Outsource the source code? Robert Gordon considers it

By Hannah Fearn

Staff dismay as consultancy recommends farming out entire IT department. Hannah Fearn reports

A university is considering outsourcing its IT provision in what would be one of the first examples of a British institution farming out an entire department to an external provider.
The move at Robert Gordon University has left staff fearing for their jobs and unions concerned about the future of its academic services.
A briefing note distributed to staff says IT consultancy HHES had been enlisted to consider the future of the department, in light of developments such as cloud computing changing the demand for its services.
"The outcome of this process has been a recommendation that the IT provision of the university, currently delivered by staff providing IT services and related technical functions to the university, be moved to an outsourced arrangement," it says.
Staff are told that the recommendation would allow "capacity for step change and economies of scale". It would also reduce risk for the university, the briefing suggests, as the external provider would be obliged to deal with any unexpected problems and give the institution "increased certainty of delivering objectives".
An academic close to the process said the announcement had been "very demoralising", with many of Robert Gordon's IT staff already looking for jobs elsewhere.

Concerns about redundancies appear not to have been assuaged by the briefing's assurances that the affected staff would be considered for transfer to the chosen external provider through the Transfer of Undertakings (Protection of Employment) regulations.
In a letter to Lydia Ross, head of human resources at Robert Gordon, Julie Yackiminie, the university's Unison convenor, says: "We have not been party to or been made aware of the scope, nature or potential outcome of this review...We consider the process to be flawed and believe (it) should be halted."
Colin Jones, lead web and applications developer at the university and a Unison representative, said: "We've all heard horror stories about outsourcing. It's a complete unknown, really. Until the tendering process and the consultation, we won't know what partner we are going to select and how it intends to deliver the service."
After the consultation and tendering process, it will take a further 12 months to select an external provider if the plan goes ahead.
Andrew McCreath, executive director (information technology and communication) at Robert Gordon, said: "No final decision has been taken at this stage, and the university will ultimately pursue whatever option is judged to best support its future ambitions and deliver long-term value for money.
"We understand that staff may feel some uncertainty at this time and we are sympathetic to this. We have briefed staff who may be affected and will be consulting with Unison as the process progresses."
hannah.fearn@tsleducation.com.

Six pioneer shared services for savings

12 May 2011

By John Morgan THES

Unions warn that complex contracts with private firms will lead to job losses, writes John Morgan

Centralised activity: combining administrative and IT functions across institutions is expected to cut costs


The University of Warwick is among six universities set to share some administrative services following repeated government calls for the sector to implement such schemes.
However, unions responded to the move with a warning that a trend towards shared services would give private firms influence over the sector, create complex contracts that fail to deliver the expected savings and lead to job losses.
Warwick said it is in advanced talks with five unnamed universities - yet to publicly announce their involvement - about sharing "a number of university administrative services and IT infrastructures". It aims to reinvest savings in teaching and research.
In the future, the group "will be expanded further to cover shared systems with other interested UK universities", a Warwick spokesman said.
The project is expected to be launched this summer by bringing together student record systems and associated registry services. The universities will work with Tribal, a provider of outsourcing services.
Declaring that the university was "not expecting any significant job losses" from the scheme, Warwick's spokesman added that savings might lead to "employing more people to deliver the student experience".
Jon Baldwin, Warwick's registrar, said: "We aim to bring together a forward-thinking group of universities who want to continue to be exemplars of best practice in university administration and also want to find ways to open up new resources to invest in the student experience and research capacity.

"We believe that the best way of achieving both those objectives is through shared services where we can learn from and support each other rather than simply individually outsourcing our needs."
David Willetts, the universities and science minister, has called for "back-office" services to be pooled because "too many universities try to do too much in-house".
But Denise Bertuchi, assistant national education officer for Unison, said shared services were "not a panacea for the funding crisis in higher education. In fact, they could add to it."
She said the union's experience in the public sector had shown that shared services created complex contracts with the private sector and hindered quality control.
To "anticipate major savings by going down the shared services route is wildly over-optimistic", Ms Bertuchi argued.
"Universities like their autonomy; they like their control," she added. "If you are going to start sharing services, you are going to get these big private organisations that will have more influence over the sector." She said the arrangements "lead to job losses".
Mike Robinson, national education officer for Unite, said shared services were a form of "creeping privatisation", with staff not guaranteed to be working for the core employer.
He added that the arrangements led to public organisations losing control of strategy and costs.
john.morgan@tsleducation.com.

Shared IT provision promises major savings

Universities will be able to save large sums on their IT provision after an investment of £12.5 million in “cloud computing” by the Higher Education Funding Council for England.

The money will be spent on two schemes managed by the Joint Information Systems Committee to improve the use of digital technology within higher education.
Cloud computing allows users to access a server or application remotely, meaning that universities will be able to share services rather than individual institutions each having to invest in the technology.
It is already a popular tool for managing student email systems, but universities have yet to make major savings from the technology for other IT needs.
£10 million will be spent on shared infrastructure to create virtual servers, storage and data management for universities. The project will include the creation of a “broker” for the procurement of shared services, which is open to both universities and their commercial suppliers.

A further £2.5 million will be spent on establishing cloud computing services for teaching, learning and research. This will include new technology to help manage research projects from before the allocation of funding through to completion.
David Sweeney, director of research, innovation and skills at Hefce, said: “At a time of pressure on university resources, it is critical that technology is used in a collaborative and cost-effective way, to deliver services that will benefit the sector.
“Cloud computing has the potential to do this in ways that will serve the academic community leading to improvements in research, teaching and administration.”
hannah.fearn@tsleducation.com

Jisc Virtual infrastructure with database as a service Award winner:

•  Paul Jeffreys et al
• Institution: University of Oxford
• Value: £1,200,000
This groundbreaking project will provide a local virtual infrastructure (VI) that will interface with a national higher education VI - or "cloud" - to enable the sharing of services across the sector and save money through economies of scale. The VI will host a self-service "database as a service" (DaaS) system that will give researchers a way of creating, configuring, editing and querying databases through a simple, flexible and intuitive web interface. Its creation will help to improve the efficiency of UK research. User support materials, courses and documentation will be developed in close collaboration with the Digital Curation Centre

Outsourcing Industry Almost as Big as Finance, According to Research

Tuesday, May 03, 2011

Britain’s outsourcing industry is now almost as big as the financial services sector, generating more than £200 billion a year, according to new research by Oxford economics released today. The industry accounts for 8 per cent of the UK’s total economic output.
The report, commissioned by the Business Services Association, encompasses services including information technology and data services, which is the largest contributor to Britain’s annual output. This line of business currently employs 340,000 people and makes a net contribution to the economy of £24.7 billion.
The outsourcing industry is also a huge contributor to the Governments coffers, paying £35 billion a year in taxes – equal to 12 per cent of the total take from business and personal taxes. The outsourcing sector is now the second-biggest employer, behind retailing, accounting for 3.1 million jobs, equivalent to 10 per cent of the British workforce.
Bindi Bhullar, director of global IT services provider HCL Technologies, said:
“Successful outsourcing projects have previously been seen so as the elephant in the room. Until now, there has been a reluctance to openly discuss the core benefits outsourcing brings to the UK economy. t is great to finally see credible research highlighting the significance of IT and IT-related BPO into context. The industry has clearly come a long way since the Y2K projects of the 1990s. This report shows how IT outsourcing has fully developed into a mature market.
“Thanks to this maturity, organisations now have access to new talent, advanced technologies that can deliver additional benefits, and most notably, faster time to market for new applications and upgrades alike.”
The research comes as welcome news to the outsourcing industry, which has been in the spotlight recently as a result of the governments drive to cut costs and reshape public services.

'Cloud' Centric approach to BPO Delivery

The National Outsourcing Association would like to invite you to our monthly seminar on'Cloud' Centric approach to BPO Delivery

Date: Tuesday 24th May 2011 Time: 8.30am - 11am 'Business Process Utilities' This seminar will focus on the future aspects of BPO and Siemens' IT Solutions and Services views on how delivery engagements will evolve, particularly in the light of the emergence of enabling Cloud technologies. We will also explore the importance of focusing on business values and needs to drive effective process transformation rather than adopting generic technology approaches to bring efficiency to existing processes. We will consider how traditional Outsourcing approaches constrained by long term contracts and costly transition might make way for more innovative and flexible utility services. By following a more 'Cloud' centric approach to BPO delivery, offering elasticity of provision within a shared, best of breed delivery model, businesses can reduce delivery capacity risk and improve process value. This combined with low cost of entry and flexible contract terms creates a new paradigm for BPO services. Moving towards a 'pay as you go' model is highly attractive where demand predictability is uncertain and capital expenditure is constrained. Traditional BPO methods will no doubt remain for some time but managing the business transformation journey to Service Orientated delivery is as important for Business Processes as it is for core IT Infrastructure. The meeting will be chaired by Adrian Quayle of the NOA and speakers to include John Hall, Head of Innovation, Portfolio & Partners from Siemens IT Solutions and Services and a representative from Hogan Lovells and TPI. Full agenda and speakers to be confirmed shortly

RSVP To register, please contact Stephanie Hamilton on stephanieh@noa.co.uk  or 0207 292 8686 NOA members and users of outsourcing services can attend free of charge Date Tuesday 24th May 2011   Location Hogan Lovells Offices Atlantic House 50 Holborn Viaduct London EC1A 2FG Sponsored by SIEMANS

Accenture and The Hackett Group Support US Universities’ Drive to Lower Costs

Wednesday, April 20, 2011

Accenture and The Hackett Group Supporting Universities’ Drive To Lower Costs and Boost Efficiency of Administrative Functions
Accenture and The Hackett Group has announced that they are working together to support the efforts of U.S. universities to reduce administrative costs and improve efficiency in response to ongoing financial and operational pressures.  Recent joint work has included the following projects at:
•The Inter-University Council of Ohio (IUC) – The Institutional Excellence and Shared Services Assessment evaluates the functions of finance, human resources, IT, and procurement to identify opportunities to lower delivery costs, increase service effectiveness and lower operating risk.  The project provides a collective assessment for the IUC and individual assessments for each of the IUC’s 14 member universities.
•Indiana University (IU) – A benchmarking assessment covers human resources, payroll, marketing and student services functions across the seven campuses in the IU system.  An analysis of the physical plant’s financial operations at the Bloomington campus also has been conducted.  Strategic recommendations have been developed to support IU efforts to increase operational efficiencies in response to budget pressures.
•Miami University – The Strategic Analysis of Support Services project will lead to a multi-year strategy to enable the university to increase organizational efficiency and achieve cost reductions in administrative and other support services without jeopardizing service levels essential to its mission and strategic goals.
•The University of Massachusetts – An assessment and benchmarking covering the procurement and accounts payable functions across the university’s five campuses provides recommendations for sustainable cost savings opportunities, improvements to purchasing tools and approaches to leverage the collective purchasing power of five campuses.
“Universities are under the same tough circumstances as most state and local governments, namely a widening gap between stagnant or slow-growing revenues alongside fast-growing expenditures needed to deliver core services,” said Dan London, North American managing director for Accenture’s Health & Public Service operating group.  “Drawing on approaches that have proven widely successful in helping businesses streamline and become more efficient, educational institutions and systems have tremendous opportunities to make better use of scarce budget resources.”
According to The Hackett Group Global Benchmark Practice Leader Anthony Snowball, “The operational challenges universities face today are similar to those in the corporate world. Institutions must pay employees, manage suppliers, sustain complex IT infrastructure, and resolve issues around redundancy, standardization, and disparate technology platforms.
“These universities are to be commended for their commitment to excellence,” said Mr. Snowball.  “They understand that they need to consider all options in improving the efficiency and effectiveness of their business operations enabling them to better direct their resources toward their core missions of educating students and performing leading edge research.”