back to article Outage-hit Lloyds Bank in talks to outsource data centres to IBM

In the week that Lloyds Banking Group suffered multiple outages, it has emerged the UK financial giant is negotiating to outsource management of its bit barns to IBM Global Business Services. Online services were interrupted on Wednesday and Thursday by unspecified technical glitches that prevented people from logging into …

  1. Anonymous Coward
    Anonymous Coward

    Don't know why people are complaining

    Lloyds business account website has been working all week. Perhaps it's just the personal account site that's glitchy?

  2. Natalie Gritpants

    I heard some wise person once say "banks are just websites with a banking license". If Lloyds outsources the website what are you left with? A management team and some high street shops that you are desperate to get rid of?

    What's to stop IBM getting a banking license and then offering to buy the Lloyds brand at a knock-down price?

    1. Anonymous Coward
      Anonymous Coward

      What's to stop IBM getting a banking license and then offering to buy the Lloyds brand at a knock-down price?

      Why take the risk on the balance sheet, when you can leave all that with Lloyds, and then charge them a small fortune each and every month. Fat margins, no downsides, no real responsibility when things go pear shaped.

      That of course is the bit of the jigsaw that Lloyds' pea brained PHBs will miss. They'll believe that outsourcing somehow delivers magical efficiency, "labour arbitrage", and technical competence, and that IBM will then share that expertise and cost savings out of the kindness of their heart. If only Lloyds looked at IBM's accounts they'd realise that the cost to serve will have to go up, because IBM's corporate costs, overheads and goodwill will far outweigh the salary savings of employing inexperienced third-worlders. And if they looked at, oooh, Cable & Wireless vs IBM, then they'd see IBM in their true light. As for the SLA that will "guarantee" that Lloyds get what they pay for....just make sure that it says "now wash your hands" at the bottom of every sheet, because that's what your SLA will be worth.

      1. Anonymous Coward
        Anonymous Coward

        Re: If only Lloyds looked at IBM's accounts

        It is enough to follow the IBM's web site to foretell what fate dooms over the Lloyds' one. In the last two years I have seen hundreds of time the portal to be up but the background apps filling it with content not to be. Hence no 404 error which is good for the stats but still empty pages causing frustrated customers. It was all across the board: IBM Announcement Letters database, support downloads, products documentation and even marketing leaflets downloads. Translating that to banking could translate to Lloyds Bank web portal running and even successful login but no statements, no payment orders or any of the... ehm, banking stuff.

    2. Captain DaFt

      "What's to stop IBM getting a banking license and then offering to buy the Lloyds brand at a knock-down price?"

      They're already a finance company! There's nothing to stop them.

      (Look a trifle risky, putting your bank under a competing company's control, don't it?)

    3. phil dude
      FAIL

      documentary...

      I think it was called "The Bank of Dave", channel 4.

      Illuminating about the "labels" of the 18th century, slapped on modern "businesses".

      P.

    4. RegGuy1 Silver badge

      Licence not license

      Sorry to be a pedant, but it's licence not license. Licence is a noun, as in driving licence.

      License is a verb, as in you are licensed to drive.

      1. Alan Mackenzie

        Re: Licence not license

        > Sorry to be a pedant ....

        Why are you sorry? You don't need to be! You've just educated me about those two words' spellings, for which, thanks.

    5. Anonymous Coward
      Anonymous Coward

      What's to stop IBM getting a banking license and then offering to buy the Lloyds brand at a knock-down price

      Competence?

  3. Jay 2

    What can possibly go wrong?

    I'm sure that's all going to run like clockwork with no problems at all...

    I wonder if the CIO has now got some sort of never-ending plan which involves fobbing off various IT to some outsourcing lot (getting a nice kickback?), getting some nice bonus and then sodding off to another company to do the same thing again before the shit hits the fan.

    Or maybe I'm just a bit too cynical?

    1. Anonymous Coward
      Anonymous Coward

      Re: What can possibly go wrong?

      That could be a dictionary definition for "outsourcing".

      1. Lotaresco Silver badge

        Re: What can possibly go wrong?

        ROFL.

        I've worked on many outsourcing projects. If we say "Well that went well." It's always with irony. A bit like on The Grand Tour.

    2. Anonymous Coward
      Anonymous Coward

      Re: I wonder if the CIO

      I recall the newly appointed CIO few years ago presenting his views just fresh from his trip to an outsourcing location outside EU. He presented to the very people repeating the improvement proposals for years as ideas only the outsourced gurus can make. The said audience was resolving problems caused by the said outsourced "gurus" 365 days a year. And top on the said CIO plans was to replace the said audience with the said gurus. Nuff said...

  4. Anonymous Coward
    Anonymous Coward

    Outsourcing...

    “The general quality levels following IBM's international push towards cheaper resources for repetitive, simple day-to-day tasks has come at a shocking price for our customers: quality and trust,” he claimed"

    My advice for businesses looking at IT outsourcing are to look at Tata - not because they are any good, but because they are about the only outsourcer where their delivery meets your day one expectations based on what you pay. i.e. they are likely to be the cheapest and a working IT infrastructure/support model isn't a business requirement...

    My advice for staff about to be TUPEd to IBM - take the money and run. If there is no money being offered, just run. It's easier to get a new job before you hit the spiralling depression that comes with working for IBM's outsourcing arm with the constant threat of job losses and real world de-skilling and Notes...

    1. Blotto Silver badge

      Re: Outsourcing...

      just working with Notes is enough to make you cry

      the biggest problem & risk for the customer is that over a short time, the loyal staff that understood the business will be moved about, retired forced out etc and then problems start to creep in and the cost steadily rises as each new project starts off not understanding the organisations needs and goes off in stupid tangents further locking in the outsourcer. There will be few left that understood why reliable systems where built the way they where and are therefore incompatible with some newish industry standard app like exchange or something. odd things done for good reasons are derided and replaced with a mash of nonsense who's builders are moved on before completion leaving an undocumented. mess for the next guy to find in a few years time.

      Unfortunately it'll be too late to even contemplate insourcing when Lloyds looks like its circling the drain due to inability to keep up with the market and various scandals caused by poorly cobbled together IT provided by a giant who cares not about the its customers customers & general lack of IT integration with the core business.

      Don't get me wrong, some bits of IT is best outsourced, installing network circuits is best left to telco's, building physical hardware is a job for hardware vendors etc.

      1. Doctor Syntax Silver badge

        Re: Outsourcing...

        "Unfortunately it'll be too late to even contemplate insourcing when Lloyds looks like its circling the drain due to inability to keep up with the market and various scandals caused by poorly cobbled together IT provided by a giant who cares not about the its customers customers & general lack of IT integration with the core business."

        The sad thing is that it won't matter because you've also described the competition.

      2. Anonymous Coward
        Anonymous Coward

        Re: Outsourcing...

        just working with Notes is enough to make you cry

        Shouldn't that be "was", not "is".......hold on......you're not telling me that Notes is STILL A THING? That businesses still use it?

        1. Hans 1 Silver badge
          Happy

          Re: Outsourcing...

          I do believe some do ... note that I personally think that Lotus Notes beats Exchange/Outlook easily ... I always loved the power, bit like Office + Sharepoint two decades early .... of course, you have to know how to use it.

          Its OS X client was great as well ! I have not used it in over a decade, I did have to get used to all the things I could no longer do with Office ... don't get me wrong, I prefer proper tools for the right task ... as in, open sourcery ... but if proprietary was corporate fallacy, then Notes back then clearly was much better ....

          Even Office 355 (was it 345 ?) has this Out of Office feature where you specify dates during which it should send automatic replies, it took MS several iterations to get that right ... it worked like a charm in Notes in 2000.... just saying.

          Notes was designed from the ground up for productivity ...

      3. Anonymous South African Coward Silver badge

        Re: Outsourcing...

        Don't get me wrong, some bits of IT is best outsourced, installing network circuits is best left to telco's, building physical hardware is a job for hardware vendors etc.

        Agreed and agreed. Noncritical IT is best for outsourcing, like mentioned above.

        Critical IT (like sysadmin etc) is best having in house, for obvious reasons.

        If you farm the whole of your IT infrastucture out, expect to pay more for a poorer (if not worse) service.

        Besides, what stops the outsourced IT shop from sneaking in "funny stuff" which causes issues, thereby ensuring them of a steady stream of revenue?

        1. Anonymous Coward
          Anonymous Coward

          Re: "funny stuff" which causes issues

          "Don't assume bad intentions over neglect and misunderstanding."

      4. Anonymous Coward
        Anonymous Coward

        Re: Outsourcing...

        Lloyds Bank has already outsourced the network circuits to a telco many years ago. Hence something else needs to be outsourced to keep the process going.

    2. GruntyMcPugh Silver badge

      Re: Outsourcing...

      "My advice for staff about to be TUPEd to IBM - take the money and run."

      Frikkin A dude! I'm coming up to the 2nd anniversary of taking VR from IBM, and it was the smartest move I ever made.

      I was TUPEd, and quickly after that, stuff spiralled downward. I was a solution designer, but IBM doesn't do BAU solutions, they were all costed projects, so that job was canned. I got redeployed on the same contract, but in Unix support, that lasted for a year or so before that job was offshored. I got benched, but got back into WIndows Support,... until that got offshored,... clung on doing Security and Compliance for accounts that had to be UK based (Banks and Govt agencies) but the list got shorter as contracts weren't renewed,... and 'UK' got redefined as 'Europe' and stuff was going to Poland. Took VR,... now work in a datacentre less than two miles from my house, and a million miles away from the morale crushing BS of IBM, management fads, and the PBC process. And we're an Exchange house,... no more Notes. I mean, if you went shopping at PC World for email software at home, and saw a box with Notes on it, and saw it came with a free util called 'ZapNotes' to tidy up when it crashed, you wouldn't buy it, would you?

      1. Alan Brown Silver badge

        Re: Outsourcing...

        "And we're an Exchange house,... no more Notes. "

        Frying pans and fires spring to mind.

  5. Anonymous Coward
    Anonymous Coward

    Helping Britain Prosper?

    By closing branches and offshoring back-office functions and making staff redundant?

    1. Anonymous Coward
      Anonymous Coward

      Re: Helping Britain Prosper?

      I've already seen the attempts of Ireland to prosper by raising the state's stake in a large bank, and outsourcing the whole bank's IT to an outsourcing company from a cheap labour country. I personally found them ironic compared to the big posters on the Dublin airport asking to bring IT jobs to Ireland... only in Departures.

  6. Anonymous Coward
    Anonymous Coward

    Banks...who needs them anyways?

    ...customers.....hmph.....

    Money....oh yes, we want money - banks would be great places if they could just have all the money and no customers....

    Customers are pesky things, they want unreasonable things, like access to their accounts and to actually be able to talk to someone in a language they can understand when things inevitably go wrong....(because we need to be as cheap as possible about having to actually spend money on them)...

    1. Aladdin Sane Silver badge

      Re: Banks...who needs them anyways?

      Borrow at 1, lend at 2, go home at 3.

    2. Hans 1 Silver badge
      Boffin

      Re: Banks...who needs them anyways?

      >Money....oh yes, we want money - banks would be great places if they could just have all the money and no customers....

      They do not want all the money, they want customers with credit cards, mortgages ... they can "print" money, remember ?

      1. Wilco

        Re: Banks...who needs them anyways?

        Pedantic, perhaps, but retail banks in the UK can't print money, except in Scotland where RBS, Clydesdale and BoS can. Proper beer tokens are issued by the Bank of England.

  7. a_yank_lurker Silver badge

    Not to self

    Never get an account at Lloyd's (do not know if they are over here). Imbeciles teaming up with idiots - nothing good can come from this.

  8. Anonymous Coward
    Anonymous Coward

    BM, for example, intends to base 80 per cent of its service staff in cheaper labour countries

    my companies goal is 70% to India..

    You work it like the following:

    Q4 layoffs

    Q1/Q2 following year new hire

    That way you avoid any reporting issues.

  9. Anonymous Coward
    Anonymous Coward

    Ah Lloyds, I was one of their frontline IT chimps for couple of years before I fled to warmer climes. I can't say a bad word about any of my supervisors or managers, they were all amazing people, but once you got to Exec level it was all about bottom line and sod the rest of it.

    They were always dead keen on outsourcing anyone who wasn't on a phone, especially "support" for their bespoke apps, which didn't work, and were never fixed, and then they turned off the old systems the branch staff would use because the old system did work.

    These are the same apps that would only work in IE6, because apparently updating them to work with newer browsers was "Out of scope".

  10. Anonymous Coward
    Anonymous Coward

    Hmmm?

    Where does Lenovo fit into this deal?

  11. TheBorg

    Guichelaar is a snake in the grass. Left Deutsche under a cloud after the HP deal was signed. Known as the smiling assassin during the TUPE negotiations.

    1. Anonymous Coward
      Anonymous Coward

      Left Deutsche under a cloud after the HP deal

      Funnily enough the director that brought HP into the company I work for left under a cloud. Of course, by the time the retards of directors realised the mistake they'd made and gave her the bullet (or generous payoff more likely), it was far too late to do anything, so now we're stuck with HPE's crappy service and outlandish costs.

    2. Bobski

      Same thing happened at Lloyds

  12. Anonymous Coward
    IT Angle

    Protection against unauthorised SCCM target deployment functions

    savvy enough to develop deployment routes that ensure such deployments only trigger against specific clients using the functions of SCCM to provide that protection

    What, do you mean someone ran a remote update that crashed forty eight servers in Ireland?

  13. Anonymous Coward
    Anonymous Coward

    Urgh

    Spent some time there, hated it. Whole place is like treacle because nothing ever gets done and people are paid to sit at a desk and do mandatory training between bouts of boredom. Projects take months and each change goes through about 15 layers of people who haven't a clue but need to sign off on the change.

    Also, they seem to have a CIO for every bloody server!

    1. Anonymous Coward
      Anonymous Coward

      Re: nothing ever gets done

      You might have sat in the wrong chair then. The time I was there was the best and most comfortable experience I had in a decade. The layers of change approval were happily filtering the piles of rubbish unexperienced outsourced staff could hammer at the running servers. The projects were delivering despite major changes in the scope just before the deadline. And the IT Operations was successfully grinding a lot of problems to particle-sized dust. At least in my team I was observing a very good synergy between Projects and Operations where the former would deploy the systems in a way to help the latter to maintain them.

      All that said it was long time ago, and the outsourcing companies were gradually replacing the flawlessly ticking processes with not so flawless ones, called "improvements".

      1. GruntyMcPugh Silver badge

        Re: nothing ever gets done

        Sorry, down voted for using the word 'synergy'.

        1. Anonymous Coward
          Anonymous Coward

          Re: for using the word 'synergy'

          Being a non-native English speaker I can only beg for your forgiveness. I am not happy with the word myself (smells of marketing BS) but was unable to come up with any useful alternative.

  14. Milton

    Staying ahead of outsourcing

    I was consulting with what might be called an experienced major British airline when it decided to outsource lots of IT in the early 00s. For amusement value this was precisely when a number of the less gormless US companies, which had pioneered outsourcing and suffered the consequences, were IN-sourcing key stuff again. But never let a Board learn from anyone's mistakes ....

    The outsourcing has of course been a catastrophe, to the point where it is now arguable that the airline has become entirely parasitised by the (predominantly Indian) outsourcer, its guts being eaten as if it exists as a life support system for its providers, instead of the other way round. The level of cost-benefit is atrocious—indeed, so slow and error-prone is the service that the company might actually be better off with no service at all. Everyone in business has seen this happen somewhere, I'm sure.

    But of course, Board members rarely act in the long-term interests of a company. Outsourcing is perhaps the perfect example. Once you have contrived to link your next couple of years' pay and eyewatering bonuses to "cost reduction" or "efficiency savings", and once you've found the right bean-counting method to bring so-called savings forward and to defer risks and costs, you're gonna go for outsourcing because, no matter what long-term damage is done, you will have collected the cash, spun your tenure as a success, and be long gone before the true consequences are felt.

    We all know executives and managers who have a reputation for staying one step ahead of the terriible disasters they've caused. Outsourcing is merely one of those disasters, but perfectly rational if your motivation is short term greed.

    1. Version 1.0 Silver badge

      Re: Staying ahead of outsourcing

      IBM has been run for the benefit of upper management for some time now - the company itself is toast, it's function now is to make the upper management wealthy so they are mostly looking at a three to five year profit . . . and then retirement.

      Nothing else matters.

  15. Anonymous Coward
    Anonymous Coward

    you live in hope that trump is dumb enough to fcuk this shite up

  16. Velv Silver badge

    In, Out, In, Out, Shake it all about

    Bank of Scotland outsourced everything to IBM Global Services in a 10 year deal a number of years ago. It was in sourced after 18 months either due to the Halifax "merger" or the Lloyds "merger".

    And now Lloyds are putting it out again...

  17. jMcPhee

    Hello Barclays

    After what happened on project Phoenix, this doesn't sound promising

  18. Anonymous Coward
    Anonymous Coward

    Amazing that this still happens

    These outsourcing agreements rarely work out well and then they are next to impossible to unwind.... The only lever IBM, or any other outsourcer, has to pull is the ability to offshore labor to India or elsewhere. It is far from clear that offshoring actually saves anyone cash... that is why, in the US, H1-B visas have become the rage, moving Indians closer to the work because coordination from opposite ends of the world without major mistakes and tons of project management overhead is difficult.... It seems like any savvy, or not clueless, executive was over outsourcing and offshoring about a decade ago. The play today is to automate all of that infrastructure at hyper scale through a Google or Amazon cloud service vs just firing relatively expensive people, hiring relatively inexpensive people..... I'm sure they have legacy hangups as a traditional financial services company, i.e. mainframe, but it would be hilarious to see the cost they are paying IBM on an annual basis vs the cost they would pay to run the same amount of workload on Google Cloud or AWS... probably 1/10th the cost or less.

    1. Doctor Syntax Silver badge

      Re: Amazing that this still happens

      "The play today is to automate all of that infrastructure at hyper scale through a Google or Amazon cloud service vs just firing relatively expensive people, hiring relatively inexpensive people"

      Same thing, different tech.

      Eventually the survivors will be those few business with the wit to realise that to do things well, from both the financial and customer service points of view, requires recruiting and retaining good people and that that requires good pay. A lot of businesses will go to the wall in the meantime.

      1. HieronymusBloggs

        Re: Amazing that this still happens

        "to do things well, from both the financial and customer service points of view"

        I suspect one of those things is not a consideration.

        1. Alan Brown Silver badge

          Re: Amazing that this still happens

          "I suspect one of those things is not a consideration."

          If you annoy enough customers, it becomes financial.

      2. Anonymous Coward
        Anonymous Coward

        Re: Amazing that this still happens

        I don't see how it is the same thing. One is a technological innovation (cloud) and the other is just a labor flip with the same technology, same legacy constraints. Cloud infrastructure improves cost and customer service or service levels. Outsourcing and offshoring, usually, degrades both.

        1. Anonymous Coward
          Anonymous Coward

          Re: Cloud infrastructure vs. Outsourcing and offshoring

          I see no difference between the two. In the outsourcing scenario the company is held hostage to the external labour's deficiencies. In the cloud scenario the company's data and services are held hostage themselves. I still remember the good old example where a company had to recover after a real disaster only to discover that their connectivity to the cloud wouldn't provide the necessary throughput. The very famous cloud provider offerred to provide the data on physical media faster at a cost with many trailing zeroes.

  19. Anonymous Coward
    Anonymous Coward

    I thought nobody ever got fired

    for buying IBM?

    1. GruntyMcPugh Silver badge

      Re: I thought nobody ever got fired

      They call it a 'Skills rebalancing exercise' now. But they send you on a course to help you get another job after you've been fired,... I mean, rebalanced.

    2. This post has been deleted by its author

  20. Anonymous Coward
    Anonymous Coward

    Where are the success stories?

    I'm yet to hear of an IT outsourcing success story after all these years.

    Surely there has been a scenario where a company has actually saved money and got a much improved service, as evidenced by end user feedback.

    Would be great to see examples of these success stories!

    1. Anonymous Coward
      Anonymous Coward

      Re: Where are the success stories?

      Every outsourcing deal is a success story for the company being outsourced. I am also eager to see any long-lasting benefit for the one outsourcing.

  21. ewoodyg

    what bank in ireland was it an when?

  22. Hans 1 Silver badge
    Boffin

    Lloyds Bank should not be Outsourcing but Automating

    They need to get some software robots in to automate the hell out of it, they will drastically cut costs ... I know a Swiss bank that did JUST THAT, cut spending across the board, but not on board level or HR ... IT has a pretty tight SLA, always met ... reliability of robots is the key.

    When you can get a robot to clone your SAP system landscape in less than a day from prod to test by the push of a button, reproducible at will, you test on very short time-frames.

    No more SAP Basis team liaising with networking, database, and OS teams to clone the systems, one after the other ... one button => landscape cloned in parallel, the time it takes depends on the system taking the longest (e.g. with biggest database).

    Shit, you can even automate reconciliation these days ... Out-source ? The Cretaceous called and wants its dinos back!

    1. Anonymous Coward
      Anonymous Coward

      Re: Lloyds Bank should not be Outsourcing but Automating

      You might have missed that Lloyds Bank has Automated many years ago. Servers are cloned with ease only to wait for their data.

    2. Robert D Bank

      Re: Lloyds Bank should not be Outsourcing but Automating

      Not sure that cloning production directly to test without redacting personal information is a wise or particularly legal thing to do, in the UK at least. The cloning is easy, the redacting not so, and takes time.

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