Some lesser-known costs of outsourced IT?

By Tony Collins

An outsourcing contract may work well in general, but what when things go wrong and the customer needs  non-routine or extra-contractual information and answers from the supplier ?


The Post Office has received a reliable, nationwide IT service from Fujitsu for more than 14 years. A centrally-imposed contract ties in post offices across the country to using Fujitsu’s Horizon accounting system

The Post Office is delighted with the system and the service, and always has been. For some years its officials considered Horizon infallible, according to evidence given to the Business, Innovation  and Skills Committee last week.

Fujitsu has continued to enhance the system and service – sometimes at its own cost.  Most post office staff have had no complaints with the system – but more than 150 subpostmasters say they have had problems that, in some cases, have ruined their lives.

During a hearing that lasted nearly three hours, the Committee’s MPs heard that the Post Office’s contract with Fujitsu meant that investigating some complaints or queries with the system was not always contractually straightforward.

Kay Linnell, a forensic accountant and fellow of the Institute of Chartered Accountants,  told MPs:

“My understanding is that the Post Office had to pay for metadata from their contractors Fujitsu. This meant that when a shortage or overage arose and subpostmasters tried to investigate it and asked the Post Office about it, there was an extreme reluctance to investigate each and every shortage or overage.”

And Ian Henderson, a chartered accountant and forensic computer specialist with 2nd Sight, told the Committee:

“… The software … works well most of the time. Like any large system, it occasionally generates errors.

“Our concern is the response by Post Office to supporting sub-postmasters when they face those problems. Yes, there is a helpline facility, and, yes, training is provided, but there is no formal investigative support.

“Under the contract, sub-postmasters are not entitled to investigative support when they say, ‘Look, we’ve got this discrepancy. I don’t understand how it happened.’

“They are left largely to their own resources, supported by the helpline and so on, to get to the bottom of those problems.

“As we have seen time and again, they have failed to do that. In some cases, Post Office has refused to provide information to them on the grounds of cost – this comes back to the contract with Fujitsu. They say, ‘It is too expensive. It is outside the terms of our service level agreement. We cannot provide you with the detailed information that Post Office holds…'”

Investigations into some of the more serious complaints by subpostmasters require access to Horizon’s audit trails. These were available for up to 42 days before 2010 and 60 days since.  MPs heard that sometimes the audit trails would be needed for investigations when they were no longer available.

Missing emails?

Henderson  claimed that 2nd Sight had requested copies of emails for 2008 but was given them for 2009. He told MPs he has still not had the emails for 2008,which the Post Office disputes.

Henderson said:  “Unfortunately, the e-mails that were provided were for the wrong year. We were investigating a specific incident in 2008 and the year’s worth of e-mails that we were given related to 2009. Therefore, it was not surprising that we said, “We have asked for 2008, please provide it.” We have still not had that…

“We were told at the time that with the first batch there were some technology issues relating to the provision of the 2008 e-mails. Two years down the line, we still don’t have those.”

But Angela van den Bogerd for the Post Office replied:  “We provided what we were asked for at the time, so, clearly, there must have been some misunderstanding. We would not have pulled a year’s worth of e-mails for a wrong year.”

Costs of storing data 

Like most commercial organisations the Post Office has to pay to store data, so it has a policy of destroying data after several years. The Committee heard that “some of the cases [being investigated] are regrettably very old, so some of the data are simply not there”.


When big organisations, particularly councils, outsource their IT, do they always take into account the costs associated with investigations of problems – accessing old audit trails, retrieving other old data such as emails, or searching for information that might have been destroyed to save money?

It’s unclear whether the outsourcing of its IT has helped or hindered the Post Office’s investigations into the complaints of subpostmasters.

3 responses to “Some lesser-known costs of outsourced IT?

  1. A great insight Tony. Well done. Most local authorities retain their data for up to 7 years. I suspect as more and more move to the cloud, this will be scrutinized to a greater degree. However, there are many statutory responsibilities that local authorities have that require long term archiving of data. This is not usually split across services. Best regards. Allan


  2. Reblogged this on sdbast.


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