Technology Outsourcing at

Background

Immediate issues

The proposed Deal

Facets needing analysis

Alternative strategies

Current Status

Founded in 19221926 –2.25 m audience, grew to 8.5m

in 19381927 – from BBCL to BBC, Royal Charter, Board of Governors1936 – started television service 1946 – launched the “third Program, triggered expansion of radio programRevenue through licensing and ads 1950s – radio 12m audience, combined TV Radio 3.50.000 licenses1953 – Coronation of Queen1955 –ITV launched1967 – color broadcast1980 – Commercial Activity under BBC Enterprise Ltd1990 – shifted from analog to digital, internal restructuring, split into 2 divisions – BBC broadcast and BBC Production2005 – 706m£

Background

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.

The players

BECTU BBC SBS Government

Promised hikesPensions &

benefits

Reduced Costs of technology raceSame or better services at a lower cost

New vertical exposureAssured business for 10 yearsExperienced employees to act as seeds for new ventures Patented Products

A way to Improve profitability and

revenue

Loss of revenue from product licensesLost ability to create new products

The DealSBS to pay £150 million

Transfer all BBCTL employees to its rolls

All technology services for 10 years

Expected services• 28500 PCs• 267 sites• Manage bbc.co.uk 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

Facets - EmotionalJob 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

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

Facets - TechnologyBefore Sell-

offAfter 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

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

After

Sel

l-off

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

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

Current StatusInitial 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

Thank You!

後也秋

Herzlichen Danke! Merci beaucoup!

Raju Krishnaswamy

Soumyajeet

Sathyababu SathyanarayanaRK Varma

Swaroop Thirumeninathan

Ravichandran K