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  1. 1. Technology Outsourcing at
  2. 2. Background Immediate issues The proposed Deal Facets needing analysis Alternative strategies Current Status
  3. 3. Founded in 1922 1926 –2.25 m audience, grew to 8.5m in 1938 1927 – from BBCL to BBC, Royal Charter, Board of Governors 1936 – started television service 1946 – launched the “third Program, triggered expansion of radio program Revenue through licensing and ads 1950s – radio 12m audience, combined TV Radio 3.50.000 licenses 1953 – Coronation of Queen 1955 –ITV launched 1967 – color broadcast 1980 – Commercial Activity under BBC Enterprise Ltd 1990 – shifted from analog to digital, internal restructuring, split into 2 divisions – BBC broadcast and BBC Production 2005 – 706m£ Background
  4. 4. Immediate causes • Directive from British government to increase revenue to I billion by 2007 • New technology initiatives needing investments – Digitizing media content and stop using tapes – Reaching New platforms mobile and internet • BBC wanted to focus more on creating content for the different platforms rather than technology.
  5. 5. The players BECTU BBC SBS Government Promised hikes Pensions & benefits Reduced Costs of technology race Same or better services at a lower cost New vertical exposure Assured business for 10 years Experienced employees to act as seeds for new ventures Patented Products A way to Improve profitability and revenue Loss of revenue from product licenses Lost ability to create new products
  6. 6. The Deal SBS to pay £150 million Transfer all BBCTL employees to its rolls All technology services for 10 years Expected services •28500 PCs •267 sites •Manage with 1.7 billion visitors daily •Move towards digital TV •267 national and international websites •25000 broadcast feeds every month •190000 calls every month from public
  7. 7. Facets - Emotional Job security • Concern about benefits • Work culture • Job Obsolescence • Primacy in the new setup SBS addressed it by • No movement of work place • Agreed to match some of the benefits
  8. 8. Facets - Political Outsourcing evokes bad images 1400 employees vs 350 employees – is a hobson’s choice in any context A profit making organization being sold off to maximize profits
  9. 9. Facets - Technology Before Sell- off After Sell- off Investments in current technology will be faster SBS could get more 3rd party contracts which would improve experience and know-how Investments in speculative technologies no major competitor would award contracts to BBCTL
  10. 10. No special measures needed beyond the standard employment or consultant contracts within BBCTL Facets – Information security New NDAs, non-compete clauses Document classifications New processes introduced to define SBS – BBC interactions Before Sell-off AfterSell-off
  11. 11. Facets – Competitive Advantage With current funding level, and projected sources of revenue BBC wanted to increase the scale of media operations dramatically to beat competition Value for money and best of breed by improving economies of scale
  12. 12. Alternate Strategies Aggressive marketing of IT Services and products by BBCTL and getting more business Hiring high caliber top management professionals to convert BBCTL into a more autonomous organization instead of selling it
  13. 13. Current Status Initial days SBS was able to do well in key indicators Reporting of parliamentary elections of 2005 was a great success using SBS IT services DMI one of the flagship initiatives taken back from SBS due to cost and time overruns Downsizing of BBCTL staff which was one of the original parameters for outsourcing happened Project Leo - blacklist of BBC handed over to SBS created a controversy Annualized Cost savings originally projected were too optimistic
  14. 14. Thank You! 後也秋 Herzlichen Danke! Merci beaucoup! Raju Krishnaswamy Soumyajeet Sathyababu SathyanarayanaRK Varma Swaroop Thirumeninathan Ravichandran K