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The IT solutions provider Sx3 has been signed up for a five-year contract worth £2m. The deal will take effect from 2003, when Castle Morpeth's current deal with Northumberland County Council's IT department runs out.
The new project will concentrate on delivering improved access to services that were rated by the Audit Commission's Best Value (BV) report as "poor" and "unlikely to improve."
Castle Morpeth deputy chief executive Tom Fairhurst believes the outsourcing deal will provide a drastic improvement to the council's services.
He said, "This will make us much more user-friendly and flexible. We have received computer services from Northumberland County Council for 20 years, but they are no longer able to meet our needs and we were well aware that we needed to improve the IT situation."
However John Mackie, senior consultant at outsourcing consultancy Morgan Chambers, believes Castle Morpeth must solve the problem rather than just place into someone else's hands.
"Outsourcing in the 1980s was all about outsourcing your problem rather than dealing with it. If services cannot be improved internally, there is nothing inherently wrong with getting an outsider to take it over, as long as you recognise the problems that you are handing to the outsourcer." said Mackie.
Castle Morpeth's decision to negotiate a new IT contract before the publication of its BV inspection report has been criticised by inspectors, who feel that the report should have been used as the focal point for awarding the contract.
Tom Fairhurst explained, "I think the BV inspectors were being disingenuous when they suggested that we should have waited for the BV report to come out before awarding the contract. We realised we had an immediate problem that had to be addressed and we wanted to sort it out as soon as possible."
John Mackie supported this view, but stressed the importance of considering all available information before outsourcing.
He explained, "The supplier as well as the organisation outsourcing, must have all information available before going ahead with anything. Suppliers do not want the bad publicity that comes with failed IT projects, so they want to know the problems and issues inside out so they can be sure they will deliver on their promises."