HP loses MoD payroll and pensions deal to CSC HP has lost the contract to supply pay, HR and pensions administration to the Service Personnel and Veterans Agency (SPVA) for the UK armed forces. "HP will work to ensure a seamless transition of activities to the successful bidder, ensuring no loss of service to the thousands of people who depend on the service," HP said in …
So the contract is worth £57m a year, plus SPVA's own admin costs of around £40m (from SPVA's annual report).
SPVA pays pensions and service salaries. In the real world, that costs about £40 per payee per year, including payroll runs, payslips, expenses and bonus processing, banking transfers and audit. That's for a competent in house service centre, using some but none-too-advanced on-line tools and UK based permanent employees - I work for a company beating the £40 benchmark, serving around 12,000 employees, with around 30 different sets of T&Cs, multiple collective agreements etc.
With circa 850,000 payees served by SPVA, allowing them £40 per head means it should be costing them around £34m a year with no further scale efficiencies over my lot's 12,000. So the civil service bunglers are being paid more than enough to do the job in the first place, but then have additionally paid an outsourcer the same again plus a 50% margin (before the variation invoices start flying). But EDS set the bar high - in 2006/7 they reamed SPVA out for £91m.
CSC have taken billions from the NHS in both real money and opportunity cost ...
http://www.ehi.co.uk/news/EHI/7666/csc-and-dh-talks-will-drag-on-to-june
Like Accenture they were seduced by iSoft in the procurement stages... that worked out really well
http://www.ehi.co.uk/news/EHI/7688/isoft-trial-told-of-%27forgery-kit%27
Only CSC were so impressed they subsequently bought the company....
http://www.computerweekly.com/news/2240105223/CSC-closes-acquisition-of-iSoft-ahead-of-NHS-IT-contract-renegotiations
There is however b*****r all to choose between the big management consultancies.
Basically IMO - if the answer is BT/Accenture/CSC/HP/Capita/etc - you're asking the wrong question. Unless the question is "how do I advance my personal PHB career from a undeserved six figure salary in the upper tier of the Public Sector into seven+."
Oh good, looks like no one will get paid then!
CSC are frigging useless from my experience. They make 100's of obvious mistakes and then charge you, the company (who is paying for their service) for that. I swear that was their business model - keep within SLA's but go over the SLA 90% of the time because it means more profit.
Good luck to them, guess they don't want to pay civil servants in normal ways anymore.... time to find a new social club ;-)
I think the common misconception here is that it is "Just Pay & Pensions" that is a big part of it, but there are lots of other components of IT that SPVA are responsible for, and subsequently so are any IT Supplier. The things that spring to mind:
- Armed Forces Compensation Scheme (AFCS) Computer System
- War Pensions Computer System (Predecesor to AFCS)
- Training Systems
- Prisoner Records (e.g. Court Marshalls)
- Helpdesk (and the IT that goes along with that)
- Desktop UAD provisioning
I think in total there are in the order of 100 Applications expected to be supported by the IT Provider.
Not to mention that part that actually should be simple - i.e. the Payroll element, is so hideously complex because of MOD rules, allowances and supplements that the JPA system has had to be so hacked together it becomes extermely complext to maintain.
THAT is where the cost goes - strip MOD process / complexity out of the equation, and you can get back to a reasonable benchmark.
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