Birmingham City Council has embarked on the largest local authority IT outsourcing and business transformation programmes seen in the UK, a 15-year deal estimated to be worth £500m.
The council this week issued a tender notice asking for a “strategic partner” to help the authority transform the way its systems and processes support the delivery of its overall priorities of “flourishing neighbourhoods and improved services”.
As well as supporting the transformation programme, the winning IT services provider will take control of a series of existing outsourcing agreements Birmingham has in place, including a server support deal with ITNet, a desktop contract with SCC and a contact centre deal with Vertex.
The contract, which the council expects to sign in the summer of 2005, will be offered on a risk and reward basis with progress made incrementally. Each individual project within the transformation programme will only be offered once performance targets have been achieved.
Glyn Evans, head of IT at Birmingham City Council, said this phase-by-phase approach is becoming more popular in the public sector.
“The incremental partnership is seen as quite attractive as it means the partner has a greater incentive,” he said. “We are developing a process which looks at the business case for each area of the project. The whole public sector needs to tighten up its approach to business cases.”
There is no real example of best practice for business transformation projects in the public sector, so the council will be pragmatic in its approach, Evans said.
“We are approaching this with no preconceptions, parts [of the transformation programme] may be kept in-house, as a partnership or fully outsourced,” he said.
“We are asking providers for experience about business transformation, and doing a parallel exercise ourselves to work out our priorities.”
The outsourcing of local authority IT staff has become a contentious issue in recent weeks, highlighted by developments at Bradford Council where IT staff used the threat of strike action to win assurances that they would not be forced to transfer to the winning services provider.
Birmingham said staffing issues, including the employment arrangements for staff, will form an important part of negotiations, and said it may consider options which do not involve the transfer of staff from the council.