The glass and chrome building in the City of London that
houses English Heritage's headquarters reveals an organisation that
is very much part of the modern age.
Although English Heritage is responsible for preserving history,
it uses high-tech methods to discharge its duty.
A rejection of the status quo in favour of continuous
improvement has also been the philosophy behind an outsourcing
strategy put in place by English Heritage's ICT director, Mike
McElwee.
For the past eight years English Heritage has outsourced the
delivery of IT services to its 130-plus sites across the UK.
Historical sites under its stewardship range from Hadrian's Wall in
the north to Carisbrooke Castle (pictured) on the Isle of White,
which makes providing an acceptable and consistent service in-house
a tough call.
"We have to link all of our people and some are located on
pretty inaccessible sites," says McElwee. "Many of the core staff
needed for delivery are based in London and it would be difficult
to maintain a pool of people with the experience to meet service
level agreements. You could probably do it on a good day."
McElwee says the beauty of using an outsourcing supplier is that
it is possible to parachute people in if there is a crisis. "An
outsourcing supplier can give technical staff a broader and better
career path too, so there is better continuity of staff," he
says.
English Heritage first decided to outsource eight years ago. But
when McElwee took up his post seven years ago, the incumbent
outsourcing provider was "not terribly impressive".
Part of the problem was that, as with any contract nearing the
end of its life, it was hard to inject purpose and commitment into
the proceedings. "They were still a credible player but part of the
process of going to tender was a desire to establish a new regime,"
he recalls.
English Heritage put out to tender a contract to run the
helpdesk, 2,500 desktops, management of wide area and local area
networks, and server hosting. It eventually selected Atos Origin,
and the deal, worth £3.5m per year, has been running for four
years.
This alone may be seen as proof that the supplier met the brief,
but as the relationship matures, the deal is providing greater
value to both parties, according to McElwee.
One pointer to this comes in the recent accreditation of both
parties with ISO 20000, the quality standard for service
management. Not only is it the only example of a supplier and
client achieving accreditation side by side, but it has also been
accompanied by a financial advantage. The Atos account manager for
English Heritage has recently been promoted to a troubleshooting
role within his company.
While English Heritage recognises it provides a training ground
for Atos, it is not jealous of the financial reward this its
supplier may reap elsewhere. Rather, self-interest dictates that
English Heritage is keen on its supplier being successful.
"We both need to win," says McElwee. "The advantage to us is
that I have a good case to get best value for money. My budget goes
down in real terms year on year. Every year I need to demonstrate
cost savings to the board."
Having a partner committed to a cycle of continuous improvement
makes it all possible. "It is easier to defend my position here
because I have the performance levels and high user satisfaction,"
McElwee says.
This sophisticated perspective did not arrive overnight but has
developed as the partnership evolved. However, McElwee went into
the tendering process and contract negotiations with his eyes open
and recommends building certain provisions into the contract from
the outset.
First, he advises organisations to take the advice of
outsourcing specialists in framing the specification and contract.
"It is something that most companies are likely to do every seven
years - certainly not often enough to be any good at it." English
Heritage hired Hedra, a consultancy firm that recommended a
particular style of penalty regime.
"We had a penalty regime with our previous supplier but it was
so complicated it could take three weeks just to get £500 off
them," says McElwee.
The Hedra version recognises that things go wrong and is lenient
with one-off incidents. However, consecutive problems or problems
that occur repeatedly are punished by a system of fines that
increase incrementally.
The other advice English Heritage received was to enforce
penalties whenever SLAs were breached.
"There was a situation at the outset of our contract with Atos
when we had to hit them with a £17,000 penalty. We were under
pressure to let it go because they were 'settling in'."
Hedra pointed out it was important to impose the penalty to
preserve the contract. "If penalties are waived, we were advised
there is a danger that a contract can be invalidated by de facto
practice."
McElwee believes it is a tribute to the quality of the external
advice that unanticipated incidents occurring during the first
couple of years did not cause major problems.
"When we referred to the contract they were all covered," says
McElwee, who reiterates the importance of building in extra time
and seeking expert advice when formulating a greenfield outsourcing
contract.
When it came to specifying the scope of the outsourcing
contract, reliable performance was top of the agenda. This had not
always been satisfactory in the previous regime, with response
times to faults being an area of particular dissatisfaction for
English Heritage.
The new contract tightened up these times and set a target of
96%, below which penalties could be invoked. In working out the
optimum benchmark in terms of attainability and price, McElwee
simulated various scenarios. A target of 90% availability would be
an appalling performance, he says. "It would mean that people would
be without their computer for half a day every week."
English Heritage established a norm based on a maximum of 30
minutes downtime per user per month, giving Wan, Lan and server
availability targets of about 99.8%.
McElwee also subjected all SLAs to "sensitivity analysis". "We
asked whether a 99.8% target was achievable or whether dropping it
a fraction would reduce costs significantly. I needed to find out
whether we were overloading resource to achieve unfeasible
SLAs."
Similarly, his team asked tenderers whether they could improve
or add extra services at little or no cost. "The questioning was
all part of the value for money equation. Are we paying over the
odds for something we do not need or are we missing a trick?"
Challenge has also been an essential component for keeping the
outsourcing contract on track. One of the best decisions the IT
department made was to retain a technical quality assurance person
in-house to test the outsourcer's propositions.
"Challenge is a fundamental tool for improving things - you
cannot lose. Either the challenge is resisted, in which case the
proposition is strengthened, or the idea is changed and that also
represents an improvement."
However, this sort of culture can be a difficult terrain to
negotiate. "People do not like challenge. Some technical staff in
particular do not like it - they can be very wedded to their ideas.
The thing you have to get across is that it is not about catching
people out, but about improvement."
Conversely, the other behaviour that makes challenge possible is
giving credit where it is due. The IT department regularly conducts
customer satisfaction surveys and "outs" individuals who have
attracted praise.
It was also important for English Heritage to decide which items
to keep outside the outsource contract. Project management, for
example, was deemed more cost-effective when done in-house. The
trick is to get the team the right size so that staff are always
busy.
"We employ at the trough level rather than peak, and can take on
extra resource when necessary," says McElwee.
Similarly, software development is a specialist activity at
English Heritage, with many conservation applications not available
as off-the-shelf packages. Because of this, the organisation has a
10-strong team of developers, based in Swindon, to program
applications, including conservation casework, archaeological
databases and "the workflow that lets us do what we have to do".
Most are written in C# and other web-friendly languages as all
software is designed to be accessible from a browser.
Meanwhile, a clause in the outsourcing contract specifies that
Atos can be brought in to supply optional extras when demand
dictates. Atos project-manages, in conjunction with KPMG on
occasions.
Underlying these extras is the understanding that both parties
win. Atos gains extra revenue without the expense of having to go
out to tender, allowing English Heritage to expect the very best
value for any extras.
English Heritage has learned a lot about what does and does not
make an outsourcing relationship work. One of the curious aspects
of success is the importance of communication with internal
customers, which can count for more than the speed or the quality
of the fix, says McElwee. "Communication is a behaviour we
reinforce with our onsite team."
Ultimately, says McElwee, the deal with Atos is successful
"because the team they have onsite here and the relationship we
have with them works very well".
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