How outsourcing can cut your IT costs by 30 per cent
Capita IT Enterprise Services, one of the outsourcer’s biggest divisions, would be a FTSE250 company in its own right. Clients include many local councils, defence, insurance, health, retail, education, energy and utility and other commercial businesses. Executive director Peter Hands tells Business Technology why outsourcing IT makes more sense than ever…
Capita is one of the largest IT services providers in the UK
4:08PM GMT 24 Feb 2015
Business Technology: Capita is one of the largest IT services providers in the UK. How many people know this?
Peter Hands: A lot of people wouldn’t perhaps recognise Capita as being as big as it is in IT, because often we’re sitting behind another part of Capita delivering the IT to support BPO transformation projects. But in recent years we have secured many IT transformation contracts independently, growing our identity in the IT industry. This year, IT Enterprise Services will bring in about £1bn in revenue.
BT: What do you say to clients who are thinking about outsourcing their IT?
PH: The pace of technology change is not getting any slower. What has changed is that you need to be more agile and have less capital tied up in IT. Outsourcing IT is like outsourcing anything else: if it’s not your core business, then you’re probably not as good at it as somebody whose core business it is.
IT is becoming ever more critical to running businesses today. In many cases, whether public or private sector, they often don’t have the scale or technical buying power to get “best in class” IT all the time.
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By outsourcing you achieve both, securing best value from vendors such as Microsoft, Oracle and Cisco plus the service quality you need for a predictable budget. The net result is "new" time to focus on strategic IT initiatives that will take your enterprise forward.
BT: How is cloud impacting the outsourcing world?
PH: People like the flexibility and agility of cloud, but they are nervous because they don’t know where their data is being held or how secure it is.
For example, regulated businesses, such as banks or public sector organisations, have to think carefully about data security and data sovereignty. For many data sovereignty is key which means it may be unacceptable to have your data offshore.
The role of IT outsourcers is now increasingly about helping clients make the right investment in private/public or hybrid cloud services – and making it all work. This part is often underestimated. We’ve invested significantly in a suite of cloud services that gives the same flexibility, functionality and utility that you get from the public cloud, but guarantees data security and UK data sovereignty. That means you can be confident that your data only resides in the UK. This is driving the adoption of cloud services.
BT: But isn’t it cheaper for me to buy my own servers?
PH: In most cases not. For example, we all get our council tax bill in March; the two months leading up to that is a very busy time for local authority finance departments. So the demand on IT is extremely high. But, for ten months of the year, it’s very low.
Using Capita Private Cloud, you can scale up, or down, to meet these demands and avoid buying server capacity that you don’t need. Outsourcing also provides access to up-to-date technology that meets regulatory requirements. That can be difficult to achieve when running your own IT in-house.
BR: Public cloud services are cheaper, but are they better?
PH: There’s no doubt that the public cloud price point is very compelling, but they are often globally-hosted and less flexible for particular business requirements.
BR: How much money can a company save on its IT budget through outsourcing?
PH: We would expect customers to be saving at least 30pc on a multi-year outsourced IT engagement. It really depends on how they adopt utility computing but cost savings and service transformation are what makes outsourcing compelling.
Quality Street: how Capita is helping the residents of Southampton
Capita IT Enterprise Services delivers the IT services behind Capita’s BPO transformation contract with Southampton City Council, and has done so since 2007. As part of this Strategic Partnership the IT element has resulted in the council making significant savings on IT costs, improving availability of services and adopting new ways of working. Together these have all brought many improvements to council staff as well as local residents.
Many of the council’s most in-demand services have been digitised and made available online through its new website. Among other things, residents can now report potholes, check bin collection dates and pay council tax online, saving the council money, and making access to services available to residents 24/7.
Adopting mobile technology has meant that around 500 staff can now work remotely, benefitting areas such as Housing Repairs where staff can now spend more time with those who need it most.
Outsourcing its IT to Capita has meant Southampton City Council can adopt and adapt to new technologies easily but remain focused on what it does best – delivering high quality services to its residents.
Out of the Ark: delivering services and lowering risk
Walking down a Capita corridor in the Ark data centre in Farnborough, Hampshire, you are struck by how scrupulously clean and quiet it is, more like a hospital than a noisy air-conditioned server room.
Partly this is because of how Ark uses green technology, recycling the air outside to maintain a constant temperature of 22-25 degrees. Filters pull air in from outside, scrubbing it until the server corridors are operating-theatre clean.
“The data centre is all about maintaining the environmental conditions at the desired state using the least amount of energy,” says Steve Hall, executive sales and marketing director, Ark Data Centres. “The matching technology control system is at the heart of the solution.”
Capita IT Enterprise Services established a partnership with Ark to provide hosting facilities for its secure flexible cloud. The collaboration has enabled Capita to deliver economic data centre services to customers and internally.
Ark has invested more than £180million in its Farnborough and Corsham data centres, and plans further significant growth in 2015.
“Capita can leverage that investment for its clients,” says Hall. “Working with us to deliver data centre management gives Capita a competitive edge in a marketplace where sometimes differences are marginal, as we can deliver our services to Capita better, faster and cheaper while lowering business risk.”