Case Study 10
Improving Outsource Management
The largest occupational pension scheme in Europe had outsourced 55% of its operations, including IT, Pensions Administration, Contact Centre, Estates, Medical Services, Security, and Finance. Its management of the suppliers had come in for criticism from both internal and external audit.
We were brought in to turn this outsource around. While repairing relationships with the suppliers, we examined a variety of options for reorganisation. The option selected removed power from the moribund "contract management" department, devolving budget to user departments. For the first time, departments learned exactly what was being purchased for them from the suppliers, and at what cost. This allowed those departments to determine the value of each service, and identify changes to better reflect their business needs. We aided a cultural change from conformance with outsource contract, to business benefit.
Working with the outsourcing partner to improve
Our client's staff and IT infrastructure were located a single building by the coast. Nearly half a million pensioners, many of them vulnerable, depend on regular pension payments from the client. Although there was a Business Continuity plan in place, setting out actions to take in the event of a disaster, a disaster such as a flood or fire could have taken out the entire building and all operations. A warm standby site, with duplicated infrastructure, would have been an expensive solution. Approximately half of the office space was let to the outsource supplier consortium who wanted additional office space in the locality to service other clients.
We developed a plan to mutually benefit both organisations:
- To provide the additional office capacity, the outsource supplier acquires a building of similar size, close enough to be commutable, but located in an area with a different risk profile.
- Each organisation house approximately half of their staff at each site under a subletting arrangement.
- Each site to contain the infrastructure required for those working there, with central servers duplicated, one at each site.
- Arrangements in place to operate double shift working at either site, using the standard infrastructure, should a disaster affect the other site.
The plan created a win-win solution for both organisations who could each achieve a double-site live fallback capability, while only having to operate a single site each, and without the cost of fully equipped empty stand-by accommodation. This provided the basis for true partnership working.See other case study in this section Back to Outsourcing