The Agency decided a partnership was the best solution

1.9  The Agency concluded that their limited in-house resources could not support the business effectively. The pressure on staff to satisfy day-to-day requirements made it difficult for them to keep up with changes in technology and growing demand from users.

1.10  Even if the Agency had been able to recruit and retain sufficient staff in-house to meet their needs for IT services, senior management recognised that the involvement of the private sector offered other advantages. Transferring some of the responsibilities for delivering IT services to the private sector would free up time for the Agency's management to concentrate on key activities, rather than the day-to-day delivery of IT services. Further, the Agency recognised that a major private sector company should be able to deliver services at a lower cost through greater economies of scale.

1.11  They decided that a partnership with a private sector IT supplier would be the best means of reducing the cost of delivering their IT services and of allowing them to have the control they wanted over the delivery of these services while enabling them to retain their IT staff. The Agency considered that a partnership, rather than an arms length outsourcing agreement, would more readily allow their engineers (who had developed a number of IT systems) to continue modifying systems in response to developments in radio spectrum technology.

1.12  As the Agency regarded IT services as central to their core activities of issuing licences and regulating use of radio frequencies the Agency attached importance to retaining an in-house IT service which had a detailed knowledge of their business and operations. They also considered it important to retain sufficient in-house expertise to interact effectively with the partner.

1.13  In 1995 the Agency's senior management gave a commitment to their IT staff that new arrangements for IT service delivery would not result in redundancies. The Agency intended that their IT staff would be involved in developing the scope of the partnership and taking the project forward. The Agency gave assurances that no member of staff would be transferred to a private partner without consent. In the event many of the Agency's in-house staff left the Agency before the partnership was agreed or shortly afterwards.

1.14  The Agency intended that the new IT support arrangements would, through their partner, provide access to a pool of well qualified IT staff. The Agency are a relatively small business, employing about 490 staff, and the senior management were concerned that a private sector supplier would allocate the best staff to bigger customers where the rewards were greatest - especially if a competitive bidding process had squeezed down profit margins. The Agency hoped that a partnership in which they and the supplier were working together to achieve a common goal would be likely to deliver the necessary quality of resources. Not only would the Agency have access to a wider range of skills and resources than hitherto, it was also intended that these would be available on tap and allow a more dynamic approach to dealing with IT problems.

1.15  When deciding the type of partnership to enter into, the Agency considered it was important to achieve an arrangement in which there would be flexibility in the delivery of IT services. The radiocommunications industry was going through a period of change and the partnership would need to be sufficiently flexible to change with it. Rapid changes in radio technology could have a significant effect on the Agency, affecting the volume of work they would be required to do and the economic and regulatory regimes. It was important to the Agency that their IT systems could cope with this change.

1.16  In the Agency's experience it could take consultants up to a year to understand fully the Agency's business and this could result in the delivery of systems that failed to meet the Agency's business requirements. The Agency therefore wanted to retain flexibility in the allocation of work between themselves and the partner and thought that an in-house team would better run the key systems. They concluded that a flexible partnership arrangement would give them the greatest say in the delivery of business critical systems.