NVT claims outsourcing IT brings huge savings

26 Nov 2010-

-Simon Bain


Scotland’s largest independent IT support group has said the Scottish Government is achieving big savings from outsourcing shared services, but most local authorities are failing to do so.


NVT, based at Bellshill in Lanarkshire, won a framework contract with the Scottish Government this year which could provide a maximum £6.8m of revenue over four years, depending on how many government agencies opt in to the shared computer support.


Stephen Park Brown, managing director of NVT, said the contract was on track for around half that total, with Strathclyde Police the latest organisation to join the framework.


NVT, which succeeded a major non-Scottish competitor in landing the contract, has used marketing to drive up use of its service, driving down the unit cost to the taxpayer at a time of cutbacks.


Mr Park Brown said: “In the past, many agencies were doing their own thing, we did a marketing campaign and a social networking site to let everyone know, and we put a big emphasis on [reducing our] carbon footprint.


How can we build the next Microsoft … if we can’t see the benefit of giving business to Scottish companies, not because they are Scottish but when they tick every single box?


Stephen Park Brown, NVT managing director



“What we are endeavouring to do is drive costs down, as is each and every one of the other police forces as they try to reduce their costs for services such as desktop support.


“If they were to come on the framework, as and when their existing contracts end, it drives the overall cost down further.”


In a further departure, NVT allows new users to sign up for the remainder of the four to five-year framework term, rather than insist they take a four-year contract from when they join.


Mr Park Brown added: “It might be a rod for our own back and some people might call it commercial suicide, but we believe by being more flexible it will benefit us.”


NVT maintains around 40,000 items for government users, but Mr Park Brown has seen a “disconnect” between central and local government practice.


He said: “We think local government in most cases has got so much duplication in there that they don’t want to fall in line with this.


“In my opinion individual councils do not pay enough attention to what other agencies are trying to do by sharing and reducing costs, there is empire-building at every level all over the public sector.”


NVT lifted its turnover by a third to £8m in the year to September 30, with profits down marginally at £616,000, as the new contract got under way but incurred start-up costs.


It employs 82, including a 10% rise this year.


Mr Park Brown said winning the contract had sent out a positive message on the ability of Scottish businesses to compete in public sector procurement.


He added: “How can we build the next Microsoft or export to help our balance of payments if we can’t see the benefit of giving business to Scottish companies, not because they are Scottish but when they tick every single box?


“There is a paradigm shift out there, that people are asking why not look at Scottish and smaller businesses to help us reduce costs.”



Original Story Here courtesy of the Herald

Graham Stevenson, Marketing Manager, NVT Group