Outsourcing, has in the last decade, taken on an almost religious zeal among believers. Nowhere is this more apparent than in the public sector. In the 1990s local authorities had to begin market testing to define whether services would be better provided by external suppliers. But in outsourcing, all organizations can be at risk of throwing the baby out with the bath water. There are, however, notable success stories from the world of outsourcing, but Lancashire County Council in the UK is an example of successfully measuring the value of the services it offers and discovering that outsourcing is not the best option.
Bill Brown and Dave Dickens, director of ICT and assistant director of ICT respectively, have spearheaded an IT revolution at the council. A revolution that has saved the organization money and improved services, they have gained recognition throughout the industry and Dickens made it into the CIO 100 last year. By benchmarking ICT services and costs, Lancashire has retained the bulk of services in house and as a result improved the services it offers. It began this process in 1998 with a rolling program of continual improvement based on benchmarking different part of its ICT services. Benchmarking is now part of the long term performance management of Lancashire County Council, one of England's largest county councils, serving 1.1 million people. Despite its size, Lancashire has achieved a top rating from the UK Audit Commission.
"As long as we are seen to compete, then people felt we were providing a better service back to the county," says Brown. But he is quick to point out, "We are not obsessively in-sourced, printing is supplied by external providers, for example. We work exceedingly closely with the private sector, with partnerships with HP, Oracle and Vodafone."
Dickens adds, "The reality is that outsourcing is always an option, but there is no point outsourcing if the in-house operation can match the performance of an external private sector provider. Simply making the change to outsourcing costs money, so there is no business case if the in-house operation is matching the performance of the peer group."
Measuring services was just the beginning. With the numbers in front of it, Lancashire had to not only to renew its IT, but also instigate a change of working culture. Together Brown and Dickens have achieved a threefold change at their Preston head office and across the county. "People got into routines that had to be challenged," Brown says.
Dickens adds, "We started a culture change to make sure our staff met new ways of working and we had to change internally. This led the whole organization to be more efficient." His department begin by challenging the issue of staff sickness, which had been a problem, not only in their department, but across the entire Lancashire County Council. "We have 220 staff, and you only need some long-term sickness to cause a major problem," Dickens said. They tackled the problem from a number of fronts including, a well-being program, as managers they took measures to manage stress and even created a program to ensure staff take exercise. "It wasn't to dictate, but to explain what sickness means to the organization." In the ICT department sickness for the 2006 to 2007 dropped to 5.5 days per full-time employee.
By far the most successful initiative was a change in how staff take and use their annual holiday allowance. In a move that's genius in its simplicity, Dickens and Brown allowed their staff to book four days as late notification days. "This takes the pressure off," both the staff members who may have issues at home with children who are ill or deliveries, and the organization as they retain a motivated and healthy staff. "Anyone with six months of no sickness get a half day of extra leave," as an extra inducement, Brown says. This scheme has now gone across the entire council.
As well as improving the holiday system, Brown and Dickens have carried out staff surveys and can now report that employee satisfaction is high.
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