London Metroplitan University Outsourcing – some free consulting advice!

The Southwest One potential dispute led me last weekend through links to the London Metropolitan University (LMU) proposed shared services outsourcing / partnership which I wasn’t aware of, and which seems to be their attempt to set up something similar to the SW1 model. The OJEU ad earlier this year included IT, Finance, marketing, procurement, HR etc etc .

Interestingly, the consulting report that suggested this to LMU was produced by “Andrews Outcomes International “ – a new firm set up by David Andrews, the Xchanging founder and CEO. The firm was also bidding, but according to reports has withdrawn now. I didn’t know Andrews was back on the outsourcing scene. He’s well connected, and I guess you can look at his track record with Xchanging in two ways. Positively, he built a large outsourcing provider from scratch, but more negatively, the company lost two thirds of this market value post flotation under his stewardship (as shareholders like me know only too well...)

Back to LMU  - they’re in dire straits now as their licence to take in foreign students has been revoked, based on fears in Government that too many of their students were actually coming to the UK to work, not study. Whatever the rights and wrongs of the case, and I'm told that LMU had been taking positive strides towards better performance, it is putting financial pressure on LMU which might make the outsource more likely.

Now apparently, the business case for the shared services is based on bringing other customers into the venture. That was of course exactly the model that SW1 proposed. Five years later, how many new customers have SW1 actually gained? None.

So let me give some free consulting advice to LMU and indeed to the bidders who are still in the frame. (Remember, according to Channel Four News, I’m an outsourcing expert!)

NO-ONE WILL JOIN YOUR VENTURE

Certainly not for several years until it is proven. And frankly, with the reputation that LMU has got (fairly or unfairly) can you really see the Board of any academic (or other public sector) body nodding their heads and saying, “yes, let’s move our critical support functions to that bastion of good practice, LMU”.

I'm not being horrible or vindictive here, just stating what seems fairly obvious really. And it doesn't mean that outsourcing isn't the right thing for LMU itself to do, I would stress. I just don't think they should go into it with some rosy vision of others queuing up to join them. Not going to happen. Guaranteed.

No fee necessary, glad to be of service.

 

Voices (5)

  1. Dan:

    I’m currently studying with London Met for my CIPS diploma, as CIPS grades it as a centre of excellence. Wonder if they asked any of their tutors for their advice on this?….

  2. Phoenix:

    LMU is looking to re-engineer its processes and then establish a Cost Sharing Group (CSG) which enables like-minded bodies to share functions and avoid VAT. The tender process is to identify a partner who will do the BPR and provide management services to the CSG. HMRC rules don’t allow the partner to take an equity stake in the venture.
    Since having to repay grant funding to the Funding Council for issues about student numbers, LMU got a new Board of Governors and a new Vice Chancellor. Difficult decisions have had to be made in the face of Govt cuts – massive reduction in courses and headcount. The CSG is part of its plan for modernisation to turn the institution around for its 30,000 students, many of whom come from disadvantaged backgrounds.
    The UKBA issue, contested by LMU, is a real kick in the teeth for them. But the effort to make LMU work deserves our support, not our disdain.

    1. Peter Smith:

      Phoenix,
      I certainly don’t have disdain for what LMU is doing and like you, I perceive that the foreign students issue does not appear to have been well handled by the government. However, it does seem to me naive if LMU believe lots of other organisations are going to rush to join their shared services venture. Evidence from across the public sector suggests this just doesn’t happen – even if LMU didn’t have these reputational issues to overcome. If the outsource makes sense on a pure LMU basis, then great, go ahead – no problem with that. But don’t build the business case on notional revenue from others.

      1. Phoenix:

        My understanding is that LMU wants to do the BPR and that the CSG is a later stage that will need its own business case. If it doesn’t stand up, it won’t happen.

  3. Dave Orr:

    Beds, Cambs & Herts Police are queuing up to join the G4S framework contract for Lincs Police in April 2013 despite another “all singing, all dancing” big Enterprise Resource Planning IT system being proven beforehand?

    Police are being egged on to join G4S despite the Olympics fiasco by a Home Secretary who survived a reshuffle for reasons presumably by advocating “Public bad, Private good”?

    http://www.guardian.co.uk/politics/2012/sep/06/home-secretary-police-outsourcing-g4s?INTCMP=SRCH

    Dogged by technical and administrative failures since its inception Southwest One has so far failed dramatically in its main purpose of delivering £197 million of savings over 10 years. Southwest One was set up under the previous Liberal Democrat administration of Somerset in 2007 as a joint venture between IBM, Somerset County Council, Taunton Deane Borough Council and Avon and Somerset Police to make savings on procurement. In February this year the Council said the venture had in fact only saved £10 million of the £50 million it was supposed to have made by that point.

    Southwest One is a template for everything that can go wrong with public sector outsourcing of services. Oversold and undelivered, this contract has cost the tax payers of Somerset dearly and left the Council in a difficult position as it tries to complete its reorganisation of services.

    “Rather than creating a more flexible and agile local government, the reality of outsourcing public services via complex contracts, is that authorities end up bound to unwieldy and inflexible contracts in the long term.

Discuss this:

Your email address will not be published. Required fields are marked *