Last year, Tower Hamlets ended an outsourcing contract with ITNet to run its helpdesk, mainframes and hardware maintenance. The council has since used helpdesk software from customer relationship management specialist Siebel to run the service itself.
In 2002, Tower Hamlets outsourced its IT helpdesk to ITNet under a two-year contract worth £3.5m, with an option to extend the deal until 2007, according to information released by ITNet.
Previously the council had outsourced to three other suppliers, before ITNet took over the management of its mainframe, hardware maintenance and helpdesk operations.
But by the middle of last year the council had decided not to extend the IT service desk contract with ITNet. The council said it wanted to bring the service in-house to reduce costs and increase the number of calls resolved at the initial inquiry.
Under the outsourcing agreement, ITNet was responsible for resolving queries from 4,500 council staff, passing problems back to Tower Hamlets' specialists if it could not resolve them.
The council received an average of 650 IT helpdesk calls a week last year.This number has since increased to 1,000 a week.
But despite the increased volume of calls, the council was confident it could run the service more efficiently than its outsourcing supplier.
Kate Sandall, technical support team leader at Tower Hamlets, said, "We were not getting the results we wanted, and we were fairly sure that we could provide a better service ourselves. In general, there were probably between 5% and 10% of calls that could not be resolved."
A spokesman for ITNet declined to comment about the Tower Hamlets contract or claims by the council that the IT helpdesk service was more efficient when run internally.
However, he said, "Time and time again our customers find that outsourcing functions such as helpdesk services brings a better level of service than in-house management, at a more cost-effective price."
The council uses Siebel's Helpdesk application, which has a set of tools that can help to resolve user queries. During the first few weeks, the in-house service desk resolved 25% more calls compared with the three previous months, when the service was outsourced, the council said.
Sandall said, "It was successful much earlier on than we had hoped. Besides improving first-time call resolution, we are also meeting our service level agreements more consistently.
"Of the 650 calls logged in the system each week, more than 90% of these enquiries are closed within the target time.
"Because more calls are resolved straight away and do not require escalation, we are reducing the cost of support and boosting our quality of employee service."