Outsourcing can be a tricky business. Gartner says half of all IT outsourcing relationships fail. But when they work, they really work. This is the story of how two partners created a long-term relationship that keeps on giving.
The Land Registry (LR) is the government agency that records the titles of over 20 million properties in England and Wales. But it had a business challenge: having completed the computerization of its textural records, it needed to introduce application systems to record and maintain title maps. However, the 300-500 workers in each of its 24 satellite offices throughout the UK were only equipped with 6,000 dumb terminals.
The agency wanted to move to a PC-based desktop system which would allow workers in the district offices to add and access maps and other scanned documents in its database. What's more, they wanted to do it quickly.
"We needed a distributed infrastructure and a user-friendly front end," says Paul Maycock, Contract Manager and Head of IT Services for the Land Registry. "Our IT department had a lot of experience in the mainframe area but little experience with desktops," he adds.
The UK government agency decided outsourcing was the best way to go for the additional skills that it required; it began a public-private partnership with HP in 1999 after a competitive tender.
The Land Registry gave the supplier eight months to roll out the new Distributed IT Infrastructure, which required the design, provision and implementation of central and distributed Servers, WAN/LAN, PCs, printers, scanners, digitizers and plotters at 26 locations throughout England and Wales. "HP rolled out the Distributed IT Infrastructure successfully as planned but business changes happened more quickly than we first anticipated," reports Maycock.
HP also took over the network design and management as part of the contract. The Agency itself harnessed the power of its mainframe to house its rapidly developing database, which is now one of the largest of its type in the world.
The original plan was to add 5,500 PCs to the system. But the implementation was so successful the Agency wanted every employee to have a PC, reports Mervyn Kinch, HP's Client Manager for the Land Registry. HP now runs the Distributed IT infrastructure for 9,500 Land Registry staff.
The Benefits of Outsourcing to a Government Agency
There are many examples of IT outsourcing contracts within UK government. Maycock says the Land Registry is slightly unusual within government in that it has developed and maintained a strong in-house IT organization, and LR is well respected for the success of its IT systems. HP has a number of other government contracts including the recent win at the Foreign and Commonwealth Office, following a reference visit to Land Registry.
HP's expertise and flexible resource capability were the primary motivations for outsourcing. "We would have had to hire many more staff for the implementation," says Maycock. HP was able to bring in teams with specialists when needed. "HP was very responsive," he says, but then the implementation teams "went home when they were done."
As the years went on and the partnership flourished, Land Registry has relied on HP to help in other areas, like developing a security architecture for LR's developing e-business services.
Outsourcing also allowed the Land Registry to enjoy HP's leverage in other areas of its business. For example, Maycock says the agency was "always frustrated and not taken seriously" by its telecom providers. Then HP took over its network and was able to negotiate a better telecom deal for the Agency because of the power of its large telecom spend.
"HP managed to do two or three things to strengthen our network that we couldn't do. Ever," says Maycock.
Creating a Public-Private Partnership
Because the Land Registry is a government Agency, it specifically designed its outsourcing relationship as a public-private partnership. "We both recognize this has to be a win-win partnership," says Maycock. As a buyer, the Land Registry recognizes that HP is a commercial organization that has to make money or they will be out of business."
Governance has been easy because HP have delivered stability and continuity during its 10-year contract. Maycock says HP has a small team of 15-20 on site; the Client Manager, who has been with the deal since the outset, sits in the office next to him. He says one of the reasons the partnership works so well is that key HP executives who negotiated the deal and set up the outsourcing contract actually joined the HP Land Registry team. "It's important not having one team negotiating the deal and another team implementing it," he says. Adds Kinch,"We started to build our relationship during the bid stage."
Maycock believes this continuity "has allowed the relationship to grow." He says the HP employees "know their business, which has cemented our relationship." Adds Kinch, "This is a relationship between individuals as well as organizations." As well as being part of the LR team, the HP employees on site act as the interface into the wider HP organization, enabling LR to benefit from the full range of HP Services and products.
Maycock adds both parties work hard to make things work. "No one is at each other's throat. So far no one has thrown the contract across the table," he notes.
In addition, Maycock prizes HP's flexibility. "We have asked them to do new things and they were eager and agreeable. We haven't had to continually get out the contract," he reports. For example, HP brought its Adaptive Enterprise solution to the relationship "so we can respond more quickly to changes in LR business needs," says Kinch.
That said, Land Registry hasn't lost sight of the fact that outsourcing has to continue to create the value. The contract has a seven-year breakpoint; Land Registry had the right to break the contract at the end of seven years. (There are currently four years left.) Instead, the two partners stayed together.
But they are now conducting a joint benchmark study "to confirm we are still getting a good, cost-effective solution," says Maycock. He says he knows he got a competitive price when he negotiated the deal; he wants to ensure the cost savings are still there. An independent advisor is studying the contract and will make the final determination.
Whatever the findings, Maycock insists this outsourcing relationship is "a great success." The reason: "The positive attitude on both sides and the commitment to work together to achieve common objectives. When the chips are down, we know the HP team really care and will deliver."