BBC IT project to save £17.9m cost it £38.2m net MPs have given the BBC a kicking over its Digital Media Initiative, a technology development programme that was meant to deliver a "benefit" of £17.9m but ended up costing it a net £38.2m. The Public Accounts Committee hauled the Beeb over the coals, questioning why the project was handed to Siemens in 2008 without tendering, …
They are muppets. To resolve the issues remaining, they have hired oodles of PA Consuliting consultants at £1000s each per day. Who's in control ? PA Consulting - watch for enormous Land & Expand bonuses for the consultants who have brought in more consultants...
BBC Management should be disciplied / fired.
At least Auntie got some savings out of it, even if it was out of pocket to get them. Auntie may even have learned a lesson or four (the jury will be out on that). Compare and contrast that with Government IT projects (ad nauseam), how many of these generate any savings at all. Or, if they do, get back the same proportion as Auntie?
Proves the point that Outsourcing isn't about saving money.
It's about:
1) moving the costs to a diiferent part of the balance sheet to make the bottom line look better this year; and
2) having someone to blame (and therefore take to court) when it all goes wrong.
Long live the Accountants and the Lawyers!!!
I disagree, (in this case it was obviously crap) but in general and in the right cases outsourcing does save money. Those cases are where there are economies of scale to be made.
For example does it make sense that a company hire the developers and build and maintain their own payroll system, or turn the job over to a company that specialises in that? If that outsourced company is running payroll for 10 companies each with 10,000 employees then it is spreading the same development and maintenance costs over 100,000 employees. Those costs don't significantly increase with the number of employees served.
However what often happens with outsourcing is that companies want something specialist and custom built rather than just fit for purpose. Add to that, they are usually crap at actually specifying exactly what they actually want. In this case you have outsourced to a company that does not understand your business and has to make a profit on a system that can't be used by anyone else. This equals additional costs on getting it right and additional costs to cover 100% of the profit margin.
Where you want a custom system you should use internals to lead the development and maintain the system and backfill with outsourced contractors during the implementation phase.
Another “successful” outsourcing project. I’ve seen 2-3 big ones during my career in the City, all of them big failures, with the provider trying to milk as much as possible out of the contract and almost nothing gets done, politics, bickering etc. I am not surprised at all.
And the worst thing? The framework for doing multimedia sharing and all that in a broadcasting and multi("new")media publishing setting not only already exists, it's free and open source to boot. Written by a Dutch broadcaster and adopted by the others. It's called "mmbase".
I reckon that with one project leader who actually knows his stuff and say a couple million --the beeb is a big corp, after all, a million is what you start with for any given project-- you could've managed to provide the glue to make that thing work in your organisation. That is, if your organisation already was anything like organised at all. But we already knew they weren't, and that in fact they so much weren't that even the meta-meta-change-change-management-manager's job description became unreadable because of the doublespeak wordsalad.
So really, this is no surprise. Even the absence of entirely practical rules like "if it costs more than the savings it claims, it's time to shoot it down right there and then" is, if not exactly forgivable, not unexpected either.
I'd suggest, however, that this failure of organisation be fixed doubleplusrightquick, or we'll have no option but to fire every last one of the beeb brass and a goodly chunk of the employees and use the rest to rebuild the thing from scratch. That would be painful, but if it's less painful than keeping the beeb around as it is, then that suddenly is a good option. And it starts to look more like a palatable option every day.
If you are instigating a project to make savings there seems to be a simple way to go about paying for it. You pay the supplier a percentage of the amount saved. So the payment terms in your contract with the supplier should be something like 50% of the amount saved each year over the life of the product. Imagine your current system costs you £1m a year. You get your new supplier to install a system that will cost £0.5m a year. Of course you'd have to put something in there for inflation. That way you're paying not for the system, but for not having to pay for the system.
That way nobody who isn't sure they can make you massive savings is going to tender.
As title - you know it would of saved millions and if it was late it would of not been the BBC picking up the tab.
Do that not have any penalty clauses in contracts thesedays. If they say they can do it for X amount in X time and fail, they should pay for there mistake not the BBC pay for there mistake.
Does this prove that outsourcing in alot of situations leads to shite results or do others have to sufffer stupid seagull managment/consultants.
"A senior leader who has a track record of successful delivery of large, complex software development projects"
An annoying trend in the last decade, thanks to the HR paper-pushers:- companies want to hire people with *proven track records* in X and yet none of them is willing to give anyone the chance of acquiring said track record (unless they already have it). These are the same HR idiot who required 5 years' worth of commercial Java experience... 2 years after Java hit the commercial scene.
And in another, these people will be retiring leaving us with a lot of willing workers without the all-important "track record".
And before anyone asks :- I'm one of the lucky ones who actually managed to acquire a "track record" in my field (not Java) before this trend started, so this isn't sour grapes.
<deep sigh>
Weren't whole sections of the Beeb's IT staff outsourced and transferred to Siemens? Probably explains why they were given the contract, it was probably given to the in house team that is no longer in house.
Outsourcing or no outsourcing, failing to fully specify a project leads to this sort of issue and uncertainty in cost.
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