Outsourcing options appraisal

Suffolk Coastal District Council has implemented the most cost-effective, reliable and flexible option for maintaining and developing its ICT Services following an outsourcing options appraisal by Socitm Consulting. By advising the Council on the future of its ICT Service following the expiry of its existing outsourced contract, Socitm Consulting helped the Council to select the most effective option for supporting its key strategic priorities of efficiency, maintenance of service quality and obligations to county-level shared services.

The Council’s long-term outsourced ICT Service contract was due to expire and the Council was concerned that a future contract should maximise available opportunities, minimise risks and be as cost-effective as possible. In particular, the Council was concerned the option it chose supported its commitment to county-level shared services to improve customer service delivery. Socitm Consulting was asked to appraise the Council’s options for the future development of its ICT Services and to support it in selecting the most effective option in terms of the Council’s wider strategic requirements.

Interviews with key Council stakeholders, including relevant directors, finance staff and the existing supplier, enabled us to establish the range and extent of existing challenges, key strategic priorities and awareness of future options, including their opportunities and constraints. We also compared the performance of the Council’s ICT Service with data from comparable Councils using the Socitm Benchmarking service, and collated market data from alternative suppliers.

We then prepared a report analysing the costs and benefits of continuing with the current outsourced service and of alternative options, including re-tendering the contract, taking the ICT Service in-house, or scaling up the commitment to shared services to include a joint outsourcing arrangement.
This report formed the basis for an internal report, which Socitm Consulting helped to draft, and which recommended that the most cost-efficient, secure and flexible option would be to bring the ICT Service in-house. This would realise significant savings (of at least £100k p.a.) in the short term by transferring the existing ICT staff through Transfer of Undertakings (TUPE) regulations, and would allow the Council to remain flexible in responding to shared services commitments and to retain an ICT innovation and development budget.

We supported the Performance and ICT officer in presenting the report to the Council Leader and the Chief Executive. The management board and Council accepted all its recommendations, including giving notice to terminate the existing outsourcing contract early in order to maximise savings.

By providing expert knowledge of ICT Services benchmarking and the outsourcing market and experience of reviewing options, Socitm Consulting was able to support the Council to analyse its options for the future of its ICT Service in terms of its overall strategic priorities. We were able to offer the Council an options appraisal tailored to its own requirements, and to support it in taking ownership of the most effective solution for its future ICT Service. As a result, the Council was able to improve its flexibility in terms of responding to its shared services commitments while making significant short term savings, and was enabled to release funding for innovative future development within its ICT strategy.

Steve Whelan, Suffolk Coastal’s Strategic Services Manager, commented: “I felt the overall service was of a high standard and would recommend both Socitm Consulting and Terry Street”.

Project identification:

Client organisation: Suffolk Coastal District Council
Client contact: Steve Whelan, Strategic Services Manager, 01394 444337, steve.whelan@suffolkcoastal.gov.uk
Lead consultant: terry.street@socitm.gov.uk
Project no: 5977