Procurement between businesses and their suppliers is traditionally done manually through negotiations and bargaining. However, online procurement or e-procurement, has already been adopted by millions of companies, and is fast becoming the most common way of buying goods from a supplier thanks to the growth of the internet. Online procurement is about “taking the manual process online and automating the whole procedure with the underlying aim centred on saving money.” (http://213.198.108.89/ebew/e2000plen/leonard.html) This reasoning is illustrated in the Mars case study where it is stated that, “many major firms achieve savings of around five per cent through the use of online procurement auctions.” Although money would appear to be the main motivator for this, there are a number of further advantages and disadvantages that go along with online procurement. These will be discussed in greater detail along with an analysis of the benefits and drawbacks of using auctions to fix prices.
Obviously the main advantage to online procurement is the cost savings to be made, “Reducing indirect procurement costs can immediately improve an organisation's bottom line”. (http://213.198.108.89/ebew/e2000plen/leonard.html) For companies who are struggling to reduce costs, this would be a highly worthwhile and beneficial transition to make. Online procurement enables a company to cut out time and money spent on negotiations and contact with suppliers by enabling the whole system to be accessed online. This point is emphasised in the Mars case study where, “many different contracts and negotiations were used to address the huge number of different purchasing situations involving private businesses, brokers, governments, monopolies and cartels.” By moving this process online, these additional costs would be significantly reduced, if not abolished.
Another main advantage of using online procurement is the increase in efficiency which results from it. According to Leonard, 2001 (http://213.198.108.89/ebew/e2000plen/leonard.html) online procurement increases efficiency in three ways; reduced cost of purchasing, reduced cost of goods purchased, and reduced inventory days. This is one of the most important aims when companies move to online procurement as demonstrated in the Mars case study, “Mars’ objective was to obtain the needed materials from its list of approved suppliers fairly and at minimum cost.” Online procurement aims to achieve these goals by providing companies with “real time information as to the status of a customer's needs.” (http://en.wikipedia.org/wiki/E-procurement) This is a huge advantage to companies as it allows them to see what changes have been made and who is currently the lowest bidder, meaning they are able to select a bidder based on current up to date information.
In addition, an important advantage to a buyer-managed purchasing model is the fact that “the solutions can be highly customised to meet the buying organisation’s needs.” (http://www.usherproject.org.uk/support/hb/HBs27v2.pdf) This is important to a company like Mars who needed a highly specific and complicated model, “Mars attempted to aggregate individual small lots in a way that benefited suppliers but different suppliers had different requirements and different opportunities for efficiencies.” The fact that online procurement can be customised is hugely important for all companies involved in the process, as it means that the system can be changed and modified to suit their requirements rather than trying to adjust their buying or selling habits to incorporate a particular procurement system.
These advantages are naturally beneficial to companies when buying/selling materials, however online procurement encompasses a number of disadvantages that should also be taken into consideration. One major disadvantage for certain companies is the fact that the potential suppliers are provided with far more information than they would normally in a manual system. This could lead to serious problems for businesses, “the vendor has the power to take advantage of the customer by knowing more information about them”. (http://en.wikipedia.org/wiki/E-procurement) Companies may discover that suppliers are more tactical than usual as they have more information at their disposal and can easily undercut competitors which is illustrated in the Mars case study in Exhibit 1, where the suppliers are constantly reducing their prices to win the bidding war.
Another potential disadvantage of using online procurement is the initial investment costs involved for companies. In a buyer focused procurement model, the set up costs will be significantly higher than the costs borne by the sellers, “These solutions will require fairly high up-front investment for the buying
organisation.” (http://www.usherproject.org.uk/support/hb/HBs27v2.pdf)
Of course this investment is made with the hope of acquiring reduced maintenance costs which is illustrated by the vice president of Business Solutions at Mars who believed that using online procurement auctions would enable Mars to achieve the savings necessary to allow the company to prosper. However, further research attempts to disprove this theory, “there will be higher system maintenance costs in these solutions for the buyer”. (http://www.usherproject.org.uk/support/hb/HBs27v2.pdf) Although not evidenced in the Mars case study, the potential savings can only be calculated over time.
Using auctions to fix prices also has a number of advantages and disadvantages for companies. Reverse auctions such as those employed by Mars have an important advantage of being extremely up to date, “reverse auctions offer the ability to conduct real-time price competitions within hours.” (http://acquisition.gov/articles/feb2007_art5.htm) This enables the supply process to be far more efficient by reducing the time invested in each transaction. In addition, an advantage to a buying company like Mars is that auctions encourage increased competition among suppliers. This ensures that the buying company is paying the lowest price possible for their materials further reducing their operating costs.
However, there are various disadvantages to this process. For companies such as Mars who value their relationships with suppliers, using auctions to fix prices can mean there is “a brute force reliance on price.” This can lead to a breakdown in communication which can be detrimental to a company’s reputation and their rapport with suppliers. To combat this, Mars realised that “additional efforts” were needed to maintain their good working relationships, however only time will tell if this technique is effective.
For millions of companies, online procurement is an extremely effective and successful way to reduce the costs of purchasing materials. However, while this technique may be seen as effective to some, it still has its disadvantages which should be taken into consideration before implementation. In addition, the use of auctions to fix prices should be carefully considered prior to applying an online procurement system. Some companies may find this a highly efficient and effective method to use, however many companies who value their relationships with suppliers may be deterred by the formal system.
References
Bell, Peter C. (2003) Mars Incorporated: Online Procurement, Richard Ivey School of Business, Version (A) 9B05E004
Integrated Acquisition Environment, 2007, Spotlight on Reverse Auctions,
Available at: http://acquisition.gov/articles/feb2007_art5.htm
[accessed 7 December 2007]
Leonard, Steven R., Cheshire Henbury, 2001, Electronic Procurement,
Available at: http://213.198.108.89/ebew/e2000plen/leonard.html
[accessed 5 December 2007]
Usher Project, 2002, e-Business Advisor Handbook,
Available at: http://www.usherproject.org.uk/support/hb/HBs27v2.pdf
[accessed 5 December 2007]
Wikipedia, 2007, E-Procurement,
Available at: http://en.wikipedia.org/wiki/E-procurement
[accessed 7 December 2007]
Sunday 16 December 2007
Assignment - Case Study - Compound
Compound UK is a division of a multinational pharmaceuticals company, and their primary focus is to sell products to hospitals and General Medical Practices in the UK. Following a massive restructuring of the National Health Service (NHS) in the 1980s/1990s, Compound UK had to react quickly and follow suit by reorganising its commercial function to adjust for various changes in the market. In 1993, Compound UK was split into eight regions each consisting of a regional manager, area managers and 150 sales representatives which led to the introduction of the software package, Lotus Notes. While Notes has been a relatively successful software package for Compound UK, there are a number of ways in which its introduction and use could have been managed more effectively and efficiently by the company which will now be discussed in greater detail.
The timing of the introduction of Lotus Notes should have been managed differently. Compound UK introduced Notes six months after the restructuring took place in 1993. This meant that employees would have had time to settle into a new routine and get used to a new structure before Notes was even introduced to them, which would have caused even more upheaval and unrest among the workforce following the restructuring of the Company. Lotus Notes should have been selected and implemented by Compound UK in parallel with the restructuring of the organisation to avoid added confusion and stress for the employees. This would mean that the employees were not given time to get used to a system that would change in six months, which would be extremely frustrating, and in addition Compound UK would benefit from an enthusiastic workforce who are excited by the prospect of a change.
Prior to the introduction of Notes, it appears that there was no training given to current staff members. New additions to the company are sent on a six week training course to introduce them to Notes and meet other people from the company. During the introduction of Notes to Compound UK in 1993, all staff should have been given extensive training on how to use Notes and it's purpose within the company. More specifically, staff should have been trained on the technical side of Notes and they should also have been trained on the principles behind Notes. This would include the details that it's purpose is to encourage the sharing of information and knowledge across the company, and not to increase competition among the reps. This is to ensure that employees do not abuse the system in any way by false or creative reporting.
Finally, during the introduction phase of Notes, the reward structure should have been revised. Obviously rewards are a great motivational tool, however when used in the wrong way, they can have the opposite effect. The reward scheme should have been made standard for everyone instead of being at the discretion of one area manager, to ensure a fair system which is healthily competitive. The reward system should have been set at a particular level, for instance, a contract target should be set for each rep which should be rewarded equally across the company if attained. This ensures that no favouritism is shown and the morale amongst the workers is high.
Although the introduction of Lotus Notes caused problems, the package was not being used for its intended purpose. Within Lotus notes there is a contact recording system. Although this can be useful for recording visits made by staff, this tool was used in the wrong way by Compound. Management implemented a “league facility which would indicate centrally” the contacts achieved by each employee. This was then used by management to assess employees. However, using this to assess employees had a negative affect on the workforce as being at the bottom of a league table could create low morale. Further it also detracts from the true purpose of the function which was a method for employees to share knowledge. Therefore, management should rethink this table and revert to the intended purpose of the recording system.
The second problem associated with the use of this contact recording system is the way that it was used by employees. The idea behind the recording system was that employees should be ‘only recording relevant calls". However, in order to manipulate their place in the league tables, employees would "register a large number of contacts". Therefore, again the use of this league table was causing further negative implications, as Compound would not be receiving an accurate picture of sales. Therefore, the use of this recording system should be scaled down and Compound should remove the league table so that the business is gaining affective use of the system.
There were further problems with the use of the email-system and discussion databases introduced by Lotus Notes. These were misused by employees with a political agenda. Firstly, with this email system, management would receive emails from employees which were non relevant or urgent or simply employees attempting to make themselves look good. Management have high level priorities to deal with, and these sort of issues should be delegated to lower levels. Therefore, this email system was not effective for Compound, as these types of emails should be filtered before they reach management so they only have to deal with issues that concern them.
Further, the discussion debates were also used by employees with agendas to impress management. These debates were used by employees “to make political statements” in order to further their career. However, some employees did not wish to take part in these debates as they saw it as a tool for career furtherance rather than sharing ideas and asking questions . Therefore, management should not use these debates as a way of assessing employees and should ensure that employees use them in the correct way.
Although the implementation of notes was not a complete failure for Compound, but it could have been used and introduced more effectively. Management could have limited some of the uses of Notes so that it was being used for its correct purpose. If they had considered its effect in more detail then they could have had a more successful system.
This assignment was prepared in collaboration with Katherine Keane.
The timing of the introduction of Lotus Notes should have been managed differently. Compound UK introduced Notes six months after the restructuring took place in 1993. This meant that employees would have had time to settle into a new routine and get used to a new structure before Notes was even introduced to them, which would have caused even more upheaval and unrest among the workforce following the restructuring of the Company. Lotus Notes should have been selected and implemented by Compound UK in parallel with the restructuring of the organisation to avoid added confusion and stress for the employees. This would mean that the employees were not given time to get used to a system that would change in six months, which would be extremely frustrating, and in addition Compound UK would benefit from an enthusiastic workforce who are excited by the prospect of a change.
Prior to the introduction of Notes, it appears that there was no training given to current staff members. New additions to the company are sent on a six week training course to introduce them to Notes and meet other people from the company. During the introduction of Notes to Compound UK in 1993, all staff should have been given extensive training on how to use Notes and it's purpose within the company. More specifically, staff should have been trained on the technical side of Notes and they should also have been trained on the principles behind Notes. This would include the details that it's purpose is to encourage the sharing of information and knowledge across the company, and not to increase competition among the reps. This is to ensure that employees do not abuse the system in any way by false or creative reporting.
Finally, during the introduction phase of Notes, the reward structure should have been revised. Obviously rewards are a great motivational tool, however when used in the wrong way, they can have the opposite effect. The reward scheme should have been made standard for everyone instead of being at the discretion of one area manager, to ensure a fair system which is healthily competitive. The reward system should have been set at a particular level, for instance, a contract target should be set for each rep which should be rewarded equally across the company if attained. This ensures that no favouritism is shown and the morale amongst the workers is high.
Although the introduction of Lotus Notes caused problems, the package was not being used for its intended purpose. Within Lotus notes there is a contact recording system. Although this can be useful for recording visits made by staff, this tool was used in the wrong way by Compound. Management implemented a “league facility which would indicate centrally” the contacts achieved by each employee. This was then used by management to assess employees. However, using this to assess employees had a negative affect on the workforce as being at the bottom of a league table could create low morale. Further it also detracts from the true purpose of the function which was a method for employees to share knowledge. Therefore, management should rethink this table and revert to the intended purpose of the recording system.
The second problem associated with the use of this contact recording system is the way that it was used by employees. The idea behind the recording system was that employees should be ‘only recording relevant calls". However, in order to manipulate their place in the league tables, employees would "register a large number of contacts". Therefore, again the use of this league table was causing further negative implications, as Compound would not be receiving an accurate picture of sales. Therefore, the use of this recording system should be scaled down and Compound should remove the league table so that the business is gaining affective use of the system.
There were further problems with the use of the email-system and discussion databases introduced by Lotus Notes. These were misused by employees with a political agenda. Firstly, with this email system, management would receive emails from employees which were non relevant or urgent or simply employees attempting to make themselves look good. Management have high level priorities to deal with, and these sort of issues should be delegated to lower levels. Therefore, this email system was not effective for Compound, as these types of emails should be filtered before they reach management so they only have to deal with issues that concern them.
Further, the discussion debates were also used by employees with agendas to impress management. These debates were used by employees “to make political statements” in order to further their career. However, some employees did not wish to take part in these debates as they saw it as a tool for career furtherance rather than sharing ideas and asking questions . Therefore, management should not use these debates as a way of assessing employees and should ensure that employees use them in the correct way.
Although the implementation of notes was not a complete failure for Compound, but it could have been used and introduced more effectively. Management could have limited some of the uses of Notes so that it was being used for its correct purpose. If they had considered its effect in more detail then they could have had a more successful system.
This assignment was prepared in collaboration with Katherine Keane.
Sunday 9 December 2007
MYSQL - Open Source Database
“Open source is a development method for software that harnesses the power of distributed peer review and transparency of process.” (http://www.opensource.org/) Open source software is the most common example of open source development, and has grown in the past ten years to become a rival to many large closed source software companies such as IBM and Microsoft. This is highlighted in the case study of MySQL, where it is stated that they experienced “a compound annual growth rate of over 100 percent over the last five years”. This illustrates perfectly how much growth this sector of the software market has experienced in recent years. Numerous businesses now use open source software to run their operations and it has many advantages for this function, however as with most products, there are also disadvantages which may deter businesses from using it.
The main advantage of using open source software is the fact that the source code is available. Without being excessively technical, the availability of the source code essentially means that everyone using the software has access to the source code to make any changes. For many companies this is a huge advantage, as it means “the code can be implemented in other pieces of software and adapted to changing environments.” (http://timjimnetworktech.wikidot.com/advantages-disadvantages-of-open-source) For many businesses, this means that the software can be adapted to suit their operations which has huge advantages over closed source packages where businesses have to adapt their operations to suit the software provided. This is highlighted in the MySQL case study where it states that “companies valued the ability to modify parts of the underlying software to differentiate themselves in their own markets.” It meant that they had the freedom to run the business the way they saw fit, rather than being restricted by their choice of software.
Leading on from this point, the fact that the source code is accessible means that anyone can modify or change the software to improve it or make it more secure, “Open Source software has huge communities of programmers involved, allowing for the rapid implementation of new features and security fixes”. (http://www.tamingthebeast.net/articles5/open-source-software.htm) This means that the software is constantly being changed and updated which is a huge advantage to business users as it means they have access to the most up to date version of the software at all times. In addition to this, companies will have peace of mind that the software is secure due to the constant updating, and bugs are far more easily fixed in open source software rather than closed source. The source code availability also means that there are various support facilities to which users can relay any questions they might have. This would be a huge advantage to a business which is looking for well informed, quick answers to any technical problems they may be experiencing which is why MySQL introduced this in early 2005, “MySQL introduced the ‘MySQL Network’, a support offer for end users”.
The most obvious advantage to using open source software in business is the fact that it is free. This point is clearly highlighted in the MySQL case study as companies stated that they were attracted to “the lower cost advantages of open source”. The popularity of the free software was further emphasised later in the study, “as the company began charging for services, there was a change in expectations from their customers”. In fact, many MySQL customers began complaining that they had to pay for services. Although this may not be the driving force behind the choice of software for every company, it certainly an important factor to take into consideration, particularly for smaller, newer businesses which are looking for ways to reduce costs. However, the decision to use open source software should only be taken after examining the disadvantages it brings to businesses.
One serious disadvantage of using open source software in business is the fact that there is no guarantee of development meaning some projects can die. This can occur “if programmers just lose interest with being involved or they become fraught with infighting; arresting further development.” (http://www.tamingthebeast.net/articles5/open-source-software.htm) This is very risky for businesses as they have the threat of losing the support service and continual improvement of the software if they decide to implement unusual software which is unpopular and others have no interest in. In order to combat this danger, MySQL created “version 5.0” which included various improvements requested by users, in the hope that most customers would implement this and gain the various support services that accompanied it.
Another downside of using open source software in business is the danger of violating any previous intellectual property rights. This can occur due to the fact that many people can contribute to an open source project, and “it is almost impossible to audit the entire code base for violations of previous licence conditions.” (http://www.cippic.ca/open-source/) This could essentially mean that a business could be using a software programme which is illegal in terms of intellectual property infringements, which could have serious consequences for the company as a whole. However, it is well known that “contributors do not vouch for the integrity of the code they contribute to the project”, (http://www.cippic.ca/open-source/) which also poses a problem for businesses as it effectively means there is no guarantee of the quality of certain open source software, and so companies may be taking further risks by choosing open source in the first place.
Finally, the advantage of the support services, like most things, has its disadvantages. Many questions can go unanswered if no-one has any interest in the topic or quite simply, doesn’t know the answer. This can frustrating for businesses as there is no legal obligation for companies such as MySQL to answer any questions set to them. This is yet another risk that companies will take if they opt to use open source software instead of the traditional close source format.
For millions of companies, open source software has been hugely beneficial in terms of flexibility, cost effectiveness, quality and support services available. Despite the obvious advantages, there are still underlying disadvantages which may deter business from fully adopting open source software in all its operations. Overall, it seems the advantages by far outweigh the disadvantages; however companies which have used closed source software for years may see it as a risky move and be unwilling to change.
References
Cippic, ‘Open Source’, 2007, http://www.cippic.ca/open-source/, [accessed 28/11/07]
Open/Closed Source Networking, ‘Advantages and Disadvantages of Open Source’, 2007, http://timjimnetworktech.wikidot.com/advantages-disadvantages-of-open-source, [accessed 30/11/07]
Open Source Initiative, 2007, http://www.opensource.org/, [accessed 30/11/07]
Taming the Beast, ‘Open Source Software in your Online Business’, 2007, http://www.tamingthebeast.net/articles5/open-source-software.htm,
[accessed 28/11/07]
Witting, C and Burgelman, R. (2006) MySQL Open Source Database in 2006 (B), Stanford Graduate School of Business, Case: SM-124(B)
The main advantage of using open source software is the fact that the source code is available. Without being excessively technical, the availability of the source code essentially means that everyone using the software has access to the source code to make any changes. For many companies this is a huge advantage, as it means “the code can be implemented in other pieces of software and adapted to changing environments.” (http://timjimnetworktech.wikidot.com/advantages-disadvantages-of-open-source) For many businesses, this means that the software can be adapted to suit their operations which has huge advantages over closed source packages where businesses have to adapt their operations to suit the software provided. This is highlighted in the MySQL case study where it states that “companies valued the ability to modify parts of the underlying software to differentiate themselves in their own markets.” It meant that they had the freedom to run the business the way they saw fit, rather than being restricted by their choice of software.
Leading on from this point, the fact that the source code is accessible means that anyone can modify or change the software to improve it or make it more secure, “Open Source software has huge communities of programmers involved, allowing for the rapid implementation of new features and security fixes”. (http://www.tamingthebeast.net/articles5/open-source-software.htm) This means that the software is constantly being changed and updated which is a huge advantage to business users as it means they have access to the most up to date version of the software at all times. In addition to this, companies will have peace of mind that the software is secure due to the constant updating, and bugs are far more easily fixed in open source software rather than closed source. The source code availability also means that there are various support facilities to which users can relay any questions they might have. This would be a huge advantage to a business which is looking for well informed, quick answers to any technical problems they may be experiencing which is why MySQL introduced this in early 2005, “MySQL introduced the ‘MySQL Network’, a support offer for end users”.
The most obvious advantage to using open source software in business is the fact that it is free. This point is clearly highlighted in the MySQL case study as companies stated that they were attracted to “the lower cost advantages of open source”. The popularity of the free software was further emphasised later in the study, “as the company began charging for services, there was a change in expectations from their customers”. In fact, many MySQL customers began complaining that they had to pay for services. Although this may not be the driving force behind the choice of software for every company, it certainly an important factor to take into consideration, particularly for smaller, newer businesses which are looking for ways to reduce costs. However, the decision to use open source software should only be taken after examining the disadvantages it brings to businesses.
One serious disadvantage of using open source software in business is the fact that there is no guarantee of development meaning some projects can die. This can occur “if programmers just lose interest with being involved or they become fraught with infighting; arresting further development.” (http://www.tamingthebeast.net/articles5/open-source-software.htm) This is very risky for businesses as they have the threat of losing the support service and continual improvement of the software if they decide to implement unusual software which is unpopular and others have no interest in. In order to combat this danger, MySQL created “version 5.0” which included various improvements requested by users, in the hope that most customers would implement this and gain the various support services that accompanied it.
Another downside of using open source software in business is the danger of violating any previous intellectual property rights. This can occur due to the fact that many people can contribute to an open source project, and “it is almost impossible to audit the entire code base for violations of previous licence conditions.” (http://www.cippic.ca/open-source/) This could essentially mean that a business could be using a software programme which is illegal in terms of intellectual property infringements, which could have serious consequences for the company as a whole. However, it is well known that “contributors do not vouch for the integrity of the code they contribute to the project”, (http://www.cippic.ca/open-source/) which also poses a problem for businesses as it effectively means there is no guarantee of the quality of certain open source software, and so companies may be taking further risks by choosing open source in the first place.
Finally, the advantage of the support services, like most things, has its disadvantages. Many questions can go unanswered if no-one has any interest in the topic or quite simply, doesn’t know the answer. This can frustrating for businesses as there is no legal obligation for companies such as MySQL to answer any questions set to them. This is yet another risk that companies will take if they opt to use open source software instead of the traditional close source format.
For millions of companies, open source software has been hugely beneficial in terms of flexibility, cost effectiveness, quality and support services available. Despite the obvious advantages, there are still underlying disadvantages which may deter business from fully adopting open source software in all its operations. Overall, it seems the advantages by far outweigh the disadvantages; however companies which have used closed source software for years may see it as a risky move and be unwilling to change.
References
Cippic, ‘Open Source’, 2007, http://www.cippic.ca/open-source/, [accessed 28/11/07]
Open/Closed Source Networking, ‘Advantages and Disadvantages of Open Source’, 2007, http://timjimnetworktech.wikidot.com/advantages-disadvantages-of-open-source, [accessed 30/11/07]
Open Source Initiative, 2007, http://www.opensource.org/, [accessed 30/11/07]
Taming the Beast, ‘Open Source Software in your Online Business’, 2007, http://www.tamingthebeast.net/articles5/open-source-software.htm,
[accessed 28/11/07]
Witting, C and Burgelman, R. (2006) MySQL Open Source Database in 2006 (B), Stanford Graduate School of Business, Case: SM-124(B)
Assignment - Long Essay - Are We Building a Surveillance Society?
For many years the UK and the rest of the world have been building what is described as a 'big brother' society. Due to the huge rise in technology during the 20th century, surveillance has become increasingly possible. However, since the digital revolution, it is fair to say that we are no longer building a surveillance society, but are living in one. Of course, this causes immeasurable controversy throughout the world and countless debates have been conducted on the subject, yet it seems that we are powerless to stop it. In order to examine our surveillance society further, it is important to look at the history of surveillance, the areas in which it is increasing and how this affects society today.
The practice of surveillance has been going on for centuries, however it is only in the last 150 years that it has taken a strong hold over our society. Surveillance using technology was first established in the late 1800's, "Wiretapping began as early as the U.S. Civil War, when both sides tapped into the other force's telegraph lines and simply copied down the messages." (http://www.recording-history.org/HTML/surveillance1.php) Since then, it has expanded and grown through audio surveillance, and more commonly today, video and Internet surveillance, and the fact that we now live in a surveillance society has come about for a variety of reasons. As already mentioned, surveillance aided by technology was first used to spy on the enemy and effectively 'steal' information, however technology has evolved so much since then that there are a number of reasons for the increase in surveillance.
Many of the changes in society have arisen from the Government’s desire to cut down on crime and protect society. Initially, the intent was to either deter the occurrence of crimes, or to have a more thorough and secure way of catching and convicting criminals. While this was effective at the time and is still relatively effective today, Governments across the world are now faced with the even bigger problem of international security issues. The terrorist attacks on America in 2001 sparked a panic across the western world which inevitably led to a huge increase in surveillance and tightened security through the introduction of biometrics and stricter controls on passport pictures. While these adjustments are still being introduced today, there are further proposals to increase security by introducing national Identification Cards for everyone in the UK.
In addition to national security, another reason behind the increase in surveillance is the prevention of fraud. Although technology is vital for our society to survive, it is also the cause of many illegal activities as criminals become more subtle about their movements. These are but a few of the main reasons behind the growing trend of surveillance in our society, and through the development and advancements in technology it has only become easier for the Government to implement new techniques to monitor our activities. In order to examine this area further, it is necessary to examine the surveillance techniques which have been introduced over the years.
One method of surveillance which has been in existence for years and is an integral part of our society is video surveillance, "almost as soon as it was invented, the camera was being used to record the faces and other physical characteristics of criminals." (http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/surveillance_society_full_report_2006.pdf) The introduction of video surveillance has had a huge impact on our society, none more so than the use of Closed Circuit Television (CCTV). This involves the "use of video cameras to transmit a signal to a specific, limited set of monitors", (http://en.wikipedia.org/wiki/Closed-circuit_television) and was first introduced to society in an attempt to reduce crime and increase public security. It has evolved through time to become an integral part of our lives, however there is constant debate that it is simply being overused, "according to statistics, the average citizen is caught on CCTV cameras 300 times a day." (http://news.bbc.co.uk/1/hi/sci/tech/1789157.stm) Although highly controversial, it is indisputable that video surveillance is a necessity for society as it is proved effective in deterring crime. This point is emphasised by the fact that thousands of homes across the world now use CCTV as a means of extra security. Countless criminals have been caught through the use of CCTV, and although difficult to measure, it is highly likely that they have deterred numerous crimes from happening in the first place. Despite these positive aspects, the use of video surveillance has been the cause of much controversy over the years which shall be discussed later.
Also, one technological advancement which has changed our lives completely is the introduction of the computer, particularly the computer database, "it is this storage capability that has formed perhaps the biggest change already brought about by the information technology revolution." (http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/surveillance_society_full_report_2006.pdf) The computer database has made it possible for Government bodies to store intricate details about every person throughout the country. Naturally this is more efficient and timely than a paper based filing system, however it can be a very dangerous tool as the information on these databases can include personal details which could be used for unlawful actions. Despite this danger, it is a highly effective aid for catching criminals as it enables files to be cross referenced and shared worldwide. In addition to this, it is an essential part of some businesses, "the collection, use and communication of large stores of personal data held on citizens are now central to the functioning of private business and the public services." (http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/surveillance_society_full_report_2006.pdf) It is probably this point which has caused most controversy in recent years with a huge increase in companies 'cold calling' people whose personal details they have on a database. However, it is difficult to imagine a world without databases; doctor surgeries, dentist surgeries, libraries, even the local video store holds personal details about every customer.
The use of the database will only increase in the future, and this point is highlighted by a new proposal by the government for National Identification cards for every UK resident. The idea behind the national ID cards is that the details (including retinal scan and fingerprints) of each resident in the UK over 16, will be stored on this one card. The details of these have been published on BBC news along with the reasoning behind them; "The government says it wants to give people a sure-fire way of proving they are who they say they are" (http://news.bbc.co.uk/1/hi/uk_politics/3127696.stm). Although they may seem unnecessary, their introduction is essentially to increase national security. The national security issues mentioned earlier have provoked a strong response by the government in the form of further surveillance and security. Their introduction also ensures that each person can be easily identified, in particular those who are residents and those who are non-residents.
However, due to the overwhelming power of the information it will need to be further secured, ensuring that it can only be accessed for the right reasons by the right people. This security problem has come under closer scrutiny recently due to a mishap which occurred with the tax office. Two discs containing the details of over 25 million people went missing when they were sent through the postal service. Mr Darling was quoted apologising saying it was an "extremely serious failure on the part of HMRC to protect sensitive personal data entrusted to it in breach of its own guidelines". (http://news.bbc.co.uk/1/hi/uk_politics/7103566.stm) This highlights the levels of high security which should be implemented when storing and using data to prevent a situation like this from reoccurring with the ID cards.
New legislation has also promoted increased surveillance, "information technologies have developed enormously and pervade the economies and societies in western states. Their uses are for both good and ill." (Taylor et al, 2001) It is because of this misuse of technology that there is an increase in legislation, and some acts which are playing a part in regulating this misuse include;
The UK Interception of Communications (Lawful Business Practice) Regulations 2000
The UK Anti-Terrorism, Crime & Security Act 2001
The UK Privacy & Electronic Communications (EC Directive) Regulations 2003
Regulation of Investigatory Powers Act 2001
The Regulation of Investigatory Powers Act 2001, "updates the law on the interception of communications to take account of technological change such as the growth of the Internet" (http://security.homeoffice.gov.uk/legislation/current-legislation/ripa-2000/). Part three of the Act illustrates the increase in surveillance by regulating cryptography. This can impose a requirement of disclosure to anyone in possession of an encryption key if it is for the purpose of national security or preventing crime. Although this seems reasonable in the circumstances, it is again imposing increased surveillance which may not be wholly necessary.
The issue of data retention also contributes to our surveillance society, "the primary objective in government data retention is traffic analysis and mass surveillance." (http://en.wikipedia.org/wiki/Data_retention) Data retention includes phone calls, emails and web sites which have been visited and has been reinforced by the Anti Terrorism and Crime Act which introduced a voluntary regulation on Telephone Operators and Internet Service Providers to retain details of customers. This has been justified as a matter of security and to prevent crime however, some people may be unaware that this information is being tracked and retained and so it could cause major controversy.
These methods of surveillance can have a significant impact on our day to day lives. For instance, video surveillance is in operation in almost every town and city in the country and many people are under the impression that it is overused. As already mentioned, someone can be caught on CCTV cameras up to 300 times a day, which may seem excessive however there is a flip side to the coin. A huge proportion of society ascertain that there are in fact not enough CCTV cameras and the man power behind the surveillance is severely inadequate, "monitoring crime on Glasgow's streets is an impossible task as each CCTV operator has to monitor 50 screens." (McKinnon, 2007) Obviously for one man to monitor fifty screens is an absurd and impossible task. Granted the video tapes can be rewound and criminals can then be caught, but that does not deter the crimes from happening in the first place. In addition to this, the article states that there are no cameras on two of Glasgow's busiest streets which is obviously a worry for residents and regular visitors to the city. For safety reasons, CCTV cameras are a fundamental part of our society and for our own safety and protection, it is vital that they are continually used in the future.
In the case of computer databases, again there are various advantages and disadvantages to it's use. The advantages of increased efficiency and timeliness are obvious to the government, however for society there appear to be more downsides. Cold calling seems to cause the biggest upset among our society as it can seem like a breach of peoples privacy, however many companies survive by using this technique. In light of the recent scandal of the lost discs, there is a huge risk borne by society that their details will fall into the wrong hands. The consequences of an inadequate security system would be disastrous for society, and so the correct measures should be implemented to protect any future projects such as the proposed ID cards. In this case, the government will need to ensure that the database is encrypted and has restrictions on those that can access it. Increased security seems to be the only compromise with databases, as it would be difficult for society to operate without them.
The introduction of Acts such as the Regulation of Investigatory Powers Act means that it has become almost impossible for the public to send information that cannot be intercepted in some way. People believe they are sending data which is secure, but this is not the case. It has been argued that this is a breach of "human rights", (Taylor et al, 2001) and it also undermines “e-commerce and the integrity of service providers, as well as causing huge potential costs in global key revocation and change.” (DTI, 1999). This Act could hinder the development of e-commerce as people will become more wary about sending information. Therefore, although this Act is suppose to simply prevent anything unlawful, it could cost a great deal to society to breach personal privacy rather than anything which is criminal.
Data retention will not have an immediate or direct affect on the public, as most will be unaware of its existence. However, data retention does seem to be a complete invasion of privacy and the public will find it difficult to carry out their day to day activities without worrying if they are being watched.
With security issues affecting the UK and other parts of the world, this has been the perfect opportunity for the Government to justify increased surveillance. Whether the majority of surveillance techniques are necessary or not is irrelevant. The fact is, with surveillance comes increased security and reduced crime. Therefore, with the government always striving for their country to be less vulnerable, it seems likely that surveillance will only continue to increase in the future.
References
BBC, 'Q&A: Identity Card Plans', 2006, http://news.bbc.co.uk/1/hi/uk_politics/3127696.stm, [accessed 26 November 2007]
BBC, 'UK's Families Put on Fraud Alert', 2007, http://news.bbc.co.uk/1/hi/uk_politics/7103566.stm, [accessed 21 November 2007]
BBC, 'Watching Your Every Move', 2002, http://news.bbc.co.uk/1/hi/sci/tech/1789157.stm, [accessed 28 November]
DTI, 1999, "Promoting Electronic Commerce: Consultation on Draft Legislation and the Government’s Response to the Trade and Industry Committee’s Report"
Home Office Security, 'Legislation', 2000, http://security.homeoffice.gov.uk/legislation/current-legislation/ripa-2000/, [accessed 30 November 2007]
Information Commissioner's Office, 'A Report on the Surveillance Society', 2006, http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/surveillance_society_full_report_2006.pdf, [accessed 21 November 2007]
McKinnon, Ross., 2007. Big Brother Isn't Watching, The Evening Times, 26 Nov. p.4-5
Nick Taylor, Yaman Akdeniz, Clive Walker, 2001, "BigBrother.gov.uk: State surveillance in the age of information and rights", Criminal Law review, pp73-90
Recording History, 'The History of Recording Technology', N.D, http://www.recording-history.org/HTML/surveillance1.php, [accessed 28 November 2007]
Wikipedia, 'Closed-circuit Television', 2007, http://en.wikipedia.org/wiki/Closed-circuit_television, [accessed 2 December 2007]
Wikipedia, 'Telecommunications Data Retention', 2007, http://en.wikipedia.org/wiki/Data_retention, [accessed 2 December 2007]
This assignment was prepared in collaboration with Katherine Keane
The practice of surveillance has been going on for centuries, however it is only in the last 150 years that it has taken a strong hold over our society. Surveillance using technology was first established in the late 1800's, "Wiretapping began as early as the U.S. Civil War, when both sides tapped into the other force's telegraph lines and simply copied down the messages." (http://www.recording-history.org/HTML/surveillance1.php) Since then, it has expanded and grown through audio surveillance, and more commonly today, video and Internet surveillance, and the fact that we now live in a surveillance society has come about for a variety of reasons. As already mentioned, surveillance aided by technology was first used to spy on the enemy and effectively 'steal' information, however technology has evolved so much since then that there are a number of reasons for the increase in surveillance.
Many of the changes in society have arisen from the Government’s desire to cut down on crime and protect society. Initially, the intent was to either deter the occurrence of crimes, or to have a more thorough and secure way of catching and convicting criminals. While this was effective at the time and is still relatively effective today, Governments across the world are now faced with the even bigger problem of international security issues. The terrorist attacks on America in 2001 sparked a panic across the western world which inevitably led to a huge increase in surveillance and tightened security through the introduction of biometrics and stricter controls on passport pictures. While these adjustments are still being introduced today, there are further proposals to increase security by introducing national Identification Cards for everyone in the UK.
In addition to national security, another reason behind the increase in surveillance is the prevention of fraud. Although technology is vital for our society to survive, it is also the cause of many illegal activities as criminals become more subtle about their movements. These are but a few of the main reasons behind the growing trend of surveillance in our society, and through the development and advancements in technology it has only become easier for the Government to implement new techniques to monitor our activities. In order to examine this area further, it is necessary to examine the surveillance techniques which have been introduced over the years.
One method of surveillance which has been in existence for years and is an integral part of our society is video surveillance, "almost as soon as it was invented, the camera was being used to record the faces and other physical characteristics of criminals." (http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/surveillance_society_full_report_2006.pdf) The introduction of video surveillance has had a huge impact on our society, none more so than the use of Closed Circuit Television (CCTV). This involves the "use of video cameras to transmit a signal to a specific, limited set of monitors", (http://en.wikipedia.org/wiki/Closed-circuit_television) and was first introduced to society in an attempt to reduce crime and increase public security. It has evolved through time to become an integral part of our lives, however there is constant debate that it is simply being overused, "according to statistics, the average citizen is caught on CCTV cameras 300 times a day." (http://news.bbc.co.uk/1/hi/sci/tech/1789157.stm) Although highly controversial, it is indisputable that video surveillance is a necessity for society as it is proved effective in deterring crime. This point is emphasised by the fact that thousands of homes across the world now use CCTV as a means of extra security. Countless criminals have been caught through the use of CCTV, and although difficult to measure, it is highly likely that they have deterred numerous crimes from happening in the first place. Despite these positive aspects, the use of video surveillance has been the cause of much controversy over the years which shall be discussed later.
Also, one technological advancement which has changed our lives completely is the introduction of the computer, particularly the computer database, "it is this storage capability that has formed perhaps the biggest change already brought about by the information technology revolution." (http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/surveillance_society_full_report_2006.pdf) The computer database has made it possible for Government bodies to store intricate details about every person throughout the country. Naturally this is more efficient and timely than a paper based filing system, however it can be a very dangerous tool as the information on these databases can include personal details which could be used for unlawful actions. Despite this danger, it is a highly effective aid for catching criminals as it enables files to be cross referenced and shared worldwide. In addition to this, it is an essential part of some businesses, "the collection, use and communication of large stores of personal data held on citizens are now central to the functioning of private business and the public services." (http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/surveillance_society_full_report_2006.pdf) It is probably this point which has caused most controversy in recent years with a huge increase in companies 'cold calling' people whose personal details they have on a database. However, it is difficult to imagine a world without databases; doctor surgeries, dentist surgeries, libraries, even the local video store holds personal details about every customer.
The use of the database will only increase in the future, and this point is highlighted by a new proposal by the government for National Identification cards for every UK resident. The idea behind the national ID cards is that the details (including retinal scan and fingerprints) of each resident in the UK over 16, will be stored on this one card. The details of these have been published on BBC news along with the reasoning behind them; "The government says it wants to give people a sure-fire way of proving they are who they say they are" (http://news.bbc.co.uk/1/hi/uk_politics/3127696.stm). Although they may seem unnecessary, their introduction is essentially to increase national security. The national security issues mentioned earlier have provoked a strong response by the government in the form of further surveillance and security. Their introduction also ensures that each person can be easily identified, in particular those who are residents and those who are non-residents.
However, due to the overwhelming power of the information it will need to be further secured, ensuring that it can only be accessed for the right reasons by the right people. This security problem has come under closer scrutiny recently due to a mishap which occurred with the tax office. Two discs containing the details of over 25 million people went missing when they were sent through the postal service. Mr Darling was quoted apologising saying it was an "extremely serious failure on the part of HMRC to protect sensitive personal data entrusted to it in breach of its own guidelines". (http://news.bbc.co.uk/1/hi/uk_politics/7103566.stm) This highlights the levels of high security which should be implemented when storing and using data to prevent a situation like this from reoccurring with the ID cards.
New legislation has also promoted increased surveillance, "information technologies have developed enormously and pervade the economies and societies in western states. Their uses are for both good and ill." (Taylor et al, 2001) It is because of this misuse of technology that there is an increase in legislation, and some acts which are playing a part in regulating this misuse include;
The UK Interception of Communications (Lawful Business Practice) Regulations 2000
The UK Anti-Terrorism, Crime & Security Act 2001
The UK Privacy & Electronic Communications (EC Directive) Regulations 2003
Regulation of Investigatory Powers Act 2001
The Regulation of Investigatory Powers Act 2001, "updates the law on the interception of communications to take account of technological change such as the growth of the Internet" (http://security.homeoffice.gov.uk/legislation/current-legislation/ripa-2000/). Part three of the Act illustrates the increase in surveillance by regulating cryptography. This can impose a requirement of disclosure to anyone in possession of an encryption key if it is for the purpose of national security or preventing crime. Although this seems reasonable in the circumstances, it is again imposing increased surveillance which may not be wholly necessary.
The issue of data retention also contributes to our surveillance society, "the primary objective in government data retention is traffic analysis and mass surveillance." (http://en.wikipedia.org/wiki/Data_retention) Data retention includes phone calls, emails and web sites which have been visited and has been reinforced by the Anti Terrorism and Crime Act which introduced a voluntary regulation on Telephone Operators and Internet Service Providers to retain details of customers. This has been justified as a matter of security and to prevent crime however, some people may be unaware that this information is being tracked and retained and so it could cause major controversy.
These methods of surveillance can have a significant impact on our day to day lives. For instance, video surveillance is in operation in almost every town and city in the country and many people are under the impression that it is overused. As already mentioned, someone can be caught on CCTV cameras up to 300 times a day, which may seem excessive however there is a flip side to the coin. A huge proportion of society ascertain that there are in fact not enough CCTV cameras and the man power behind the surveillance is severely inadequate, "monitoring crime on Glasgow's streets is an impossible task as each CCTV operator has to monitor 50 screens." (McKinnon, 2007) Obviously for one man to monitor fifty screens is an absurd and impossible task. Granted the video tapes can be rewound and criminals can then be caught, but that does not deter the crimes from happening in the first place. In addition to this, the article states that there are no cameras on two of Glasgow's busiest streets which is obviously a worry for residents and regular visitors to the city. For safety reasons, CCTV cameras are a fundamental part of our society and for our own safety and protection, it is vital that they are continually used in the future.
In the case of computer databases, again there are various advantages and disadvantages to it's use. The advantages of increased efficiency and timeliness are obvious to the government, however for society there appear to be more downsides. Cold calling seems to cause the biggest upset among our society as it can seem like a breach of peoples privacy, however many companies survive by using this technique. In light of the recent scandal of the lost discs, there is a huge risk borne by society that their details will fall into the wrong hands. The consequences of an inadequate security system would be disastrous for society, and so the correct measures should be implemented to protect any future projects such as the proposed ID cards. In this case, the government will need to ensure that the database is encrypted and has restrictions on those that can access it. Increased security seems to be the only compromise with databases, as it would be difficult for society to operate without them.
The introduction of Acts such as the Regulation of Investigatory Powers Act means that it has become almost impossible for the public to send information that cannot be intercepted in some way. People believe they are sending data which is secure, but this is not the case. It has been argued that this is a breach of "human rights", (Taylor et al, 2001) and it also undermines “e-commerce and the integrity of service providers, as well as causing huge potential costs in global key revocation and change.” (DTI, 1999). This Act could hinder the development of e-commerce as people will become more wary about sending information. Therefore, although this Act is suppose to simply prevent anything unlawful, it could cost a great deal to society to breach personal privacy rather than anything which is criminal.
Data retention will not have an immediate or direct affect on the public, as most will be unaware of its existence. However, data retention does seem to be a complete invasion of privacy and the public will find it difficult to carry out their day to day activities without worrying if they are being watched.
With security issues affecting the UK and other parts of the world, this has been the perfect opportunity for the Government to justify increased surveillance. Whether the majority of surveillance techniques are necessary or not is irrelevant. The fact is, with surveillance comes increased security and reduced crime. Therefore, with the government always striving for their country to be less vulnerable, it seems likely that surveillance will only continue to increase in the future.
References
BBC, 'Q&A: Identity Card Plans', 2006, http://news.bbc.co.uk/1/hi/uk_politics/3127696.stm, [accessed 26 November 2007]
BBC, 'UK's Families Put on Fraud Alert', 2007, http://news.bbc.co.uk/1/hi/uk_politics/7103566.stm, [accessed 21 November 2007]
BBC, 'Watching Your Every Move', 2002, http://news.bbc.co.uk/1/hi/sci/tech/1789157.stm, [accessed 28 November]
DTI, 1999, "Promoting Electronic Commerce: Consultation on Draft Legislation and the Government’s Response to the Trade and Industry Committee’s Report"
Home Office Security, 'Legislation', 2000, http://security.homeoffice.gov.uk/legislation/current-legislation/ripa-2000/, [accessed 30 November 2007]
Information Commissioner's Office, 'A Report on the Surveillance Society', 2006, http://www.ico.gov.uk/upload/documents/library/data_protection/practical_application/surveillance_society_full_report_2006.pdf, [accessed 21 November 2007]
McKinnon, Ross., 2007. Big Brother Isn't Watching, The Evening Times, 26 Nov. p.4-5
Nick Taylor, Yaman Akdeniz, Clive Walker, 2001, "BigBrother.gov.uk: State surveillance in the age of information and rights", Criminal Law review, pp73-90
Recording History, 'The History of Recording Technology', N.D, http://www.recording-history.org/HTML/surveillance1.php, [accessed 28 November 2007]
Wikipedia, 'Closed-circuit Television', 2007, http://en.wikipedia.org/wiki/Closed-circuit_television, [accessed 2 December 2007]
Wikipedia, 'Telecommunications Data Retention', 2007, http://en.wikipedia.org/wiki/Data_retention, [accessed 2 December 2007]
This assignment was prepared in collaboration with Katherine Keane
Sunday 2 December 2007
BBC Outsourcing Case Study
“Outsourcing involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider.” (http://en.wikipedia.org/wiki/Outsourcing) A high proportion of companies now use outsourcing as a way to increase efficiency and performance in a certain area of their business. This may seem a novel technique to some, however outsourcing is not a new concept; it has been a growing trend among businesses for a number of years and continues to expand across business sectors today. For the BBC, the decision was a brave one as it was unprecedented in their sector. Although controversial at the time, the decision seems to have been a success, which is in part thanks to the process employed by the BBC to select a supplier. This process had many positive and negative aspects which had a substantial effect on the overall outcome of the project.
One positive aspect of the selection process was the fact that it was done over a relatively long period of time. It took the BBC eight months to actually select Siemens Business Services and a further three months to complete the whole process. This would have been of great benefit to the BBC, “investing effort in the early stages of the outsourcing can help to prevent an outsourcing disaster.” (http://www.out-law.com/page-501) This ensured that due time and consideration was given to the actual process itself, not simply the planning and preparation of the project, enabling the BBC to make the best choice possible. Further to this, the number of man hours spent on the project would have only aided the selection process.
Another positive aspect of the selection process is the way the BBC evaluated the bidding companies. It is extremely important to “technically, know and understand your existing IT operation and what you seek by way of external IT services from the service provider.” (http://www.out-law.com/page-501) Despite having no comparison to use, the BBC was able to establish certain criteria on which to judge the companies. The criteria mainly focused on the size of the bidding firm, their cultural fit with the BBC, their value for money, their understanding of the BBC business, and their commitment to the project. These factors were extremely effective in aiding the selection process, as it enabled the BBC to differentiate between companies based on specific factors which were important to them. In addition, it meant that the companies were judged on a variety of factors and not simply on their IT skills and knowledge meaning that an overall scope of the bidding companies was established before making any decisions.
Expanding on this, another positive aspect of the selection process was the fact that the evaluating team did not consist solely of experts from the BBC’s IT department. Initially there was an evaluating team of twenty six “core members” which may seem excessive, however they were to evaluate eighty bidding companies. After these companies were whittled down to thirty one, the BBC created an evaluating team of only eight members. This was a highly effective move by the BBC as they selected experts from different fields such as finance, procurement and technology, meaning the individual bids could be judged from different view points within the BBC, giving them a complete overview of each company.
Despite these more positive features, there were still some negative aspects which could be improved upon in the future. Firstly, the fact that over one hundred people located in different departments within the BBC carried out negotiations with bidding companies was a basic error. This could result in a severe lack of co-ordination between departments and employees, resulting in the wrong company being chosen. Although the BBC seem to have been lucky this time, future negotiations should be left to a smaller team of dedicated staff, working in close proximity with each other to ensure any decisions are completely correct.
The most notable error on the part of the BBC was the lack of communication between management and the employees. The choice to outsource would inevitably have a detrimental effect on the workforce, “it is difficult to dispute that outsourcing has a detrimental effect on individuals who face job disruption and employment insecurity.” (http://en.wikipedia.org/wiki/Outsourcing) When the implementation of the project began, the employees did not know anything about it, “This was completely unexpected”. This showed poor management skills by the BBC, as it implies there was no respect given to employees, and as a result, the employees were against the project from the word go. This initial lack of respect shown to the employees created a huge problem for the BBC. During the selection process BECTU, the union, ran a series of ballots because the BBC failed to conduct negotiations regarding the employees’ future. This then led to the threat of a strike which was thwarted by the BBC threatening BECTU with legal action. This was yet another mistake made by the BBC as it seemed like a desperate attempt to regain control of the situation, however the result was further alienation of their workforce.
Overall, the decision to outsource seems to have been a great success for the BBC. The process the BBC employed to select a supplier was undoubtedly going to be extremely difficult as this move was completely unprecedented. The management team were effectively going in blind as they had no comparison to give them direction or ideas. All things considered it was a relatively successful implementation and a very wise decision by the BBC, with only a few errors along the way. However, like most new projects, “Once an outsourcing deal has been concluded, committed management of the outsourcing relationship is critical to its success.” (http://www.out-law.com/page-501) Of course the first major test was the broadcasting of the general elections, which SBS and the BBC passed with flying colours. Overall it seems as though the BBC have reaped the rewards for their initial bravery, however only time will tell if it is a sustainable operation for the BBC.
References
CIO Insight, ‘IT Outsourcing: Expect the Unexpected’, 2007, http://www.cioinsight.com/article2/0,1397,2104842,00.asp, [accessed 20/11/07]
Outlaw, ‘An Introduction to IT Outsourcing’, 2004, http://www.out-law.com/page-501, [accessed 20/11/07]
Wikipedia, ‘Outsourcing’, 2007, http://en.wikipedia.org/wiki/Outsourcing,
[accessed 22/11/07]
One positive aspect of the selection process was the fact that it was done over a relatively long period of time. It took the BBC eight months to actually select Siemens Business Services and a further three months to complete the whole process. This would have been of great benefit to the BBC, “investing effort in the early stages of the outsourcing can help to prevent an outsourcing disaster.” (http://www.out-law.com/page-501) This ensured that due time and consideration was given to the actual process itself, not simply the planning and preparation of the project, enabling the BBC to make the best choice possible. Further to this, the number of man hours spent on the project would have only aided the selection process.
Another positive aspect of the selection process is the way the BBC evaluated the bidding companies. It is extremely important to “technically, know and understand your existing IT operation and what you seek by way of external IT services from the service provider.” (http://www.out-law.com/page-501) Despite having no comparison to use, the BBC was able to establish certain criteria on which to judge the companies. The criteria mainly focused on the size of the bidding firm, their cultural fit with the BBC, their value for money, their understanding of the BBC business, and their commitment to the project. These factors were extremely effective in aiding the selection process, as it enabled the BBC to differentiate between companies based on specific factors which were important to them. In addition, it meant that the companies were judged on a variety of factors and not simply on their IT skills and knowledge meaning that an overall scope of the bidding companies was established before making any decisions.
Expanding on this, another positive aspect of the selection process was the fact that the evaluating team did not consist solely of experts from the BBC’s IT department. Initially there was an evaluating team of twenty six “core members” which may seem excessive, however they were to evaluate eighty bidding companies. After these companies were whittled down to thirty one, the BBC created an evaluating team of only eight members. This was a highly effective move by the BBC as they selected experts from different fields such as finance, procurement and technology, meaning the individual bids could be judged from different view points within the BBC, giving them a complete overview of each company.
Despite these more positive features, there were still some negative aspects which could be improved upon in the future. Firstly, the fact that over one hundred people located in different departments within the BBC carried out negotiations with bidding companies was a basic error. This could result in a severe lack of co-ordination between departments and employees, resulting in the wrong company being chosen. Although the BBC seem to have been lucky this time, future negotiations should be left to a smaller team of dedicated staff, working in close proximity with each other to ensure any decisions are completely correct.
The most notable error on the part of the BBC was the lack of communication between management and the employees. The choice to outsource would inevitably have a detrimental effect on the workforce, “it is difficult to dispute that outsourcing has a detrimental effect on individuals who face job disruption and employment insecurity.” (http://en.wikipedia.org/wiki/Outsourcing) When the implementation of the project began, the employees did not know anything about it, “This was completely unexpected”. This showed poor management skills by the BBC, as it implies there was no respect given to employees, and as a result, the employees were against the project from the word go. This initial lack of respect shown to the employees created a huge problem for the BBC. During the selection process BECTU, the union, ran a series of ballots because the BBC failed to conduct negotiations regarding the employees’ future. This then led to the threat of a strike which was thwarted by the BBC threatening BECTU with legal action. This was yet another mistake made by the BBC as it seemed like a desperate attempt to regain control of the situation, however the result was further alienation of their workforce.
Overall, the decision to outsource seems to have been a great success for the BBC. The process the BBC employed to select a supplier was undoubtedly going to be extremely difficult as this move was completely unprecedented. The management team were effectively going in blind as they had no comparison to give them direction or ideas. All things considered it was a relatively successful implementation and a very wise decision by the BBC, with only a few errors along the way. However, like most new projects, “Once an outsourcing deal has been concluded, committed management of the outsourcing relationship is critical to its success.” (http://www.out-law.com/page-501) Of course the first major test was the broadcasting of the general elections, which SBS and the BBC passed with flying colours. Overall it seems as though the BBC have reaped the rewards for their initial bravery, however only time will tell if it is a sustainable operation for the BBC.
References
CIO Insight, ‘IT Outsourcing: Expect the Unexpected’, 2007, http://www.cioinsight.com/article2/0,1397,2104842,00.asp, [accessed 20/11/07]
Outlaw, ‘An Introduction to IT Outsourcing’, 2004, http://www.out-law.com/page-501, [accessed 20/11/07]
Wikipedia, ‘Outsourcing’, 2007, http://en.wikipedia.org/wiki/Outsourcing,
[accessed 22/11/07]
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