Investigating Outsourcing

October 28, 2013  3:50 PM

What compensation do you pay a subpostmaster that has been in jail as a result of computer error?

KarlFl40 Profile: KarlFl40

I have been following the story of sub-postmasters being charged with false accounting. I took over the story after a former Computer Weekly colleague originally picked the story up.

It involved sub-postmasters for the Post Office claiming they have been falsely accused of cooking the books. But many blame the Horizon Accounting system, which was developed by ICL/Fujitsu Services, for the problems. The latest article is here, and it appears there is light at the end of the tunnel for getting on 100 subpostmasters.

Recently lots of other media organisations have picked up on the story. And I am not surprised as it is a shocking tale of an allegedly faulty IT system or perhaps the processes that surround it leading to sub-postmasters being imprisoned or having to make up accounting shortfalls. Lives have been ruined and homes lost but a group of individuals, supported by the press and later MPs finally have an end in sight.

Following years of campaigning and later pressure from MPs, the Post Office agreed to investigate claims that the system was at fault. The Post office had always maintained that the system could not be wrong. But after a closer look it changed its stance and acknowledged there could be problems related to the Horizon system used by thousands of sub-postmasters.

If it is proved that some of these individuals were at no fault for the accounting errors there could be large compensation pay-outs. I spoke to Conservative MP for North East Hampshire James Arbuthnot, who chairs a group of MPs trying to encourage the Post Office to get to the bottom of the case. He praised the Post Office for agreeing to get to the bottom  of this despite the fact that for years it had taken the stance that the computer system was not at fault.

But interestingly many people I speak to believe the Post Office want to sort this out now to leave the door open to privatization. Royal Mail has just done it and the Post Office could be next.

The last thing the Post Office will want if it is privatized is the threat of large compensation pay-outs to subpostmasters wrongly imprisoned for false accounting as a result of a dodgy computer system.

2013 has seen the campaign win support and some major victories.

Read a timeline of articles on the subject from Computer Weekly:

May 2009 – Bankruptcy, prosecution and disrupted livelihoods – Postmasters tell their story

September 2009 – Post-masters form action group after accounts shortfall

November 2009 – Post Office theft case deferred over IT questions

February 2011 – Post Office faces legal action over alleged accounting system failures

October 2011 – 85 sub-postmasters seek legal support in claims against Post Office computer system

June 2012 – Post Office launches external review of system at centre of legal disputes Post Office launches external review of system at centre of legal disputes

January 2013 – Post Office admits that Horizon system needs more investigation

January 2013 – Post Office announces amnesty for Horizon evidence

January 2013 – Post Office wants to get to bottom of IT system allegations

June 2013 – Investigation into Post Office accounting system to drill down on strongest cases

July 2013 – Post Office Horizon system investigation reveals concerns

October 2013 – End in sight for sub-postmaster claims against Post Office’s Horizon accounting system

October 24, 2013  1:42 PM

Government IT Oligopoly should not be broken up but should be more transparent

KarlFl40 Profile: KarlFl40

The government is desperate to use more SMEs as suppliers. In IT this is particularly important for competition because a small group of large IT suppliers, known as the Oligopoly, dominate government IT business.

Just last week the Office of Fair Trading (OFT) launched an investigation into the dominance of a few big suppliers in government IT.

Here is a guest blog on the subject from Alice Watson is a director at Porge Research, which specialises in providing market intelligence to public sector suppliers. She talks about an alternative to stripping the big players of work, through more transparent sub-contracting by the big suppliers.”

Government needs big and small suppliers

By Alice Watson

“Size matters. Or at least it does according to the Office of Fair Trading which is questioning the fairness of the domination of the Public Sector ICT market by a small number of big suppliers. It’s a view that is echoed by Bill Crothers, Whitehall’s chief procurement officer who – speaking to the FT back in July criticised the fact that just ten IT companies account for 70-80% of Government business.

But before we vilify the major suppliers for dominating the market, let’s not forget that it is Government, not the private sector that has determined the procurement strategy. It is not through cajoling or manipulation that the big boys have taken control of market share. They have simply responded to the specification – a specification that Government has brought to bear, and perhaps with just cause.

By definition, Government is big. And with a major institution come major IT requirements, where risk must be minimised and managed. Fragmentation of these contracts into multiple smaller affairs inevitably introduces risk and an element of finger pointing – ‘It wasn’t my fault Gov, it was his!’ they cry.

And then of course there’s the obvious yet overlooked question of whether dissolving major IT contracts actually solves the issue or simply shuffles it along a little. Government, after all, can’t afford to leave risk unmanaged. So as the major IT players exit, the Management Consultants enter and a new breed of big contract is born -along with associated costs.

So what’s the solution?

Well, let’s get one thing straight. I like SMEs – I run one! So Government’s desire to kick start the economy by awarding 25% of its business to SMEs is laudable. But let’s put self interest aside for a minute.

Surely a positive path forward is to combine the very best that both our major players and our SMEs have to offer. We can do this, by creating a more visible market of sub-contractors.

Major IT contracts already include a significant proportion of sub-contracts, but they’re currently going under the radar. Instead we need publicaly available registers for the major prime contracts which detail all the sub-contracts let by the Prime Contractor. This will encourage transparent and open competition at the sub-contractor tier of the market.

A buoyant and open sub-contractor market offers SMEs a fair share of the cake, whilst ensuring Government retains the benefits of a single prime contract.

I recognise that many SMEs may disagree, keen for a direct relationship with Government. But this comes at a cost.  Terms and Conditions are onerous and procurements are protracted and costly.

I fear that fragmenting large contracts into SME sized chunks will simply see one flawed procurement strategy replaced with another. So it might not be SMEs’ favoured solution, but creating a more visible market of sub-contractors is certainly a pragmatic and attainable option. It’s also one that recognises that ‘beautiful’ – in procurement terms at least, comes in all shapes and sizes.”

October 22, 2013  8:22 PM

Why CIOs outsource IT, according to HCL’s customers

KarlFl40 Profile: KarlFl40

HCL has given its CIO customers a platform to share experiences.

I recently met up with HCL and I was told about a digital magazine the Indian IT services supplier publishes. Going by the name CIO Straight talk it is an interesting publication.

It has some interesting articles. It is the CIO customers of HCL talking about why they outsource. It reveals an impressive list of customers for HCL.

Take a look, here are the online issues of CIO Straight Talk from HCL

Issue 3

Issue 2

Issue 1

I wonder what the CIOs think of HCLs famous “employees first customers second” strategy?

October 17, 2013  3:22 PM

Mobile operator customer services have come a long way, well done O2

KarlFl40 Profile: KarlFl40

Competition makes any company up its game. Consumer facing businesses in today’s digital world can’t afford to give poor customer service. People find out quickly.

This is a story about how mobile operator customer services have changed in the last ten years.

About 8 years ago I had a monthly contract with Orange. When my SIM failed I requested another and had to pay about £15 for it and have it delivered to my place of work. According to Orange the SIM was delivered, but according to the staff in the post room it wasn’t. So, no SIM.

Orange agreed to send me another but only if I paid another £15. This would not happen today because competition is fierce in the mobile sector. As a result I left Orange and moved to O2, where I have been since.

I am sure Orange, now part of the EE partnership with T-Mobile in the UK, has improved its customer services since then. But I recently had an experience that I thought was worth writing about. It shows how important customers are to mobile companies as they fight over customers in a saturated market.

Being a Computer Weekly journalist I am usually quick to complain when things go wrong with an IT supplier, but in this case I am going to write about a good experience, because it does show how the mobile sector has changed.

I recently moved to a Blackberry Z10 on my account with O2. Last week I updated the software and as a result was unable to make or take calls. Everything else worked fine.

I began my journey using O2’s online chat, which I like because no more long and expensive phone calls. I was asked a few questions and then told to take it to my nearest shop and they would send it for repair. This was quick and the person I was in contact with seemed to quickly identify the problem. I work at Oxford Circus in London so there are lots of O2 store near.

I went down and got served straight away, even though it was busy. I explained what happened and I was very quickly given a replacement phone and told they would do the rest. This was great and I only had to pay a refundable deposit for the phone I was borrowing.

This was a Friday afternoon. By the Tuesday my phone was back at the store fixed. Good service.

The other good thing was the advice I was given about saving all the data on the phone. Things like contacts and pictures. I might write for Computer Weekly but I am as far from being an expert tech user as you can get, so it was great that the people in the store, including the Guru, did everything for me.

And guess what? The problem was related to the phone itself and not O2. But O2 still did all this. It cost me no extra money and not really any inconvenience. Actually the  small mobile phone I was given, that only needs to be charged once a week and fits in your pocket, was great for a change. It just meant I wasn’t doing work emails all night.

So I was a very happy customer. If this is what competition brings then I am all for it.
Well done O2 staff at 134 Oxford Street

October 16, 2013  3:05 PM

Do we really need another review of government IT procurement?

KarlFl40 Profile: KarlFl40

The Office of Fair Trading has launched a study looking at government IT procurement practices. These things are ten a penny and they all make the same conclusion and nothing is done about it.

There are a small number if large IT suppliers dominating the market, it is too difficult and expensive for suppliers to switch suppliers, and who would forget that it is too hard for small suppliers to get into the game.

These are the early findings of the OFT, surprise, surprise. It will now look in more depth.
But what will be different to the pages and pages of reports that have come before it about the same thing making the same conclusions?

Who knows, this could be a clever way for the government outsourcing the whip to the OFT?
We know the government has to tread carefully whenever it makes decisions that impact big business after all. So perhaps by getting a semi-independent body like the OFT to do the report might be a way of getting things changed without being blamed.

Let me know what you think? Are you tired of endless reams of paper being wasted on reports into government IT procurement?

October 15, 2013  12:40 PM

How long before UK IT start-ups offshore jobs en masse?

KarlFl40 Profile: KarlFl40

Is the writing is on the wall? There have been some interesting stories lately about how UK firms are struggling to get the right IT staff and are looking overseas for them. There seems to be a real disconnect between the IT skills the UK needs and the IT skills it has. Or is it just that the UK skills are more expensive?

Digital firms are looking abroad because they are short of qualified staff. Well at the right price anyway.

Start-ups are calling for changes to the visa system to help them get the staff to grow.

Offshore IT services firms are reporting big business in London’s Tech City.

Boris Johnson calls for special London Visa for overseas IT professionals.

Meanwhile thousands of experienced and newly qualifies IT professionals are unemployed, under-employed or working in jobs unrelated to their jobs. Don’t get me wrong I am a supporter of attracting the right skills to the UK from overseas. But is it not a good idea to retrain all the IT professionals that are looking for work? Figures from the Higher Education Statistics Agency (HESA) show that Computer Science graduates are the largest group of unemployed graduates in the UK.

Here are HESA the 2010 figures for graduate unemployment:

Computer science 14%
Communications 13%
Education 5%
Veterinary Science 4%
Medicine & dentistry (approximately 0%)

It could be interesting if Labour win the election and follow through with the idea of forcing employers to create an apprentice for every migrant worker employed.

Could there be an even deeper UK IT skills shortage if jobs continue to be completed by overseas professionals? What do you think? Do you think offshoring IT work will create a skills shortage in the UK?

October 7, 2013  3:14 PM

Man that helped build original students loan system says new online version is hard work

KarlFl40 Profile: KarlFl40

I was with a former EDS executive last week and he was telling me about the problems he is having sorting out the student loan for his son, who has just started university. He says the new online system is really difficult to use and that “the overall process is much more complex than it used to be.”

The interesting thing is he was the project leader at EDS for the original students loan system. It was all paper based with applications sent through the post. He lead a team that built the system underpinning student loans.

I was at university in the mid 90’s and in those days being online was not that common. Being wired was nothing to do with computers and gadgets.

Anyway in 1990 EDS build the computer system supporting the student loans application process and then supported it for five years. The system was built by EDS using IBM technology.

The government now is making a bit of positive noise around its online student loans application system, or student finance system as it is known, because it is the only one of its 25 systems in its digital transformation that has actually gone live. These are the systems that are theoretically being developed using agile methodology. You know the ones, cheaper to built and more user friendly.

I think this unhappiness might be an example of the users being unhappy from the start. You are taking out a massive loan to pay both fees and living allowances. Of course you are going to find it tough to fill in forms that lead to huge debts.

When I was a student it was great. More money to spend at the pub…on books. In those days fees were paid for so we were more than happy to fill in a few forms.

Like any system if the users are against using it in the first place it is unlikely they will sing its praises.

October 4, 2013  11:12 AM

IT services sector in acquisition spree

KarlFl40 Profile: KarlFl40

The IT services sector is seeing a burst in acquisition activity as the companies that emerge from years of recession strong begin to consolidate the sector.

Getronics has acquired NEC Enterprise Solutions’ business in the UK as well as units in other European countries, Cognizant has taken over France based Equinox Consulting, Accenture is buying procurement business process outsourcing firm Procurian and Civica acquired InfoMaster which supplies software to the local government sector in Australia.

These follow acquisitions from large suppliers. Microsoft bought Nokia’s Devices and Services business for £4.6bn and Vodafone sold of its stake in US firm Verizon Wireless to Verizon Communications for $130bn. Extreme Networks acquired rival Enterasys Networks for $180m.

So some businesses are adding to their portfolios while others are just trying to survive. It’s the perfect mash-up. Well this depends what customers think.

October 3, 2013  4:52 PM

Don’t let your outsourced IT service turn to horse meat

KarlFl40 Profile: KarlFl40

This guest post looks at the risks associated with outsourcing to multiple suppliers without the right level of management in place to make sure it does as it should.

It comes from Paul Cash. He is managing director at ITSM services supplier Partners in IT.

When it comes to outsourcing, out of sight shouldn’t mean out of mind
By Paul Cash
“What can users of IT outsourcing learn from the horse meat scandal that gripped the media earlier this year? As with the problems with the NHS 111 phone line, the lessons to be learned are around the complexities of managing multiple suppliers in a highly sophisticated supply chain. We found ourselves unwittingly tucking into pony burgers because the retailers had failed to keep track of an incredibly complex network of suppliers. And while those suppliers’ lack of quality control created the problem, the country’s supermarkets get the blame from the consumer, demonstrating that the one thing you can’t outsource is responsibility.
Outsourcing of IT services can be a particularly attractive solution to organisations for a number of reasons – removing the burden of day-to-day management of services, reducing costs and having the knowledge your infrastructure is in a ‘safe pair of hands’. For these reasons, the market continues to burgeon with Gartner predicting that the worldwide IT outsourcing (ITO) market will reach $288bn in 2013. However, the ITO market is becoming much more complex, partly as a result of technology development and specialisation, and partly in response to downward pressure on costs from customers.
Ensuring that outsourcers deliver

Companies increasingly tend to buy on a ‘best-of-breed’ basis, selecting not one outsourced supplier but multiple vendors. The result is typically several ‘best-of-breed’ players in ‘service towers’ with little attention paid to how these different vendors will be coordinated into coherent single service provision. This leads to a confusing supply chain and one that demands more effort from the buyer than in the past when, historically, a single service partner might have delivered all these services and required less management.
If responsibility can’t be outsourced then it’s still the job of the business, and ultimately the IT department, to ensure that outsourced services are delivering as promised and to measure them accordingly. The question for many businesses is just how to do this? As standard, outsourcing agreements have Service Level Agreements (SLAs) in place; as such, many businesses think this protects them from poor service. However, if they aren’t looking at the right metrics, or indeed measuring them until the job is done, then they are running serious risks of delivering sub-standard service.
Putting the right tools in place
How can IT departments avoid these kinds of issues? First, they must ensure that a service management layer overlays all the towers with their individual SLAs, and that this includes a good service catalogue with the SLAs clearly defined within it, as recommended by ITIL. This approach has recently been endorsed by the UK government with the 2012 publication of a draft Service Integration and Management (SIAM) framework. While this is primarily designed for the public sector, commercial organisations can learn from it in terms of controlling an array of ‘best-of-breed’ suppliers. 
In parallel with the creation of this service management function, organisations also need to ensure that they have the right tools and processes in place to ensure that they can track performance and ensure coordination of the different suppliers. There is a range of increasingly sophisticated tools on the market which can deliver these requirements, including those required by SIAM, providing they are configured in the right way.
Ensuring that metrics really measure
Most importantly, businesses should ensure they have adequately defined the metrics they need to track performance across the various service towers on a continuous basis.  Defining these indicators is obviously complex, and will depend on each individual business’s requirements. But organisations can identify the right metrics for them by understanding their own level of maturity and how well the IT function is integrated into the wider business. Broadly, there are five key levels of ITSM excellence:
•    Business alignment: monitoring how closely IT services are supporting strategy and delivering customer satisfaction
•    Process: defining the right SLAs, and tracking performance against them on an on-going basis
•    Technology: measuring the investment, deployment and performance of infrastructure
•    Organisation: aligning people with technology, process and SLAs, and ensuring the right skills are in place
•    Culture: the experience of doing business with the IT function
Learning the hard way
Major supermarkets indeed learned the hard way that merely publishing a written specification was not enough to maintain quality and reputation.  Corporations with multiple IT subcontractors and outsourced services equally need to ensure that they manage traceability and accountability on a continuous basis if they want to avoid similar damage to reputation and results through sub-standard IT services.  There are process definitions, standards and products that exist to ensure greater compliance and quality control throughout the IT supply chain – businesses that do not embrace these, or fail to establish appropriate metrics, run the risk of uncovering poor outsourcer performance when the damage is already done.”

October 1, 2013  9:46 AM

Is Buy Your Own Device really the same as Bring Your Own Device (BYOD)?

KarlFl40 Profile: KarlFl40

I was with a contact of mine the other day who was telling me about his visit to the Government ICT 2.0 event recently. He works for Unisys.

Unisys had a stand at the conference and were handing out business cards with USB cards built in. These cards had white papers and other information about BYOD programmes.

The challenge facing government BYOD is one that revolves around security. Security rules and paranoia make BYOD tough. For example attendees at they Government ICT 2.0 event that visited the Unisys stand had to say no to the USB cards containing information about implementing BYOD. This is because they are not allowed to plug them into their devices due to security fears.

The government is eager for public sector organisations, particularly local government to introduce BYOD schemes to cut costs.

The government last week issued security approval for public sector organisations to offer bring your own device (BYOD) schemes for employees to access data and applications using their own smartphones and tablets. “What is necessary is that the device is placed under the management authority of the enterprise for the complete duration it is permitted to access official information. Hence, a BYOD model is possible – although not recommended for a variety of technical and non-technical reasons,” it said.

So you buy your own device to save your employer money but it is not really yours.

Is working from home also BYOD? Buy Your Own Desk.

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