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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