How BT cut the cost of computing

And outsourcing desktop management not only saved millions, it also improved service

And outsourcing desktop management not only saved millions, it also improved service.

For telecoms giant BT, controlling costs, in particular IT-related costs (which amount to around £1bn a year), is a strategic priority. The company had invested extensively in using the network to drive desktop management best practices such as remote monitoring, helpdesk remote support, builds and application packaging, but was keen to go even further.

As BT explained, “We have a large desktop/laptop estate widely dispersed in the UK with 7,000 homeworkers. Managing all aspects of this environment internally was making less and less sense financially, and we were keen to find a way to reduce the costs associated with desktop management.”

Even though cost reduction was a driver, it wasn’t the only one; BT’s other goals included improving service levels and the end-user experience, and transforming and growing external opportunities.

Power of partnership
The most effective way to achieve these goals was to outsource some aspects of the management of its desktop environment.

To deliver maximum benefit and service to the business BT wanted to complement its desktop management with improvements in managing logistics and engineering, so it opted to work with a partner that could provide it with a number of further cost and value benefits. This approach also enabled BT to benefit from industry best practice and to build a partnership with a desktop services provider for external opportunities.

Computacenter was one of five companies to bid for the five-year desktop managed service contract, which is worth around £30m a year and which started in March 2002. The company had the proven capability and scalability to fulfil BT’s internal requirements and to work with BT on creating new customer services. During its successful tender, Computacenter had demonstrated it could reduce costs year on year while also improving service levels and delivering value to the business.

The contract involved an extremely complex six-month transition programme, not only of technology, but also of processes and people. As Penny Edwards, service implementation manager at Computacenter, explains, “The managed service contract covers a range of areas, including provisioning, installation, maintenance, PC refresh, disposal and support – all of which needed to be seamlessly transitioned without any impact on the end-users. This alone was a massive challenge, plus we were working to a very tight timescale, which meant there was simply no margin for error.”

Managing the transition
The two companies embarked on an intensive planning process, with a number of workshops to help identify potential risk factors and the roles and responsibilities of the individuals involved.

The 50-plus Computacenter transition team used an in-house methodology called Pride (Project In a Dynamic Environment) to project-manage the process, and developed a comprehensive communications plan to ensure that information was constantly shared.

“This was the largest transition we had ever attempted, and as such required a massive amount of planning and resources,” says Edwards. “The risks and challenges were immense, and required comprehensive project and change management expertise and capabilities.”

Such skills proved essential to the success of the transition. As BT explained, “A transition project like this is absolutely critical. If it goes wrong it can have massive commercial and operational implications for both the customer and supplier. Thanks to the framework used, and the tremendous team effort on both sides, the transition was extremely successful.”

As part of the contract, 347 BT engineering staff and 90 contractors transferred to Computacenter.

“Communication was fundamental to the success of the staff transfer and their integration with Computacenter,” explains Dave Ashley, sector services director at Computacenter. “The engineers being transferred had worked at BT for an average of 25 years, so it was essential that we helped them cope with and accept the change.”

To win hearts and minds, Computacenter set up a communications team to inform the former BT staff about the transition, run joint roadshows, arrange visits to the Computacenter HQ in Hatfield, and provide opportunities for feedback. The success of this process is best demonstrated by the improved performance, and the fact that more than two years later, 99% of the transferred staff have remained at Computacenter.

David Anderson, a former BT manager who is now a service delivery manager at Computacenter, says, “It is great to be part of a dynamic, responsive organisation. We have all pulled together to help improve the service to BT and it has been enjoyable working with established Computacenter employees, who are now close colleagues.”

Long after the transition has been completed, Computacenter has retained the communications team. “The importance of communication in delivering IT services is often underestimated,” says Ashley, “which is why we have taken this unique step of providing both our internal BT team and its end-users with a dedicated communication resource.”

In addition to sending out weekly bulletins to the 450-strong Computacenter team working on the BT account, the team also organises quarterly conference calls to promote discussion around issues such as current service levels and future plans.

Optimum service
Service levels are a key part of the agreement, and Computacenter’s performance is measured against numerous different service levels, covering everything from hardware and software provisioning to desktop installation and repair. Users are supported by a service desk, with BT providing all first-line support - which can involve handling as many as 1,450 calls a day.

Raising the level of service to internal customers was a key objective for BT, and within just six months of working with Computacenter, it was able to make significant improvements. For example, in the first year of the contract, the SLA for the national repair service improved from 64% to 93%.

Computacenter and BT have put in a number of new processes to achieve these successes. “Instead of using two separate hardware and software pools of engineers, we have created a single multiskilled team, which enables us to resolve incidents or installs with a single desk visit,” explains Ashley. “A series of work styles have also been created by BT, which enable us to bundle standard products and services together to meet the individual needs of BT’s UK users.”

Ongoing cost reduction
BT has also been able to enjoy other financial benefits as a result of the desktop managed service agreement. A key objective of the deal is that Computacenter reduces the cost of managing BT’s desktops by a guaranteed amount. In the first year of the contract with Computacenter, BT saved more than £7m, and will be able to continue to make significant IT cost savings.

This ability to make ongoing cost reductions relies heavily on the continuous improvement business process re-engineering being undertaken by Computacenter.

“It helps identify where efficiencies and savings can be made by continuously reviewing standards and processes across all of BT’s sites,” explains Ashley. “Not only does this help ensure that service improvements are constantly being achieved, it also ensures that the services we deliver to BT evolve with the needs of its customers throughout the duration of the contract.”

This emphasis on service delivery has led to significant improvements and value benefits. By using IT service management best practice and recognised tools such as ITIL (the IT Infrastructure Library), Computacenter has helped BT to provide a significantly better desktop service to internal customers – and at a reduced cost. The service is now more efficient and joined-up, there are more management controls in place, and budgeting is simpler thanks to a transparent cost per user. At the same time, BT has also been able to enhance the flexibility of its desktop services to ensure Computacenter can meet the demands of the business and end-users.

Joining forces
The desktop managed service contract is just one element of the partnership between Computacenter and BT. The two companies are also committed to combining their expertise and resources to help deliver IT and desktop management solutions to businesses and public sector organisations.

“Having created the industry benchmark for the management of our own desktops, we are extending the partnership with Computacenter to help address the needs of our customers,” says Pierre Danon, CEO of BT Retail. “By combining our strengths and skills, we are able to offer customers a comprehensive suite of services and solutions to meet their IT and communication requirements.”

One high-profile example of the success of the partnership is a recent contract win with Germany’s federal ministry of finance. BT and Computacenter will deploy and manage wide area network IP connections between 1,000 ministry locations.

“Organisations are increasingly realising that a partnership approach is the most cost-effective way for implementing and managing IT infrastructures,” says Mike Norris, CEO of Computacenter. “The partnership enhances both companies’ ability to help customers maximise the business value of their IT and minimise costs.”

This was last published in February 2005

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