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BBC to sell off IT

Auntie gets the professionals in

The BBC has announced the final eight bidders for its IT services contract, so be sold later this year. Outsourcing but not offshoring is the stipulation to the bidders, who will be required to keep the business in the UK.

The shortlist of final bidders includes Computer Sciences, Fujitsu, Electronic Data Systems, The Capita Group, Accenture, IBM, LogicaCMG and HP.

The BBC technology group includes BBC Technology Direction, the organisation responsible for buying and specifying technology services to approximately 30,000 desktops, and BBC Technology, the IT arm that delivers content and technology to the BBC as well as to third parties such as Direct TV and ESPN.

The winning bidder will be required to buy the Technology group, essentially keeping its 1,400 employees. The Technology Direction group, numbering only about 50 employees, will stay with the BBC.

John Varney, CTO of BBC Direction, put the value of BBC Technology in the "high hundreds of millions of pounds."

Varney said while off shoring application development will be permitted everything else must stay within Great Britain. All services, help desks, and network support will be inside the UK.

"The BBC is part of the UK's cultural heritage. It is important that services be delivered from inside the U.K. and the future of the 1,400 staff must be assured," Varney said.

By outsourcing IT the BBC expects to realise an annual saving of between £20m and £30m. Currently, it is costing the BBC about £200m to deliver all services that include IT, telephony broadcast engineering and satellite.

Varney indicated a number of factors that contribute to the projected cost savings in outsourcing its current operations. Among the factors was a consolidation of networks and servers around a central approach. Currently the BBC runs around 800 servers, distributed throughout the UK. The commoditisation of IT platforms also plays a key role in going to outsourced providers as well as savings in payroll.

"We can get much greater benefit from the huge economies of scale than a third party can deliver," Varney said. A third party that handles millions of desktops can do it more cheaply than one company that handles only 30,000 desktops.

BBC is expected to announce the final three bidders by the first week in May.


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