Posts Tagged ‘outsourcing’

Creating a more “cloud-friendly” Europe

Monday, January 30th, 2012

At the World Economic Forum recently Neelie Kroes announced the setting up of the “Cloud Partnership”.

With it she announced a policy to increase the uptake of cloud computing throughout Europe through the creation of common standards and regulation, together with an initial investment of Euro 10 Million from the European Commission to make it happen.

Personally I’m always a little concerned by announcements to boost the economy through greater regulation. If however the policy results in greater uptake of cloud computing by the public sector (whether through true “public” clouds or through the greater use of “private” clouds), as common standards are agreed and accepted then there is a real chance of (much-needed) cost savings, which must be welcome.

Let’s hope an agreement on standards can be reached more quickly than agreement on the debt crisis, even if it does involve putting up with unnecessary repeated references by politicians to becoming “not just Cloud friendly but Cloud active”.

Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.

Richard Nicholas

Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com

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Reconciling localism with shared services?

Monday, February 7th, 2011

The localism agenda aims to decentralise power to local communities with power being exercised at the lowest practical level. Some commentators have argued that the sort of shared services arrangements seen to date are more about “local centralism”- where authorities design arrangements to retain as much power and influence as possible.

However, rather than contradictory, localism has the potential to bring new energy and a new perspective to shared services. For example, the general power of competence can give councils more confidence to deliver creative and innovative shared services arrangements. Too often the worry about whether an authority has power to implement a good idea can prevent its delivery.

For too long, shared services have been largely confined to public sector to public sector arrangements. Total Place moved things forward by challenging local public services to come together to deliver placed based solutions. Twinning localism with shared services can bring a new perspective to arrangements with local communities being built into shared service approaches.

Posted by Nick Mackenzie, who specialises in corporate law in both private and public sector, mergers and acquisitions, reorganisations, private equity, MBOs, MBIs, joint ventures, corporate governance and director’s duties.

Nick Mackenzie

Nick Mackenzie
0121 237 4564
nmackenzie@brownejacobson.com

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The dawn of the public sector entrepreneur

Monday, February 7th, 2011

It could be argued that the delivery of shared services requires a more entrepreneurial approach, and with that comes its own challenges. Can local authorities, who are traditionally risk averse, really transform themselves into entrepreneurial organisations and do we really want our local authorities to adopt an entrepreneurial ethos that encourages risk taking?

We would do well to remember that many entrepreneurs fail time and time again and that only a few truly succeed. So if we are to encourage entrepreneurism should we not limit that extent of the services exposed to any risks and should we not try to identify a new breed of local government employee who truly embraces this ethos. Perhaps more authorities need to follow the lead set by Sunderland who recently screened thousands of their employees for entrepreneurial talent!

Posted by Dominic Swift, who specialises in commercial propertyand property development law advising on all aspects of development transactions; advises on property elements of insolvency and banking.

Dominic Swift

Dominic Swift
0115 976 6148
dswift@brownejacobson.com

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Risky business

Monday, February 7th, 2011

Our recent shared services report confirms that local authorities are increasingly seeking efficiencies through outsourcing or similar partnerships. There are undoubtedly savings to be made. But also high level risks.

For example, after several years of outsourced operations, it might be difficult and expensive to bring the services back as in-house skills may have been lost, even if the partnership with the private sector partner has been a success.

There is also an inevitable loss of control, where front line services are affected, leading to reputational and political risks that are hard to state in cash terms.

These risks can, and should, be managed through a sound outsourcing contract, but they cannot be avoided entirely and are not easy to quantify.

For many authorities, increased outsourcing will be a vital tool to save costs and adopt an enterprising approach to service delivery. A similarly enterprising approach to risk and reward will also be needed.

Posted by Craig Elder, who specialises in project finance; Projects; PFI/PPP ; commercial contracts ; waste and defence sectors; long term/complex service arrangements;public sector procurements

Craig Elder

Craig Elder
0115 976 6089
celder@brownejacobson.com

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'We can deliver!' – Can these words expose you to unlimited liability?

Friday, January 29th, 2010

If they’re made dishonestly they might…

In particular, if you’re a provider of outsourcing services and make a statement that you:

  • can deliver a project within certain prescribed timescales and    
  • are making this statement having carried out a proper analysis of the work involved

Then, if your customer believes you, you may well find that your contractual limits on liability will not protect you, as one supplier found to their cost in the long awaited decision between BSkyB and EDS this month.

 It was held by the Judge that the statements made by the supplier were not only incorrect but were also dishonest, since the person making them knew them to be wrong.  

This allowed the customer to claim for Fraudulent Misrepresentation (under the Misrepresentation Act 1967).  Since liability for Fraudulent Misrepresentation cannot be limited, when the project went over-budget and missed the deadline, the supplier’s £30 Million cap on liability was ineffective. 

Liability has yet to be decided (and the case may be appealed) but the misleading statements made by the supplier may well mean that it now faces liability of £200 Million or more. 

The lesson for suppliers – if you’re bidding on a project be careful what claims you make about your ability to deliver and never claim to have assessed the risk unless you truly have.  Given the recent history of IT projects delivered late and over budget in the public sector  I suspect there will be a number of customers scanning emails in the light of this case to see what optimistic IT providers might have promised.

Richard Nicholas

Posted by Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com

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Posted in Commercial contracts, IT Contracts, Manufacturing, Outsourcing | 1 Comment »