BT tries to rescue its faltering IT outsourcing deal in Cornwall

By Tony Collins

BT has appointed a new senior management team in Cornwall to help rescue a faltering IT-based outsourcing deal there.

Two years into the 10-year contract, BT has not met commitments and guarantees it gave when setting up BT Cornwall to take over the running of ICT, human resources, document management and other services for Cornwall Council,  Peninsula Community Health and Cornwall Partnership NHS Foundation Trust.

BT has made improvements in the past two months. If these are not sustained the council says that it will consider its options including early termination.

A BT spokesperson told Campaign4Change this week “We are working closely with our partners in this project to ensure we deliver on all aspects of the contract.”

A table in an officers’ report to the council this month puts the situation bluntly. The only commitment that is met 100% is for baseline savings – which are deducted at source.

Overview of BT Cornwall’s performance against commitments and guarantees

KPI measures Achieved (185/289) – 64%

PI measures Achieved (266/402) – 66%

Service Transformation (percentage of plans completed) – 38%

Financial contractual baseline savings (10% & 11.6%) – 100%

Trading gain share received (est £17.4m over 10 years) – £0

Guaranteed new jobs in Cornwall (yrs 1 & 2 111 new jobs target / 35.1 created) – 32%

Committed new jobs in Cornwall (yrs 1 & 2) – 0

Cornwall Council rushed into signing a contract with BT, before local elections in May 2013. This appears to be acknowledged in the report to the council. It says that, in the timescales available, due diligence and analysis before the contract signing was not at an ideal level.

BT made contractual commitments over new jobs, service transformation, key performance indicators, and performance indicators. The council’s report says that some contractual commitments have not been met.

The report also says the council “might be paying twice for replacement assets”.

There were delays in securing contract novations with suppliers which meant, as an interim measure, the council “had to pay suppliers and reclaim the monies from BT Cornwall”.

As part of their bid submission, BT estimated trading gain share to the public sector partners of £17m over the 10 years of the contract. “To date, no gain share has been received from trading. It is recognised, however, that this is not a contractual commitment,” says the report.

BT Cornwall made a contractual commitment to deliver a minimum of 197 additional jobs to Cornwall over the life of the contract with 111 of these being delivered in the first two years. “Of these, 35 have been delivered so far.”

There was also a commitment to try and deliver a further 240 jobs in the first two years and none of these has been delivered.

The Service Desk has failed to cope with or process the number of incidents being reported. Users have abandoned calls after “lengthy and fruitless waits for assistance”. The report adds: “The latest KPIs demonstrate that there is still some way to go in terms of Service Desk performance.”

There have been concerns among some councillors about reports of job losses within BT Cornwall, and the loss of expertise that had been transferred to BT Cornwall from the council.

A problematic upgrade to Windows 7  left users on Windows XP and in some cases unable to access their desktop or laptop. The report says:

“Despite being discussed extensively throughout the dialogue stages of the contract, it was noted that the delivery of Windows 7 had been under-resourced and the deployment methodology inefficient.

“Fortunately, because the government had negotiated the extension of support to Windows XP, the Council had not suffered the very serious consequences the delay would otherwise have caused.

“It is fair to say that the council is not entirely blameless for the long delay to the upgrade process as many officers failed to attend for their upgrade appointment. That said, had BT Cornwall adopted a more user-friendly method of upgrade, the ‘no-shows’ would not have been such a problem.

“There has also been an issue around the number of software applications which have required Windows 7 compatibility but, again, this was an issue which BT were aware of during the dialogue leading up to the Contract and knowing the challenging timescale, it was their responsibility to design a methodology and/or to commit the resources required to ensure the complexities were addressed and the process completed by the due date.

“Members have asked for an estimate of the time lost and financial cost to the council caused by the overall delay and the operational downtime as a result of issues with upgrades which have prevented use of laptops/PC’s and meant teams/individuals have been unable to work effectively or at all for periods of time.

“It is not possible to calculate this accurately any more than the time lost through unjustified ‘no-shows’ or late notification to BT Cornwall of software applications can be estimated. It is also difficult to estimate the downtime due to the failings of the upgrade process when compared with the problems inevitably caused by the large organisational transition to a new operating system.”

Andrew Wallis, an independent councillor in Cornwall and cabinet member, says on his blog that is concerned that BT Cornwall has had two years to deliver on the contract and has failed.

“There is only so many second-chances you can give. For me, if by summer BT Cornwall do not deliver their commitments, than I am afraid we must be in the area of looking to terminate the contract …”

 The council’s report highlights:

–  A lack of challenge to requests for replacement equipment.

 – ICT support much reduced

– Performance under the Service Level Agreement down.

– Projects taking longer to be initiated.

 – Peninsula Community Health and Cornwall Partnership NHS Foundation Trust unhappy with the responses they had received from BT Cornwall in respect of the delivery of their ICT services.

New management

The new management at BT Cornwall includes an interim chief executive, Gavin Finlayson, an interim chief technical officer, Phil Healy, and an interim project delivery director, Chris Swann.

Ian Dalton, President of BT,  Global Government and Health, who is head of the public sector for BT in the UK, has written to Cornwall Council this month to restate BT’s commitment to the 10-year service delivery agreement.

Comment

Campaign4Change warned in 2013 that the signing of a deal was being rushed – Council approves BT deal after hurried talks.

We also said that if the promises, commitments and guarantees came to nothing, nobody in the public sector – officer or councillor – would be held accountable. And nobody has.

How is it that councils – whose officers are supposed to be professionals – can continue to sign outsourcing deals that are clearly at the outset no more than superficially attractive and which put public money and service to users at obvious risk?

Services at Cornwall seem to have worsened since the deal was signed. So why were councillors given rosy reports on the future of services, jobs and IT support in the period running up to contract’s signing?

Better surely if councillors had received neutral reports on the pros and cons of outsourcing. Too often naive councillors are in awe of beautiful marketing brochures – sometimes commissioned by the council itself -that eulogize the benefits of outsourcing and put the risks in the appendices.

The word “guarantee” means little before an outsourcing deal is signed. Indeed in 2003 we suggested the “G” word be banned from the outsourcing lexicon.

BT’s corporate management, having realised how bad things were in Cornwall, appears to be doing all it can to rescue the deal. But can it afford to employ people it doesn’t really need, to meet a contractual commitment?

It’s extraordinary that the BT Cornwall outsourcing deal went through the full council with hardly a word of opposition.

There again, councillors believe their officers are the professionals who would not sign an ill-considered outsourcing deal. Or would they?

Isn’t it time that the elected representatives of the public became more professional themselves before putting services to users and so much public money at risk?

Public sector outsourcing failures – European Services Strategy Unit reports

Cornwall Council approves BT deal after hurried talks – 2013

BT Cornwall is not working for Cornwall Council as it should – councillor Andrew Wallis’s blog

Cornwall Council report