The Financial Services Authority (FSA) is planning to
outsource its core IT services including datacentre, network,
helpdesk, testing and desktop management in a five-year deal with a
single supplier to be announced later this year.
The move comes one year into a three-year programme to transform
the regulator's IT into a best-in-class operation.
The IT function is critical to the FSA's regulatory work because
its systems have to be used by every financial services company
operating in the UK.
The department has a budget of £40m a year and employs 160 IT
staff, supported by 120 contractors. Between 80 and 90 positions
are set to be outsourced.
The outsourcing is central to the FSA's turnaround plans, which
it drew up after it commissioned a report on its IT operation from
consultancy firm Orbys last year.
Orbys found the FSA's information services organisation to be
"very immature".
Its report said, "The division has so few industry standard
attributes that systems and services are delivered to the business
in an ad hoc, random and chaotic way. There have been examples
recently of systems delivery failure even though there were no
business or technological challenges."
Separately to its outsourced services deal, the FSA will begin
outsourcing large parts of its application development function
using a framework agreement. Work will be awarded to the systems
integrators - Capgemini, Tata Consultancy and Xansa - one project
at a time.
Application development is split into five programmes. The
largest programme, Arrow 2, will provide applications to support
the FSA's risk-based approach to regulation.
Its Integrated Regulatory Reporting programme supplies the
systems that every financial services company must use to submit
electronic regulatory returns.
The other programmes are business intelligence, records
management and market monitoring technology.
The scale of the transformation will be a challenge for the
regulator, said FSA IS director Darryl Salmons. "Any major change
programme inevitably brings with it a degree of uncertainty for
staff. People do not like uncertainty and that was recognised
within IS and senior management," he said.
More information
www.fsa.gov.uk