3.30 While the partnership has met the Agency's expectations, it has not lost its commercial edge. This is due to active monitoring of Radio Spectrum International's performance and to tight management of changes and developments to the IT services, including on one occasion securing a more cost effective IT service from another contractor.
3.31 The Agency established a unit to monitor the partnership and to act as the gateway through which all communications relating to operational aspects of the IT services flow between them and Radio Spectrum International. Thirteen employees of the Agency staff this unit, most of whom had been part of the in-house IT services unit. Possessing familiarity with the functionality and performance of the Agency's IT systems, this unit scrutinises Radio Spectrum International's solutions for meeting the changes and developments to the IT services proposed by the Agency's users. This scrutiny has often resulted in Radio Spectrum International agreeing to reduce their costs for such changes and developments (see Figure 11).
11 |
| Estimated savings obtained by the Agency’s monitoring of Radio Spectrum International’s proposed solutions for nine changes to, or developments of, the IT services made between June 1998 and April 2000 | |||||
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| Project | Radio Spectrum International’s original estimate | Radio Spectrum International’s estimate after negotiations with the Agency | Estimated savings | Estimated savings as a percentage of the original estimate | |
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| Unattended Monitoring | £285,000 System | £260,000 | £25,000 | 8.8 | |
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| Changes to FiLSM system | £101,000 | £85,000 | £16,000 | 15.8 | |
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| Post implementation support of the RULES system | £290,000 | £247,000 | £43,000 | 14.8 | |
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| Additional link status of OMNIBUS | £72,000 | £60,000 | £12,000 | 16.7 | |
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| ALPACA stage 9 | £953,000 | £923,000 | £30,000 | 3.1 | |
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| RULES Stage 2 -Implementation of the third wave of spectrum pricing | £33,000 | £25,000 | £8,000 | 24.2 | |
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| RAMPS functionality to RULES | £108,000 | £104,000 | £4,000 | 3.7 | |
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| FiLSM | £87,000 | £63,000 | £24,000 | 27.6 | |
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| Memory upgrades to laptops | £22,000 | £7,000 | £15,000 | 68.2 | |
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| Total savings from these nine projects | £177,000 |
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| Source: The Agency |
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3.32 The head of the monitoring unit informed us that, initially, Radio Spectrum International's solutions often exceeded the Agency's business needs and had to be down-graded. More recently, he has observed better correlation between the proposed solutions and the Agency's actual needs.
3.33 In the case of the "Unattended Monitoring System" project (the first of the projects listed in Figure 11) the Agency exercised their right to seek other bids for developments to the IT services. Realising that an IT solution was required to meet a business need the Agency approached Radio Spectrum International, but considered the solution they proposed expensive. Making enquiries in the market the Agency found a less expensive solution. With this knowledge the Agency returned to negotiations with Radio Spectrum International and were able to extract a workable deal that was in the interests all parties. Radio Spectrum International agreed to enter into a sub-contract with the third party contractor to undertake the work. While the cost to the Agency for this arrangement is more than they would have paid the third party contractor, the deal struck with Radio Spectrum International not only delivers savings against the original proposal, but also avoids potential conflicts at the interfaces between two IT service suppliers.
3.34 The Agency have also sought to retain commercial pressures on Radio Spectrum International through exercising their right to test the value of the IT services provided by the company. To avoid this threatening the partnership, the Agency have from the outset let it be known that they would make use of this right. The Agency intend to initiate the first value test during the year 2000.