponsored by the Department for
Business, Innovation & Skills with the Chancellor offering up to
£165m of new loans to companies (where previously grants had
been provided in certain circumstances). This should provide much
further support for business innovation, as it takes great ideas from
the drawing board through to production in the UK.
WHAT ASPECTS HAVE BEEN IMPROVED?
Small and medium-sized
businesses are the engine
room of the UK economy.
Economic growth and
enhanced productivity
can be achieved by scaling
up those businesses to
create the new jobs and
industries of tomorrow. It
is our mission to make the UK the best place in the world
to innovate. We are working towards making the UK a
centre of excellence and home for high value jobs across
all sectors of our economy.
Ruth McKernan, chief executive of the UK’s innovation agency
Turnover
Reduced costs
Efficiency
Profit
0% 20% 40% 60%

THE MAJORITY OF NEW INVESTMENTS HAVE BEEN FUNDED
BY INTERNAL FUNDS
However in the survey the vast majority of new investments have
been funded from internal funds, with over 50% funded by retained
profits and over 20% by reserves.
A much smaller number have been funded from external sources
such as banks (17%), private equity (3%) and grants (8%).
The Government continues to support companies via the R&D tax
credit and patent box regimes. The total amount of support provided
to SMEs by R&D tax credit relief was worth £800 million in 2013/14,
the latest year for which figures are available. Furthermore the
number of SMEs claiming the relief grew by 19% compared to the
previous year.
Having said that, only 16,000 of SMEs claimed R&D tax relief in
2013/14 and it is widely recognised that not all eligible companies
are making claims. In response, HMRC has introduced a new
‘advance approval’ scheme for smaller business claiming relief for
the first time in the hope that this will encourage more businesses to
do so.
Take up of the Patent Box has been slower. This is partly because
this provides tax relief on profits made, rather than cash back, so is
of less benefit to companies in the early stages of growth which are
investing heavily in innovation and new technology.
The government
has worked hard to
encourage expenditure
on R&D. For some
companies, particularly
small start-up
companies, the cash
flow that can result from
a repayable credit can make a significant difference.
Paul Falvey, Tax Partner, BDO LLP Bristol
It’s good to see that
organisations in the
Bristol and South West
area are investing in
innovation and process
improvements, but when
it comes to capital the
funding ladder remains
broken making the growth journey from small to large an
unnecessarily rough ride.
We need to do more to expand the external finance
options that can match long-term growth ambitions – we
need new sources of committed capital.
Deborah Waddell, Director, CBI South West

Its good news that the Enterprise Zone regime is to be extended and
will include Bristol Temple Quarter and Bath and Somer Valley (West
of England LEP).
This should aid businesses and encourage further private investment
in these areas. Businesses basing themselves in Enterprise Zones
can access a number of benefits such as up to 100% business rate
discount worth up to £275,000 per business over a five year period;
simplified local authority planning and Government support to
ensure that superfast broadband is rolled out throughout the zone,
and, if necessary, public funding.
With nearly 90% of the organisations surveyed intending to further
invest in improved technology and innovation over the next year to
18 months any extra support will be welcome.
HOW WAS THE INVESTMENT FUNDED?
Retained profits
Grants
Reserves
Shareholder
investment
Profit
Private equity
0% 20% 40% 60%
IN THE NEXT YEAR TO 18
MONTHS DO YOU INTEND TO
INVEST IN ANY NEW, IMPROVED
TECHNOLOGY OR INNOVATION
PROCESSES IN YOUR BUSINESS?
Yes we intend to invest
significant resources
Yes we intend to invest
some resources
No we do not intend to
invest
13%
63%
25%

THE CATALYST FOR INVESTMENT IS TO MAKE PROCESS
IMPROVEMENTS
The catalyst for these investments made by the organisations
surveyed is to make process improvements in seven out of 10 cases
and to reduce costs and to stay ahead of the competition in a half of
all cases.
Investing in innovation will help to raise productivity which is a
global challenge, as there is now a large and widening productivity
gap existing between the UK and leading advanced economies.
Narrowing this gap is a prize worth striving for. For instance,
matching the productivity of the US would raise GDP by 31 per cent,
equating to around £21,000 per annum for every household in the
UK.
WHAT WAS OR IS THE CATALYST FOR THE INVESTMENT?
To stay ahead of
competition
To address
data issues
To make process
improvements
To address process
requirements
To keep up with
competitors
To reduce costs
To invest in
sustainable energy
0% 20% 40% 80%60%

CASE STUDY: MENINGITIS RESEARCH FOUNDATION
A SUCCESSFUL CHARITY REINVENTING ITSELF
Meningitis Research Foundation
(MRF) was started in the UK
over 26 years ago in 1989 by
parents of children and others
affected by Meningitis. Now
with around 50 staff the charity
has funded vital research and
supported the development and
implementation of vaccines against several forms of meningitis and
septicaemia in the UK.
The development of these meningitis vaccines and the resultant
reduction in meningococcal disease in the UK has been a good
outcome for the charity. However, there is still a massive amount of
work to do overseas, where the problems of meningococcal disease
still exist. For example, Meningitis is a massive problem across Africa,
particularly in what is called the ‘Meningitis Belt’.
The Meningitis Research Foundation has been working in this part of
Africa for over 20 years with for example projects in Malawi; an ex
British colony with a parliamentary democracy modelled on the UK,
but the 4th poorest country in the world.
The Foundation has also funded research in the Mali, Gambia,
Burkina Fasso and Tanzania. The UK is the world leader for all types
of vaccination so Meningitis Research Foundation wants to use the
knowledge it has gained in the UK to make a difference abroad.
This has resulted in a decision to move the HQ from Thornbury
to the centre of Bristol. Bristol is very well connected with good
transport links for road, rail and air and the city is recognised as
having the biggest international charity hub outside London.
Bristol is also renowned for being a good place to live and work, and
so another reason for moving is that it should be easier to recruit
and retain staff.
And, with many other international charities based in Bristol there is
large pool of good fund raisers to draw from too.
An area of innovation for Meningitis
Research Foundation has been its
investment in the funding of the first
genome library of meningococcal disease
anywhere in the World. A genome is an
organism’s complete DNA.
Each genome contains all the information
needed to build and maintain that
organism. Meningitis is a publically
notifiable disease in the UK, so when it is diagnosed, doctors have
to send samples to a laboratory in Manchester to be identified
and stored. This has resulted in a large sample of Meningitis
genomes going back over many years.
Now, if there is any new outbreak, the genome can be identified
and any changes to it can be recognised. Bacteria are very
adaptable and so having a sample of the genome changes
over the years is not only helpful with treatment, but also can
determine what vaccines to use to protect the population.
For example there has been a recent epidemic of Meningitis in
Chile and Argentina and there are signs that these same forms of
Meningitis are on the increase in the UK.
This genome library has helped to identify the specific strains of
the bacteria causing the outbreaks and thus inform life-saving
vaccine policy .
As the new Chief Executive Vincent Smith elaborates: “I’m thrilled
to be joining MRF at such an exciting time.Vaccines are already
proving their worth in controlling some forms of meningitis and
septicaemia in the UK.
Research into new and better vaccines for wider protection in
the UK must continue to build on this success.At the same time
meningitis is still a common cause of death in some of the poorest
countries in the world.Whilst that challenge persists, so does our
work.”
meningitis research foundation
Charity for Meningitis Research
www.meningitis.org
vincent smith
Chief Executive

CASE STUDY: TORRY HARRIS BUSINESS SOLUTIONS
PROVIDING HIGH QUALITY IT SOLUTIONS TO
SOLVE A RANGE OF
BUSINESS PROBLEMS
Torry Harris Business
Solutions is a multinational provider of business, technology and
consulting services with its national UK office located in Bradley
Stoke, North Bristol. The company focuses on high-end, niche
technical skills, predominantly in Integration, SOA/API, Cloud
Integration, Mobility, Data Analytics and Digital Enablement
services.
Sujay Gupta, Director, explains “Torry Harris Business Solutions
is an organisation providing specialist IT solutions and can be
described as being similar to the analogy between a heart surgeon
and a general physician in that rather than being generalist IT
providers, we specialise in providing high quality, niche IT solutions
to solve a range of business problems”
Torry Harris specialise in IT transformation programmes for
business in 5 key areas.
The first is in integration of systems and their architecture.
This means Torry Harris help businesses to connect different
IT systems to each other, often using the Service-oriented
Architecture methodology. The assets are then made
consumable/accessible to third-parties through API-enablement.
This is often challenging owing to the inherent complexities
of legacy environments and the transformative nature of such
initiatives thereby necessitating the skills of a specialist.
The second area of focus for Torry Harris is Cloud enablement.
Torry Harris does not provide Cloud infrastructure or platforms as
such but helps organisations move to the Cloud model through
Consultancy services, migration services and SaaS enablement of
enterprise assets.
For example Torry Harris can make applications scalable to the
Cloud so that the organisation’s systems can be used everywhere
whilst still appearing local.
The third area of specialization is mobile. Torry Harris do not just
implement mobile apps, but provide an end to end rendering of
functionality through mobile as a channel. This includes readying
the back-end systems for consumption through the mobile, the
middleware needed to reduce dependencies and the architecture
required for the initiative’s analytics. Mobile applications are in
fact just another channel to market and so it is often the tinkering
with the back-end functionality and interface with the existing IT
infrastructure that is required for organisations to ensure a successful
mobile strategy.
Fourthly Torry Harris provides data analytics services enabling
organisations to have a full picture of their customers, for example
what different channels they use to buy; what mobile products they
use; where they shop, live and work – thereby giving organisations
the opportunity to gain competitive advantages through a deeper
understanding of their customers to enhance their customer’s user
experience and meet their requirements as closely as possible.
This allows an organisation to ensure all products and services
and any third party relationships are aligned with their customers’
lifestyles and choices.
Finally Torry Harris helps organisations with their digital
transformation projects, for example, helping customers to decide
what digital stacks to invest in and API enabling their back-end
systems to work effectively in an ‘as-a-platform’ model, irrespective
of the product investments they make.
This service is especially useful today given the multitude of
monetization opportunities and
business models it opens up to an
enterprise, which can be tapped with
the enterprise’s existing assets in most
scenarios.
torry harris business solutions
IT services & consulting company
www.thbs.com
sujay gupta
Director

Outsourcing has been common over the last ten
years and is now growing exponentially around the
world. The reasons are many as organisations seek
to redirect strategic internal resources, to reduce
operating and investment costs and to gain access
to much-needed talent.
In the UK, large numbers of both public and private sector
organisations are increasingly adopting an outsourcing approach,
largely for activities where there are cost advantages of doing so
or where outsourcing provides access to expertise not available in-
house.
OUTSOURCING IS POPULAR
Many organisations in the Bristol and South West area are also
outsourcing with 59% of those taking part in the Business Pulse
survey currently outsourcing a part of their business.
Kerry Hallard, CEO, National Outsourcing Association confirms
similar findings
THE GROWTH AND CHANGING
NATURE OF OUTSOURCING
OUTYSOURCING IS EVOLVING
In a recent survey of our membership, conducted as part
of the NOA’s Outsourcing in 2020 research, we found
that 70% of organisations are going to increase their
use of outsourcing - 35% plan to do so significantly.
This confirms what we already suspected: outsourcing
will become even more popular as a business practice
between now and 2020.
Kerry Hallard, CEO, National Outsourcing Association
DO YOU CURRENTLY
OUTSOURCE ANY ASPECT OF
YOUR BUSINESS?
Yes
No
41%
59%

THE LARGEST AREA OF THE BUSINESS TO BE OUTSOURCED
IS PAYROLL
Of those organisations that outsource by far the biggest area of
the business to be outsourced is payroll with over one third doing
so, closely followed by IT and manufacturing by nearly a quarter of
respondents. HR is outsourced by a further 18%. Other significant
areas of the business that are outsourced are finance (15%) and sales
and marketing (15%).
We have seen a
substantial increase in
interest in outsourcing
services over recent years
and have a large number
of clients outsourcing tax
compliance, accounting
and payroll both in
the UK and overseas. Of particular interest are centrally
managed services in overseas countries. Our growing
Bristol-based team is able to provide local expertise
in any country but with all the benefits of a UK-based
relationship and a single point of contact.
Duncan Ashman, Global Outsourcing Partner, BDO LLP
WHAT PART OF THE BUSINESS DO YOU OUTSOURCE?
Payroll
Other
Customer service
Design
Manufacturing and
production
Logistics
Finance
Sales and
marketing
Packaging
HR
IT
0% 20%10% 30% 40%

Of those who outsource nearly three quarters outsource in the UK
with 19% outsourcing to Asia and 16% to Europe.
THE MAIN REASON TO OUTSOURCE IS TO DELEGATE
FUNCTIONS TO A SPECIALIST
We might expect that the major reason to outsource would be to
reduce costs but in our survey this is not the case. Although 28% of
organisations surveyed gave cost saving as a reason to outsource,
for a greater number (41%) the reason was to delegate functions
to a specialist followed by gaining access to resources not available
internally for 34%.
The full Outsourcing in 2020 research report was recently published in the Outsourcing
Yearbook 2016 and is accessible on the NOA website (www.noa.co.uk)
WHERE DO YOU OUTSOURCE?
UK
Asia
Europe
Other
0% 60%20% 40% 80%
Traditionally, outsourcing is used to lower the cost
of business functions that are standard across many
businesses. These include HR, IT and lead generation,
where companies will use specialist companies that can
help them meet their goals, whilst lowering costs.
When it comes to digital transformation, we see
outsourcing evolving. Companies may choose to
outsource to gain the confidence and expertise to help
them discover and deploy the right tools and technologies
that will help their business to move forward. Sometimes
it’s because they want the benefit of being the first mover
and disrupting their industry. Sometimes it’s because they
realise if they don’t do it, they will fall behind. Others are
pushed to do it by the market, reluctantly.Cutting costs is traditionally seen as the prime reason
to outsource. However, BDO’s survey found that’s not
necessarily the case in the Bristol and South West area,
and this coincides with our own research.
Across the UK, we saw that a quarter of organisations that
outsource now do so primarily to improve the customer
experience they offer. Customer-centricity and great
data management are the new top priorities for most
organisations – through the use of best-of-breed service
providers, these goals become far more achievable.
Juan Pablo Luchetti, Consultancy Director, Mubaloo Limited
Kerry Hallard, CEO, National Outsourcing Association

A fifth of businesses surveyed were considering outsourcing as any
part of their business strategy over the next 12 to 18 months
Of those businesses looking at outsourcing over the next 12
to18 months the vast majority, nearly two thirds are looking at
outsourcing finance.
WHY DO YOU OUTSOURCE?
WHAT PART OF THE BUSINESS ARE YOU CONSIDERING TO
OUTSOURCE?
0% 30%10% 20% 40%
To reduce costs
To tap in and leverage
global knowledge bases
To focus on core business
To gain access to resources
not available internally
To delegate functions to a
specialist
Other
Finance
HR
Payroll
Sales and
Marketing
IT
Design
Manufacturing
and production
Other
0% 60%20% 40% 80%
ARE YOU CONSIDERING
OUTSOURCING ANY PART OF
YOUR BUSINESS OVER THE NEXT
YEAR TO 18 MONTHS?
80%
20%
Yes
No

The vast majority (88%) of those looking to outsource over the next
12 to 18 months were looking at outsourcing in the UK, with the USA
being the next most popular place being considered.
One respondent said, “We don’t deliberately select a given area; we
work on availability of key resources”.
For businesses considering outsourcing over the next 12 to 18
months reducing costs is not the main reason to do so. Delegating
functions to a specialist is the most important for nearly two thirds
of respondents followed by gaining access to resources not available
internally for 43%.
WHERE DO YOU INTEND TO OUTSOURCE? WHY ARE YOU CONSIDERING OUTSOURCING?
UK To reduce costs
Europe
USA
To focus on core
business
Asia
To gain access
to resources not
available internally
Africa
To delegate functions
to a specialist
South America
To enter new
markets
Australia /
New Zealand
Other
0% 80%20% 40% 100%60% 0% 20% 40% 60%

THE WEST OF ENGLAND GROWTH HUB
An exciting new resource for businesses in the
West of England that are thinking of outsourcing
was launched in Bristol recently. This is a new online portal offering a
one stop shop for local business support and outsourcing.
This new concept for the region, The West of England Growth
Hub, aims to revolutionise business support, creating a web-based
community linking support providers and
outsourcing organisations with SMEs.
BUSINESS PULSE STEERING COMMITTEE
l to r: Rhydian Pountney General Manager, ROW Sales Division
Renishaw, George Ferguson Mayor of Bristol, Adam Powell Director
of Skills LEP, Gavin Thompson Business Editor Bristol Post, Tony
Antonius Director BDO LLP, Cathy Hawkins BDM BDO LLP, Lynne
Tomlin Business West , James Durie Director of Bristol Chamber of
Commerce & Initiative, Mark Mason CEO MUBALOO
Many small and medium sized businesses do not have the
internal resources or expertise to manage the processes
needed to grow their business. The West of England
Growth Hub provides instant access to a network of
growth support to help our local business community
confidently expand and grow.
Sam Bell, Project Engagement Officer, West of England Growth
Hub

CASE STUDY: CAPITA ASSET SERVICES
OUTSOURCING SPECIALISTS EXPANDING IN THE
SOUTH WEST
Capita Asset Services has
the largest professional
services company
secretarial team in the
UK. It is part of Capita’s
growing Capita Asset
Services division, which
predominantly offers
financial outsourcing
services to a wide
range of institutional, corporate, financial, fund and private clients
worldwide.
Capita Asset Services employs circa 8,000 people in the UK and
internationally. The business is very much focused on integrated
professional support for the private sector, both nationally and
regionally, and already has a number of offices in the South West.
Whilst Capita can provide a “one-stop shop” fully outsourced
solution, much of the work is based around working in partnership
with existing secretariats, providing them with access to a wider,
technically competent team that is both flexible and scalable.
The main challenge to outsourcing company secretarial services
often comes from the secretariat itself. This is often borne from a
lack of understanding and a fear of being replaced. Supplementing,
rather than replacing, existing resource provides assurance to
organisations and flexibility, particularly during peak periods and
one-off projects, that would otherwise be difficult to achieve.
The company secretary’s role is frequently viewed as niche and
teams are often very small and overburdened.
jonathan dale
Senior Manager

Heavy reliance on key individuals raises concerns with senior
management and boards, whilst the inefficiencies that exist when
individuals are required to fulfil senior management roles and also
carry out basic administration can be difficult to reconcile.
Cost is always a consideration, but is not the main driver for
seeking outsourced company secretarial services, with most clients
looking to utilise flexible and skilled resource with a broad base of
experience. Working in partnership with clients, Capita’s team-based
approach also ensures that work is carried out at the right level
which can yield cost savings.
In common with many professional services providers Capita Asset
Services recognises that Bristol is an important location, and is
establishing a local company secretarial team in April 2016 which
will work alongside existing Capita teams from across its divisions.
One of the key benefits of having a company secretarial team in the
city will be the ability to tap into a strong and dynamic employment
market, establishing a centre of excellence that is able to service
clients in both the region and the country as a whole.
Jonathan Dale, Senior Manager at Capita Company Secretarial
Services, comments:”The understanding of how a technical role such
as the company secretary can be outsourced is changing, but there
is still a lack of understanding of how our offering supports existing
secretariats.
“We take a partnership approach to supporting our clients which can
include supporting in-house teams, providing business continuity,
greater depth of resource and addressing specific needs during peak
times.
The variety of experience that we are able to offer our employees
helps us to attract and retain a dynamic, motivated and highly
knowledgeable team which in turn contributes to the quality of
resource available to support our clients.”
capita asset services
Financial outsourcing services
www.capitaassetservices.com

CASE STUDY: MUBALOO AND SD SEALANTS
OUTSOURCING GAVE SD SEALANTS THE CONFIDENCE TO EXPAND
SD Sealants is a family run business, first established in 1973 in
Somerset. Since then it has steadily grown to be one of the largest,
family run sealant specialists in the UK with eight offices across
England, Scotland and Wales.
Bristol-based Mubaloo is a mobile consultancy and enterprise
app developer, which helps companies transform their business
processes through consultation, development and deployment of
mobile applications.
Mubaloo worked with SD Sealants to create a new app with the aim
of helping the organisation double in size, reduce pressure on admin
staff and improve the field force work process.
Prior to the app, SD Sealants applicators would use a transfer paper
pad with four sheets that would need be posted to the head office at
the end of each week.
The process would see documents get damaged or lost in the post,
not to mention adding to the time it takes to process orders. The SD
Sealants app, designed and developed by Mubaloo has been created
to make the operating model more efficient, helping the business to
grow.
The main purpose of the app is to allow SD Sealants applicators to
input job information on site, add photos and additional details to
job files, access payment information and deliver information back
to head office in real time.
The app enables SD Sealants to improve overhead recovery, reduce
errors and allow the company to expand its service offering,
including integrating the firm’s recently launched cosmetic repair
business.
tony webb
SD Sealants
The app
in action

Mubaloo worked with SD Sealants at every stage of the process from
defining strategy behind the app, right through to development and
deployment.
The app is now being used by SD Sealants applicators across the
UK, leading to a huge amount of improvements to both internal
intelligence but also time saving.
On average, the app has freed up an extra five hours per worker on
a weekly basis. The app has already helped the business to expand
with a 25% growth in turnover with no additional overhead to
manage this expansion required.
MUBALOO LIMITED
Mobile consultancy and
enterprise app developer
www.mubaloo.com/
SD SEALANTS
Sealants & Cosmetic Repairs
www.sdsealants.co.uk
The outsourcing of this development has significantly added value
to SD sealant and the opportunity to grow without being concerned
about additional investment in admin or processes.

NOTES

FOR MORE INFORMATION:
PAUL FALVEY
+44 (0)117 930 1635
paul.falvey@bdo.co.uk
16-0799
This publication has been carefully prepared, but it has been written in general terms and should be seen as
broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act,
or refrain from acting, upon the information contained therein without obtaining specific professional advice.
Please contact BDO LLP to discuss these matters in the context of your particular circumstances. BDO LLP, its
partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from
any action taken or not taken by anyone in reliance on the information in this publication or for any decision
based on it.
BDO LLP, a UK limited liability partnership registered in England and Wales under number OC305127,
is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent member firms. A list of members’ names is open to inspection at
our registered office, 55 Baker Street, London W1U 7EU. BDO LLP is authorised and regulated by the Financial
Conduct Authority to conduct investment business.
BDO is the brand name of the BDO network and for each of the BDO Member Firms.
BDO Northern Ireland, a partnership formed in and under the laws of Northern Ireland, is licensed to operate
within the international BDO network of independent member firms.
© April 2016 BDO LLP. All rights reserved.
www.bdo.co.uk

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