HP in €20m Outsourcing Deal with Education Firm

Sunday Business Post - June 2006

An Chéim – the IT systems provider for Ireland’s Institutes of Education – are very happy with the progress of their seven year, €20m outsourcing arrangement with HP.

The contracts came into effect last May and An Chéim and HP have been working together for the last six months to move each Institute’s server hardware and associated software to a central HP managed location.

“We have taken each of the banner applications for each institute and transitioned them into the HP Data Centre in Citywest. So they are now being served out to the sector from that location. We will have full implementation by the end of July,” says Derek Feeney – manager of An Chéim Computer Services Limited.

An Chéim is a wholly owned subsidiary of the Dublin Institute of Technology. Its function is to provide IT services to all institutes of higher education in Ireland, including both hardware and software services. It employs seventeen people at its HQ in Tallaght.

The systems implemented by An Chéim for each of the 13 Institutes of Technology and Tipperary Institute include a financial management system, a student record system, a suite of fully integrated HR applications and a library system. HP are now responsible for the maintenance and upkeep of all of these and the deal ensures that the initial investment of €45m is protected, while the benefits associated with a common design are realised.

“HP are providing help-desk support, so they are the first point of contact for the Institutes for the support of their systems. They are providing technical services as well including UNIX support, Windows and NT support, database administration. They are also providing some analyst support and some applications development support,” says Feeney.

Each Institute will also benefit from significant savings due to the fact that no individual Institute will have to invest in the technology or the staff to manage each application. Furthermore, each Institute will gain from the added efficiency of their IT staff being freed up to deal with other issues and benefit from reduced energy costs associated with running the hardware.

This outsourcing arrangement allows An Chéim to focus on planning and strategy decisions, leaving the day to day management and running of the systems to HP.

“We are trying to use a common sense approach and use everybody’s strengths. They are the strengths of HP – technical services, database management, 24/7 operations – our strengths are in working with the business to address the changing needs of Irish higher education,” says Feeney. “Scarce An Chéim resources are now released to focus on the business analysis and business process consulting in the higher education field on behalf of the institutes.”

The deal came about after a dedicated period of preparation and thought. IBM Consulting Services were asked to carry out an independent report on the Institutes’ IT requirements and determine which aspects were suitable for outsourcing. There was then an EU procurement process and HP won the tender.

Obviously, the IT services area is developing rapidly, and Feeney is aware that over the course of a seven year arrangement – which has an option to extend to eleven years – new technologies and circumstances will arise. However he is confident that the deal agreed caters for all eventualities.

“Over the seven years the piece will change. You are never going to remain static. We have a comprehensive contract but you can never legislate for everything and that is where building the relationship with the supplier is key. If things change we can negotiate with HP for a new statement of work, but we are not limited to HP – there is flexibility built into the contract and we would be quite prepared to negotiate with HP or anybody else who can provide the extra services,” says Feeney.

Feeney and An Chéim have spent the last year concentrating on finalising the deal and implementing the outsourcing arrangement, but he is now turning his attention to the future.

“What we need to do now is go forward with the Institute of Technology sector and determine what their requirements are and there are certainly changing requirements in the business – the whole move towards modularisation and improving access to education is a big driver,” says Feeney.

Feeney is very happy with the savings which this outsourcing arrangement will make for An Chéim, and while he doesn’t use specific examples, he feels that this deal is a good example of the benefits of partnership between business and the public sector.

“There are always challenges in relation to ICT projects and I think this is an example where it has worked. IT takes a lot of effort and a lot of vigilant management to make it work and build a relationship, but we set out to achieve certain things and we have done that,” he says.