uhi ict shared services business case and business plan
Transcription
uhi ict shared services business case and business plan
UHI ICT SHARED SERVICES BUSINESS CASE AND BUSINESS PLAN University of the Highlands and Islands Network Latest Revisions - April 2013: EMEC VPN over The Highland Council Bandwidth increases at LCC & Ness Walk Shetland Islands Council Orkney Islands Council Islesburgh Learning Centre Heriot-Watt University © 2013 University of the Highlands and Islands NAFC Marine Centre Scalloway Castle St (ERI) Sandwick Learning Centre Open Fibre Stromness North Highland College Thurso Orkney College Kirkwall Shetland College Lerwick Wick Dornoch Burghfield Dornoch Ross Hse University of Aberdeen Highland Theological College 20M (Dingwall) MPLS Alness University of Stirling 10M MPLS 100M MPLS JANET Western Isles Hospital & Dental Unit 5M MPLS 8M 100M LES 45M MPLS JANET 45M MPLS JANET Inverness Campus Beechwood University of Aberdeen Midmills Open Fibre 100M LES Raigmore CfHS 100M LES 10M MPLS InvernessOpen College Fibre 10M MPLS 10M MPLS Benbecula Forestry LIS Fairways Strontian 200M MPLS JANET 2M Lews Castle College Stornoway Portree High School Ness Walk Lochmaddy 8M Portree Kings House 300M MPLS JANET 90M MPLS JANET Plockton High School Barra UHI Regional Network MPLS VPN 45M MPLS JANET HEBNET Sabhal Mor Ostaig Isle of Skye Buckie 10M MPLS Keith 200M MPLS JANET 5M MPLS Forres Nairn Open Fibre Linkwood JANET Mallaig 20M MPLS JANET The Highland Council 200M MPLS JANET Moray College (Elgin) Private ADSL 100M MPLS Perth & Kinross Council 20M MPLS West Highland College Fort William 5M MPLS Perth College 100M LES Private ADSL 100M LES Blairgowrie Kinross 100M LES Pathways Argyll College Oban Scone Airfield Dunstaffnage Marine Lab (SAMS) Argyll & Bute Council Learning Centres x50 Rothesay Dunoon 10M LES Islay Hazelburn (Campbeltown) Public Internet Kilmory Tobermoray Helensburgh Learning Centre Learning Centre Arran Lochgilphead Dumfries Revised 19 November 2013 ACKNOWLEDGEMENTS PREPARED UNDER THE SUPERVISION OF THE SHARED SERVICES BOARD Iain Macmillan (Chair) Alan Ashworth Lindsay Ferries Dawne Hodkinson Alun Hughes Anne Lindsay Niall McArthur John Maher AUTHORS Julie Cribb Alun Hughes John Maher THANKS TO THOSE WHO PROVIDED INFORMATION, HELP AND SUPPORT Ray Aitken Alan Ashworth Susan Bald Mark Beattie Rosemary Beaudoin Jeanne Boyd Andy Brown Ray Crabb Bob Cree-Hay Stuart Cruickshank Tracey Cruickshank Mike Devenney Steve Douglas Anna Enos Lindsay Ferries Roddy Ferrier Robert France James Garrow Mhairi Glen Steve Gontarek Iain Gordon Laura Henderson Dawne Hodkinson Richard Hughes Fraser Hutcheon Duncan Ireland Carol Kirk Deborah Lally DJ Lamont Fiona Larg Elaine Laurenson Anne Lindsay Paula Lister John McAlpine Niall McArthur Donald MacBeath Lorna MacDonald Marion MacDonald Martin MacDonald Mike MacDonald Tony McGregor Elizabeth McHugh Gary Mackenzie Donald Maclean Lorraine MacLennan Iain Macmillan Jacky MacMillan Murdo MacMillan John Maher Ian Martin Elaine Munro Fiona Mustarde Ian Neilson Jane Ollerenshaw Thomas Redmond Danny Richardson Gary Ryan Christine Scott Chris Sellers Gerard Sheal Jill Sinclair Donna Smith John Smith Sue Smith Roray Stewart Jem Taylor Darryl Thompson Carolyn Thomson Gary Tooke Lewis Vernal Craig Walker David Wood Joe Wright and the Principals/Directors of all Academic Partners and the University UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN CONTENTS Acknowledgements ................................................................................................................................................ 2 List of figures .......................................................................................................................................................... 6 List of tables ............................................................................................................................................................ 7 Introduction to the revised Business Plan .............................................................................................................. 8 Fort Augustus 3 and the changes in this revised version ................................................................................... 8 What happens next? ........................................................................................................................................... 8 1 EXECUTIVE SUMMARY ...................................................................................................................................... 10 1.1 Current Status ............................................................................................................................................ 10 1.2 Introduction ............................................................................................................................................... 10 1.3 Options Analysis ......................................................................................................................................... 10 1.4 What kind of organisation would it be? .................................................................................................... 11 1.5 Growth ....................................................................................................................................................... 11 1.6 Governance – A ‘Commissioning Board’ .................................................................................................... 12 1.7 Additional Costs ......................................................................................................................................... 12 1.8 Savings ....................................................................................................................................................... 12 1.9 ICT STRATEGY ............................................................................................................................................. 13 1.10 Scope – Core And Full .............................................................................................................................. 14 1.11 Service Level Agreements ........................................................................................................................ 16 1.12 Operational Aspects ................................................................................................................................. 17 1.14 Corporate Governance ............................................................................................................................ 18 1.15 Directors .................................................................................................................................................. 19 1.16 Organisational Structure And Management ............................................................................................ 20 1.17 The Company As An Employer ................................................................................................................. 21 1.18 Current Financial Position ........................................................................................................................ 22 1.19 Proposed Funding Model ......................................................................................................................... 22 1.20 Next Steps ................................................................................................................................................ 25 2 MANDATE ......................................................................................................................................................... 26 1 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 3 CURRENT STATUS AND CONTEXT ..................................................................................................................... 28 Geography ........................................................................................................................................................ 28 Wide Area Network .......................................................................................................................................... 29 Wifi ................................................................................................................................................................... 30 Videoconferencing ............................................................................................................................................ 30 E-mail ................................................................................................................................................................ 32 Virtual Learning Environment ........................................................................................................................... 33 Library And E-Resources ................................................................................................................................... 34 Helpdesk ........................................................................................................................................................... 34 Servers and Storage .......................................................................................................................................... 35 Telephony ......................................................................................................................................................... 35 ICT Service Support ........................................................................................................................................... 35 External Context ............................................................................................................................................... 37 4 OPTIONS ANALYSIS ........................................................................................................................................... 38 Options ............................................................................................................................................................. 38 Analysis ............................................................................................................................................................. 38 Recommendation ............................................................................................................................................. 40 Conclusion ........................................................................................................................................................ 42 Timescale .......................................................................................................................................................... 43 5 CURRENT FORM AND STATUS OF THE COMPANY ........................................................................................... 44 6 VISION AND MISSION ........................................................................................................................................ 46 7 BUSINESS OBJECTIVES ...................................................................................................................................... 48 Growth .............................................................................................................................................................. 48 Governance - Commissioning Board and UHI Shared Services Limited............................................................ 49 External Services and Income Generation ........................................................................................................ 49 For-Profit Trading ............................................................................................................................................. 50 Members External to the UHI Partnership ....................................................................................................... 50 8 FINANCIAL IMPLICATIONS OF MOVING ICT SERVICES INTO A SHARED SERVICES COMPANY .......................... 51 Additional Costs of the Shared Services Company ........................................................................................... 51 2 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Transition Costs ................................................................................................................................................ 52 Technology Changes ......................................................................................................................................... 52 Expected Efficiency Gains ................................................................................................................................. 53 9 ICT STRATEGY ................................................................................................................................................... 55 The Environment .............................................................................................................................................. 55 Strategic Themes .............................................................................................................................................. 56 What does this mean? ...................................................................................................................................... 56 Work Streams ................................................................................................................................................... 59 10 SERVICE SCOPE - FULL AND CORE SERVICES ................................................................................................... 64 Core Services – Available to All ......................................................................................................................... 65 Full Service – Available to Fully Opted-In Members Only ................................................................................. 66 11 SERVICE LEVEL AGREEMENTS ......................................................................................................................... 68 Service Availability ............................................................................................................................................ 68 Service Performance ......................................................................................................................................... 69 Notice Periods................................................................................................................................................... 69 Service Review Meetings .................................................................................................................................. 69 Complaints ........................................................................................................................................................ 70 Presence ........................................................................................................................................................... 70 Requests for Service ......................................................................................................................................... 71 Helpdesk Support ............................................................................................................................................. 71 Customer Satisfaction ....................................................................................................................................... 72 Audit ................................................................................................................................................................. 72 Service Catalogue ............................................................................................................................................. 72 12 STAKEHOLDER GROUPS .................................................................................................................................. 74 13 OPERATIONAL ASPECTS .................................................................................................................................. 76 Physical Presence.............................................................................................................................................. 76 The IT Estate ..................................................................................................................................................... 77 Facilities ............................................................................................................................................................ 80 Structure of Service Delivery ............................................................................................................................ 81 3 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Licence and Contract Management .................................................................................................................. 83 Procurement ..................................................................................................................................................... 83 Assets ................................................................................................................................................................ 83 Insurance .......................................................................................................................................................... 84 Premises ........................................................................................................................................................... 84 Servicing the Service ......................................................................................................................................... 85 14 CORPORATE GOVERNANCE ............................................................................................................................ 86 15 DIRECTORS ...................................................................................................................................................... 88 16 STRUCTURE OF THE COMPANY ...................................................................................................................... 90 Organisation ..................................................................................................................................................... 90 Senior Management ......................................................................................................................................... 91 17 EMPLOYMENT MATTERS ............................................................................................................................... 93 General ............................................................................................................................................................. 93 TUPE.................................................................................................................................................................. 93 Training and Staff Development ....................................................................................................................... 94 Future Employment and Terms and Conditions ............................................................................................... 95 HR Activities ...................................................................................................................................................... 95 Pensions ............................................................................................................................................................ 96 18 CURRENT FINANCIAL POSITION ...................................................................................................................... 98 Summary Results .............................................................................................................................................. 98 Variation across Partners ................................................................................................................................ 101 Staffing ............................................................................................................................................................ 102 19 FINANCIAL MODEL ........................................................................................................................................ 104 General Approach to Charging ....................................................................................................................... 105 Subscription Metrics ....................................................................................................................................... 106 Operating the ‘Exact Reimbursement’ Criterion ............................................................................................ 106 Division of Recurrent Costs Amongst Members - Methodology .................................................................... 107 20 OPERATING AS A COST SHARING GROUP - THE VAT EXEMPTION ................................................................ 110 The Conditions and HMRC's Guidance ........................................................................................................... 110 4 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Further Implications ....................................................................................................................................... 111 Member Eligibility ........................................................................................................................................... 112 21 INVESTMENT STRATEGY ............................................................................................................................... 114 22 FINANCIAL STATEMENTS .............................................................................................................................. 116 Cash Flow ........................................................................................................................................................ 116 Balance Sheet ................................................................................................................................................. 117 23 POTENTIAL FUNDING SOURCES .................................................................................................................... 118 SFC .................................................................................................................................................................. 118 Janet ............................................................................................................................................................... 118 European Funding........................................................................................................................................... 119 External Commercial Services......................................................................................................................... 119 ICT-Related Income Currently Generated by Academic Partners................................................................... 119 24 REGIONAL DEVELOPMENTS .......................................................................................................................... 120 APPENDIX A1: DETAILED FINANCIAL DATA RETURNS ......................................................................................... 122 APPENDIX A2: UHI ICT SHARED SERVICE SPECIFICATION ................................................................................... 123 APPENDIX A3: THE FORT AUGUSTUS 2 AGREEMENT ......................................................................................... 161 APPENDIX A4: ISSUES LOG FROM THE FORT AUGUSTUS 2 SUMMIT ON SHARED SERVICES ............................. 165 APPENDIX A4a: ISSUES LOG FROM THE FORT AUGUSTUS 3 SUMMIT ............................................................... 172 APPENDIX A5: UHI ICT SHARED SERVICES RISK REGISTER .................................................................................. 196 APPENDIX A6: ARTICLES OF ASSOCIATION OF UHI SHARED SERVICES LIMITED ................................................ 201 APPENDIX A7: BUSINESS SYSTEMS CONVERGENCE STRATEGY ......................................................................... 217 APPENDIX A8: DRAFT JOB DESCRIPTIONS – CHIEF EXECUTIVE AND DIRECTOR, ICT .......................................... 248 5 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN LIST OF FIGURES 1 Proposed organisational structure 20 2 Academic Partner and Learning Centre locations 28 3 Network services 29 4 Wifi activity 30 5 VC bookings by activity 31 6 Predicted VC usage for teaching to 2017 31 7 Predicted total VC bridge usage to 2017 32 8 Typical VC system usage by month and by event 32 9 Average active courses on the VLE per month, 2011-current 33 10 Growth in average number of VLE users per day, 2011-current 33 11 UHI Helpdesk logged calls and resolution 34 12 Number of ICT staff by Academic Partner 36 13 Options Analysis 38 14 Helpdesk priority levels and responses 72 15 Service catalogue entry example – MyUHI 73 16 Location of ICT shared service staff and the services they provide 82 17 Structure of the Company and the ICT service 90 18 Range of ICT projected spend as a proportion of turnover 101 19 Range of printing and copying projected spend as a proportion of turnover 102 20 Staff age profile 103 21 Staff salary range 103 22 Location of all staff 103 6 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN LIST OF TABLES 1 ICT Shared Service Budget 14-15 24 2 Transitional Scheme 25 3 Site list 76 4 Total ICT planned spend (2013/14) 99 5 ICT non-staff projected spend by category 99 6 Summary of University income 100 7 ICT staff projected spend and numbers 100 8 Categories of zero spend 102 9 ICT Shared Service Budget 14-15 108 10 Transitional Scheme 109 11 SFC funding bid 118 7 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN INTRODUCTION TO THE REVISED BUSINESS PLAN Fort Augustus 3 and the changes in this revised version The first version of this Business Plan (‘version 1’) was released on 8 October 2013. It was discussed in detail at our third summit meeting in Fort Augustus on 30/31 October. We are very grateful to delegates for their support and positive approach to moving the project forwards. In this revised Business Plan we have, limited timescale available, attempted to address as far as possible the main issues identified. The financial model proposed was considered too turbulent, and too disadvantageous to too many APs including a number of the smallest. A working party was proposed to consider alternatives, established under Alan Ashworth’s chairmanship, and its deliberations are reflected in a much revised Chapter 19 and summarised in the Executive Summary at 1.19. It would be fair to consider this work in progress, as although the working group expressed a clear view as to the principles to be followed in the new model, it has not had an opportunity to review the detailed outcomes. There was renewed debate around the voting model for UHI Shared Services Limited. We detected a higher degree of support than previously for a one-member, one-vote solution and we have proposed a revised voting model in Chapter 14, summarised in the Executive Summary at 1.14. This is not quite 1M1V but we think it embodies the spirit of that approach and has the extra benefit of making it easier to take on members external to the partnership. Pensions were discussed at length and it is clear that the feeling of delegates was that a commitment to offer LGPS to transferred staff was key to the success of the initiative. The initial pensions advice that we received after the issuing of version 1 is now summarised in Chapter 17. Between the publication of version 1 and this revision we have received confirmation from SFC that, subject to clarification of costs and agreement of conditions of funding, they have agreed to fund the initiative to the full extent of the £2.16m that we requested. There are no substantive changes in this version because of that, but we have updated the language to reflect the much improved position. Delegates expressed a range of views about the senior staffing structure, and more broadly, about employment practices within the new Company. A HR workstream has been established, led by Lindsay Ferries, to address these issues and its programme of work is outlined in Chapter 17. A revision of the staffing structure, removing one of the ‘Head’ posts (enterprise architecture and strategy) and incorporating that activity within the ‘Infrastructure’ section, is proposed and the revised organogram can be seen at Chapter 16 and in the Executive Summary at 1.16. We were advised not to be too extravagant as to the language we used around redundancy and relocation of staff, though it remains the situation that no compulsory redundancies are planned in the formation of the new service and the intent is that the organisation will remain distributed. References to these issues have been revised at a number of locations in the document. We made some other changes, typically for extra clarity, in a number of areas including the definition of service scope, the ICT strategy, and issues around cash flow. What happens next? We are now hoping that Academic Partners and the University can agree to commit to the shared service on the terms outlined in this Business Plan. We recognise that there are unresolved issues, not least around 8 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN pensions, and that these will need to be worked through to general satisfaction before agreements can be finalised. However even addressing these issues has a high level of commitment as a prerequisite, and therefore, by the target date (19 December 2013) Academic Partners and the University are asked to: Become members of the Company if they are not already members, and Commit to participating in the shared service, specifying whether as 'full' members or members taking the core service only. In committing to participating we recognise that there are some fundamental and some detailed issues still to be resolved and that the decision to commit is based on satisfactory resolution of those issues: o o o o o confirmation of acceptable first-year costs to each member acceptable arrangements for the transfer of pensions being achieved detailed agreement as to the mechanism of apportionment of running costs in future years being achieved the conditions of funding specified by the Scottish Funding Council as applicable to members being acceptable suitable arrangements for ensuring the ongoing liquidity of the Company being agreed 9 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 1 EXECUTIVE SUMMARY 1.1 Current Status A core set of ICT services is provided to the Partnership, funded by top-slice from the HE funding stream. Academic Partners themselves provide local services which vary very significantly. Much activity is duplicated or operated in parallel across the Partnership and the overall ICT infrastructure is as a result complex and heterogeneous with many points of failure. It is not obvious that we are collectively spending too little or too much on ICT (especially when we take European funding into account) but the growth in common services has not led to Partners taking commensurate savings, and the overall ICT environment is clearly inefficient with insufficient value being returned for the Partnership’s investment. 1.2 Introduction At the Fort Augustus 2 summit on shared services in April 2013, it was agreed that: the University and its Academic Partners agree to collaborate to develop a range of shared services to be delivered for the collective good. They will operate on the principle of collective self-provision rather than outsourcing. The first services to be delivered will be ICT services and will be provided by a new shared services company, UHI Shared Services Limited, subject to the satisfactory conclusion of a due diligence process and the development of a business case acceptable to the partnership. The Shared Services Board here sets out a Business Case/Business Plan which we believe meets that requirement and which we commend to the partnership. 1.3 Options Analysis It was agreed at Fort Augustus to establish UHI Shared Services Limited as a Company Limited by Guarantee, to operate as a Cost Sharing Group under the terms of the Finance Act 2012, thereby not having to charge VAT on services to its members. ICT staff currently employed by the University and its Academic Partners would be transferred to it. Outsourcing the whole service was explicitly ruled out. In the Business Case/Business Plan we validate that conclusion by offering an options analysis across four different futures – retaining the status quo, operation of the shared service directly by the University or one of its Academic Partners, delivery via the Cost Sharing Group and whole-service outsourcing. We conclude that the approach agreed at Fort Augustus was the right one. In particular we thought that the requirements for flexibility, adaptability and responsiveness and the ability to operate more as a business, were best satisfied by the establishment of the Cost Sharing Group. Even if the setting up of a separate legal entity turned out not to be strictly necessary for the avoidance of VAT, we would still prefer this option. 10 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 1.4 What kind of organisation would it be? The aims of the Company can be taken directly from the Fort Augustus 2 agreement - enhanced student experience, greater ability to deliver equivalence, greater efficiency and effectiveness and improved quality. We take from the same document the ‘ethos’ points that will guide the company in its operation and development: Collectively owned and governed Supporting the whole business of all members including HE, FE, research and other core activity Acting and managed according to business disciplines Flexible, adaptable and able to respond quickly to changes in the partnership or the external environment A lean and cost-effective management structure with minimal bureaucracy Not an outsourcing model, though, as now, specific elements of the service may be outsourced where appropriate A distributed workforce Development of a wider range of professional specialisms Commitment to developing its staff Full transparency to its members as to its financial, contractual and other arrangements Stakeholders have made it clear that while efficiency and effectiveness is expected, and indeed required, what is of prime importance is quality of service. 1.5 Growth There may seem to be a contradiction between the expectation that a shared services organisation should save money for its members, and therefore reduce its economic footprint, and the normal drive for growth which is part of the sustainability agenda for many companies. The Company will need to grow from its original establishment delivering ICT services. Common ICT services are the necessary underpinning for the shared services in transactional areas which present greater opportunities for savings. The Capita Report (Outline Business Case for a new operating model. University of the Highlands and Islands. January 2012) indicated that ICT services in themselves were not of sufficient volume to sustain a shared services organisation. We are not necessarily convinced that that is the case, but the new organisation will have overheads that will be proportionately smaller if more functions are taken on board. The most desirable form of growth is through taking on new functions from member organisations, delivering improved efficiency and effectiveness and proportionately reducing the overhead. In addition, this allows improved synergies across areas of service, improving efficiency and quality of service even further. The Shared Services Board has considered the range of support services currently delivered within the partnership and assessed the extent to which they are suited to be taken into the shared services organisation. The current list of 'Priority 1' areas, i.e. those judged to have the greatest 11 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN potential for cost savings and/or improved service, includes admissions/registry/student records, finance and HR (transactional activities) and library services. Incorporating these services is not part of this business plan, but creating a vehicle that has that potential is. 1.6 Governance – A ‘Commissioning Board’ We think that in considering future shared services beyond ICT, it will be necessary to separate the 'commissioning' function from the delivery function. In particular we would like to see the establishment of a 'commissioning board' with very senior representation from the partnership, whose function would be to: determine which services are priorities for sharing and in what way (i.e. via shared services company or by another means) for those services to be transferred to UHI Shared Services Limited, to engage in a commissioning dialogue in which, inter alia, issues of cost vs. quality of service are considered offer continuing guidance on the balance of expenditure and service levels across the different areas of activity. The Commissioning Board would act as a representative body of the UHI membership of the Company. However the contractual relationship would remain between the Company and its members. 1.7 Additional Costs We estimate the additional running costs of the Company at £100,000 per year, or approximately 1.7% of its initial anticipated turnover. A range of transitional costs has been identified, including additional staff training and development, travel and subsistence and technology investment to provide something closer to a common playing field. We understand that SFC funding will be forthcoming to covering these costs subject to final confirmation. Work is being commissioned on the pensions implications, which remain to be clarified in detail. 1.8 Savings In most cases these can only be broad estimates, when we can make estimates at all. They do not necessarily relate to cash savings – in particular, we expect to make very significant improvements in the way in which staff are collectively deployed, with reductions in redundant and duplicated work and efficiencies achieved through automation of routine tasks, but the anticipated consequence is a redeployment of staff to work that has more value to the end-user, rather than a reduction in overall staffing costs. 12 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN In our submission to SFC we have used a consultant’s figure of £376,100 as the saving that we might make from the implementation of a standard thin-client based technology for applications delivery. Much of this saving accrues to Academic Partners through lower costs of procurement and replacement of end-user devices such as PCs and terminals, and lower energy costs where that equipment is deployed. There is acknowledged scope for software rationalisation and we think a saving of around £170,000 may be possible in the short to medium term. We do not propose that physical assets should transfer to the Company. The Company may however acquire assets after it begins trading. Delegates at Fort Augustus 3 were interested in the likely future costs of the ICT service beyond the first year. The first point to make is that this is a matter for the membership to determine - there may be a requirement for investment to achieve strategic aims or efficiency gains elsewhere in the business, or conversely there may be an overriding imperative to reduce costs. Our expectations on costs assuming, broadly, a steady state in terms of ICT provision, are as follows: In the first year, as indicated, we expect to hold expenditure at a level equivalent to current spend, adjusted for inflation. In the second year, we expect to take efficiency gains sufficient to cover the loss of the temporary (first year) funding support from SFC. In the third year, we would hope to make efficiency gains of between 3% and 5%. These figures do not account for inflation. 1.9 ICT STRATEGY ICT is now fundamental to the delivery of any organisation's operational and strategic goals. The University and its Academic Partners is a modern, widely dispersed organisation, operating in a highly competitive and fast moving sector. It's customers are increasingly "tech savvy" with high expectations when interacting with the services they are consuming. To fulfil its potential the partnership needs a modern, coherent and effective ICT service. In the current economic and funding climate any new investment in ICT needs to be based on sound academic and business reasons. Operational efficiencies need to be maximised and services improved. The proposed shared service puts the partnership in a position where, for the first time, it can realistically achieve a unified ICT strategy. This will allow it to make informed technology choices that can be implemented in a coherent and efficient manner across the partnership, ensuring an equivalence of experience and quality of service. The Business Case/Business Plan contains a comprehensive, though draft, skeleton of such a strategy, with a set of strategic themes around: Our customers Our people Distributed capacity and local resilience 13 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Environmental and operating efficiency 1.10 Scope – Core And Full The Business Case/Business Plan is predicated on the assumption that the majority of Academic Partners, along with the University, commit fully to the shared service, including transferring their ICT staff to the Company. We know already that a smaller number do not intend to do so – currently these are SAMS, Sabhal Mòr Ostaig and Orkney College. (In the case of Orkney College the local authority’s policy will not permit the transfer of staff.) It is recognised that effective participation in the UHI partnership is contingent on the ability to use some common information systems, such as the VLE and student records system, and therefore a core set of services, broadly equivalent to those currently provided by the University’s LIS department, will be available to all UHI members of the company. The basket of core services will be charged separately from the ‘option’ services. 14 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN CORE SERVICES – AVAILABLE TO ALL Admissions and enquiries platform Multimedia content hosting Backup and data recovery MyUHI thin client platform and any successors Business continuity support (system-wide) Network security testing (automated) CLA Copyright Web Based Register Online enrolment environment Course database Online fee payments support Desktop VC (Jabber) Online module selection system Document management and collaboration platform Online student feedback system Domain and URL management Email, calendar, instant messaging Podcasting service Reading list management e-portfolio system Research information management platform (PURE) e-Resources provision and management Resource discovery tools FES return support Security (WAN environment) File store Service desk (Helpdesk) Helpdesk platform Service desk (Helpdesk) – out of hours HESA KIS return and NSS support Service level reporting HESA Returns Statutory returns support Information security policy maintenance Student and staff badges – software environment Interactive voting system Inventory and asset management platform IT compliance management (system-wide) Janet Learning analytics Learning content – hosting and technical advice Student attendance platform Student records core reports Student records accessibility platform Student records fees environment Student records portal Student withdrawal tools Library management system Telephony – UHI internal, desktop Module Catalogue platform Timetabling/VC booking systems platform(s) 15 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Training materials provision (generic) UHI Toolkit platform Videoconferencing – bridging, connection, booking, scheduling, user support User account provision Virtual learning environment (Blackboard, Blackboard Mobile, Collaborate) VC recording Web content filtering Video streaming service for learning content (Helix) Web – One Web development and infrastructure Wide Area Network Wi-Fi FULL SERVICE (OPTION) – AVAILABLE TO FULLY OPTED-IN MEMBERS ONLY Apple device support AV equipment – procurement support, installation, configuration IT classroom and laboratory support Business continuity support (local) IT compliance management (local) Business systems convergence project LAN management Comms room management Licensing audit services CRM software platform (as developed through business systems convergence strategy) Mobile device support Desktop applications delivery, other than via thin client Out of hours class support Equipment disposal (compliant) Printing and photocopying management Finance software platform (as developed through business systems convergence strategy) Server platform for non-core services HR software platform (as developed through business systems convergence strategy) VC studio endpoint management and support Mobile telephony PC support Terminal (thin client) support Web analytics, design, development 1.11 Service Level Agreements During consultation, many stakeholders emphasised the importance of 'robust' service level agreements. At the same time we also heard, sometimes from the same people, about the importance of maintaining flexibility, particularly at the local level. We agree with both positions. It UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 16 is important to set clear expectations in the minds of both service providers and consumers as to the services being provided, but it is also important that we don't lose what people value about their local services in the transition to the single service. The Business Case/Business Plan sets out an approach to the development of new Service Level Agreements focussed around: service availability targets which more closely reflect impact on users, e.g. higher availability targets during critical period such as enrolment development of performance measures, e.g. system response times improved communications, including notice of changes customer satisfaction as a key performance indicator 1.12 Operational Aspects The proposed service would remain distributed with a strong emphasis on local presence. The contract that the Company will have with each of its members will include a definition of where that service will be provided as well as its scope. Over time, we expect that the rationalisation of the ICT environment and the continued development of remote technical support capability will free up locally-based staff to provide for more face-to-face user support, enabling the service to cope better with the changing demands on the service and a more mobile user base. Increasing use of intelligent systems will help maximise resource usage and could lead to reduced investment requirements for end-user equipment, which also has the potential for releasing IT staff to spend more time on supporting the users rather than dealing with the equipment. The ICT service will be structured into a number of sections each with a head of service, and in addition there will be a key contact or Relationship Manager at each Partner who will be responsible for the end user experience across all services at all sites for which they have responsibility. Regular Service Review meetings will take place which will afford the opportunity for feedback and continuous improvement as well as noting matters in relation to the SLAs with respect to each service. As the shared service is embedded, in all cases staff, regardless of location, will work in virtual teams based on the functions they provide to ensure efficient use of resources and deployment of common solutions and standards. Disentangling the service over the first year will enable best use of people within the Company to provide a much stronger and resilient service, with team working providing the strength and depth which is much harder to achieve within the current status, resulting in fewer single points of failure (SPFs) and providing greater flexibility to cover for peaks and troughs. An early opportunity for savings, more efficient working and a better quality of end user experience is in the consolidation of software applications and the negotiation of new contracts, managed by a small team of staff with relevant expertise and negotiating skills, focussing on customer needs and not purely on the potential for cost savings. We do not propose that physical assets should transfer to the company. However, in order to carry out its functions, the company will need to deploy and control equipment owned by its members, and we propose that a part of the formal agreement entered into by each member should detail the UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 17 assets owned by the member (if any) that the company has the right and obligation to manage. New assets acquired by the company will be company assets unless procured for, and recharged to, members. In order to support the principle of remaining distributed in terms of staff location, we propose that it be part of the contractual relationship between UHI Shared Services Limited and its members that staff located at Academic Partner or University premises be accommodated free of charge. This is consistent with a general principle of minimising transactions where the Company procures services from its members on a paid-for basis. These services are likely to be subject to VAT and the net result is simply a transfer of funds out of the partnership to HM Treasury. As the service goes live the Shared Services Company will employ around 80 people and be responsible for its own financial and legal affairs as well as other functions as outlined in the Corporate Services Department shown in the Organisation Chart in Chapter 16. Additional resource will be required to provide these functions, in particular financial expertise. In the short term a bid has been put to SFC which includes £100k to allow for acquiring these services in the transitional period, which we understand will be forthcoming subject to final confirmation. Once the service is established and the nature and extent of the ongoing requirements are clearer the resulting overhead will need to be built into the shared service budget for future years. 1.14 Corporate Governance UHI Shared Services Limited is established as a Company Limited by Guarantee, Company No. SC457396, with its registered office at Synergie House, Fairways Business Park, Inverness IV2 6AA. It is owned by its members. All UHI Academic Partners, including the University, are eligible to become members. As the Articles currently stand, members have voting rights which vary according to their financial contribution to the company. Each member has the greater of: one vote; or one vote for every complete £200,000 of annual subscription payable by that member in respect of the then current financial year. 'Annual subscription' means that part of the total running costs of the Company contributed by the member in that financial year. In the first version of this Business Plan, the Shared Services Board proposed no change to these arrangements, though there had been some discussion at the Fort Augustus 2 summit of a onemember, one-vote alternative. The issue was raised again at Fort Augustus 3 and there seemed to us to be a greater consensus this time for such an approach. We are therefore proposing the variant that follows. Each member who subscribes for the full range of services offered: 10 votes Each member who subscribes to a 'core' bundle only, or a set of services greater than the ‘core' but less than the full range: 5 votes UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 18 Members who take specific services only, less than the 'core' provision: 1 vote The third category would typically apply to members outwith the UHI partnership. Members would only fall into one of the above voting categories at any one time, i.e. they have 10, 5 or 1 vote(s) in all circumstances. Obviously the model is intended to encourage maximum participation. The scenario in the second category - where a member takes a range of services somewhere between 'core' and 'full' - is not intended to suggest that a pick-and- mix approach is available to the services described as 'option' in respect of the ICT service, but accommodates a future, when we have brought on additional services, in which perhaps some members are taking the 'core' option for some areas of shared service and 'full' for others. We would need to take some care in drafting to future-proof the wording. This approach deals comfortably with the concern that it is difficult to bring in new external members, and thereby grow the business, with 1M1V. There should also be no issue with Teckal compliance and the requirements for Cost Sharing Groups. What it does not provide for, in itself, is stability in governance for the Company if there are very major changes in the structure of the membership, e.g. through substantial mergers. At this stage we simply note this as a risk, which the membership would need to deal with if it became a practical problem. Note also that this proposal would result in the incorporated colleges not having a collective majority of votes, nor would any individual member have anything approaching a 20% level of control of the Company. Members delegate the day-to-day management of the Company to the Board of Directors, who delegate the operational management of the Company to the executive. 1.15 Directors The Articles of Association of UHI Shared Services Limited provide that there must be a minimum of five directors. Eligibility to be a director of the Company has been limited to employees, directors or trustees of member organisations, and employees of the Company. In the event that a director ceases to satisfy one of these conditions, he or she ceases to be eligible to be a director. The term of office of directors is three years, renewable for two further consecutive terms of three years. Directors who are not employees of the Company are unpaid. The Board of UHI Shared Services Limited is currently: Iain Macmillan, Lews Castle College UHI (Chair) Alan Ashworth, West Highland College UHI Lindsay Ferries, Inverness College UHI Alun Hughes, University of the Highlands and Islands Anne Lindsay, Moray College UHI Niall McArthur, Inverness College UHI UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 19 The current members of the Board are drawn from those members of the Shared Services Board eligible to be directors at the current date. The Board is of the view that its membership is likely to need to change in the relatively near term, reflecting the transition of the shared services initiative from project to service, and the need to separate the functions of identifying and prioritising candidate activities for shared service from the governance and management of operational services. The Board recognises that the Articles in themselves do not provide for a balanced or representative Board membership. While not wishing to hard-code such provisions into the Articles, the Board would propose to adopt a set of principles of corporate governance which would, inter alia, provide that appointment of directors should be informed by the following criteria: appointed from a suitably wide range of member organisations bringing an appropriate range of skills and experience to the Board where appropriate, ability to provide through cross-representation links with the governance structures of the University. 1.16 Organisational Structure And Management Figure 1 shows the proposed organisational structure of UHI Shared Services Limited at the time that it begins trading. The structure provides for the appointment of further Directors of service areas in future, but only the Director, ICT is proposed to be appointed at this stage. Figure 1: Proposed organisational structure UHI SHARED SERVICES LIMITED Board of Directors Chief Executive Corporate Services Finance, Administration, SLA monitoring, documentation, change management, compliance, procurement, environmental, project management, business continuity, information security Director, ICT Director, Service 2 Director, Service 3 Director, Service 4 Head of Service Delivery Head of Infrastructure Head of Corporate Systems Head of Learning, Teaching & Research Support Service desk, local ICT support, desktop & mobile devices, incident support, installation & service rollout, VC Studio/Endpoint support Network (WAN/LAN/wifi), system architecture, ICT Strategy, servers, directory services, thin client, filestore, DBMS, telephony, server rooms, R&D, video infrastructure, backup SRS, BI & Reporting, UHI Records, IDM, systems development & integration, business systems, SharePoint, web development, TOMAS VLE, LMS, e-Resources, VC service, email, collaboration tools, timetabling, PURE, generic applications, usability, academic and research liaison, assistive technologies UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 20 The structure of the ICT service proposed is relatively conventional and parallels that found in many other UK universities. Adopting a standard and well-understood structure should help mitigate risk in moving to a different operating environment. The Chief Executive will be appointed by the Board at such time that there is sufficient commitment from members that the Board can be certain that the company will trade. The Chief Executive is responsible for overall strategy and management of the company, its financial integrity, compliance and the overall management of its relationship with its members and external stakeholders. Critical activities at start-up will include working with the Director, ICT to embed the shared service within the new Company. An important element of the role in the early years of the company will be the extension of its business into other areas of shared service. There is a general presumption that posts will be filled from within those staff in scope for transfer unless in the opinion of the Board this is not appropriate. The Board recognises that if external appointments need to be made then a contingency is likely to need to be invoked for the additional cost of doing so, and this will be addressed in fine-tuning the budget plan. 1.17 The Company As An Employer We believe on the basis of advice that TUPE regulations apply to the transfer of staff from the University and its Academic Partners to UHI Shared Services Limited. These regulations provide for the protection of salary and terms and conditions of employment for transferring staff. We will of course ensure full compliance with the regulations, including the recognition of Trade Unions being carried over to the new employer. The Company intends to seek Admitted Body status in the Local Government Pension Scheme (LGPS) in order to be able to offer these pensions to transferring staff, the vast majority of whom are already members of the LGPS. We are currently taking professional advice on the implications of this. The Company is committed to remaining distributed. There will therefore be a principle applied that there will be no compulsory relocation of staff as the shared service goes live. No compulsory redundancies are envisaged associated with the move to the shared service. However, as the service faces disentanglement and restructuring following the move to the shared service some staff may prefer to apply for voluntary severance. The Company will consider providing this option where it makes business sense to do so. As the staffing of the new, shared ICT service be made up as far as possible from the staff transferring to it from the University and its Academic Partners, we anticipate a major staff development and training requirement. No position has yet been taken as to the exact nature of employment policy or terms and conditions in the new company. That will need to be determined in advance of trading and at least in advance of making any new appointments. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 21 We note the Fort Augustus 2 Agreement provision that the company will have an ethos of 'acting and managed according to business disciplines' and will be 'flexible, adaptable and able to respond quickly to changes in the partnership or the external environment'. To us this suggests that the Company should certainly not be constrained to the standard employment practices of universities and colleges, which is not to say that inferior conditions are envisaged. 1.18 Current Financial Position The data collection exercise underpinning this Business Case/Business Plan collected staffing and non-staffing spend and budget over three financial years. We have based our plan on 2013/14 data as being somewhat more reflective of the current position than previous years’ data and we are as comfortable with its accuracy as we are for other years. The figures do not include spend at SAMS, Sabhal Mòr Ostaig and Orkney College, or out-of-scope expenditure such as that on PCs, laptops, smartphones, tablets and other items of end-user equipment – purchasing decisions on these remain the responsibility of individual member organisations, subject to caveats regarding minimum specification – Chapter 13 Procurement. The total budgeted expenditure, net of income, is £5,962,232. The staffing element of this is £2,894,417. There are 80.13 FTE ICT staff in total in scope, made up of 82 individuals. 1.19 Proposed Funding Model Based on the current funding envelope (slightly adjusted as explained in the Business Plan) we propose a net operating budget of £5,962,232 in the first year, which would run from 1 April 2014 to 31 March 2015. The proposal is that predictable annual running costs be recovered from members on a formulaic basis and that major strategic investment, according to an agreed ICT investment strategy, should be sought from the University Court via the FE Regional Board and HEPPRC. In the first version of this Business Plan we outlined a proposal whereby ‘core’ costs were divided amongst members according to weighted student and staff numbers, and ‘option’ costs according to turnover. We further assumed that the current top-slice for EO LIS services would be discontinued and the funds distributed to APs, and we took the effect of this distribution to be a general uplift in the unit of resource. The consequences of this in terms of the impact on individual AP finances are broadly as follows: distribution of top-slice with the RAM risks not putting individual APs in enough funds to pay their ‘core’ subscription. In particular, APs with small proportions of HE do not do well from this model, and generally, smaller APs are disadvantaged relative to larger ones. allocating ‘option’ costs by formula has the effect of bringing all members’ contributions towards an average unit cost. This benefits those with a relatively high level of current spend and ‘penalises’ those with lower current costs. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 22 Overall, the model tended to disadvantage smaller APs. Smaller APs include those with the lowest proportion of HE, and probably because of economies of scale issues, smaller APs tend to benefit from top-slicing relative to larger ones. Also, lower unit costs at some smaller APs are not necessarily reflective of poor provision or inadequate investment – they often reflect a no-frills approach to ICT provision and an absence of some of the infrastructure and management costs that come with operations on a larger scale. At Fort Augustus 3, we agreed to set up a working group to examine the financial model and to produce recommendations on an alternative which would be more generally acceptable. That group, chaired by Alan Ashworth, has met twice and at its second meeting commended a model with the following characteristics: for ‘core’ costs, preserving the effect of the current top-slice (whether or not the funds were actually distributed to APs) – i.e. there would be no financial impact on APs from introducing the shared service for ‘core’ for ‘option’ costs, modelling the cost allocation in the way that ‘core’ had been in the initial proposal, i.e. using weighted FE WSUMS, HE FTEs, and staff numbers An illustration of the application of this revised model follows. In this table, we have only modelled the ‘option’ costs as we are proposing that there be no financial impact on APs in respect of ‘core’ costs. The ‘variance’ column shows the financial impact on each AP, at this stage without any transitional scheme. It would be fair to consider this work in progress, as although the working group expressed a clear view as to the principles to be followed in the new model, it has not had an opportunity to review the detailed outcomes. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 23 Table 1. ICT Shared Service Budget 14-15 Total service running costs Core Service Option Service £5,962,232 £3,812,442 £2,149,790 wSUMs Data Year HE Data Year Staff Data Year 2011/12 2012/13 2012/13 wSUMs Weighting UG Weighting PGT Weighting Staff Weighting Budget inscope spend Variance Option cost distribution model Argylll College University HTC Inverness College Lews Castle College Moray College NAFC North Highland College Orkney College Perth College SAMS Shetland College SMO West Highland College Totals wSUMs 9,788 0 0 44,183 8,430 26,318 0 17,584 5,128 33,021 0 6,663 896 5,669 157,681 UG FTE 54 0 62 1,154 289 808 26 377 172 1,476 72 151 104 90 4,834 PGT FTE 0 23 2 8 24 0 0 3 24 11 0 1 2 0 98 Staff 71 181 18 260 112 225 50 198 87 323 148 67 90 74 1,904 1 50 50 100 Weighting Option Cost 19,606 £78,413 19,227 £76,898 4,988 £19,950 128,320 £513,225 35,272 £141,071 89,201 £356,764 6,315 £25,257 56,352 £225,383 0 £0 139,684 £558,675 0 £0 20,957 £83,820 0 £0 17,586 £70,334 537,507 £2,149,790 £126,454 £49,534 £27,479 £443,186 £154,605 £298,434 £88,002 £214,963 £0 £627,149 £0 £80,602 £0 £39,381 £2,149,790 -£48,041 £27,364 -£7,529 £70,039 -£13,534 £58,330 -£62,745 £10,420 £0 -£68,474 £0 £3,218 £0 £30,953 £0 The range of the individual financial impacts on APs is considerably lower in this model, though it also has the effect of turning ‘winners’ into ‘losers’ and vice versa. It probably serves to illustrate that there is no one ‘right’ answer. We hope that this model or a close variant of it is reasonably acceptable to APs and the University though of course it could be refined or developed further as necessary. The figures are still based on 2013/14 budget as per the previous version of this Business Plan; they may look different when we have 2012/13 out-turn figures available. Individual variances will still be quite sensitive to the quality of the declaration of in-scope costs – in particular, any significant under-declaration would have the effect of increasing any apparent ‘deficit’. Note also that any decisions by individual Academic Partners to take the ‘option’ package or not will affect the overall envelope and therefore the level of cost for each other member. In the case of smaller APs the effect would in all probability not be large. We think that a transitional scheme is still likely to be required even though the impact of this new model is considerably less. At this stage we propose a scheme similar to that contained in the previous version of the Business Plan, i.e. a smoothed transition from ‘historical’ in the first year to the full application of the model in year 4. The following table makes the unrealistic assumption that the overall cost will be absolutely flat in cash terms and that the scope of the service does not change over the four years. It is illustrative of the effects of a transitional scheme rather than a prediction of the precise bill to individual APs over a number of years. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 24 Table 2. Transitional funding support Transitional Funding Support (without inflation) 100% 67% 33% 0% Member Argyll EO HTC Inverness LCC Moray NAFC NHC Orkney Perth SAMS Shetland SMO WHC Total Option Cost Option Cost Option Cost Option Cost Year 1 Year 2 Year 3 Year 4 £126,454 £49,534 £27,479 £443,186 £154,605 £298,434 £88,002 £214,963 £0 £627,149 £0 £80,602 £0 £39,381 £2,149,790 £110,442 £58,655 £24,970 £466,530 £150,094 £317,876 £67,089 £218,436 £0 £604,327 £0 £81,675 £0 £49,698 £2,149,790 £94,425 £67,777 £22,459 £489,881 £145,582 £337,322 £46,170 £221,910 £0 £581,498 £0 £82,747 £0 £60,018 £2,149,790 £78,413 £76,898 £19,950 £513,225 £141,071 £356,764 £25,257 £225,383 £0 £558,675 £0 £83,820 £0 £70,334 £2,149,790 1.20 Next Steps We hope that the broad proposals contained in this Business Case/Business Plan can be agreed at Fort Augustus on 30/31 October. If they are, then the anticipated timetable thereafter, through to the agreed go-live date of 1 April 2014 will be as follows: Internal Partner Consultations Fort Augustus 3 Summit Business Plan revision and contract/SLA preparation TUPE consultations within Partners Publication of final Business Plan Partner agreements and SLAs issued Partners return signed agreements Transition planning and preparation Shared Service goes live - staff transfer into Company UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 9 – 29 October 2013 30 – 31 October 2013 1 – 18 November 2013 November 19 November 2013 25 November 2013 19 December 2013 6 January – 31 March 2014 1 April 2014 25 2 MANDATE The first Fort Augustus summit meeting held in May 2011 culminated in an agreement which gave to the UHI Shared Services Project Board the mandate to build on significant current shared service activity by further developing shared services across a range of IT areas and implementing standard platforms, a common application set and minimum specifications appropriate to purpose across the range of IT services. There was a feeling at the time that significant cost cutting could be achieved in this way and a topdown target for this was set. The agreement coming out of the summit included establishing a Programme Board to take on the responsibility for: · · · · · · · · governance of the shared service(s) strategy including the development of a strategic roadmap ensuring delivery of projects within the roadmap prioritisation of developments and services finance and resources setting and assurance of service standards and quality development and agreement of the service definition/SLA and definition of common platforms, and the communications and consultation strategy. A first pass data collection exercise took place alongside a comprehensive consultation with Academic Partners. The overwhelming message from this was that very little in the way of cost savings could be achieved by bringing together IT across the Partnership without damaging the service and indeed some investment would be likely to be necessary in order to establish a common standard of infrastructure at an appropriate level. However it was foreseeable that efficiencies could be gained in the future as a result of forming a shared ICT service and building on this by bringing other services together. During 2012 the Programme Board continued to progress activities and workshops were held to identify the scope of an ICT Shared Service from which a staffing envelope could be determined and a total cost model developed. By early 2013 it became evident that dedicated Project staff would be necessary and a Project Director and Project Manager were recruited. In April 2013 a second Fort Augustus summit was held to note progress so far, to reaffirm commitment to the development of Shared Services which would support the whole business of UHI, but which prioritised the ICT Shared Service as a critical enabler to realise the potential for further shared services development. It was also confirmed that the focus would be on maintaining and improving the quality of service. Following this event UHI Shared Services Limited was established as a vehicle for taking forward the shared service as a Cost Sharing Group and the Programme Board members became the Directors of the Company with responsibility for developing UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 26 the ICT Shared Service by 1 April 2014. The Fort Augustus 2 Agreement sets out the characteristics and principles of the Shared Service. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 27 3 CURRENT STATUS AND CONTEXT Geography The region that UHI serves is not only significant, it is also geographically diverse and much of it is very remote and difficult to access easily or quickly. There are nearly 90 people working in 14 Partners supporting the ICT service across this area and the service is delivered through a single infrastructure and telephone network serving 87 individual sites located across the Highlands and Islands as shown in Figure 2. Figure 2. Academic Partner and Learning Centre locations UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 28 These sites range from small campuses with no permanent IT staff presence, to main College Campuses with large Learning Resource Centres that include dedicated computer and videoconference facilities and a team of on-site IT technicians. Major European investment, totalling over £7m, enabled a complete refresh of the Wide Area Network (WAN), wifi and videoconference facilities throughout the partnership between 2008 and 2010 and many Partners took the opportunity to enhance their own facilities at the same time. Wide Area Network As of April 2013 the wide area network services, operated with financial support from Janet, serves the 87 UHI locations plus a number of external organisations. Figure 3. Network Services University of the Highlands and Islands Network Latest Revisions - April 2013: EMEC VPN over The Highland Council Bandwidth increases at LCC & Ness Walk Shetland Islands Council Orkney Islands Council Islesburgh Learning Centre Heriot-Watt University © 2013 University of the Highlands and Islands NAFC Marine Centre Scalloway Castle St (ERI) Sandwick Learning Centre Open Fibre Stromness North Highland College Thurso Orkney College Kirkwall Shetland College Lerwick Wick Dornoch Burghfield Dornoch Ross Hse University of Aberdeen Highland Theological College 20M (Dingwall) MPLS Alness University of Stirling 10M MPLS 100M MPLS JANET Western Isles Hospital & Dental Unit 5M MPLS 8M 100M LES 45M MPLS JANET 45M MPLS JANET Inverness Campus Beechwood University of Aberdeen Midmills Open Fibre 100M LES Raigmore CfHS 100M LES 10M MPLS InvernessOpen College Fibre 10M MPLS 10M MPLS Benbecula Forestry LIS Fairways Strontian 200M MPLS JANET 2M Lews Castle College Lochmaddy 8M Stornoway Portree High School Ness Walk Portree Kings House 300M MPLS JANET 90M MPLS JANET Plockton High School Barra UHI Regional Network MPLS VPN 45M MPLS JANET HEBNET Sabhal Mor Ostaig Isle of Skye Buckie 10M MPLS Keith 200M MPLS JANET 5M MPLS Forres Nairn Open Fibre Linkwood JANET Mallaig 20M MPLS JANET The Highland Council 200M MPLS JANET Moray College (Elgin) Private ADSL 100M MPLS Perth & Kinross Council 20M MPLS West Highland College Fort William 5M MPLS Perth College 100M LES Private ADSL 100M LES Blairgowrie Kinross 100M LES Pathways Argyll College Oban Scone Airfield Dunstaffnage Marine Lab (SAMS) Argyll & Bute Council Learning Centres x50 Rothesay Dunoon 10M LES Islay Hazelburn (Campbeltown) Public Internet Kilmory Tobermoray Helensburgh Learning Centre Learning Centre Arran Lochgilphead Dumfries UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 29 Wifi A major development has been the move to a ubiquitous wifi service which: brought together 11 different Wireless Services established 13 Wireless LAN Controllers (WLCs) hosting 650 wifi Access Points (WAPs), and provided a management suite to overview the service and drill-down to details of operation and usage. Typical usage as shown in Figure 4 is Up to 1,750 wifi users at peak time (11:00 to 12:00 midweek) Figure 4. Wifi activity Since this service was brought on-stream it has been possible to introduce a Bring Your Own Device (BYOD) wireless registration service which has been enthusiastically taken up throughout the partnership, especially by students who benefit from a streamlined learning experience between home and College. Since introduction statistics show that there are: o o 6112 registered users since installation 5419 current registered devices Videoconferencing The other main service which received major investment as part of the SDB Programme was videoconferencing. Almost everyone in UHI uses this service for learning, teaching or administration without needing to consider what is ‘behind the scenes’ and perhaps without realising that in 2011 UHI was shortlisted for the Times Higher Education Award for the Outstanding ICT Initiative of the Year for the developments carried out across our videoconference service. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 30 The investment provided for replacement of the VC Bridge with High Definition (HD) capability and greatly increased capacity to cater for the growing demand on the service, as well as enabling the upgrade and refurbishment of 166 studios and lecture theatres with HD end-point equipment. The control room in Shetland is managed by a team of three staff dedicated to the service who have a comprehensive management system with which to run the studio environment. This has enabled the service to support over 12,000 conferences last year, and the 15-channel VC recording facility has provided over 2880 recordings since introduction in 2012/13. Figure 5 show the typical spread of VC events over the year with the proportion of teaching to administrative meetings facilitated. Figure 5. VC bookings by activity Figures 6 and 7 illustrate how this number has risen over the years, and is forecast to increase significantly over the next two years, for both teaching purposes and total usage: Figure 6. Predicted VC usage for teaching to 2017 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 31 Figure 7. Predicted total VC bridge usage to 2017 Figure 8 shows typical monthly usage of the VC system broken down by type of event. Figure 8. Typical VC system usage by month and by event However, with the growth in 1-1 and small meetings taking place over the VC it has also been necessary to introduce personal videoconferencing where individuals can dial into a meeting from their desktops, laptops and other devices using the Jabber system. Since its introduction ‘Jabber for Telepresence’ PC / MacOSX / iPad client software for personal videoconferencing has enabled: Up to 15,000 user registrations Up to 625 concurrent sessions. E-mail Another key system underpinning the whole range of activities across UHI is the e-mail service. During 2012 over 57,000 staff and student accounts were successfully moved from Groupwise to Microsoft Office 365 with a minimum of disruption to the service. Currently 2.7 Petabytes (1 000 000 000 000 000 bytes!) are allocated to UHI based upon an allocation of 50GB per mailbox. This UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 32 service is now outsourced to Microsoft though specialist staff are still required to support the University’s operation of the service and be the main contact between UHI and our supplier. Virtual Learning Environment Central to the delivery of learning and the support of teaching in UHI is the Virtual Learning Environment (VLE) Blackboard. This was the other main service to be upgraded during 2012 and migrated to Blackboard as a managed service. Figures 9 and 10 show how essential the VLE service now is for learning and teaching. Figure 9 shows that there are more than 3,500 courses on the system, of which around 2,000 are currently active. Figure 9. Average active courses on the VLE per month, 2011 - current Figure 10 highlights the growth in demand on the service over the past 18 months to a current average level of some 60,000 users per day. Figure 10. Growth in the average number of VLE users per day, 2011 - current UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 33 Library And E-Resources Access to e-Resources is critical for staff and students, many of whom are studying in remote locations, in an environment where the bookstock is distributed throughout Academic Partner sites and the nearest physical Library may be a significant distance away. To date there are some 44,000 eJournal titles and 48,000 eBooks accessible through the electronic Library Management System receiving something in the order of 36,000 searches per month. The Rowan Partnership is a partnership to deliver a shared library management system (LMS) using the Millennium LMS that was already operational at UHI. It was formed in 2011 between UHI, the University of the West of Scotland (UWS) and SRUC. The shared LMS went live February 2013. It has enabled the sharing of system costs across three partners, and the appointment of a full-time systems librarian. In future, it may provide the underpinning for the sharing of other library functions. It was selected as a case study in the Universities Scotland/Ernst & Young An Assessment of Shared Services in Scotland’s Higher Education Sector, August 2013. Helpdesk With the range of and continual demand on these key services it is inevitable that users have problems from time to time. Much has been done over the past year to improve the UHI Helpdesk service including an upgrade to the Web Helpdesk providing a number of ways of fault reporting and the ability for users to track the response to the reports, as well as providing a 24/7 service by introducing the NorMAN out-of-hours service. The number of calls to the UHI Helpdesk was over 20,500 for the year to the end of Augusts 2013, averaging over 1,700 per month, peaking at 2,478 in September 2012. Figure 11 shows the volumes of call by month as well as the number of first time fixes during that time: Figure 11. UHI Helpdesk logged calls and resolution Call Volumes UHI Helpdesk - Logged Calls 3000 2000 1000 0 Total Calls Logged Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug12 12 12 12 12 13 13 13 13 13 13 13 13 2451 2478 1707 1638 1099 2016 1705 1452 1288 1690 1755 1435 2248 First Time Resolved 620 535 405 446 268 436 404 389 464 602 526 528 754 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 34 Since its introduction in November 2012 there has also been a steady, if low, level of calls to the outof-hours service. The helpdesk service, perhaps moreso than any other, depends upon a close working relationship with the Partner IT staff distributed throughout the partnership to resolve many local issues requiring a hands-on presence. Servers and Storage The university runs many of its services in a virtual computing environment that allows the efficient use of storage and hardware. This saves many tens of thousands of pounds on power, hardware maintenance and simplifies its management and deployment. Using a sophisticated configuration of diverse comms rooms in Inverness Longman and Ness Walk Inverness the core services are protected from single site failure. The whole virtual infrastructure which supports over 300 live servers is distributed at three sites and is ran on only 18 physical servers. Underpinning this is some 180TBytes of storage distributed in the server clusters at Perth and Inverness. Further developments are planned for the Perth cluster in collaboration with the college IT department and the creation of a resilient mirror of services in the same way as those used at Inverness. Telephony The UHI Telephony service currently supports some 3300 extensions across the whole partnership and its 87 sites. From a single IP handset in a remote Learning Centre to a large campus supporting hundreds of extensions the service allows all users to access the same level of service. Any academic partner can deliver its numbering range to any site and divert its extension to anywhere in the network at the press of a button. All the extensions are able to take calls directly from outside the organisation and using an integrated internal directory any handset can call any other using its five digit number. All internal calls are at no additional cost as they utilise the existing data network. An audio conferencing facility is available to all users and is widely used on some courses where video is less important than the audio. The system also connects over 2000 users to an integrated voicemail facility allowing a user to be left messages when they are away from their desks. ICT Service Support Apart from the University’s IT infrastructure and services, Partners have an extensive IT estate planned, operated and maintained on their own sites by IT staff employed by them. The equipment and facilities at Partner sites range in quantity and quality as highlighted by an IT Estate survey UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 35 carried out during the summer of 2013 and the high level outcomes of which are presented in Chapter 13. The ICT services have been converging over time. In comparison with a snapshot from 2006, there has been considerable progress in harmonising: Desktop video communications Directory services Helpdesk systems VC studio environments, through the SDB NGV project Wifi In addition, systems at Argyll College and North Highland College have become significantly more aligned with the rest of the Partnership over that period. An overview of the systems that remain unconverged can be gathered by reference to the ‘Full Service (Option)’ listing of services in the Executive Summary and in Chapter 10. The Business Systems Convergence project has the potential to accelerate the provision of common systems particularly in finance and HR. The University employs 40 largely specialist staff - one-third of whom are located at Partner sites outwith Inverness - developing, maintaining and operating these key ICT services and providing the helpdesk function to the University’s 47,000 staff and student users. However, more than half of the staff working in ICT across the University are currently employed by Partners working either singly or in small teams, supporting the whole range of campus based operations at the user interface and undertaking many of the Partner based activities where local need and demand dictates. The number of staff available to perform these activities at Partners varies widely, as shown in Figure 12. Figure 12. Number of ICT staff by Academic Partner UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 36 External Context The McClelland Review (Review of ICT Infrastructure in the Public Sector in Scotland, 2011) suggested that there has been too much of a culture of self-sufficiency in ICT infrastructure provision in the public sector, leading to increased costs, and while the specific estimates of the savings available to the public sector through sharing need to be treated with great caution, the general message around sharing of common applications platforms and rationalisation of data centres is valid and has informed Government policy. A review of shared services potential in HE conducted by HEIDS at much the same time showed that there was an increased appetite for shared services at what become known as the ‘above campus’ level – for the rest of the sector, this still falls well short of the development of combined services, though this has happened to a degree where institutions share physical premises, e.g. at the Crichton campus. The Scottish Government’s Digital Public Services strategy is articulated through a set of sectoral strategies – for these purposes further and higher education are treated as a single sector, and again the development of further shared services is a major theme in the FE&HE strategy. A new ‘catalyst’ unit to help bring forward new shared services initiatives is to be funded within APUC and may turn out to be a valuable sectoral resource for us to draw on. Elsewhere in Scotland, the FE regionalisation agenda has led to a rapid convergence of information systems in some of the new institutions. There are likely to be some very useful lessons to be taken from these experiences, especially as the pace of change will not have allowed for a leisurely process of detailed requirements gathering, specification and phased implementation with parallel running. We are aware of the number of shared services initiatives elsewhere in the public sector which have had mixed levels of success. In particular those mandated by central government, and therefore perhaps insufficiently owned by their members and customers, have seemed to be problematic. High set-up costs – to the extent that they may never be recovered through savings – seem to be common. Some of those cost elements are: the cost of major staff restructuring and relocation; new premises; the implementation of high-end, and very expensive, ERP (Enterprise Resource Planning) systems. In the more successful initiatives, the concept of the ‘intelligent customer’ seems to have been very important – that is, customers who are willing to accept a standardisation of service offering and business process across the customer base in return for greater efficiency and reduced cost. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 37 4 OPTIONS ANALYSIS Options There is a spectrum of models which would achieve the delivery of a single ICT shared service. During consultation with Partners and in the UHI Shared Services Board however it emerged that there were four main options identified for further analysis including, as a baseline, the ‘no change’ option: A – NO CHANGE The University continues to provide a core set of ICT services to the Partnership funded through the HE element of SFC funding. Academic Partners continue to self-provide services on a local basis according to their individual needs. B – A SINGLE SERVICE PROVIDED BY THE UNIVERSITY (OR ONE OF THE ACADEMIC PARTNERS) AND FUNDED THROUGH TOP-SLICE Staff would transfer to the University (or an Academic Partner) which would be fully funded to provide the service to the rest of the Partnership. C – A SINGLE SERVICE OPERATED BY A NEW ORGANISATION STRUCTURED AS A COST SHARING GROUP Staff would transfer to the new company, which would be funded by subscription payments from its members (the University and its Academic Partners) D - OUTSOURCE THE WHOLE SERVICE The entire ICT service to be provided under contract by a commercial operator. Analysis These options were considered against a set of desired characteristics taken largely from the Fort Augustus 2 Agreement and the results shown in Figure 13. N – Not achievable within the Option P – Only partially achievable within the Option Y – Achievable within the Option Figure 13. Options Analysis Characteristics A B C D Notes Fulfil the targets of the Regional Outcome Agreement relating to an N P Y N A – does not meet ROA requirement UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 38 ICT Shared Service within the agreed timescale B – would require re-planning and new consensus “By the end of 2013-14, implement the project plan that will see the Learning and Information Services shared services project through to full implementation” D – could not be specified and tendered in time Collectively owned and governed (Fort Augustus 2 Agreement, 2.1.1) N B – could be collectively governed but not owned C – P because the Company would still be somewhat constrained by the cultural expectations of its members N P Y Acting and managed according to business disciplines (FA2, 2.1.3) We assume in interpreting this criterion that the organisation should be free to set operating parameters such as employment policy with reference to industry comparators Flexible, adaptable and able to respond quickly to changes in the partnership or the external environment (FA2, 2.1.4) N N P Y N P Y N A lean and cost-effective management structure with minimal bureaucracy (FA2, 2.1.5) N P Y P Enhanced student experience, improved quality (FA2, Preamble) N P Y Y Y Y Y P Development of a wider range of professional specialisms (FA2, 2.1.8) N Y Y N Not an outsourcing model (FA2, 2.1.6) Y Y Y N D - P because of the requirement to retain significant contract management capability Distributed workforce (FA2, 2.1.7) UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 39 Greater ability to deliver equivalence (FA2, Preamble) N P Y Y Ability to address environmental and sustainability issues P P P P Greater efficiency and effectiveness (FA2, Preamble) N P Y P Full transparency to its members as to its financial, contractual and other arrangements (FA2, 2.1.10) N P Y N Affordability C – P because although technologically a range of environmental initiatives are possible, many of these would be dependent on the cooperation and assistance of Estate Managers at Partner sites being outwith the control of the Shared Services Company A – N because current level of duplication unaffordable Score N Y Y N 5 17 26 10 D – N because of effect of paying VAT, profit etc. Based on Y=2, P=1, N=0 Recommendation Considering each of the Options against the characteristics identified highlights the following: OPTION A – NO CHANGE This option has been discounted. Not only does it fail to deliver against the targets set out in the Regional Outcome Agreement, retaining the status quo continues the inefficiencies of duplication, perpetuates the range of service quality and end user experience, has the potential to delay the implementation of technology developments, has little influence in strategic planning and investment and offers little to Academic Partner staff in the way of career development or progression. The only real benefit of retaining the status quo would be in having the distributed workforce, thereby building on the local knowledge and relationships developed across the Partnership over many years. However, this positive feature is carried through to Options B and C. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 40 This option contains the least transitional risk, as there is no transition. OPTION B – A SINGLE SERVICE PROVIDED BY THE UNIVERSITY (OR ONE OF THE ACADEMIC PARTNERS) AND FUNDED THROUGH TOP-SLICE This option has the second-highest score and while not preferred, has some desirable characteristics. It is possible that a model such as this would be appropriate for some future shared service. This option removes the requirement to establish a separate legal entity, but equally eliminates the opportunity to create an organisation with a complete service focus and with greater freedom to act flexibly and responsively. We have some concerns about the VAT issues within this model, as partners would effectively betransferring their internal services to an external provider without paying VAT, and without using the model of a Cost Sharing Group now provided within legislation for the purpose of avoiding VAT. It would also not be able to avoid charging VAT on services outside the top-sliced element. The only comments on the Options Appraisal were received from Executive Office, in a paper by Lorna MacDonald, Director of Finance. In her paper, the Options Appraisal is re-presented and rescored. 'Option B' is expanded into two options: B - a single service provided by the University and funded through 'top-slice' C - a single service provided by one of the Academic Partners In the re-score, the new Option B is scored highest, the Cost Sharing Group option next, and the new Option C third. The higher score for the new Option B over the CSG model (new option 'D') is achieved by higher scores in these criteria: 'Flexible, adaptable and able to respond quickly to changes in the partnership or the external environment' - Y vs P 'A lean and cost-effective management structure with minimal bureaucracy' - P vs N 'Greater efficiency and effectiveness' - Y vs N 'Affordability' - Y vs P The one criterion on which the CSG option is rated higher is: 'Collectively owned and governed' - P vs Y. The Shared Services Board has considered the alternative options appraisal as well as the other issues raised in the paper, some of which are addressed elsewhere in the revisions to this Business Plan. We were not entirely convinced about the separation of new options 'B' and 'C' as within a VAT group, as is being suggested, any member might supply services to another without incurring VAT. Also, not all members might be included within a VAT group. It also seemed to the Board that the administrative overhead of operating the Company, while not a negligible consideration, seemed to impact disproportionately on as many as three of the criteria where the 'EO' option was scored above the 'CSG' option. We also felt, on the basis of feedback from stakeholders, that the scoring of the EO option as preferable on grounds of flexibility, leanness, efficiency and effectiveness was UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 41 unlikely to be supported by the majority of the Partnership. It remains our view that it would be very difficult to achieve a significant level of support for this option. OPTION C – A SINGLE SERVICE OPERATED BY A NEW ORGANISATION STRUCTURED AS A COST SHARING GROUP This is the Shared Services Board’s preferred option. It is perhaps not surprising that this is the case, given that elements of the Fort Augustus 2 Agreement which inform the evaluation criteria effectively assume this outcome. We do however believe that this is validated through the assessment against other options, and we also believe that it is the option preferred by the majority of Academic Partners. Not only is it the best fit for the governance requirements expressed by APs and recorded in the Fort Augustus 2 Agreement, Option C also meets the criteria for all staff, resource, financial, service quality, strategic and business characteristics identified as necessary by all Partners during consultations throughout the process so far. It involves the overhead of establishing a separate organisation, which later in this document we estimate initially at 1.7% of turnover. The Shared Services Board believes however that this should not be a barrier to setting up a service company which has the freedom to operate outwith the constraints of its member organisations. This option addresses the VAT risk by adopting the model set out in legislation. Establishing a shared service in this way also provides a model and a firm foundation for bringing together other services which have the potential not only for sharing and service improvement, but also a greater potential for efficiency savings as outlined in the Regional Outcome Agreement 2013. OPTION D – OUTSOURCE THE WHOLE SERVICE Delegates at Fort Augustus 2 agreed that this was not an appropriate way forward and therefore it is not surprising that it fails the options analysis. There is no discernible appetite in the Partnership for this approach. It would be extremely difficult. The specification and procurement process alone would be long-drawn-out if it could even be concluded – agreeing a common specification across this number of partners would be a major challenge. If that could be overcome, we doubt that it could be done cost-effectively. A commercial provider’s requirement to charge VAT and retain a profit would mean that they would have to take massive efficiency gains to make a suitable financial case. Especially as there is no mature market in UK HE for whole-service outsourcing, we find this unlikely without the impact of such savings falling heavily on the customer. We would also be concerned about the Partnership’s ability to collectively manage such an outsourcing agreement. For these reasons (and no doubt others) the option is discounted. Conclusion UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 42 This Business Plan is therefore predicated upon the choice of Option C as the preferred operating model. Timescale Assuming that Partners accept the recommendation of the Shared Services Board and agree to go forward with Option C, the schedule through to the agreed go-live date of 1 April 2014 will be as follows: Internal Partner Consultations Fort Augustus 3 Summit Business Plan revision and contract/SLA preparation TUPE consultations within Partners Publication of final Business Plan Partner agreements and SLAs issued Partners return signed agreements Transition planning and preparation Shared Service goes live - staff transfer into Company UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 9 – 29 October 2013 30 – 31 October 2013 1 – 18 November 2013 November 19 November 2013 25 November 2013 19 December 2013 6 January – 31 March 2014 1 April 2014 43 5 CURRENT FORM AND STATUS OF THE COMPANY UHI Shared Services Limited was incorporated on 22 August 2013 as a Company Limited by Guarantee, company no. SC457396. Its registered office is at Synergie House, Fairways Business Park, Inverness IV2 6AA. The initial members of the Company are: Board of Management of Inverness College Board of Management of Lews Castle College University of the Highlands and Islands West Highland College UHI Board of Management of Moray College Board of Management of Perth College of Further Education Other Academic Partners of UHI are eligible to become members and may do so on application. The initial Board of Directors of UHI Shared Services Limited is as follows: Iain Macmillan, Lews Castle College UHI (Chair) Alan Ashworth, West Highland College UHI Lindsay Ferries, Inverness College UHI Alun Hughes, University of the Highlands and Islands Anne Lindsay, Moray College UHI Niall McArthur, Inverness College UHI The Articles provide that Directors must be employees, directors or trustees of a member organisation, or employees of the Company. Directors who are not employees of the Company are not remunerated. The Company is not currently trading and holds no funds The Company is established with the intention of operating as a Cost Sharing Group under the relevant provisions of the Finance Act 2012. The objects for which the Company is established are (as defined in the Articles): (a) the co-operative supply of services by members through the Company primarily but not exclusively to members in pursuit of the members’ municipal interest and co-operative benefit; and (b) anything incidental or conducive to any of those objects listed at sub-article (a) above. The Articles also provide that: The income and property of the Company shall be applied solely in promoting the object of the Company as set out in article 2 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 44 No dividends or bonus may be paid or capital otherwise returned to the members Apart from UHI and its Academic Partners, any other member must be "another United Kingdom Contracting Authority which is approved by resolution of the directors and which in each case carries on a “relevant activity” for the purpose of sub paragraph 1 (a) of Part 2 (Group 16) of Schedule 9 to VATA 1994 as inserted by Section 197 (2) of the Finance Act 2012 and receives or intends to receive from the Company the supply of services which are directly necessary for the relevant activity" which essentially covers the requirements which any member would need to satisfy to be a valid member of a Cost Sharing Group. The potential admission of new members who are not part of the UHI partnership is discussed in Chapter 7. There are no current plans to admit any such members. The full Company Articles are at Appendix A6. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 45 6 VISION AND MISSION UHI Shared Services takes its core remit from the agreement at the Fort Augustus 2 summit: "The aim is enhanced student experience, greater ability to deliver equivalence, greater efficiency and effectiveness and improved quality" “ … the University and its Academic Partners agree to collaborate to develop a range of shared services to be delivered for the collective good. They will operate on the principle of collective self-provision rather than outsourcing.” Not all future shared services will necessarily be operated by the Company. There are likely to be services better suited to delivery through collaborative agreements, in which work is distributed amongst partners, rather than transferred to a separate company. Also, UHI Shared Services would be cautious about extending its activities into services which were essentially regulatory, and certainly does not expect to develop into the delivery of academic programmes. This is not to say that the company will not deliver training in support of its services, nor that it will not engage in applied research intended to generate evidence to inform investment decisions. It exists to support the core business of its members, not to take it over. This is not an outsourcing initiative, however the company needs to be able to operate in a way that would enable it to be competitive with outsourcing companies should the service(s) be markettested at some time in the future. We note that (in contrast to the US, for example) there is as yet no mature market for whole-service outsourcing in UK tertiary education. The 'ethos' as captured in the Fort Augustus 2 agreement will guide the company in its operation and development: Collectively owned and governed Supporting the whole business of all members including HE, FE, research and other core activity Acting and managed according to business disciplines Flexible, adaptable and able to respond quickly to changes in the partnership or the external environment A lean and cost-effective management structure with minimal bureaucracy Not an outsourcing model, though as now, specific elements of the service may be outsourced where appropriate A distributed workforce Development of a wider range of professional specialisms Commitment to developing its staff Full transparency to its members as to its financial, contractual and other arrangements. Our stakeholders have made it clear that while efficiency and effectiveness is expected, and required, what is of prime importance is quality of service. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 46 The Shared Services Board believes that the requirements for collective ownership and governance, businesslike operation, flexibility and agility, low overhead and bureaucracy all point towards the creation of a separate entity with its own governance arrangements. As things stand, the appropriate entity appears to be a Cost Sharing Group, though the Shared Services Board also recognises that changes in the external environment and the make-up of the UHI partnership could have the effect of making an alternative legal form more appropriate. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 47 7 BUSINESS OBJECTIVES This chapter deals with issues around the future development of UHI Shared Services Limited beyond the scope of its initial ICT offering to the University and its Academic Partners. Plans for the development of the ICT shared service are addressed in Chapter 9. Growth There may seem to be a contradiction between the expectation that a shared services organisation should save money for its members, and therefore reduce its economic footprint, and the normal drive for growth which is part of the sustainability agenda for many companies. UHI Shared Services will need to grow from its original establishment delivering ICT services. Common ICT services are the necessary underpinning for the shared services in transactional areas which present greater opportunities for savings. The Capita Report, “Outline Business Case for a new operating model. University of the Highlands and Islands. 10 January 2012”, indicated that ICT services in themselves were not of sufficient volume to sustain a shared services organisation. We are not necessarily convinced that that is the case, but the new organisation will have overheads that will be proportionately smaller if more functions are taken on board in the future. The most desirable form of growth is through taking on new functions from member organisations, delivering improved efficiency and effectiveness and proportionately reducing the overhead. In addition, this allows improved synergies across areas of service, improving efficiency and quality of service even further. The Shared Services Board has considered the range of support services currently delivered within the partnership and assessed the extent to which they are suited to be taken into the shared services organisation. The following is the current list of 'Priority 1' areas, i.e. those judged to have the greatest potential for cost savings and/or improved service: ADMISSIONS/REGISTRY/STUDENT RECORDS All aspects of student and course data handling, reports, data analysis FINANCE INCLUDING PAYROLL Common technology platform, shared policies and processes, transactional activities HUMAN RESOURCES Common technology platform, shared policies and processes, transactional activities, reporting, analysis UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 48 LIBRARY The Shared Services Board is commissioning a report (from an existing College Librarian within the UHI partnership) which will be based on consultation with the practitioner community and other stakeholders and which will propose an appropriate way forward in the shared services context. STUDENT SUPPORT FUNDS Complete service except some student facing support Incorporating these services is not part of this business plan, but creating a vehicle that has the potential to do so is. Governance - Commissioning Board and UHI Shared Services Limited The Board of UHI Shared Services Limited believes that it will be important to separate the 'commissioning' function from the delivery function. In particular we would like to see the establishment of a 'commissioning board' with very senior representation from the partnership, whose function would be to: determine which services are priorities for sharing and in what way (i.e. via shared services company or by another means) for those services to be transferred to UHI Shared Services Limited, to engage in a commissioning dialogue in which, inter alia, issues of cost vs. quality of service are considered offer continuing guidance on the balance of expenditure and service levels across the different areas of activity. The Commissioning Board would act as a representative body of the UHI membership of the Company. However the contractual relationship would remain between the Company and its members. External Services and Income Generation A frequently asked question is whether the Company expects to offer services outwith the UHI partnership. Our answer at this stage is that this is not a high priority, though the Company Articles allow for it. We need to ensure that this kind of activity does not detract either from the quality and focus of services to the UHI partnership, nor from UHI partnership members' ability to control and direct the services that they receive. Insofar as services can be delivered to such third parties without compromising UHI members' interests, such growth can be positive, though unless it is particularly profitable (and therefore delivered outside the scope of the VAT exemption) it is unlikely to dilute the overhead very much, and therefore is unlikely to offer much in the way of cash savings to the membership as a whole. In these cases we would normally seek an opportunity to enhance services as part of the deal. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 49 For-Profit Trading For-profit trading is explicitly allowed for in the HMRC guidance on the cost sharing exemption. The issue has been raised as to whether the requirement not to 'distort the market' applied to cost sharing groups is a problem; according to the recent HEFCE guidance it would seem not, but we would probably wish to take more detailed advice on this. There is a further potential benefit: given that the company will spend a significant amount on VATable services, significant external trading could have the effect of improving its VAT partial exemption position, further reducing costs to members. Members External to the UHI Partnership The Articles provide that members external to the UHI partnership may be admitted if it is: “another United Kingdom Contracting Authority which is approved by resolution of the directors and which in each case carries on a “relevant activity” for the purpose of sub paragraph 1 (a) of Part 2 (Group 16) of Schedule 9 to VATA 1994 as inserted by Section 197 (2) of the Finance Act 2012 and receives or intends to receive from the Company the supply of services which are directly necessary for the relevant activity.” UHI currently supplies services to five other HEIs, including the University of the West of Scotland and SRUC in respect of the shared library management system. If these organisations were brought into membership we would be able to supply them with services free of VAT, at cost. We would need a clear methodology to apportion a real cost including a realistic share of overheads. 'External' organisations admitted in this way would have voting rights in the company, likely to be at the lowest level – in the voting rights proposal contained in this revised version of the business plan, 1 vote compared with 10 votes for members who participate fully. Non-voting membership does not satisfy the HMRC criteria for membership of a cost sharing group and a negligible level of control (e.g. one vote in 10,000) would be likely to fail the public procurement Teckal test, making such arrangements non-compliant in EC procurement terms. In determining whether to offer membership to external organisations, the Board will need to weigh the benefits of being able to offer VAT-free services against the loss of flexibility in charging arrangements and the dilution of UHI members' voting rights. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 50 8 FINANCIAL IMPLICATIONS OF MOVING ICT SERVICES INTO A SHARED SERVICES COMPANY Here we examine the additional costs of operating a separate company as a Cost Sharing Group against the operational efficiencies that might be expected. Clearly if the overhead of operating a separate company were excessive in relation to the anticipated benefits we should re-examine the proposed delivery vehicle. We think however that it is important to distinguish between the cost implications of this particular shared services approach and the required investment in ICT which would be required whatever the organisation structures involved. We have therefore largely separated discussion of the latter into a later section, i.e. Chapter 22, ‘Investment Strategy’. However we strongly believe that the creation of a single ICT service puts us collectively in a better position to address investment requirements rationally. Additional Costs of the Shared Services Company We would first like to note all the things that we do not propose to do, which in many other instances have caused major financial issues for new shared services organisations. There is no staff reduction programme associated with the move to the single service, and therefore no substantial upfront cost. If there is a voluntary severance scheme made available at entry, it will be such as to pay for itself in-year. There is no physical relocation of staff involved, and no new building costs. Many shared services organisations have invested in very high-end, and very expensive, commercially-orientated Enterprise Resource Planning (ERP) systems. This turns out to be very expensive indeed when the system is configured to support multiple business processes of different customers, without rationalising those processes themselves. In contrast, our Business Systems Convergence strategy is modest, based on process convergence, and likely to involve procurement of standard business systems available on HE framework pricing. ADMINISTRATIVE AND RELATED COSTS There are unavoidable costs of operating the company as a separate entity. We intend to operate in as lean and cost-efficient manner as possible and at the moment envisage the likelihood of only one additional staff appointment, that of a Finance Officer; we think that not doing so would be a false economy given the £6m or so initial turnover of the Company. The Company will require legal and professional services, including audit; and insurances, including employer’s liability insurance. There are other relatively minor costs such as Data Protection notification. We have estimated the total annual costs of the above at about £100,000 – put another way, 1.7% of initial turnover. If we become liable for business rates at Fairways (and we hope not to) that figure rises by about £30,000. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 51 PENSIONS At the moment we do not have an estimate of the effect of transferring liability for pension provision from existing employers to the Company. Initial advice suggests that we might reasonably hope that the effect would be broadly neutral. However we cannot rule out the potential for the Company’s assessed contributions to be higher than the aggregate of current employers’ contributions (which are at varying levels) nor of a bond being required to be posted by the Company. The FRS17 accounting standard requires the Company to show the deficit (or surplus, but in reality we will be talking about a deficit) attributable to the LGPS as a liability on its balance sheet, as is the case with some but not all of the existing employing institutions. The effect of this may be that the Company is apparently insolvent. This is not an uncommon situation and it does not mean that the Company is not a going concern and that it cannot trade. However there are significant accounting implications and we will take appropriate professional advice. Transition Costs By ‘transition costs’ we mean here those costs associated with transition to new ways of working, as well as those involved in bringing elements of the technology base to a common standard. We expect to obtain SFC support for these costs as well as for the administrative overhead indicated above. NEW WAYS OF WORKING Especially as we have a principle of working on the basis of the existing staffing complement, and as we anticipate a greater degree of specialisation in the new service (see Chapter 17), it would be appropriate to budget for very significant staff retraining and reskilling costs in the first year – we think £100,000 would be a suitable commitment. In addition, staff working together in new ways will need to travel more, at least at first, and we expect that to cost an additional £50,000 in year 1 above current commitments. Technology Changes Technology changes are not inextricably linked to the development of shared services. Some, like the updating of LAN infrastructures to a common standard, make particular sense in that context because they make the environment as a whole easier to manage, but in general, they are needed anyway. In our discussions with SFC, we have identified the following technology transition costs: Thin client development Providing a standard technological means of delivering applications to the desktop (or indeed laptop or mobile device) providing common services to everyone, everywhere. Includes a provision for upgrading UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN £1,116,000 52 software licensing to a common standard Business systems Additional support for business process rationalisation and transition to the converged environment, above the £320,000 already budgeted £375,000 Local Area Network (LAN) environments The ICT estate survey has identified out-dated and diverse equipment at many sites. Manageability would be improved by investment in new, standardised technology, as would local network performance and security £250,000 Expected Efficiency Gains In most cases these can only be broad estimates, when we can make estimates at all. They do not necessarily relate to cash savings – in particular, we expect to make very significant improvements in the way in which staff are collectively deployed, with reductions in redundant and duplicated work and efficiencies achieved through automation of routine tasks. The anticipated consequence of this is a redeployment of staff to work that has more value to the end-user, rather than a reduction in overall staffing costs. Delegates at Fort Augustus 3 were interested in the likely future costs of the ICT service beyond the first year. The first point to make is that this is a matter for the membership to determine - there may be a requirement for investment to achieve strategic aims or efficiency gains elsewhere in the business, or conversely there may be an overriding imperative to reduce costs. Our expectations on costs assuming, broadly, a steady state in terms of ICT provision, are as follows: In the first year, as indicated, we expect to hold expenditure at a level equivalent to current spend, adjusted for inflation. In the second year, we expect to take efficiency gains sufficient to cover the loss of the temporary (first year) funding support from SFC. In the third year, we would hope to make efficiency gains of between 3% and 5%. These figures do not account for inflation. THIN CLIENT Our consultant’s estimate, in 2011, of the saving that could be achieved by widespread rollout of thin client technology was £376,100. As this largely relates to client-side savings we are reluctant to revise this up substantially, though we might expect additional energy-related savings at Inverness College. This does not include the savings that might arise from software rationalisation, though it very much provides a platform for that to happen. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 53 Much of the cost saving in this overall figure arises from lower costs of procurement and replacement of end-user devices such as PCs and terminals, and lower energy costs where that equipment is deployed. In our scenario much of the financial benefit would accrue to members directly rather than reducing the cost of core service. SOFTWARE RATIONALISATION Estimated total software spend across the Partnership in 2013/14 (excluding those institutions taking only the core service) is £1.735M annually. Studies elsewhere have suggested that the type of savings achievable through rationalised software provision might be in the order of 20%. We are not convinced that this level of saving is achievable for us in the short term, partly because the balance of spend is skewed towards the University rather than Academic Partners. We do think that 10% is a realistic figure, arising from a combination of negotiation of contracts on a partnership-wide basis and rationalisation of the range of applications in use. Our indicative figure for savings in this area is therefore £173,500 per annum. HARDWARE PURCHASE AND MAINTENANCE We would caution against expecting significant saving in this area. Larger Academic Partners, in particular, have invested in server infrastructure over the years, though little of that has been recent; we should certainly be able to make better use of this kind of equipment if we manage it collectively and it should cost less. However we have not been able to make a realistic estimate of the cash saving. In terms of end-user equipment such as PCs, laptops, classroom equipment, smartphones etc., where budgets will remain the responsibility of members, we would hope to gain efficiencies from standardisation, but there are relatively few areas where we would make major volume-related savings, as these items are typically available through nationally-negotiated framework agreements. We think that savings in procurement of such devices (especially classroom and office PCs) might be most likely to arise (accruing to members) through the provision of better management information about the utilisation and age profile of the existing fleet, allowing better-informed procurement decisions. ENERGY COSTS Some potential saving due to the adoption of lower-powered end-user devices is anticipated in the ‘thin client’ section above. We also know, to a considerable extent because of the Jisc-funded ER4SER project carried out by the University, that there is considerable inefficiency in the way that server rooms across the Partnership are cooled and heated, and we would expect a programme of improvements in those areas to considerably reduce energy costs, again accruing to members rather than the Company. We are not able to quantify these at present and in most cases installed metering does not provide for direct measurement of server room energy costs. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 54 9 ICT STRATEGY ICT is now fundamental to the delivery of any organisation's operational and strategic goals. The University and its Academic Partners is a modern, widely dispersed organisation, operating in a highly competitive and fast moving sector. It's customers are increasingly "tech savvy" with high expectations when interacting with the services they are consuming. To fulfil its potential the partnership needs a modern, coherent and effective ICT service. In the current economic and funding climate any new investment in ICT needs to be based on sound academic and business reasons. Operational efficiencies need to be maximised and services improved. The proposed shared service puts the partnership in a position where, for the first time, it can realistically achieve a unified ICT strategy. This will allow it to make informed technology choices that can be implemented in a coherent and efficient manner across the partnership, ensuring an equivalence of experience and quality of service. The Environment ICT is a key enabler to delivering UHI's strategic plan and it is important that the ICT strategy is responsive to the current and future challenges of UHI's internal and external environment: Student experience is a key measure of success and an influencing factor in recruitment and retention. Given UHI's geography and its reliance on technology to deliver its mission, the ICT experience from the range, quality, newness, usability and convenience of the services offered, is an important factor in determining satisfaction UHI is going through a period of uncertainty in terms of structure and governance and any ICT service needs to be flexible and agile There will be continued development of UHI’s curriculum delivery model for FE and HE including greater use of shared teaching resources and the continuation of networked delivery through existing, including VC, and new collaboration tools Strategic growth, particularly in HE FTE in the south and west of the Highlands and Islands UHI is pursuing RDAP and a corresponding growth in Research, requiring research data management and specialist services UHI is developing new distribution channels Funding pressures mean extending the life of equipment and a drive to make all services as efficient as possible Following the McClelland review the Scottish Government has embarked on a shared services agenda for the public sector ITaaS (IT as a Service) and Cloud computing are developing models of service delivery that, where appropriate, offer greater flexibility, agility and transparency. Taking advantage of this needs new skills and ways of working; UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 55 HIE are funding a program of fibre broad band roll out across the Highland and Islands that should bring better opportunities for connectivity and resilience Statutory carbon reduction targets will be pushed down to smaller enterprises and UHI will only be able to address these in a coherent manner if the entire ICT estate is considered as a whole. Strategic Themes The ICT service will have a set of core strategic themes which will be the foundation of any service development and offering: OUR CUSTOMERS We will place the customer experience at the heart of the service offering and value excellent customer service at every level of the organisation OUR PEOPLE We will invest in our people and collaboration tools to enable distributed teams and specialist skills to be located anywhere and effective everywhere DISTRIBUTED CAPACITY AND LOCAL RESILIENCE We will enable the customer to access the services they require, where and when they require them and be cognisant of emerging delivery channels We will develop the data network capacity to meet increasing demands and provide local resilience where possible in the event of network failure ENVIRONMENTAL AND OPERATING EFFICIENCY We will operate the service as efficiently as possible by reducing duplication and divergence and maximising common solutions and standards We will minimise the divergence in our hardware and software catalogue and combine our spend to maximise our purchasing power We will manage the service’s carbon footprint by consolidation and better environmental management of computing facilities and smarter working practices. What does this mean? Here are some examples of how the Strategic Themes are and will be embedded into the service offering: UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 56 CUSTOMER EXPERIENCE AND ENABLEMENT Deliver a high quality user and customer service experience Being transparent about the services we provide, what is required and how they are accessed and what to expect when something goes wrong and how it will be resolved Self-service resolution for common problems including password reset Appropriate and equal prioritisation of issues and resolution through use of a single helpdesk service and software tool Expand scope of NorMAN after hours helpdesk service Visible ICT service desks where students are located Promote a Gaelic interface for accessing ICT services where practical and possible Embedding customer service in the heart of the new ICT service Scheduled visits to sites that have no permanent staff located there Engagement with staff and students to develop their ICT skills and resolve common issues through regular ICT clinics Timely recommended “reading” and training for staff based on the current needs at that point in the academic calendar Work and print anywhere – be able to access files and print anywhere in the Partnership for students and staff Further development of online tools for student records management by students and staff "Single sign on" meaning users only have to login once for the majority of applications UHI wifi and EDUROAM allowing staff, students and visitors access to wireless connectivity throughout UHI and when visiting other academic institutions BYOD and multiple channels making it more convenient to consume ICT services Further data integration provisioning secondary systems from core systems to improve timeliness of processes, reduce administration overheads and improve user experience. PEOPLE AND SKILLS A commitment to develop and operate distributed teams and specialist skills Work towards attaining an industry standard department accreditation No centralisation on Inverness (or anywhere else) UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 57 A Personal Development Plan for every staff member and an investment in training to upskill staff Value customer service as a skill Introduce Social Business techniques and tools to coordinate the service delivery and respond to customer demands quicker. DISTRIBUTED CAPACITY AND LOCAL RESILIENCE Ensure remote sites can still operate some services if there is a failure in data connectivity Ensure appropriate business continuity and disaster recovery Develop provision for local file store, print and application delivery (where applicable) services Strategic plan for delivery of appropriate network capacity to sites based on growth of HE and FE student numbers by location and network teaching delivery growth plans Storage capacity planning and investment to meet projected needs of staff and students Virtualisation, if possible, of remaining real servers Replicated and load balanced data centres over multiple sites for LIVE, Development and DR capability Cloud and managed services where appropriate Focus on fewer database technologies correctly deployed for performance and resilience. ENVIRONMENTAL AND OPERATING EFFICIENCY Get the ICT provision to a common standard and address major technological choices around WAN refresh, Telephony refresh and future VC and collaboration provision Minimise power consumption Maximise efficiency in service provision Maximise combined purchasing power Reduction and consolidation of data centres and more efficient environmental control By 2020 to have minimal data centre capacity on site due to developments in server technology and cloud services Software rationalisation Common desktop build and remote management UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 58 Common print anywhere solution with pull printing, cost allocation (staff and students) and online payment Business systems convergence Single back-up solution Decreased time to value through increased agility Appropriate use of shared services developed for the HE/FE and wider public sectors Being capable of meeting statutory requirements on carbon reduction targets. Work Streams STUDENT EXPERIENCE, TEACHING AND LEARNING, RESEARCH It is important that during the period of implementation and bedding in of the new service that the core services to students, teaching and research continue to be delivered to a high level. The key elements of this are: VC capacity meets the needs of the University and FE Region VLE (Blackboard) enables delivery of FE and HE curriculum Effective management information regarding e-Resources use so they can be managed effectively RIS (PURE) operationalized and a strategic road map for its development agreed with the Research Office LMS (Millennium) provision continues to support the needs of FE, HE and Research and the ROWAN partnership More support for Research activity including ICT equipment advice and specialist computing services. SERVICE DISENTANGLEMENT The first phase will be to create the separate service elements based on standard configurations and a consistent user experience. This will require disentangling the current ICT service offering and developing solutions that can be delivered across the Partnership in a consistent manner. Starting with the base elements of networks, directory services, desktop, file store and back up, secondary services can be added including print anywhere. At the end of this stage a user anywhere in the partnership should have a consistent and better experience logging onto their PC or device, accessing their files and printing and be able to do that at any site. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 59 In addition to make sure everyone has their needs prioritised correctly a single helpdesk call process will be rolled out. As the core services are created and managed by smaller dedicated teams ICT will be able to deliver ICT service desks in each of the APs where the service has a permanent presence and offer a defined maintenance visit schedule to those that don’t, including remote sites. The key elements of this are: Institution of a single helpdesk call process using UHI Helpdesk (150), utilising the Webhelpdesk software to ensure consistent prioritisation and resolution of all support requests, and provide the information for SLA monitoring LAN equipment upgrades where applicable and the application of a common configuration and network monitoring Single back up service to ensure consistency in backup and recovery of data Single active directory and group policy administration to ensure improved login times Standard desktop builds and remote management using SCCM to minimise hands-on maintenance Global print and scan anywhere solution with pull printing, cost allocation and online payment facility ICT service desks at visible locations in each of the APs where the service has a permanent presence Consolidation of existing database and migration, where possible, to a fewer number of supported platforms. SERVER ROOM CONSOLIDATION The Partnership has a significant number of server rooms, most non-specialist and poorly insulated, and an over capacity in virtual machine hardware because of the needs of replication handled at a local level. Most of this hardware was purchased 5 years ago and is now coming to the end of its useful life. The majority of the physical server estate is also effectively end of life. The University and a number of APs have recently invested in new hardware and the partnership’s server environment will be consolidated on this in a smaller number of specialist server rooms. This will provide efficiencies in server maintenance and licensing, power and A/C consumption and release some estate for re-use. The physical server estate will, where possible, be virtualised and the hardware retired. The key elements of this are: Transferring local virtual machine provision to core service VMWARE Virtualise where possible remaining physical hardware servers UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 60 Decommission redundant server rooms Manage appropriately server room temperatures to within safe operating parameters to reduce A/C costs. MAJOR INFRASTRUCTURE A single service will allow an overarching dialogue, which is not currently possible, with individual APs, the FE Region and the University to determine where strategic development, and where applicable, growth is going to be delivered in the partnership and how this is going to be realised in a strategic way through investment in additional WAN capacity. The current WAN contract is due to come to an end in 2016, although an extension to existing arrangements may be possible. By this point the roll-out of BT fibre across the region and the SWAN1 framework will be in place, giving the potential for better connectivity and resilience in areas currently reliant on microwave and satellite links. The key elements of this are: LAN refresh to bring equipment up to a minimum standard of performance and reliability making ongoing maintenance more efficient Alignment of AP, FE Region and UHI strategic growth with WAN connectivity to individual sites Telephony refresh and making use of new unified comms technologies Monitoring and making best use of proposed BT fibre roll out WAN re-procurement in 2016, utilising SWAN framework services and taking advantage of any 'contractual' hub arrangements with regional providers e.g. Pathfinder North Thin client to bring energy and heat efficiencies, access to UHI's suite of standard software and enable remote working UHI wifi and EDUROAM services for students, staff and visitors. PEOPLE AND SKILLS It needs to be recognised that customer service is a skill that needs to be developed. There are also specialist roles which will require new skills to fill them. In addition many people will not be used to or initially comfortable with working in a highly dispersed environment with virtual teams and matrix management. There will be a need to identify existing skills and develop new skills in order to support the staff of the new service integrate and fulfil their potential. The key elements of this are: 1 The Scottish Wide Area Network (SWAN) aims to “deliver a single public services network available for the use of any, and potentially all, public service organisations within Scotland; with aggregated demand delivering both cost and performance advantages.” It is aimed to be live by April 2014. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 61 The need to form project teams to disentangle the ICT provision A skills identification and gap analysis and subsequent development using a recognised framework e.g. BCS SFIA(PLUS) skills framework Development of specialist teams to manage the disentangled services. SERVICE MANAGEMENT The new service will require the procedures and tools to manage the staff, ICT estate and services effectively. There will be a requirement to provide effective reporting against SLAs and budget as well as monitoring of system performance to identify issues and feed into capacity planning and resource reallocation. Effective asset management and procurement processes will require all assets to be identified, profiled and recorded to enable age profiling and determine renewal schedules. The key elements of this are: Clear reporting lines and admin procedures SLA monitoring and reporting Comprehensive network, device and service monitoring giving: o Rapid response to LIVE issues o Monitoring of capacity utilisation o Feedback to Partner management of ICT resource utilisation o Longitudinal analysis Asset register, age profiling and disposal Business continuity and DR plans for every site and service Procurement procedures and authorisation process Budget monitoring and reporting. CORPORATE SYSTEMS AND INFORMATION MANAGEMENT The FE Region and UHI are demanding more management information, not just from student records, to facilitate strategic planning and performance management. The service will also inherit numerous different business systems from different vendors running on different platforms. Some, where there is lots of commonality (e.g. timetabling), will lend themselves to better, more consolidated implementations. Others are going through re-procurement and will need to be managed as affectively as possible until common systems emerge. The key elements of this are: UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 62 Deliver the reporting requirements for the University and the Highlands and Islands FE Region Facilitate the Business Systems Convergence projects for Finance, HR, Timetabling and CRM. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 63 10 SERVICE SCOPE - FULL AND CORE SERVICES A full list of the activities in scope for the initial shared services offering is at Appendix A2. The primary purpose of that document is to define the boundaries of the service - i.e. to enable clarity about which functions (or staff, or contracts) are included within the service and which remain with member organisations. It does not in itself form a full service catalogue (that issue is dealt with in section Chapter 11). The full set of services is that which will be provided to those member organisations which participate fully in the shared service and transfer their ICT staff to UHI Shared Services Limited. A smaller 'core' set - those not shown as 'full service' - will be provided to all members. Broadly speaking this set of services is similar to that currently provided by Executive Office LIS through the top-slice, and consists of services which are essentially independent of location ('above campus'). These services - virtual learning environment, student records, email, videoconferencing etc. - are those which we believe are essential for members to consume if they are to function effectively as UHI Academic Partners. Members who take the core services only will continue to provide 'local' services themselves, and will not transfer staff or contracts to UHI Shared Services Limited. This plan is based on the assumption that of the current UHI Academic Partners, SAMS, Sabhal Mòr Ostaig and Orkney College will take core services only. Others may choose to do so though clearly at some point the initiative becomes unviable if critical mass is not achieved. It should be noted that Academic Partners taking only the core service are as eligible to become members of UHI Shared Services Limited as those taking the full service and indeed will need to do so if opportunities to provide VAT-exempt services are to be exploited. The core services are a whole package and have to be taken together whether or not a Core-only member chooses to have alternative local provision. The development and implementation of new core and non-core services will be in line with the ICT strategy, which will be developed in consultation with all members as per the stakeholder analysis in chapter 12. While trying to be inclusive as possible in the development of non-core services, the final decision regarding these will be taken by those members taking the full service. However, coreonly members will be encouraged to implement similar solutions to maintain strategic alignment and facilitate a continuity of experience for all staff and students across the UHI Partnership. The following is a summary of those services in the 'core' and 'full' lists. It should be read in conjunction with the more detailed definitions in the service scoping document. It has been somewhat simplified from that document and in particular some elements of service which are primarily carried out at Academic Partners but which have an element of support from the shared service have been omitted from this list. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 64 Core Services – Available to All Admissions and enquiries platform Multimedia content hosting Backup and data recovery Business continuity support (system-wide) CLA Copyright Web Based Register Course database Desktop VC (Jabber) Document management and collaboration platform MyUHI thin client platform and any successors Network security testing (automated) Online enrolment environment Online fee payments support Online module selection system Online student feedback system Domain and URL management Podcasting service Email, calendar, instant messaging Reading list management e-portfolio system Research information management platform (PURE) e-Resources provision and management FES return support File store Helpdesk platform HESA KIS return and NSS support HESA Returns Information security policy maintenance Resource discovery tools Security (WAN environment) Service desk (Helpdesk) Service desk (Helpdesk) – out of hours Service level reporting Statutory returns support Interactive voting system Student and staff badges – software environment Inventory and asset management platform Student attendance platform IT compliance management (system-wide) Student records accessibility platform Janet Student records core reports Learning analytics Student records fees environment Learning content – hosting and technical advice Student records portal Library management system Module catalogue platform Student withdrawal tools Telephony – UHI internal, desktop UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 65 Timetabling/VC booking systems platform(s) Training materials provision (generic) Videoconferencing – bridging, connection, booking, scheduling, user support UHI Toolkit platform Virtual learning environment (Blackboard, Blackboard Mobile, Collaborate) User account provision Web content filtering VC recording Web – One Web development and infrastructure Video streaming service for learning content (Helix) Wide Area Network Wi-Fi Full Service – Available to Fully Opted -In Members Only Apple device support AV equipment – procurement support, installation, configuration IT classroom and laboratory support IT compliance management (local) Business continuity support (local) LAN management Business systems convergence project Licensing audit services Comms room management Mobile device support CRM software platform (as developed through business systems convergence strategy) Mobile telephony Desktop applications delivery, other than via thin client PC support Equipment disposal (compliant) Server platform for non-core services Finance software platform (as developed through business systems convergence strategy) Terminal (thin client) support HR software platform (as developed through business systems convergence strategy) Web analytics, design, development Out of hours class support Printing and photocopying management VC studio endpoint management and support As a general rule, service development work required by a member only taking the core service, for example, customisation work on a core system, or interfacing a self-provided system with the UHI technical environment, will be chargeable. Some of the services included in the subscription for full members only may be made available, on an exceptional basis, to core service members if they have been fully funded or if the member UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 66 concerned is prepared to have a charge levied for the service. This might be the case, for example, if those members wished to opt into shared business systems, which would be to the benefit of the whole partnership. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 67 11 SERVICE LEVEL AGREEMENTS During consultation, many stakeholders emphasised the importance of 'robust' service level agreements. At the same time we also heard, sometimes from the same people, about the importance of maintaining flexibility, particularly at the local level. We agree with both positions. It is important to set clear expectations in the minds of both service providers and consumers as to the services being provided, but it is also important that we don't lose what people value about their local services in the transition to the single service. EO LIS currently operates a standard Service Level Agreement in respect of a range of its core services, which was approved by Executive Board in 2007. The main element of this is a service availability target of 99%, measured on a 24x7x365 basis, for services such as the VLE, email, student records, etc. Service availability is monitored automatically and a monthly service review report issued. The report provides monthly and cumulative statistics on service availability, broken down by site where appropriate (e.g. WAN connections) together with narrative comment on the reasons for failures. Statistics on volumes of service usage are also included. A monthly service review report will continue to be published, though its content will be revised to reflect the new SLA requirements and the changed range of services. Service Availability Service availability is monitored automatically. Where a key service target is expressed in numerical terms we believe it is important that it is capable of being automatically monitored to avoid excessive overhead in managing the SLA. The service environment that is delivered has a number of internal dependencies, and therefore we will monitor and apply the statistics to all systems as failures in one section may have a number of service effects. We group system monitoring to provide stats for a Service known and used by a customer, as all services have a number of system components which may or may not be redundant and used by other services. An issue that is sometimes raised around the current service availability targets is that they do not take account of the likely impact of outage on the consumer. For example, a failure of the student records system for some hours early on a Sunday morning would be unlikely to be disruptive, but a similar failure during the daytime on a peak enrolment day would be far more damaging. We therefore propose that the IT shared service adopts a service availability standard that is tiered according to likely impact taking into account the academic and institutional calendars, as follows: Service availability target - 24x7x365 - 99% Service availability target - core hours - 99.5% Service availability target - critical periods (separately defined) - 99.9% ‘Core hours’ will be defined according to the period of peak usage, normally equivalent to the ‘college day.’ It may take some time to develop automated monitoring processes for all systems. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 68 Service Performance There are no current targets for service performance, e.g. for response times such as screen refresh on data entry, or login times. In those cases where the shared service is managing the service endto-end, i.e. where members have subscribed to the 'full' service, we believe that it should become realistically possible to set a number of such performance targets. We do not propose to do this where the local ICT environment remains under local control and where performance may be affected by issues to do with the local area network or home environment. A variant approach may need to be adopted where the service has been outsourced to a third party. In order for service performance targets to apply, a minimum specification of end-user device must be deployed by the member organisation. That does not mean that the shared service will not deliver service to devices which do not meet the specification, but that performance (or indeed any functionality at all) cannot be guaranteed. That minimum specification will be reviewed and will change from time to time, probably annually. Performance targets and other quality expectations for service will be set in consultation with service owners and user groups. Notice Periods Customers need, and should be entitled to, appropriate notice of significant changes in the ICT services they receive. This includes new services being introduced, changes to existing services, and services being decommissioned. Suitable notice also needs to be given for planned outages, e.g. for maintenance and upgrades. It is recognised that there is always likely to be the occasional requirement for emergency downtime, in cases of unexpected system issues. Notice period for: Planned outages - 5 working days Service decommissioning - 3 months (allowing for customers to raise objections) New services - normally 1 month in advance of introduction Emergency outages - no minimum notice period, but announcement always to be made in advance when possible; may not be possible out-of-hours Up to 4 maintenance weekends per year may be announced for planned work in the main data centres. In addition, a service development roadmap will be published and regularly updated, showing planned developments up to 2 years in advance, where possible. Service Review Meetings After the introduction of the standard SLA in 2007, a monthly service review meeting cycle was established, with representatives from Academic Partners invited to discuss performance against the SLA, remedial action plans where required and any proposed developments or changes to the SLA. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 69 These meetings were discontinued after a series of meetings where no Academic Partner representatives attended. However we think that in the new environment of service delivery it is more likely that members will want to have representatives attend meetings where the performance of the service can be discussed and assessed against published criteria. The service will therefore commit to hold such meeting monthly while there is a demand, but will also seek to add value to such events by, for example, theming them around topics of interest to members. As outlined in the service structure each member will also be assigned a management contact who will be responsible for escalating and dealing with any service issues. There will be a minimum of two formal service review meetings held individually at a site specified by the member for each member. Members and their management contacts may agree a further schedule of reviews where required. Where a site has experienced significant operating issues a Service Action Plan will be agreed put in place and this will outline any additional meetings required. Complaints There will be a formal mechanism available for making complaints, all of which will be recorded and responded to within 5 working days. Numbers of complaints will be published in the monthly service review reports. Presence An important feature of the service is on-site support, which will be proactive as well as reactive. There is definitely no proposal to withdraw front-line staff to a remote service centre or centres. Where physically possible and practical the service will provide on-site support through manned ICT helpdesks, preferably in highly visible locations e.g. the library or learning resource centre. Where there is no physical presence of on-site ICT staff, scheduled visits will provide local staff and students access to a face to face service. All issues will be recorded and tracked in the Helpdesk system and, in the event that the matter cannot be resolved immediately, progress towards resolution can be monitored. This will also provide valuable information on trends in types of help calls and performance against agreed SLAs. Analysis of this information will help proactive changes to the service to address common issues and improve turnaround times. Requests which involve this kind prioritisation of resource allocation will need to be made by a nominated member of staff of the member organisation, or their nominated reserve. The Company will endeavour to be flexible where the request falls outside the formal remit of the service, but is within the capability of local staff. This may arise where the staff concerned previously carried out that function for their Academic Partner. For each location served there will be a published indicative schedule of the staff presence on site. The larger sites will have a full-time staff presence throughout core hours. Smaller sites will have a fractional presence. The smallest sites will be visited regularly by support staff. Every site on the schedule will be visited at least twice per year. It is recognised that for operational reasons the UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 70 detailed schedule of deployment of staff will be subject to change. The Company will follow relavant legislative requirements to ensure that all staff working with students are subject to the correct vetting and are eligible to carry out any duties required. Requests for Service A formal channel will be made available by which requests for service can be made and will be responded to. Where the request is for a service that has already been implemented elsewhere, or follows an established pattern ("more of the same") then a response indicating the timescale for delivery will be issued within 5 working days. Members may wish to decide if there are specific groups or individuals who have the authorisation to request certain activities, especially where those activities will impact other local departments (e.g., room moves only from facilities contact). Where there is no resource issue then work will be scheduled and delivered as outlined above and in the priorities. Where there is a resource issue, but a request doesn’t involve development and only impacts on the requesting member the priority of the work against other requests will be discussed and agreed between the identified member representative and the Company management contact. Where the request involves development work or will effect a number of members, an initial response will be made within the same period indicating whether the Company is able to undertake the work, and whether it is chargeable; further discussion with the requester is likely to be required in such cases along with a review to ensure that the request will be suitable for all members who may require the solution. The Company will publish and maintain a list of the developments being worked on. Helpdesk Support Helpdesk support will be available 24x7. Outside core hours, it may be contracted out to a remote call handling service, as it is at the moment. The telephone system is not currently capable of monitoring call pickup times (delay between first ring and call answered, or call failures). At such a time when it is, we will seek to reinstate targets for call answering. All support requests to the helpdesk are logged, whether made by telephone, in person, by email, or through the web form. We will seek to extend the range of channels by which customers can contact the helpdesk, e.g. via Twitter, or indeed to follow progress on resolution or restoration following a major incident or outage. Calls will be prioritised, and target resolution times set, according to Figure 14. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 71 Figure 14. Helpdesk priority levels and responses Customer Satisfaction The UHI Shared Services Board believes that customer satisfaction is likely to be the best indicator of the quality of services that it delivers. We will therefore carry out a comprehensive annual survey of customer satisfaction, covering all main services and all locations and commit to publishing the results with a target of continuous improvement. The annual survey may take place at different times for different groups of customer, to ensure that we target groups at the right time to maximise survey return whilst being mindful of the academic calendar. The Company will also look to develop personal helpdesk follow up for a random sample of calls monthly. This has been piloted by UHI Helpdesk and has received very positive feedback. These will be in addition to the current practice of publishing (in the Monthly Service Report) the results of the call survey which is sent out with every closed helpdesk call. Audit The Company expects to engage with the University's Audit Committee and other interested stakeholders to agree an approach to audit which protects the interests of the Company and its members. Particularly in the initial period of operation of the shared service, issues of interest would be expected to include information and data security and data processing agreements. Service Catalogue A summary list of the ICT services to be provided by UHI Shared Services Limited is in the previous Chapter. Further clarification on scope is to be found in Appendix A2. We expect that scoping statement to become a historical document - it will not be updated. Instead it will be supplanted by a service catalogue, made up of individual entries which describe each service offered. An example follows: UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 72 Figure 15. Service catalogue entry example - myUHI Name of service myUHI Description Virtual desktop access for UHI The myUHI Citrix service provides a virtual UHI desktop on any internet connected computer. Using the myUHI link, you can log into the service and access your files from any computer and you can also access a range of software applications that run across the internet. This means that you don't have to have these applications on your computer but you can still use them from any computer connected to the internet. Provided with Citrix version x Normal hours of service 24x7x365 Scheduled downtime None Available to All staff All students Software is installed as part of a standard UHI image. Students and staff may also download the component software from the UHI website Charges None. Core service Where http://my.uhi.ac.uk The myUHI service requires you to log into the service using your UHI user name and password. Documentation We recommend the use of Internet Explorer with myUHI. FAQ: Help material/videos: PC Requirements More help mailto:[email protected] helpdesk.uhi.ac.uk www.uhi.ac.uk/lis Service level agreement 24x7x365 - 99% Core hours - 99.5% Critical periods - 99.9% See also Technical information (authorised users only) UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 73 12 STAKEHOLDER GROUPS The unusual structure of the UHI partnership, along with the distributed nature of the service, means that there is a complex mapping of communications lines between customers and service providers. The following matrix is an attempt to make some sense of that mapping and indicate how relationships might work in practice. Board Court (APs) Faculties Director, ICT Service Head Head, Service delivery Helpdesk Local service lead Service quality Routine requests Day-today frontline issues Escalation Service requests Overall shared services strategy, via Commissioning Board Regional bodies (HE, FE) Members Chief Executive ICT investment strategy Appoint directors, approve subscriptions Accountability for service ICT Planning Service development issues Accountability for service ICT Planning Service development issues (normally Head of LTR Support) Subject networks Service development issues (normally Head of LTR Support) Staff (individual) Head of LTR Consultation Service quality Student body Consultation Service quality Students (individual) UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Escalation Service requests 74 Practitioner groups Consultation PPF, FEPPF Service development issues (normally Head of Corporate Systems) User Groups Consultation, feedback, focus groups, project sponsorship Trade unions Consultation External organisations New members Potential members External service provision approval UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 75 13 OPERATIONAL ASPECTS Physical Presence As indicated in the introduction to the current IT Estate (Chapter 3) UHI delivers service to 87 sites connected to its network across the partnership. These sites would be the basis for the Shared Service contracts and are specifically: Table 3. Site list Ref UHI157 AP AR Site Name Oban UHI065 AR Ref UHI010 AP MO Site Name Forres Lochgilphead UHI008 MO Nairn UHI149 AR Hazelburn UHI159 MO Biblical Gardens UHI069 AR Kilmory CSC UHI160 MO Greshop Vocational Ctr UHI057 AR Campbeltown UHI009 MO Keith UHI058 AR Dunoon UHI011 MO Buckie UHI064 AR Arran UHI048 NAFC UHI059 AR Islay UHI019 NH Thurso UHI060 AR Rothesay UHI022 NH Dornoch Ross UHI062 AR Tobermory UHI023 NH Alness UHI090 AR Helensburgh Library UHI020 NH ERI Castle St UHI061 AR Tiree UHI121 NH Dornoch Burghfield UHI063 AR Here We Are UHI024 NH Dale Farm LBTC UHI144 AR Fionnphort UHI035 OR Kirkwall Campus UHI148 AR Craignish UHI137 OR Centre for Nordic Studies UHI039 AR Rothesay CSC UHI042 OR Stromness UHI038 AR Dunoon CSC UHI013 UHI068 PE Perth Campus AR Rothesay office UHI014 UHI056 AR Eclark PE Pathways UHI016 UHI001 PE Crieff EO Ness Walk UHI017 PE Kinross UHI124 EO Fairways UHI018 PE Blairgowrie UHI075 EO CHS UHI125 PE Scone Airport UHI049 HTC Dingwall UHI055 SAMS Dunstaffnage UHI002 IN Inverness Longman UHI043 UHI003 IN Inverness Midmills SH Lerwick Gremista UHI044 UHI004 IN School of Forestry SH Unst UHI045 UHI115 IN Dumfries Dental Centre SH Brae UHI046 UHI073A IN Aviemore SH Aith UHI047 UHI025 SH Whalsay LE Stornoway UHI143 SH Gutters Hut UHI032 LE Benbecula SH Mareel UHI026 LE Barra SH Gressy Loan UHI118 LE Western Isles Hospital UHI088-5 SH Sandwick School UHI146 LE Taigh Chearsabhagh UHI088-1 SH Islesburgh UHI007 MO Elgin Main Campus UHI086 SH Mossbank UHI120 MO Elgin Technology Centre UHI087 SH Ness UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN NAFC Marine Centre 76 Ref Ref UHI142 AP SH Site Name Blydehaven Nursery UHI081 AP WHC Site Name Portree HS UHI145 SH Hospitality UHI052 WHC Mallaig UHI092 SH Whalsay HC UHI079 WHC Broadford Sabhal Mòr Ostaig UHI051 WHC Kinlochleven ICC Islay UHI054 WHC Kilchoan WHC Ullapool UHI033 UHI034 SMO SMO UHI082 WHC Portree UHI083 UHI050 WHC Fort William UHI078 WHC Gairloch UHI077 WHC Taigh Darach UHI053 WHC Strontian On 1 April 2014 there will be a seamless transition to the shared service in the experience of the end users. UHI Shared Services Limited will deliver the ICT service to these sites, to all Partners, supported by IT staff operating from the bases at which they are currently employed, according to the principle of no compulsory relocation. The contract that the Company will have with each of its members will include a definition of where that service will be provided, and its scope – members who have opted out of the full service will receive on-site support only in respect of core services, such as telephony and the WAN. Over time, we expect that the rationalisation of the ICT environment and the continued development of remote technical support capability will free up locally-based staff time for more face-to-face user support, enabling the service to cope better with the support demands of BYOD and a more mobile user base. The IT Estate The following section is taken directly from the initial high-level report provided by Jem Taylor as a result of undertaking a comprehensive survey of the IT Estate throughout the partnership during the summer of 2013. The IT Estate Survey, carried out during the summer of 2013 undertook a physical IT survey to obtain an overview of the IT estate at a wide range of academic partner sites. The outputs of this exercise included: - PC fleet size and age profile for each site - Quantification of potential for a LAN renewal / energy footprint reduction project - Quantification of the IT server fleet age and quality - Quantification of the physical environment in IT server / comms rooms - Comparison of asset inventory data with actual equipment on the ground 2 - Evaluation of practicality of migrating asset data onto the WHD asset management system The survey was based on site visits and on a survey questionnaire sent out to IT managers and other IT related staff. The rate of return for the questionnaire was disappointingly low, and questionnaire data obtained was insufficient for any overall detailed analysis. However, there was sufficient data to draw some high level conclusions. 2 The WHD Helpdesk system provides a common fault report and management platform used by all IT staff across the UHI partnership. This system has a powerful asset management facility which could potentially be used to improve asset reporting and management, as well as linking fault history to specific assets. Inverness College staff are, at the time of writing, trialling its use to replace their existing asset database. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 77 The site visit methodology was tested and refined in Stornoway at the end of the 12/13 academic year and then used at a range of sites during the summer, ending in Perth at the start of the 13/14 session. We visited the main campus of each Academic Partner (excluding SAMS and SMO), and many subsidiary campuses too, from Portree and Broadford to Buckie and Keith, and from Campbeltown and Dunoon to Stromness and Lerwick. At most sites, the method included - photographing every room - counting every item of IT equipment - recording the size of monitor screens - recording the age of desktop PCs and laptops - counting the LAN data ports in use, and - interviewing a range of staff including IT practitioners, librarians, assistive technologists, etc. Where available, the asset register was obtained for comparison with the survey data. Only at the two largest sites – Inverness and Perth colleges – was the asset register found to be of such a quality that it could be used directly as the basis of further analysis, and then only for analysis of the desktop PC fleet. The survey data was been augmented and validated in September 2013 using network scans of the UHI Active Directory environment to detect ‘live’ Active Directory managed workstations on the network. This scan data, combined with the physical survey and asset register, gives increased confidence in the figures. Summary statistics In total, the Academic Partnership owns somewhere between 6,300 and 6,800 desktop and laptop PC and Macintosh computers including Thin Client workstations. This figure is significantly above our previous indicative planning estimate of 4,500 to 5,000 which was based on an analysis of building plans and desk capacities carried out more than ten years ago. Age profile Of these at least 2,554 and perhaps as many as 4,000 can be classed as ‘old’ – requiring replacement in the near future. Of those devices surveyed and classified, 50% were ‘old’. Fewer than 900 devices were positively identified as ‘Good’, and a further 1,589 as ‘OK’. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 78 Vignettes Apart from the wealth of data and photographs obtained – which are stored in a shared drive with access available on request – the survey visits and staff interviews conducted lead to some interesting vignettes: Physical Environment We found many computer rooms to have been fitted with air conditioning (which is good) but set to very cold (which is not so good). Why is this an issue? Apart from meaning we had to keep our jackets on, this has real costs to the organization who pays the energy bills. As we explored in the recent Jisc funded “ER4SeR” project – using both practical investigation and theoretical modelling - if the target temperature of the computer room is lower than the target temperature of the building heating system, then heat will naturally flow from the rest of the building, through the uninsulated walls of the room, only be pushed outside by the cooling system. The building heating system will try to maintain the building temperature, while the computer room cooling works against it, leading to higher power bills both for cooling and for heating even when there is no IT equipment actually in the room! Ideally, the target temperature of the coolers should be low enough to protect the IT equipment (below 30C say) but high enough that mostly, the waste heat naturally flows into the building and out through the exterior walls. Only when the natural heat flow is inadequate should the cooling plant kick in, at perhaps 28C, to remove genuinely surplus heat while maintaining the thermal gradient that allows heat to spontaneously flow the way we want it to. This points up that at the organizational scale of a college, neither the IT team not the Estates team will likely include an IT environmental controls specialist. In a larger organization, the cost of installing and understanding better temperature and energy monitoring and controls can be recovered through better management of the physical environment and hence significantly lower energy bills and reduced carbon footprint. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 79 Lack of proactive monitoring In a number of sites we found LAN equipment with warning lights showing, or with very noisy fans (a sign of incipient failure), or running hot. These items of equipment can be expected to fail in service, causing disruption to users, and are probably contributing to increased energy bills and increased thermal wear and tear on other equipment in the same room. All of these point to an absence of proactive monitoring and planned maintenance. Instead the typical support response will be reactive – only when one of these items fails will it be replaced, possibly after a delay caused by needing to order up a replacement. The physical environment for IT has a wider estates footprint Generally in small learning centres, IT infrastructure has to share space with people. The classic example is the small data cabinet on the wall behind the reception desk, where the noise from the fans in the equipment causes maximum annoyance to the lone centre manager! In one particularly extreme example we visited, in a rather larger local learning centre with several classrooms and staff, we observed that a data cabinet had been installed in the corner of an office some years ago; there was presumably no suitable plant cupboard available, or perhaps the building design had not included the requirement for an IT rack. Over the years the rack had as you would expect gradually filled up with noisy and hot IT equipment – LAN switching, routers, servers, monitors, disk packs etc. At some point a second rack had been added, though this is now empty. All this equipment emits enough heat and noise that the office – large enough for three staff – is so unpleasant a working environment that it is only usable as a store. This would not be a concern, but for the shortage of space in the building which means that two staff have their desks in the corridor outside this room; unfortunately for them, in the height of summer the door of the room has to be kept open to stop the IT equipment from overheating, so that their corridor area becomes unbearable as well. If the equipment could be replaced with modern low-energy / low-noise types or where appropriate relocated to a remote datacenter, the entire room could be returned to use as staff accommodation. The value of physical estate occupied by IT was out of scope of our survey, but ought to be taken into account when investing in energy footprint reduction in the future. Another opportunity for the shared service will be to review and consolidate the printing and copying service across the partnership bringing all MFDs into a managed print environment. This will not only provide a much better user experience, it could provide cost savings in leasing to the Partners. This would need to be implemented over a number of years. Strategic decisions will be required in the early years of the shared service, not only to address the current state of IT Provision throughout the partnership, but also as major capital investment is going to be necessary in the areas of telephony and VC and as the WAN contract comes to an end in 2016. Facilities As outlined above, many of the facilities hosting parts of the network are located at Partner sites. These are rooms housing specialist equipment which tend to be visited when there are problems by specialist network engineers. Although these areas are within the control and responsibility of UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 80 Partners, it is essential that specialist shared service staff have access to them at all times in case of emergency. There are also opportunities to consider the working environment in and around some of these rooms which might provide better use of space for host Partners and greater efficiencies for the shared service. As storage is increasingly being virtualised or moving to the cloud there will be fewer comms rooms required in the medium to long term yielding not only savings, but also returning valuable space to Partner estates. All large campuses have computer and learning resource centres and videoconference suites for classroom based learning with groups of students. Increasing use of intelligent systems will help maximise resource usage and could lead to reduced investment requirements for end-user equipment, an additional benefit of which would be releasing IT staff to spend more time on supporting the users rather than dealing with the equipment. Structure of Service Delivery In the run up to the go-live date there will be extensive communications with all staff who will transfer to the shared service so that, quite apart from the legal requirements, there is clarity about the transfer arrangements and management and operational structures to which everyone will be working from day 1. Staff will understand the focus of their activities as the service goes live, and it is likely that during the transitional period these will be very similar to the roles which they are currently undertaking, but perhaps more importantly they will know who they are working with, who they report to, how the communications channels will work and what communication tools will be set up to support them in their roles. Much of this preparatory work will take place prior to the service going live so that there should be no surprises on the day. We are planning for a seamless move into the shared service which will not be discernible to the end users. The ICT service will be structured into a number of sections each with a head of service, and in addition there will be a key contact or Relationship Manager at each Partner who will be responsible for the end user experience across all services at all sites for which they have responsibility. Regular Service Review meetings will take place which will afford the opportunity for feedback and continuous improvement as well as noting matters in relation to the SLAs with respect to each service. As in the current situation, the shared service will have staff distributed across the Partnership providing local and partnership services either in a dedicated or mixed capacity. As well as current Academic Partner ICT staff, as indicated earlier a third of current University staff are also located in Academic Partners. Figure 16 provides a model of how these staff would be distributed and the matrix of services they would provide. Depending on operational requirements, specific location and the particular service element, this could mean dedicated onsite staff providing services locally, onsite visits or remote configuration. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 81 Figure 16. Location of Shared Service ICT Staff and the Services They Provide Academic Partner A Academic Partner B Academic Partner C Academic Partner D Ness Walk Fairways Local Support Local Support Local Support Local Support Local Support Local Support Helpdesk Helpdesk Helpdesk Helpdesk Helpdesk Helpdesk Relationship Management Relationship Management Relationship Management Relationship Management Relationship Management Relationship Management Learning, Teaching & Research Learning, Teaching & Research Learning, Teaching & Research Learning, Teaching & Research Learning, Teaching & Research Learning, Teaching & Research Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Corporate Systems Corporate Systems Corporate Systems Corporate Systems Corporate Systems Corporate Systems Service Management Service Management Service Management Service Management Service Management Service Management Primarily local service Partnership service provided from this location Provided by Partnership service external to this location Primarily Local Service These functions are provided to the AP primarily by the staff located at that site. Those staff may also assist in other Partnership services, and staff located at other APs or Fairways may be called upon to provide absence cover or specific project resource. Partnership Service These functions are provided to the Partnership by staff located at numerous APs and Fairways. Provided by Partnership Service These functions are provided to that AP by staff located at other APs and Fairways. This will include onsite activity to meet that AP’s operational needs. As the shared service is embedded, in all cases staff, regardless of location, will work in virtual teams based on the functions they provide to ensure efficient use of resources and deployment of common solutions and standards. For example, while Infrastructure is delivered out of four separate locations in Figure 1 shows they are all working for the same team which may be coordinated from another location entirely. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 82 As well as providing a Partnership service they might also be involved in providing local onsite service. In these cases they will also be coordinated by the relevant Relationship Manager. This is especially true of Local Support, although again the solutions they are delivering will be coordinated across the Partnership. This does not rule out site specific solutions but the emphasis will be on commonality if any of the efficiency gains of being a shared service are to be attained. Restructuring of the service in this way will enable best use of people within the Company to provide a much stronger and resilient service, with team working providing the strength and depth which is much harder to achieve within the current status, resulting in fewer single points of failure (SPFs) and providing greater flexibility to cover for peaks and troughs. This will result in better service provision to Partners, a better quality of end user experience and enable the service to retain local knowledge and build on relationships already in place whilst enhancing the opportunities for Partner based staff to develop into specialist areas if they so wish. Licence and Contract Management As highlighted earlier, there is much duplication across the partnership in relation to software and licence agreements and hardware maintenance contracts and this inevitably means that there is also duplication of effort in managing these at each site. A follow on from this is that there exists a range of versions of applications running across the partnership which causes additional problems for upgrades, maintenance and support. An early opportunity for savings, more efficient working and a better quality of end user experience is in the consolidation of software applications and the negotiation of new contracts, managed by a small team of staff with relevant expertise and negotiating skills, focussing on customer needs and not purely on the potential for cost savings. Procurement Procurement for major capital expenditure will continue to be made using APUC where possible and Public Contracts Scotland or existing Frameworks where available, buying through the University where this presents the best or only option e.g. when the contract must be with an educational institution. The Company expects to be able to become an Associate Member of APUC enabling access to APUC frameworks and contracts. Responsibility for the decisions around the purchase of PCs, laptops, desk phones, smartphones, tablets and other items of end-user equipment out of the scope of the shared service will continue to rest with Partners, however, in the interests of achieving efficiencies, minimising the range of end-user equipment connected to the network and requiring support and attaining minimum specifications (defined by USSL), the shared service will offer support and advice when Partners are planning procurement, including management information on PC usage and recommendations on specification. SLAs and performance monitoring will only apply where a member has maintained at least the specified minimum standard of equipment. Assets We do not propose that physical assets should transfer to the company. Our reasoning is that since these will have a book value to the member concerned (unless written-off), they would be expected UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 83 to be paid for them; as the company will not have the funds to pay for them, those funds would need to be sourced from members; there seems to us to be little point, and significant complexity, in the company borrowing from its members in order to pay them for their equipment, when it will have to recover the cost of repayments through increased subscriptions. All the funds would remain inside the 'system' (the partnership) but would be recycled to little point. Note that if the company were able to access external borrowing to pay for the assets then the interest costs involved would simply add to the whole cost of the enterprise. However, in order to carry out its functions, the company will need to deploy and control equipment owned by its members, and we propose that a part of the formal agreement entered into by each member should detail the assets owned by the member (if any) that the company has the right and obligation to manage. New assets acquired by the company will be company assets unless procured for, and recharged to, members. Insurance The company will ensure that its assets are appropriately insured. We propose that members continue to insure assets that remain theirs as they do at present. In most cases these are already included in wider institutional policies. Premises 56 potentially in-scope staff are based at Academic Partners or at Ness Walk. The University pays a standard fee for its staff based at Academic Partners (currently £2,000 p.a. for a shared office). The Company proposes not to operate such an arrangement for its staff based at Academic Partners or Ness Walk. In order to support the principle of remaining distributed in terms of staff location, we propose that it be part of the contractual relationship between UHI Shared Services Limited and its members that staff located at Academic Partner or University premises be accommodated free of charge. This is consistent with a general principle of minimising transactions where the Company procures services from its members on a paid-for basis. These services are likely to be subject to VAT and the net result is simply a transfer of funds out of the partnership to HM Treasury. The Company's registered office is at Synergie House, Fairways Business Park, Inverness IV2 6AA. These premises are currently leased by the University and occupied primarily but not exclusively by LIS staff. There are 26 in-scope staff based at Fairways. The initial intention was for the Company to take over the lease from the University. However, doing so would expose the Company to liability for business rates at nearly £30,000 p.a. and therefore, subject to taking appropriate advice on the matter, we now propose that the same arrangement applies in this case as to the accommodation of other staff. We understand that the University has some concerns as to whether this is appropriate, and it may be that further dialogue is required. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 84 Servicing the Service In its current form the IT service draws management, finance, personnel and administration services from within each of the Partners, a significant amount of which is provided by Executive Office departments outwith LIS. As the service goes live the Company will employ around 80 people and be responsible for its own financial and legal affairs as well as other functions as outlined in the Corporate Services Department shown in the Organisation Chart in Chapter 16. Additional resource will be required to provide these functions, in particular financial expertise. In the short term a bid has been put to SFC which includes £100k to allow for acquiring these services in the transitional period, which we understand will be forthcoming subject to final confirmation. Once the service is established and the nature and extent of the ongoing requirements are clearer the resulting overhead will need to be built into the shared service budget for future years. There are several options for acquiring this support depending on the nature of the service required, from recruitment to some of the specialist areas, through to buying the service in from Partners, subject to the constraints noted in Chapter 20. Examples of such services include HR, financial transaction processing and Health and Safety. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 85 14 CORPORATE GOVERNANCE UHI Shared Services Limited is established as a Company Limited by Guarantee, Company No. SC457396, with its registered office at Synergie House, Fairways Business Park, Inverness IV2 6AA. It is owned by its members. All UHI Academic Partners, including the University, are eligible to become members. As the Articles currently stand, members have voting rights which vary according to their financial contribution to the company. Each member has the greater of: one vote; or one vote for every complete £200,000 of annual subscription payable by that member in respect of the then current financial year. 'Annual subscription' means that part of the total running costs of the Company contributed by the member in that financial year. In the first version of this Business Plan, the Shared Services Board proposed no change to these arrangements, though there had been some discussion at the Fort Augustus 2 summit of a onemember, one-vote alternative. The issue was raised again at Fort Augustus 3 and there seemed to us to be a greater consensus this time for such an approach. We are therefore proposing the variant that follows. Each member who subscribes for the full range of services offered: 10 votes Each member who subscribes to a 'core' bundle only, or a set of services greater than the ‘core' but less than the full range: 5 votes Members who take specific services only, less than the 'core' provision: 1 vote The third category would typically apply to members outwith the UHI partnership. Members would only fall into one of the above voting categories at any one time, i.e. they have 10, 5 or 1 vote(s) in all circumstances. Obviously the model is intended to encourage maximum participation. The scenario in the second category - where a member takes a range of services somewhere between 'core' and 'full' - is not intended to suggest that a pick-and- mix approach is available to the services described as 'option' in respect of the ICT service, but accommodates a future, when we have brought on additional services, in which perhaps some members are taking the 'core' option for some areas of shared service and 'full' for others. We would need to take some care in drafting to future-proof the wording. This approach deals comfortably with the concern that it is difficult to bring in new external members, and thereby grow the business, with 1M1V. There should also be no issue with Teckal compliance and the requirements for Cost Sharing Groups. What it does not provide for, in itself, is stability in governance for the Company if there are very major changes in the structure of the UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 86 membership, e.g. through substantial mergers. At this stage we simply note this as a risk, which the membership would need to deal with if it became a practical problem. Note also that this proposal would result in the incorporated colleges not having a collective majority of votes, nor would any individual member have anything approaching a 20% level of control of the Company. The Articles make provision for there to be members which are external to the UHI partnership: A member must be UHI or an Academic Partner or another United Kingdom Contracting Authority which is approved by resolution of the directors and which in each case carries on a “relevant activity” for the purpose of sub paragraph 1 (a) of Part 2 (Group 16) of Schedule 9 to VATA 1994 as inserted by Section 197 (2) of the Finance Act 2012 and receives or intends to receive from the Company the supply of services which are directly necessary for the relevant activity. However, it is proposed that no such members should be admitted until the Board of Directors is satisfied that the benefits of doing so are not compromised by detraction from core business or by dilution of UHI members' interests. The Shared Services Board considered a category of membership with no or insignificant voting rights, but this would be incompatible with a requirement to demonstrate Teckal compliance in the context of EU public procurement law. Members delegate the day-to-day management of the Company to the Board of Directors, who delegate the operational management of the Company to the executive. Directors of the Company are required by the Articles of Association to be employees, directors or trustees of member organisations, or employees of the Company. Details of Board membership are addressed Chapter 15. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 87 15 DIRECTORS The Articles of Association of UHI Shared Services Limited provide that there must be a minimum of five directors. There is no maximum. The Shared Services Board has taken the view that it would not be desirable to be over-prescriptive as to the make-up of the Board, as the scope of activity of the Company may change significantly over time, as may the structure of the UHI partnership. Directors may be appointed according to the conditions contained in the model articles for private companies limited by guarantee, i.e. by ordinary resolution (of the members) or by a decision of the directors. In response to issues raised during consultation, eligibility to be a director of the Company has been limited to employees, directors or trustees of member organisations, and employees of the Company. In the event that a director ceases to satisfy one of these conditions, he or she ceases to be eligible to be a director. In any other circumstance provision for the removal of directors is contained within the Companies Act 2006. The term of office of directors is three years, renewable for two further consecutive terms of three years. Directors who are not employees of the Company are unpaid. The Board of UHI Shared Services Limited is currently: Iain Macmillan, Lews Castle College UHI (Chair) Alan Ashworth, West Highland College UHI Lindsay Ferries, Inverness College UHI Alun Hughes, University of the Highlands and Islands Anne Lindsay, Moray College UHI Niall McArthur, Inverness College UHI The current members of the Board are drawn from those members of the Shared Services Board eligible to be directors at the current date. The Board is of the view that its membership is likely to need to change in the relatively near term, reflecting the transition of the shared services initiative from project to service, and the need to separate the functions of identifying and prioritising candidate activities for shared service from the governance and management of operational services. The Board recognises that the Articles in themselves do not provide for a balanced or representative Board membership. While not wishing to hard-code such provisions into the Articles, the Board would propose to adopt a set of principles of corporate governance which would, inter alia, provide that appointment of directors should be informed by the following criteria: appointed from a suitably wide range of member organisations bringing an appropriate range of skills and experience to the Board UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 88 where appropriate, ability to provide through cross-representation links with the governance structures of the University where the Directors of the Company, as the Board, are primarily responsible for: determining the company’s strategic objectives and policies; monitoring progress towards achieving the objectives and policies; appointing the Chief Executive; accounting for the company’s activities to relevant parties. In addition, Directors’ statutory duties and code of conduct are set out in the Companies Act 2006. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 89 16 STRUCTURE OF THE COMPANY Organisation Figure 17 shows the proposed organisational structure of UHI Shared Services Limited at the time that it begins trading. The structure provides for the appointment of further Directors of service areas in future, but only the Director, ICT is proposed to be appointed at this stage. The process for recruiting the Chief Executive, the Director, ICT, and Heads of section is described later in this Chapter. These are the only posts defined at this stage. The descriptive text in the boxes is an outline of the functions to be carried out within that area, rather than a list of posts. Figure 17. Structure of the Company and the ICT service UHI SHARED SERVICES LIMITED Board of Directors Chief Executive Corporate Services Finance, Administration, SLA monitoring, documentation, change management, compliance, procurement, environmental, project management, business continuity, information security Director, ICT Director, Service 2 Director, Service 3 Director, Service 4 Head of Service Delivery Head of Infrastructure Head of Corporate Systems Head of Learning, Teaching & Research Support Service desk, local ICT support, desktop & mobile devices, incident support, installation & service rollout, VC Studio/Endpoint support Network (WAN/LAN/wifi), servers, system architecture, ICT Strategy, directory services, thin client, filestore, DBMS, telephony, server rooms, R&D, video infrastructure, backup SRS, BI & Reporting, UHI Records, IDM, systems development & integration, business systems, SharePoint, web development, TOMAS VLE, LMS, e-Resources, VC service, email, collaboration tools, timetabling, PURE, generic applications, usability, academic and research liaison, assistive technologies The structure of the ICT service proposed is relatively conventional and parallels that found in many other UK universities. Adopting a standard and well-understood structure should help mitigate risk in moving to a different operating environment. SERVICE DELIVERY This area brings together and co-ordinates ‘central’ support functions such as helpdesk (even if this is physically distributed) with ‘face-to-face’ and locally-based customer service and support. Initially at least the largest number of staff will be located within this area. This reflects the proposed emphasis on service quality and customer service. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 90 INFRASTRUCTURE ‘Infrastructure’ includes the communications environment whether wired or wireless – Wide and Local Area Networks, telephony, wifi and the connection to Janet. It covers servers, backup, video bridges (MCUs) and technologies such as thin client which deliver applications to the desktop. Essentially, the hardware that underpins everything else and the connectivity that joins it all together. It is also concerned with the design and development of the overall ICT environment, and is concerned with the interaction of infrastructure, software systems, and identity management; systems interoperability; the rationalisation of current systems and introduction of new systems into the environment. It takes an overview of the ‘disentanglement’ of systems referred to in the IT strategy at Chapter 9. The ‘strategy’ referred to in this area is entirely technical. In an environment of UHI’s complexity, diversity and range this high-level focus on systems architecture is critical. CORPORATE SYSTEMS These are the technologies that underpin the Partnership’s operations as a business or businesses – student records, finance, HR, customer relationship management (CRM), document management and web development. Many of these systems have been developed and managed in isolation in the past, and so the Business Systems Convergence strategy is a major challenge and focus for this area. LEARNING, TEACHING AND RESEARCH SUPPORT The focus on Corporate Systems above is paralleled by a focus here on the systems and services that support learning, teaching and research. This is a rapidly developing area both in terms of pace of change of technology and uptake, particularly in FE. This area also includes those areas of library services – the library management system (LMS, includes online library catalogue) and electronic resources such as e-books and e-journals. CORPORATE SERVICES This section, reporting to the Chief Executive, provides administration and compliance services to the Company. Senior Management UHI Shared Services Limited will be led by a Chief Executive, to be appointed by the Board at such time that there is sufficient commitment from members that the Board can be certain that the company will trade. The Board will aim for an appointment in early 2014 so that: the Chief Executive is in post for the period running up to initial operations the Chief Executive is in place before other senior appointments are made Figure 17 earlier in the Chapter shows an outline of the organisational structure of UHI Shared Services Limited at the time of its initial operation. The structure will need to remain flexible as and when new services are added or there are relevant changes in the operating environment. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 91 The Chief Executive is responsible for overall strategy and management of the company, its financial integrity, compliance and the overall management of its relationship with its members and external stakeholders. Critical activities at start-up will include working with the Director, ICT to embed the shared service within the new Company. Draft Job Descriptions for each of these roles are at Appendix A8 which illustrate the distinct nature of each role. An important element of the role in the early years of the company will be the extension of its business into other areas of shared service. Major functional areas will be managed by Directors, of which only one is required in the first instance, i.e. the Director, ICT. This post and the Head posts reporting to it will be appointed by the Chief Executive working with a subcommittee of the Board, which would include the Director, ICT for the recruitment of the service Heads. These positions will be allocated before 1 April 2014, so that there can be clarity of reporting lines for all affected staff from the outset. There is a general presumption that posts will be filled from within those staff in scope for transfer unless in the opinion of the Board this is not appropriate. The Board recognises that if external appointments need to be made then a contingency is likely to need to be invoked for the additional cost of doing so, and this will be addressed in fine-tuning the budget plan. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 92 17 EMPLOYMENT MATTERS General The Shared Services Board and UHI Shared Services Limited believe on the basis of advice that TUPE regulations apply to the transfer of staff from the University and its Academic Partners to UHI Shared Services Limited. The TUPE regulations provide for the protection of salary and terms and conditions of employment for transferring staff. We will of course ensure full compliance with the regulations. The Regulations further provide for the recognition of Trade Unions to be carried over to the new employer. UHI Shared Services Limited intends to seek Admitted Body status in the Local Government Pension Scheme (LGPS) in order to be able to offer these pensions to transferring staff, the vast majority of whom are already members of the LGPS. Pensions are considered in Chapter 17. The Company is committed to remaining distributed. There will therefore be a principle applied that there will be no compulsory relocation of staff as the shared service goes live. However, this is not to say that staff will not be able to relocate as opportunities arise through training and development or the identification of specialist skills or expertise requirements as the service is disentangled. There is also likely to be a natural movement of staff in response to the operational needs of the business which may result in the shared service requiring a presence where none currently exists. As the service is disentangled and the new structures emerge during the first year of operating as a shared service then the needs of the business in relation to its customers will take precedence and the physical distribution of the service and its staff will be reviewed. No compulsory redundancies are envisaged associated with the move to the shared service. The ICT service currently being delivered is largely the same as the service which will continue to be delivered, maintained, developed and improved by the new Company and as such will require essentially the same body of staff to deliver it as the shared service goes live. However, as the service faces disentanglement and restructuring following the move to the shared service some staff may prefer to apply for voluntary severance. The Company will consider providing this option where it makes business sense to do so. Though not the subject of the current SFC Transitional Funding Bid it is possible that an application to cover the additional costs of providing such a scheme could be made, such as has been the case elsewhere in the sector. TUPE Staff will transfer to UHI Shared Services Limited on their current salaries, terms and conditions. It is likely that some time after the Company begins trading that a restructuring of staffing will be required, not necessarily as a one-off. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 93 UHI Shared Services Limited has no issues around accepting all its liabilities and obligations under the TUPE regulations. Training and Staff Development We propose that the staffing of the new, shared ICT service be made up as far as possible from the staff transferring to it, from the University and its Academic Partners. It is inevitable that there will be a skills gap. This is unlikely to be a major problem on 'day one' as the process of change will be gradual, but the overall skillset needed by the service when it is more mature and stable will be rather different to the aggregate skillset now. There may also be immediate requirements to do with the skills required to run the company, particularly in finance. This is not addressed here. The intention is that as far as possible the necessary skills transformation will be achieved by retraining and reskilling existing staff rather than a process of deselection and new recruitment. Discussions with staff at a number of Academic Partners have suggested to us that there is considerable interest in the development and training opportunities that an expanded, shared service might be able to offer. Provision of staff development and training for technical staff has been variable across the partnership. Data supplied to us for 2012/13 suggest that the total spend on staff development and training for technical staff was £41,859, with £30,905 of that being spent by the University on approximately half the total staffing number. Six Academic Partners who employ ICT staff reported no spend on staff development at all. We think that at this aggregate level of spend there is little realistic prospect of achieving the degree of change necessary. We have therefore included in our funding request to SFC an amount of £100,000 for additional staff development in the first year. Broadly, we expect to see a higher level of specialisation across the ICT staffing base, as repetitive and duplicative work is engineered out. Some of the required specialisation will be technical, e.g. in: thin client technology LAN management database management systems integration and middleware. However, much of the specialisation required will be in less technical areas, reflecting a trend towards outsourcing specific services, often to cloud providers. Such specialisations would be likely to include: business analysis contract and supplier management contract negotiation software portfolio management. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 94 An early priority will be to assess and map the skills of transferring staff - as well as understanding their interests in moving into new areas. A training and staff development programme will be developed and managed holistically. We would hope to gain some input from staff development practitioners in the partnership. Future Employment and Terms and Conditions No position has yet been taken as to the exact nature of employment policy, terms and conditions in the new company. That will need to be determined in advance of trading and at least in advance of making any new appointments. We note the Fort Augustus 2 Agreement provision that the company will have an ethos of 'acting and managed according to business disciplines' and will be 'flexible, adaptable and able to respond quickly to changes in the partnership or the external environment'. To us this suggests that the Company should certainly not be constrained to the standard employment practices of universities and colleges, which is not to say that inferior conditions are envisaged. HR Activities Consultation during the Fort Augustus 3 summit identified a number of issues relating to HR and employment matters. It was agreed that a short life working group would be set up under the leadership of Lindsay Ferries to address these issues. In discussion with the HR Practitioner Group on Thursday 14th November a PID was developed for the HR workstream with the key objectives identified in three areas as: SELECTION OF MANAGEMENT POSTS 1. Following the template proposed for the Chief Executive job, complete job descriptions for Director of ICT and Heads of Service 2. Formalise recruitment process 3. Support and act as HR advisor, supporting recruitment panel TUPE TRANSFER 1. Review all current RPA’s and TU membership pertaining to those staff transferring into UHI Shared Services 2. Establish terms and conditions of those staff transferring to UHI shared services 3. Consider RPA for UHI Shares Services 4. Prepare TUPE scripts and schedule of formal consultation for management leads at individual employers UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 95 5. Liaise with Trade Union full time officials regarding representation and schedule of individual meetings 6. Act as single point of contact for management leads regarding issues raised associated with individual consultation 7. Prepare all standard documentation in advance of formal transfer OUTLINE POLICES/PROCEDURES 1. Desk review of specified policies/procedures identifying point of commonality/divergence and indicate where there is a contractual obligation 2. Aligned to principles agreed for UHI shared services and in line with ACAS code of practice draft a Code of Conduct, Grievance, Discipline, Attendance and Maternity Policy and Procedure Pensions At 3 October 2013 there were 82 staff actually in post who would be candidates for transfer to the Company and 77 of those are current members of the Local Government Pension Scheme, with five different administering authorities, though the largest number (53 in total) are with Highland Council. Of the remaining five, two are in different schemes and three are in none. The intention of the Company is to seek admitted body status in the LGPS and to offer LGPS pensions to transferred staff. This would ensure that the Company met its TUPE obligations – though legally it is not bound to offer exactly the same scheme – and would also meet the reasonable expectations of transferred staff. The advice received to date (from Barnett Waddingham LLP) is broadly as follows: There are two options for transferring LGPS pensions. One would be to replicate the current arrangements for each fund, i.e. for the Company to be set up as an admitted body in each relevant fund. Under this option, they advise that they 'expect the ongoing benefit cost to be similar' but there are qualifications to this, including a risk that costs would increase, and this option would be administratively complex for the Company for the foreseeable future. The other option is to set up the Company as an admitted body in one fund and transfer all staff to it. It might be natural for that to be the Highland Pension Fund but there might also be an option to choose (on a variety of grounds) one of the other funds. This would involve more work in the short term but would be simpler to administer in future. In either case it would be important not to trigger a 'cessation debt' - that is, an expensive one-off contribution to pay for all benefits that the staff concerned have accrued. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 96 In conclusion their advice is that 'it is reasonable to assume that once the new company is set up it would be unlikely that your long-term pension costs would change significantly. However, that does depend on the approach taken by each fund and ... there is a risk that your costs are increased.' There is obviously a significant effort involved in planning for and managing this transition and the Shared Services Board believes that engaging professional support throughout this activity, and for its full range, is the best way of mitigating risk both in terms of cost exposure and time over-run. In further discussion with Barnett Waddingham following the receipt of initial advice, they have indicated that they believe that the target date for transfer of staff of 1 April 2014 is achievable, although there may be formal elements of the pensions transfer process remaining to be completed after that date; this obviously depends on the specific circumstances that are encountered during the work and the Shared Services Board is aware of the risk that there may have to be a delay to the 'live' date. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 97 18 CURRENT FINANCIAL POSITION We have collected data from the University and all Academic Partners who have declared that they may be candidates to join the full shared service. The aggregate data that we present here therefore does not include local spend by SAMS, Sabhal Mòr Ostaig or Orkney College. The primary purpose of the data collection has been to establish a basis for the overall budget for the new shared service. Gathering non-staffing spend by category also enables some estimates to be made of the potential efficiency gains to be made by taking a rationalised approach. Such estimates have, of course, to be speculative but can reference experience elsewhere. Overall, we think that the data collected is of reasonable quality. At some, probably most, institutions the way that accounts are coded has meant that some of the information on historical spend has had to be retrieved by manual trawl and is therefore subject to error. We think that this error is fairly small overall but almost all of the error is likely to be under- rather than overdeclaration. Summary Results We gathered data for 2011/12, 2012/13 (actual) and 2013/14 (budget/projected) spend. In the analysis that follows we have preferred the 2013/14 data as being somewhat more reflective of the current position and we think it is probably at least no worse in terms of accuracy. Of course the final out-turn will not exactly match this figure. The 2013/14 figures show a small cash increase over 2012/13. One of the reasons for collecting data covering more than one year was to detect any major turbulence in spend patterns. No such turbulence is evident from the figures, except that there is a relatively large item in the University budget for 2013/14 related to business systems convergence. In gathering the data, we referenced the definition of scope that is reproduced in Appendix A2. The major items of spend that are therefore excluded from the overall envelope are to do with PCs, laptops, smartphones, classroom equipment and other end-user devices. Spend on these items will remain the responsibility of member organisations, though they will be supported by the shared service. We have as part of the exercise gathered data on out-of-scope spend and we show that for interest and information. We have counted spend on printing and photocopying as a separate category. This is because although we would hope to roll this category into the shared service, as there are significant efficiency savings to be had (over time), the financial model in respect of this area will need to be different, as charges will need to relate directly to volume. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 98 Table 4. Total ICT planned spend (2013/14) Non-staff, in scope £3,564,433 Staff, in scope £2,894,417 Total £6,458,850 Income not including recharges to APs £520,351 Total net of income £5,938,499 Printing and copying £325,742 Non-staff, out of scope £807,560 We collected the non-staff spend by category. The following table shows non-staff spend broken down by the categories we used, and shows separately the University’s spend and the aggregate of spend at Academic Partners. Table 5. ICT non-staff projected spend by category Category University Academic Partners Total Wide Area Network Network related hardware Software Hardware maintenance Telephony Travel & subsistence Staff development & training Other annual fixed Consultancy Contract & nonpayroll staff Other in-scope Total £701,422 £43,851 £55,700 £701,422 £99,551 £1,281,298 £220,093 £454,467 £17,500 £1,735,765 £237,593 £87,074 £85,848 £53,863 £199,531 £6,600 £6,750 £286,605 £92,448 £60,613 £51,575 £201,630 £4,000 £25,231 £20,000 £9,000 £76,806 £221,630 £13,000 £39,000 £2,769,654 £794,779 £39,000 £3,564,433 A little more detail on these returns is in Appendix A1. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 99 NOTES ON UNIVERSITY INCOME Table 6. Summary of University Income WAN £421,542 Mostly Janet, some income from other connected bodies Recharges to APs £107,302 Shared library system £30,209 Translation Memory Service (TòMaS) £55,000 Licences – Copyright Licensing Agency, Microsoft Campus Share of costs paid by UWS and SRUC Grants from HIE and Bòrd na Gàidhlig Miscellaneous (estimate) £10,000 Total £624,053 Costs associated with these activities, apart from the WAN, are included in staffing, software, consultancy and travel & subsistence spend lines. Staff spend includes employer’s on-costs but not other overheads. There are 82 individuals making up the 80.13 FTE. Table 7: ICT staff projected spend and numbers University Academic Partners Total ICT staff FTE 38.8 41.33 80.13 ICT staff costs £1,597,151 £1,297,266 £2,894,417 There has been a perception that, for ICT staff if for no others, University pay rates are higher than those at Academic Partners. The average pay rates that can be derived from the above would seem to support that. However, having examined the detailed data, our view is that the difference is primarily attributable to the types of staff roles that the University has. When roles of a similar nature or similar value are compared, there tends to be a broad comparability across the Partnership, though there is certainly a level of local variation, and some apparent outliers. Overall our judgement would be that concerns over the potential for an expensive ‘levelling-up’ exercise are largely unfounded. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 100 Variation across Partners The data shows a considerable variation in spend across partners. For us, this data is useful because it: suggests (no more than that) where there may be an investment deficit, either overall or in specific areas indicates where the application of formula-based funding might have significant impact on local budgets. In the following figures, we have used the turnover figures that formed the basis of the distribution of the procurement shared service costs. They are therefore not quite up-to-date. Figure 18. Range of ICT projected spend as a proportion of turnover 7.00% 6.00% 5.00% 4.00% Out of scope spend 3.00% In-scope spend 2.00% 1.00% 0.00% One AP did not give us any data on their not-in-scope spend for 2012/13 or 2013/14 and for these illustrative purposes only we have therefore used their data on not-in-scope spend from 2011/12. The range of in-scope spend is from 1.5% to 4.9% of turnover. The outliers are typically smaller institutions who have some non-standard spend distributions and where relatively small amounts make a significant percentage difference. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 101 Figure 19. Range of printing and copying projected spend as a proportion of turnover 1.20% 1.00% 0.80% 0.60% Printing and copying spend 0.40% 0.20% 0.00% Two APs did not give us this data. The relative spend may reflect differences in contract costs but is clearly also affected by numbers of small sites. CATEGORIES OF ZERO SPEND Another interesting element of the data returns is where a number of APs reported no spend at all in certain categories. Table 8. Categories of zero spend Spend category Network related hardware Hardware maintenance Travel and subsistence Staff development and training Number of APs reporting zero spend/budget (2012/13 in brackets) 6 (6) 6 (6) 4 (4) 7 (5) One AP did not provide sufficient breakdown to be accurately included in the above figures. Staffing As indicated above, total staffing spend is £2,894,417 for 2013/2014, inclusive of employer’s oncosts – superannuation, NI – but not including travel and subsistence, staff development, or any other overheads. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 102 Figure 20. Staff age profile This information was not available for 3 staff. Figure 21. Staff salary range Salaries have been converted where necessary to full-time basis for the purposes of comparison. Figure 22. Location of all staff UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 103 19 FINANCIAL MODEL This section has been changed considerably from the first version of the business plan. Following discussion at Fort Augustus 3, a working group was established to revisit the financial model in an attempt to produce a model more acceptable to APs, in particular those who stood to become net losers in the original model. The proposals from that working group are set out in the latter parts of this section, beginning with “Division of recurrent costs amongst members – methodology.” The text up to that point has not changed significantly. In the previous section we arrived at a total financial envelope for the in-scope services as currently delivered of £5,938,499 taking into account external income of £520,351. The Shared Services Board proposes to set a budget for the shared service which is based on this figure plus a small inflationary increase. This, we think, is in line with the Fort Augustus 2 Agreement clause "Initially operate within the current overall staffing and revenue cost envelope of the partnership, excluding any agreed transitional costs." We assume that the income figure will remain broadly comparable and that, if it does not, expenditure will be adjusted to match. Most of the income is relatively dependable – around £400,000 is from Janet, an arrangement which we expect to continue3, and most of the rest is quite stable (network connections to other organisations, the library management system service to UWS and SRUC). We noted in the previous section that the University budget for 2013/14 included a significant amount - £320k – for business systems convergence. This is the only major item of expenditure in this year. This level of investment is such that we would – as indicated in Chapter 22 – normally consider it to be the subject of an investment plan to be submitted to the FE Regional Board and HEPPRC. However if we do not include it at all in the base costs we will have an unrealistically low figure, as there are historically funds for specific initiatives which may not be at this level individually but might approach it collectively. We propose to adjust the envelope down by £75k to take account of this and to broadly reflect the funds that have typically been allocated to smaller-scale initiatives. There are some additional costs which arise as a result of establishing a new, separate legal entity. We have estimated the additional overheads at £100,000 p.a. in our draft bid to SFC. We have also asked for additional sums to cover extra staff training and development, more staff travel in the first year and technology developments. The total bid is outlined in section Chapter 21. Here we are assuming that the extra costs are covered by that external support and they are not therefore modelled into the first-year costs. In the second and subsequent years we aim to have taken enough efficiency gains to offset these extra costs. 3 “Janet contracts with UHI to provide connectivity to the nine tertiary education sites in UHI for which Janet is funded to provide service, and it is envisaged that this arrangement will continue for the foreseeable future.” – Stephen Percival, Janet, in a paper presented to the SWAN Programme Board, 18 July 2013 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 104 Our working inflationary assumptions are 1% for staff costs and 2% for non-staff. Applying this and the £75k reduction to the base figures gives a total budget of £5,962,232 in the first year, which would run from 1 April 2014 to 31 March 2015. We agreed at Fort Augustus 3 that these figures would be revisited in the light of the 2012/13 financial year out-turn. This information is currently being gathered but is not complete at the time of issuing of this document. The proposal is that predictable annual running costs be recovered from members on a formulaic basis (discussed further below) and that major strategic investment, according to an agreed ICT investment strategy, should be sought from the University Court via the FE Regional Board and HEPPRC. General Approach to Charging Broadly speaking, we could identify two possible approaches to charging – transaction-based and subscription-based. We believe that the former is not generally desirable, other than in specific circumstances, for the following reasons: it can have the effect of driving behaviour that is not desirable for the organisation as a whole, e.g. by reducing the level of use of a fixed asset there is a significant overhead associated with administering a charging regime of this kind, and for some services, it is difficult to identify a suitable transaction metric it is difficult to reconcile this model with the requirement on a Cost Sharing Group to operate on an ‘exact reimbursement’ basis – this could be achieved by allocating the total costs to members on the basis of volume of use, but this could only be done in arrears and would not allow members to predict their bills accurately. We have assumed that members would prefer predictability in the charging regime and therefore we do not propose considering transaction-based charging further, except in specific circumstances where actual costs are directly related to consumption, e.g. printing charges. (Printing and copying costs are not included in the total of £5,962,232.) A subscription-based model is not without its disadvantages. Operating within a fixed cost envelope has benefits in terms of budgetary stability for the partnership, but imposes constraints on USSL’s ability to respond to changes in demand. One response to this is to emphasise robust capacity planning (e.g. in predicting the impact on costs of increasing take-up of networked technologies for FE) and another is the recognition that in some circumstances rationing might have to apply. Another potential perceived disadvantage is that this kind of funding model explicitly decouples charging from usage, and involves the near-certainty of there being ‘winners’ and ‘losers’. There is no straightforward fix for this, other than to tie the subscription rate to some reasonably credible proxy for the ability to consume service, that is seen to be fair by member organisations. The issue of mitigation of changes to members’ cost bases is further discussed below. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 105 Subscription Metrics We have considered the question of on what metric(s) should subscriptions be based. The obvious contenders are: (a) student numbers. Many services and software products are licensed in this way. Taken at a partnership-wide level, this metric is probably more important than any other in determining the overall cost of service. However, it would not work well for the University or for SAMS, both of which have small student populations relative to the size of their operation. It would be possible to attach varying weights to different kinds of students, though the evidential basis for doing so on any particular ratio would be weak. (b) staff numbers. The Microsoft campus agreement is operated on this basis. It might be a better overall proxy for ‘scale of operation’ than student numbers, as it would also reflect research and commercial activity as well as central University functions. One very specific objection to this model is that it is sensitive to outsourcing activities in a way that arguably it should not be, i.e. a member organisation gains an extra financial benefit from reducing its staff numbers by outsourcing. (c) turnover. The Janet network charges are based on this (in fact on total incomes as reported to HESA). The costs of the procurement shared service are apportioned on this basis. It is a good proxy for ‘scale of operation’ provided that it is defined correctly (e.g. the University’s figure should not include sums disbursed to APs). As, however, it is typically people who consume services, it is further removed from ‘reality’ than either staff or student numbers. Operating the ‘Exact Reimbursement’ Criterion It is worth thinking about how we approach satisfying the ‘exact reimbursement’ criterion (from the Finance Act 2012) which is required in order to operate as a Cost Sharing Group which does not have to apply VAT on services to its members. The guidelines require that no profit element is added to charges to members, but the same guidelines also state that the model of distribution of charges to members is a matter for agreement by members, not imposition by HMRC. It will be important to maintain an awareness of any case law or new guidance in this area, as not only will it not be possible to demonstrate ‘exact reimbursement’ at the level of an individual AP member, it will definitely not apply at this level. The most obvious example of this is the cost of the wide area network (WAN). First, this varies substantially according to geography, with some circuits of similar capacity far more expensive than others. Some APs have many more sites than others, and additionally, some connections (to the University and the designated FE colleges, one per institution) are funded via Janet and some are not. The varying costs of provision to different APs are currently invisible within the top-slice, and within a subscription model, will amount to cross-subsidy which, while not immediately visible, is completely quantifiable. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 106 It could be argued that such a charging methodology distorts the calculation of viability for operations at a particular location – e.g. it is possible to imagine some learning centres closing in fairly short order if their connectivity costs were attributed directly to their P&L accounts. However, the Shared Services Board takes the view that such ‘internal’ cross-subsidy currently exists to support the UHI mission and it is not the role of the Shared Services Board to engineer it out. (Of course, this argument only applies within the UHI partnership. Should we bring on an ‘external’ member, we should of course not be subsidising them in any way.) Division of Recurrent Costs Amongst Members - Methodology In the first version of this Business Plan we outlined a proposal whereby ‘core’ costs were divided amongst members according to weighted student and staff numbers, and ‘option’ costs according to turnover. We further assumed that the current top-slice for EO LIS services would be discontinued and the funds distributed to APs, and we took the effect of this distribution to be a general uplift in the unit of resource. The consequences of this in terms of the impact on individual AP finances are broadly as follows: distribution of top-slice with the RAM risks not putting individual APs in enough funds to pay their ‘core’ subscription. In particular, APs with small proportions of HE do not do well from this model, and generally, smaller APs are disadvantaged relative to larger ones. allocating ‘option’ costs by formula has the effect of bringing all members’ contributions towards an average unit cost. This benefits those with a relatively high level of current spend and ‘penalises’ those with lower current costs. Overall, the model tended to disadvantage smaller APs. Smaller APs include those with the lowest proportion of HE, and probably because of economies of scale issues, smaller APs tend to benefit from top-slicing relative to larger ones. Also, lower unit costs at some smaller APs are not necessarily reflective of poor provision or inadequate investment – they often reflect a no-frills approach to ICT provision and an absence of some of the infrastructure and management costs that come with operations on a larger scale. At Fort Augustus 3, we agreed to set up a working group to examine the financial model and to produce recommendations on an alternative which would be more generally acceptable. That group, chaired by Alan Ashworth, has met twice and at its second meeting commended a model with the following characteristics: for ‘core’ costs, preserving the effect of the current top-slice (whether or not the funds were actually distributed to APs) – i.e. there would be no financial impact on APs from introducing the shared service for ‘core’ for ‘option’ costs, modelling the cost allocation in the way that ‘core’ had been in the initial proposal, i.e. using weighted FE WSUMS, HE FTEs, and staff numbers UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 107 An illustration of the application of this revised model follows. In this table, we have only modelled the ‘option’ costs as we are proposing that there be no financial impact on APs in respect of ‘core’ costs. The ‘variance’ column shows the financial impact on each AP, at this stage without any transitional scheme. It would be fair to consider this work in progress, as although the working group expressed a clear view as to the principles to be followed in the new model, it has not had an opportunity to review the detailed outcomes. Table 9. ICT Shared Service Budget 14-15 Total service running costs Core Service Option Service £5,962,232 £3,812,442 £2,149,790 wSUMs Data Year HE Data Year Staff Data Year 2011/12 2012/13 2012/13 wSUMs Weighting UG Weighting PGT Weighting Staff Weighting Budget inscope spend Variance Option cost distribution model Argylll College University HTC Inverness College Lews Castle College Moray College NAFC North Highland College Orkney College Perth College SAMS Shetland College SMO West Highland College Totals wSUMs 9,788 0 0 44,183 8,430 26,318 0 17,584 5,128 33,021 0 6,663 896 5,669 157,681 UG FTE 54 0 62 1,154 289 808 26 377 172 1,476 72 151 104 90 4,834 PGT FTE 0 23 2 8 24 0 0 3 24 11 0 1 2 0 98 Staff 71 181 18 260 112 225 50 198 87 323 148 67 90 74 1,904 1 50 50 100 Weighting Option Cost 19,606 £78,413 19,227 £76,898 4,988 £19,950 128,320 £513,225 35,272 £141,071 89,201 £356,764 6,315 £25,257 56,352 £225,383 0 £0 139,684 £558,675 0 £0 20,957 £83,820 0 £0 17,586 £70,334 537,507 £2,149,790 £126,454 £49,534 £27,479 £443,186 £154,605 £298,434 £88,002 £214,963 £0 £627,149 £0 £80,602 £0 £39,381 £2,149,790 -£48,041 £27,364 -£7,529 £70,039 -£13,534 £58,330 -£62,745 £10,420 £0 -£68,474 £0 £3,218 £0 £30,953 £0 The range of the individual financial impacts on APs is considerably lower in this model, though it also has the effect of turning ‘winners’ into ‘losers’ and vice versa. It probably serves to illustrate that there is no one ‘right’ answer. We hope that this model or a close variant of it is reasonably acceptable to APs and the University though of course it could be refined or developed further as necessary. The figures are still based on 2013/14 budget as per the previous version of this Business Plan; they may look different when we have 2012/13 out-turn figures available. Individual variances will still be quite sensitive to the quality of the declaration of in-scope costs – in particular, any significant under-declaration would have the effect of increasing any apparent ‘deficit’. Note also that any decisions by individual Academic Partners to take the ‘option’ package or not will affect the overall envelope and therefore the level of cost for each other member. In the case of smaller APs the effect would in all probability not be large. We think that a transitional scheme is still likely to be required even though the impact of this new model is considerably less. At this stage we propose a scheme similar to that contained in the UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 108 previous version of the Business Plan, i.e. a smoothed transition from ‘historical’ in the first year to the full application of the model in year 4. The following table makes the unrealistic assumption that the overall cost will be absolutely flat in cash terms and that the scope of the service does not change over the four years. It is illustrative of the effects of a transitional scheme rather than a prediction of the precise bill to individual APs over a number of years. Table 10. Transitional funding support Transitional Funding Support (without inflation) 100% 67% 33% 0% Member Argyll EO HTC Inverness LCC Moray NAFC NHC Orkney Perth SAMS Shetland SMO WHC Total Option Cost Option Cost Option Cost Option Cost Year 1 Year 2 Year 3 Year 4 £126,454 £49,534 £27,479 £443,186 £154,605 £298,434 £88,002 £214,963 £0 £627,149 £0 £80,602 £0 £39,381 £2,149,790 £110,442 £58,655 £24,970 £466,530 £150,094 £317,876 £67,089 £218,436 £0 £604,327 £0 £81,675 £0 £49,698 £2,149,790 £94,425 £67,777 £22,459 £489,881 £145,582 £337,322 £46,170 £221,910 £0 £581,498 £0 £82,747 £0 £60,018 £2,149,790 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN £78,413 £76,898 £19,950 £513,225 £141,071 £356,764 £25,257 £225,383 £0 £558,675 £0 £83,820 £0 £70,334 £2,149,790 109 20 OPERATING AS A COST SHARING GROUP - THE VAT EXEMPTION Here we set out the rationale and practicalities around operating as a Cost Sharing Group. It is somewhat simplified for a general audience but for those interested, references to the HMRC guidance on the exemption and HEFCE's further explanatory notes, published recently, are at the foot of this section. Transactions between organisations such as the University and its Academic Partners normally attract VAT if they are for the supply of services which are not themselves exempt. The provision of education is exempt, so the supply of teaching services is not VATable, but for example, if a member of staff of one UHI Academic Partner provides a non-teaching (for example, ICT) service to another, and a charge is made, that charge will be liable for VAT. Therefore organisations such as universities and FE colleges who wish to share services by having one party deliver them and charge the other(s) have been historically discouraged from doing so by the prospect of having to add VAT, thereby increasing the cost of the service, as universities and colleges are typically able to reclaim only a few percentage points of the VAT they pay. The provisions in the Finance Act 2012 which relate to Cost Sharing Groups provide a means of avoiding this problem. However, the requirements which must be satisfied are not trivial. The Conditions and HMRC's Guidance 4 1. There must be an 'independent group of persons' supplying services to persons who are its members. This means essentially that a group of member organisations ('persons') come together to create an organisation (the CSG) which will provide services to them. That organisation must be legally separate from its members. It does not have to be a limited company though that is a likely form for it to take. The requirement is that it be of a form which is capable of being registered for VAT, though it need not actually be so registered. We have set up UHI Shared Services Limited as a Company Limited by Guarantee owned by its members to satisfy this criterion. 2. All of the members must carry on VAT exempt and/or non-business activity. There is no requirement that all or even most of the member's activity falls into this category - it need only be 5%. It would be a very odd educational (or research) institution which did not meet this criterion. Note however that this criterion is not the same as the one which determines whether the supply of services by the CSG is VAT-exempt. 3. The services supplied by the CSG must be 'directly necessary' for a member's exempt and/or non-business activity. This criterion is critical in determining whether a supply can be made free of VAT. In most circumstances and for most educational institutions, a simplified test devised by HMRC applies. That is, if the member's proportion of VAT exempt and/or non-business activity is over 85%, 4 The HMRC guidance is at http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE… HEFCE's guidance on the guidance is at http://www.hefce.ac.uk/news/newsarchive/2013/name,83013,en.html UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 110 then all services supplied by the CSG are automatically deemed 'directly necessary'. If the '85%' test is not satisfied, then the 'directly necessary' test must be considered on a case-by-case basis. The 85% test can also be applied to only part of a business, if a 'sectorised' partial exemption and/or business/non-business method applies. This would only be likely to work if the member was consuming the services only in that part of the business undertaking the exempt activity, which may be unlikely. There is no useful working definition of 'directly necessary'. It is clear that it does not cover the kind of generic services that could support any business operation. The example given by HMRC and the Treasury during their consultation events was cleaning services - ordinary office cleaning would not pass the test, but the specialist cleaning services required in hospital wards might do so. In our case, generic IT services like finance systems, telephony or network connectivity would not pass, but services specifically supporting the provision of education might, e.g. VLE or student records systems. If it comes to it, we might need to take specialist advice on that. Note that the exemption only applies to the supply of services, not goods. 4. The CSG must only recover the member's individual share of the expenses incurred by the CSG in making the exempt supplies to its members. This is the so-called 'exact reimbursement' criterion. The CSG is not prohibited from making a surplus (though there may then be tax implications) if that is intended to be returned into the service. HMRC do not set out any requirements as to how the costs must be apportioned, leaving that matter to the CSG members, but will expect a suitable audit trail to enable them to be satisfied that this criterion is met. Part of Chapter 19 'Funding model' references this criterion and notes that 'exact reimbursement' will need to be considered across the membership rather than on a member-by-member level, as a formulaic distribution of costs is by definition not necessarily linked to the real costs of supply. We should keep under regular review any case law which develops in the interpretation of this condition. Meanwhile, we hope that it might give some comfort to those members who do not take the 'full' service, as by definition, we should not be deliberately taking a profit from them. 5. The application of the exemption to the supplies made by the CSG to its members must not be likely to cause a distortion of competition. This is generally taken as a prohibition on the marketing, advertisement or promotion of services (unless the VAT exemption is not applied in those cases). HMRC's view is that the CSG may gain members by recommendation, invitation and word of mouth. It should not act like a commercial operator. Further Implications The cost sharing exemption only really works if the CSG is the employer of the staff. This is because the exemption does not apply to supplies to the CSG. The CSG pays VAT on services that it buys in. For example, if the CSG pays a supplier for a hosted service and passes on that charge to its members, it pays VAT on that charge, but does not add VAT again when it passes the charge on. If the CSG were an ordinary VAT registered trading organisation, in the same example, it would buy in services from the supplier, but if it added no mark-up to those costs, would reclaim the same amount of input VAT as it charged output VAT, and the effect would be the same. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 111 The difference arises in the treatment of staffing costs. If the CSG buys in its staffing effort, even if this is from its own members, it is liable to pay VAT. However if it is itself the employer, no VAT ever gets paid and the supply of services based on those staff remains exempt. For this reason it is necessary for the CSG to be the employer of the staff providing the service. The fact that supplies to the CSG are not exempt provides the rationale for minimising transactions where the CSG pays its members for services. These will normally attract VAT and therefore simply result in a net loss to the partnership. It is not for the CSG's benefit that we propose this - as the CSG just needs to be put in funds to cover its costs - but the partnership's as a whole. This is why we are suggesting that members agree to host staff at no cost, and why if we must be charged for other services, that this be done at as low a level as possible. We expect that the Company will need to be VAT-registered as it is likely to provide some VATable services to some of its members as well as to non-members and this will probably take it over the VAT threshold. Member Eligibility The Articles of UHI Shared Services Limited provide that: A member must be UHI or an Academic Partner or another United Kingdom Contracting Authority which is approved by resolution of the directors and which in each case carries on a “relevant activity” for the purpose of sub paragraph 1 (a) of Part 2 (Group 16) of Schedule 9 to VATA 1994 as inserted by Section 197 (2) of the Finance Act 2012 and receives or intends to receive from the Company the supply of services which are directly necessary for the relevant activity. The University and its Academic Partners are therefore able to become members of the Company subject to their satisfying the provisions of carrying on a "relevant activity" (which they all do) and "receives or intends to receive from the Company the supply of services which are directly necessary for the relevant activity." The latter is not a given, and is probably the only circumstance in which the eligibility of an Academic Partner may come into question. These provisions are derived from the Finance Act 2012 and are necessary in order for UHI Shared Services Limited to act as a Cost Sharing Group. In addition, to be a member of a Cost Sharing Group at all, members must undertake at least 5% of exempt/non-business activity, and we assume that all UHI Academic Partners do. Members, if not already in receipt of VAT exempt services (i.e. those satisfying the ‘directly necessary’ criteria referred to earlier) must be able to evidence a "realistic and genuine intention" to do so. This must be within the next 12 months. If only some of the services to a particular member count as 'directly necessary' then only these services would qualify as VAT exempt and other services would be subject to VAT. In some scenarios it may be necessary to add VAT to some or all charges made to members. This would be unlikely to apply to members fitting a 'normal' FE or HE profile. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 112 It is unlikely that subsidiaries of Academic Partners would qualify to become members of a Cost Sharing Group, or if they did, to receive services free of VAT. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 113 21 INVESTMENT STRATEGY UHI Shared Services Limited would propose to fund major investments in infrastructure via a separate route from day-to-day services, which are funded by member subscription. Chapter 9, IT Strategy, indicates major candidate areas for investment in the coming years. These major investments are defined as those with a one-off cost over a threshold to be defined £200,000 is a possible figure - which may or may not meet a formal definition of 'capital'. That cost will be based on spends with external suppliers, will not include allocation of internal resource such as the time of existing staff, and will be based on the cost over three years including annual maintenance. It is permissible under the regulations for Cost Sharing Groups for a surplus to be built up if that surplus is intended for future investment in the service. For various reasons, this is not our preferred option. Increased member subscriptions would be required, and there are potential tax implications. We suspect that introducing another entity into the UHI family able and seeking to hold surpluses would not necessarily be in line with the wishes of all members. Perhaps more importantly, we see the investment strategy as tightly aligned with the UHI/regional strategy. For this reason we think that the investment strategy should be approved at HEPPRC/FRB/UC level and that funding should be allocated at this level. This enables UHI governance to be comfortable that UHI Shared Services strategy, at least in terms of major service development, is aligned with partnership strategy. The potential for a single, shared ICT strategy is one of the key benefits of developing the single service. We suggest that a strategic investment plan for ICT should be developed by UHI Shared Services working with member institutions and with UHI academic structures. This would be a 3-year rolling plan, revised and updated annually. The plan would be approved in principle annually by HEPPRC/FRB/UC and funds formally allocated on a year-by-year basis. In this context we could usefully look at the historical expenditure on major infrastructure items over the past five years. The majority of expenditure has been part-financed through European funding in the SDB programme. This continues a pattern where major infrastructure investment has been highly dependent on external funds. (However SDB matched funding for technology projects was from SFC capital grant, not, for example, from Highlands & Islands Enterprise, so we have contributed some of our own money). Funding of a total of £7,038,169 was committed (and spent) through the SDB programme on ICT projects. Over the same period, we estimate that approximately another £600,000 was spent by the University on projects of a significant size not funded through SDB. This gives an annual average level of major infrastructure investment of a little over £1.5m. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 114 Projecting detailed costs into the future would need to await agreement on a development programme, but we believe that the historical level of spend is a reasonable guide to what we would need to provide for in the future, i.e. it would be prudent to think in terms of around £1.5m a year. General expectations are that the availability of external and capital funds will continue to decline. It therefore becomes even more important that we plan for effective and targeted use of such funds as we can make available ourselves, and have strong business cases for such investment. We would like to make it clear that the necessity for a planned investment programme for ICT is independent of the development of a shared service. We would need it anyway. The shared service puts us in a better position to have a collective strategy, and, we hope, to have a mature debate around it, but it does not in itself make it easier to fund. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 115 22 FINANCIAL STATEMENTS Cash Flow The Company will need working capital from the moment it begins trading. Also, a significant proportion of expenditure, relating to annually-renewed contracts and licences, is front-loaded in the financial year. We are preparing a detailed profile on the basis of the data that we already have. There is potential for SFC to assist us in dealing with this by front-loading some of their funding, and we propose to encourage them to do so. A risk has been identified that a member in financial difficulty might fail to make its payments to the Company in time, potentially causing the Company to be unable to meet its own commitments. A possible approach to mitigation of this risk is to make provision for the University to make the necessary payments, withholding the corresponding amount from its payment to the member. There is also the possibility of unforeseen liabilities that are not covered by indemnities from members and cannot be covered by corresponding savings. In this case and potentially in the case of default above, there needs to be provision in an emergency for additional funds to be raised from the membership as a whole. Currently, SFC funding flows into the University on a 10 month schedule and is then passed to Academic Partners through the RAM on the same schedule: · · · · · · · · · · · · August September October November December January February March April May June July 11% 11% 11% 11% 10% 8% 0% 0% 10% 10% 10% 8% As we move into the shared service however, the major regular spend will be the monthly salary bill and therefore a decision will need to be made as to whether it is practicable to follow this schedule for the payment of member subscriptions. There are also implications for the Company start-up dating from 1 April 2014. High among these is the fact that financial processes within the University have led the LIS Management Team to configure their budget to align with UHI’s financial year, i.e. 1 August – 31 July. In particular, over the last few years negotiations have taken place with the majority of software licence, e-Resources and maintenance contract suppliers to bring annual contracts into line with these dates too. A major effect of this is that a high proportion of annual scheduled contract spend will have been paid out on 1 August 2013 for which the Shared Services Company will take responsibility on 1 April UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 116 2014. As a result the University will present a bill to the Company for the 4 remaining months these contracts have to run before renewal. In addition, rather than this major item of spend (almost 50% of the annual non-staff budget) being spread throughout the year, the majority of invoices associated with it will fall due in August 2014. Apart from member subscriptions the main element of income to the shared service is from Janet, which to date is invoiced on a twice yearly basis and which, in itself, would not cover the annual contracts bill. It will not be possible to develop an accurate cash flow forecast until the next stage of due diligence is performed when the details of all Partner annual contracts and their periods and due dates are collected. However, it is already apparent that there will be shortfalls, especially in the first six months of the shared service going live and an agreement has been sought from UHI that they will support the Company with cash flow issues, if necessary, in the short term. Balance Sheet The Balance Sheet for the Company is one of the suite of financial statements to be produced. It is a snapshot of the financial situation of the Company over a set period. It details the financial structure of the business in terms of fixed assets, debtors, stock, creditors and profit/loss. UHI Shared Service Limited will start trading on 1 April 2014. There is to be no asset transfer and there will be no debtors or creditors at that point. As it is a service company there will be no stock or work in progress to record. There will be no opening balance and essentially only a forecast profit or loss depending on the cash flow forecast for the same period. As has been stated, until the next phase of due diligence takes place it is impossible to forecast cash flow accurately and therefore these financial statements will be produced at a later stage. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 117 23 POTENTIAL FUNDING SOURCES As discussed elsewhere in this business plan, the main sources of funding for the activities of UHI Shared Services are expected to be: subscription funding from members supporting annual running costs 'top-sliced' capital funding from the regional board structures for FE and HE supporting an infrastructure investment programme. SFC We are in dialogue with SFC with the aim of securing funding to support the transition to shared services. Currently (at the date of publication of this business plan) the 'ask' under discussion is shown in Table 11. We understand that the funding will be forthcoming, subject to formal confirmation, but in order to achieve this we will need to address the future prospects of efficiencies beyond ICT services. Table 11. SFC Funding Bid Setting up the shared services company £169,000 Transitional costs of establishing a common ICT environment, of which: £1,741,000 business systems £375,000 thin client £1,116,000 LAN infrastructure renewal £250,000 Transitional costs of operating the new company, of which: £250,000 administrative costs £100,000 staff training and development £100,000 extra year 1 travel and subsistence £50,000 Janet UHI currently operates a 'regional network' on behalf of Janet which provides connectivity to the 10 fundable bodies eligible for a Janet connection (including the University). The funding Janet provides is broadly equivalent to the direct cost of providing a single connection to each of those institutions and the partnership funds the remaining costs, currently from top-slice. The amount is around £400,000 per year and would not be expected to change significantly prior to the expiry of the current WAN contract in 2016. Janet have indicated that although they are bringing othe regional networks 'in house' they have no plans to do so with the UHI network in the foreseeable future. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 118 If Janet funding is brought directly into UHI Shared Services Limited we will need to ensure that the relationship does not compromise the VAT position of the Cost Sharing Group. We do not however currently see a problem with this. European Funding If European funding is available for further infrastructure development we would expect it to be sourced via the University. There would be other potential sources of funding only available via the University or potentially an Academic Partner. External Commercial Services Our approach to commercial trading and the accession of new members of the Company is set out in Chapter 7. Generally, the Company is open to generating external income and bringing in new members if the circumstances are right, but not at the expense of loss of focus on core services to UHI partnership members. There are some existing services provided to other institutions and organisations: network connectivity (Stirling, Heriot-Watt, Aberdeen and EMEC) and shared library management system (UWS, SRUC) and these are proposed to continue. They are of relatively low value compared with overall turnover and generate little if any real surplus. Network connectivity provided to non-Janet-eligible organisations e.g. HEBNET, is subject to minima in pricing to avoid state aid issues, and these arrangements are typically therefore unavoidably moderately profitable. ICT-Related Income Currently Generated by Academic Partners The data collection exercise has suggested that the total amount of such income is almost negligible, and may in any case not be in scope for the shared service. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 119 24 REGIONAL DEVELOPMENTS The planning context for shared services in the UHI partnership has never been stable, and it may not be so now. The original business driver for shared services was seen as the need to reduce costs in a scenario where a funding 'cliff edge' was envisaged in the relatively near future. That did not materialise, and we are now more focussed on delivering efficiency and effectiveness, supporting the changes that will be needed to educational delivery in a regional context. The risk in broad terms has always been that our planning for shared service delivery is overtaken by changes in the external environment, and this section of the business plan attempts to address that risk. In particular we address the issues and potential issues arising out of regionalisation, and also the issues for the incorporated colleges arising out the ONS reclassification of FECs into the Central Government sector. In general, the impact of the Post-16 Education (Scotland) Act on our shared services agenda is either neutral or positive. In the Highlands and Islands, it has not had the effect of changing the number of separate legal entities, and the ability for a separate company to act as a Cost Sharing Group is unchanged. The question does arise as to whether a Cost Sharing Group is strictly necessary for the purposes of avoiding liability for VAT, if the funding for shared services could be top-sliced from both HE and FE funding streams, which will in future both flow through the Court of the University. (Though we should note that these funding streams do not support the entirety of activities of Academic Partners). Our view as the Shared Services Board has been that if we are setting up a shared services function to provide services to multiple organisations, the safest route to doing so in a VAT compliant fashion is to use the very specific type of vehicle provided for in recent legislation (the Finance Act 2012) to achieve that purpose. Indeed when the exemption became available, we preferred that to the previous option of asking SFC to divert funding for shared services 'at source'. However, the Shared Services Board does not see the establishment of a Cost Sharing Group as simply a necessary evil, or extra overhead, necessary to legitimise the delivery of shared services without an additional VAT burden. Our view is that the creation of a separate entity, focussed on the delivery of services, is the best way to ensure that services are able to operate in the way outlined in the Fort Augustus 2 Agreement, i.e., Collectively owned and governed Supporting the whole business of all members including HE, FE, research and other core activity Acting and managed according to business disciplines Flexible, adaptable and able to respond quickly to changes in the partnership or the external environment A lean and cost-effective management structure with minimal bureaucracy UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 120 Not an outsourcing model, though, as now, specific elements of the service may be outsourced where appropriate A distributed workforce Development of a wider range of professional specialisms Commitment to developing its staff Full transparency to its members as to its financial, contractual and other arrangements We also believe that the establishment of the new company is the best way to ensure that we make progress now, meeting the Outcome Agreement targets, and that it also provides for stability of the ICT service through any potential changes in the structure and governance of the partnership. We do not see any scenario, short of a full merger of all organisations in the UHI partnership, in which a Cost Sharing Group would not be an appropriate and suitable delivery vehicle. In a scenario (and we make no representations as to the likelihood of this) where a critical mass of the partnership came together either as a single organisation or as a VAT group, it might be appropriate to look at changing the status of the Cost Sharing Group to that of a subsidiary, but that change should be entirely manageable. Risk mitigation actions: Take professional advice, review if necessary the Articles of UHI Shared Services Limited in the context of the potential for a controlling mass of its members becoming subject to the ONS reclassification, to avoid undesirable implications for then operation of the Company Ensure that the governance arrangements and financial model for UHI Shared Services Limited are not compromised by structural change in the partnership Keep the legal form and governance of the company under review in the case of any such structural changes. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 121 APPENDIX A1: DETAILED FINANCIAL DATA RETURNS The following table shows a more detailed breakdown of the financial returns by respondent. As providing the raw totals in each area for the smallest colleges risks making it possible to derive individual salary data, we have shown composite figures for the smallest Academic Partners (Argyll, HTC, NAFC, Shetland, WHC) across each element. These figures relate to 2013/14 budget data. This was the most complete data set at the time of the Business Plan going to print on 19 November 2013. University Inverness College Moray College - Lews Castle College - Perth College - North Highland College - Total - Smaller colleges combined - Wide Area Network Network related hardware Software Hardware maintenance Telephony Travel & subsistence Staff development & training Other annual fixed Consultancy Contract & non-payroll staff Other inscope Staff 701,422 43,851 18,700 - - - 30,000 7,000 99,551 1,281,298 220,093 144,000 8,000 18,000 - 55,000 3,000 34,136 - 165,000 6,500 38,331 - 1,735,765 237,593 87,074 85,848 50,400 400 19,000 1,800 21,000 - 30,251 3,600 35,000 500 43,880 300 286,605 92,448 53,863 - - 5,000 - 1,750 - 60,613 51,575 918 - - - - 24,313 76,806 201,630 4,000 - - 9,000 - 20,000 - - 221,630 13,000 39,000 - - - - - - 39,000 1,597,151 219,201 114,715 203,535 145,619 365,423 248,773 2,894,417 Total 4,366,805 441,619 153,515 296,535 213,606 624,173 362,597 6,458,850 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 701,422 122 APPENDIX A2: UHI ICT SHARED SERVICE SPECIFICATION Phase 1 – IT Services Note that inclusion in scope does not mean that a service will be fully provided or even provided at all from day 1, just that it is in scope to be provided. The ‘core’ service elements are provided to all UHI member APs including the University. The ‘full’ service elements are provided only to those members who are full participants in the shared service, i.e. have transferred their in-house IT operations. Contents INFRASTRUCTURE, NETWORK AND TELEPHONY LEARNING TECHNOLOGIES LIBRARY TECHNOLOGIES STUDENT RECORDS SERVICE APPLICATIONS PROVISION HOSTED APPLICATIONS SUPPORT VIDEOCONFERENCING EMAIL AND COMMUNICATIONS SERVICE DESK REGIONAL SERVICE DELIVERY PRINTING AND COPYING TRAINING STRATEGY, INFORMATION SECURITY AND COMPLIANCE SERVICES PRIMARILY FOR EXTERNAL CUSTOMERS INFRASTRUCTURE, NETWORK AND TELEPHONY The data processing, storage and communications infrastructure. Networks – wide area, local and wireless. Internet and web services. User accounts and security. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 123 Service area Included Not included Backup and data recovery Backup of core services and centrally-held data Personal devices Implementation of retention policies Setting backup retention policy and timescales Backup of locally stored and managed data Comms room physical environment Management of physical comms room environments incl. air conditioning, physical access control Energy costs Content filtering (web) Delivery of content filtering services to designated users Policy decisions as to who gets content filtering applied to them Disposal Provision of compliant disposal service Not for personally-owned devices Domains/URLs Implementation and maintenance of technical aspects Approval for use (within *.uhi.ac.uk) File store Provision of file/data storage capacity in our own or externally-sourced provision Does not extend to files stored on desktops or places where they shouldn’t be Maintenance of appropriate security environment, access controls, backup Notes Full service only Full service only Full service only Personal storage UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 124 Inventory and asset management Provision, maintenance and support of asset management solution Janet Delivery of Janet services within the partnership LAN cabling Specify, provide and maintain appropriate cabling infrastructure Full service only Under contract to Janet(UK) Costs related to new build and refurbishments should be built into the capital cost of the works Full service only LAN patching Full service only Maintain patch panels and patch cables LAN switching Provision and maintenance of hardware Management and configuration of inter-VLAN routing, VTP, STP, QoS, DHCP, trunk/access ports Costs related to new build and refurbishments should be built into the capital cost of the works Full service only Monitoring network performance UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 125 Multimedia content hosting Provision of specialist hosting/storage Maintenance of interfaces with third-party services MyUHI Provision, maintenance and development of thin-client applications delivery service Management of third party services such as YouTube Content monitoring Support for personallyowned devices accessing MyUHI Configuration and packaging of applications to run on the MyUHI service Providing user accounts Account provisioning for staff and students – ensuring appropriate access to all authenticated systems User rights management UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN For students, dependent on enrolment in student records system, and for staff, may become dependent on entry in HR system (in the future). 126 Security Maintenance and management of edge firewalls Decide who has to use filtered context Construction and maintenance of SVI (VLAN) ACLs Configuration and management of NPS (RADIUS) domain authentication for network device access Configuration and management of WLAN authentication (e.g. 802.1x) Implementation of AD Certificate Services Server environment supporting core services Support, management and patching of all servers Server platform for non-core services Support, management and patching of server environment Installation support for customer-owned applications Server platform may be made available to run customer-owned applications subject to technical compatibility and capacity and licencing. May be a chargeable service. SEE Hosted Applications Support Full service only. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 127 Storage Area Network (SAN) Cabling and port configuration for network switches Cabling and zone administration for fibre switches Adding new LUNs Telephony – mobile including smartphones Management of corporate devices Support for user-owned devices Contract management Procurement advice and support Email integration Call and contract charges are the responsibility of member organisations Device provision decisions and associated costs are the responsibility of member organisations Full service only Telephony – UHI internal, desktop Provision of external lines Provision and maintenance of inter-site connectivity Contract management Deployment of handsets to user requirements Provision of voicemail service UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Call charges are the responsibility of member organisations Handset provision decisions and associated costs are the responsibility of member organisations UHI IP telephony can be delivered in nonUHI environments (e.g. in the home, to support home working) but this would normally be a chargeable service 128 Web add-ons/ Advise on plugin selection plugins Install, customise, support and maintain plugins Web analytics Installation, configuration, customisation and maintenance of tools Analysis Accessibility compliance and testing Content Web design Full service only Full service only Reporting Full service only Aesthetic Design Provision of advice and expertise Web development Database development and maintenance Server side configuration and coding UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Full service only* *One Web infrastructure is a CORE service 129 Wide Area Network Documentation Operation Management Planning Bandwidth management Costs related to new build and refurbishments should be built into the capital cost of the works. Costs to include equipment, installation and first year’s bandwidth charges In-year non-budgeted increased bandwidth cost to be borne by the member. Bandwidth charges for year 2 onwards will be borne by UHI SS subject to budget approval UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 130 Wi-Fi Issuing Guest Wi-Fi passes Maintenance and management of UHI ubiquitous Wi-Fi environment Costs related to new build and refurbishments should be built into the capital cost of the works UHI Wi-Fi can be delivered in non-UHI environments (e.g. in the home, to support home working) but this would normally be a chargeable service For CORE-only members, where UHI SS does not manage the LAN infrastructure: Access point spares will be provided but fitting will be a local responsibility the SLA will be applicable to the service entry point to the LAN Learning Technologies The provision and support of technology systems that support learning and teaching. Not including academic policy or pedagogic advice. Service area Included Not included UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Notes 131 e-portfolio system Currently Mahara System configuration and maintenance User support and problem resolution Interfacing with other UHI systems Interfacing with third-party systems User and account management Interactive voting system Currently Turning Point using remote poll server Account management Ongoing development Learning analytics Provision of reports and datasets Learning content Provision of technical advice and support to staff involved in content creation using UHI-supported tools Development of new content Quality assurance Pedagogical advice and support Provision of hosting platform(s) as appropriate UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 132 Podcasting service Maintenance and ongoing development Research and development Content uploading and management Maintaining awareness and knowledge base re VLE and other learning technologies in a worldwide context Testing and evaluation of new tools and technologies (working with customer groups) Video streaming service for learning content Virtual learning environment Configuration and maintenance Content uploading and management Currently HELIX Currently Blackboard System configuration and maintenance User support and problem resolution Interfacing with other UHI systems Interfacing with third-party systems User and account management Module space and group management UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 133 Library Technologies The provision of electronic information resources – e-journals, e-books, datasets and others – and the maintenance of systems that provide access to them. The provision and support of computer systems that underpin library operations. Service area Library management system (LMS) Included Not included System configuration and maintenance User support and problem resolution Notes Currently Millennium – note development to share this system with University of the West of Scotland and SRUC, potentially others Interfacing with other UHI systems Interfacing with third-party systems User and account management Client deployment UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 134 Resource discovery tools System configuration and maintenance User support and problem resolution Interfacing with other UHI systems Interfacing with third-party systems User and account management Security services Local provision decisions and associated costs are the responsibility of member organisations Ensuring that locallydeployed solutions are consistent with technology deployed centrally and with each other Technical procurement support Self-service provision Local provision decisions and associated costs are the responsibility of member organisations Central licence management and system integration and configuration Technical procurement support Reading list management Provision and maintenance of software and system tools Data input Automated generation of reading lists for the VLE UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 135 Cataloguing Provision of external MARC record source Copy and original cataloguing for print and digital items E-resource journal and dataset cataloguing Maintenance of cataloguing standards policy e-Resources Digitisation Management and development of e-resource collections Negotiation and management of licence agreements Provision and maintenance of resource discovery tools and gateways and access and authentication mechanisms Provision of usage statistics/KPIs STUDENT RECORDS The provision, development and maintenance of the IT system(s) for student records management. Support for the production of reports and the maintenance of data integrity. Data exchange with other systems (timetabling, finance etc.) and the use of the student record in identity management (e.g. providing user accounts in other systems). No responsibility for data input, and for the ‘truth’- as opposed to internal consistency - of data. Service area Included Not included UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Notes 136 Accessibility Configuration of AAM in SITS to user requirements Relates to SITS Accessibility module Maintenance of software to record PLSP (Personal Learning Support Plan) reports Admissions and enquiries Configuration of UHI records and SITS client to handle online applications (HE & FE) and enquiries Data agreements on what is collected and entered and by whom Production of reports for admissions and enquiries Maintenance of UCAS interface Attendance Configuration and maintenance of systems for recording attendance Production of reports on attendance Core Reports UKBA student attendance recording and monitoring EMS student attendance recording and monitoring Configuration based on specifications Development and initial testing of new reports Reporting Instance maintenance and support UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 137 Course database Configuration of UHI Records tool to allow creation, maintenance and publishing of course database Examinations office support Production of reports to support exam office Configuration of UHI Records tool to record exam location preference FES Configuration to support regional outcome agreement outputs / requirements Integrity of FE data Configuration of the FES return Updating of relevant tables Maintenance of AP specific aspects of data systems HESA KIS return and NSS Configuration of SITs KIS module to SFC specification Collection and input of necessary data HESA Returns Data quality reporting Authorization to commit to HESA Large batch data fixes Configuration of online data capture/data tools to meet requirements of latest HESA student record Analysis of, and strategy for, fixing data to improve HESA statistics Data integrity checks and corrections Updating relevant tables UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 138 Module Catalogue Creation and maintenance of online module catalogue tool (CUR03 and additional marketing info) Content entry and updating Creation of XML export file for web publishing Production of core and adhoc analysis reports Linking module catalogue to online module selection tool Online Enrolment Configuration of UHI Records tool to allow students to enrol online Support for CSP/ATR Annual implementation/ timeline for activity Returners survey, collating and sharing results, modifying records to allow enrolments Collection/entry/ verification of PAT information Online Fee Payments Configuration of UHI records to use selected online payment gateway and merchant services provider Online payment reporting Creation of invoices as per SITS Fees Reconciliation of online payment bank account to receipts UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 139 Online module selection Configuration of UHI Records tool to select modules online Creation of single module instance (MAV) Creation and maintenance of module diets in SITS using SITS user interface Setting student and PAT/PL user permissions Data quality reporting Online student feedback Creation of online survey Analysis of dataset Data quality reporting Creation of specified KPI reports Setting student permissions PPF & Development and maintenance of data collection and analysis tools FE ‘PPF’ support Development and maintenance of the Academic Development Plan tool SFC Returns Report for FTE extract to agreed counting method (FTE counts) FE - PCSR Submission of returns with explanations for any anomalies (as defined by SFC) Monitoring FTEs over the session PCSR - FE destinations information return to SFC UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 140 SITS Fee profile and AP specific account code configuration Running SITS fee menu processes Batch process configuration Invoicing Fee reporting Receipting Fee invoice and receipt template maintenance Credit notes Fees SAAS/SLC/ LEAs SAAS/SLC Attendance student to enrolment matching /interface file transfer SDS data sharing agreement – support for file creation Debt management Reconciliation of invoices/credit notes/receipts to bank and control accounts ILA200 certification and claiming ILA 500/PT fee waiver grant Loading interface into Finance system Reporting to SDS SITS-VLE links Provisioning of VLE with student module/unit enrolment data Enrolling students to module/ unit level to allow data transfer Reports written to highlight discrepancies between SITS/VLE module enrolment positions Student and staff badges Maintenance of software to support ID system Maintenance of UHI students and staff badge template(s) Provision of physical badges and badge printing systems UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 141 Student Progressing and Certification Production and updating of exam/progression board reports Documentation/ training/ support for academics and registry mark entry Updating of SQA tables Data extracted, cleaned, and sent to SQA Provision of RPL tool for entry of results Updating SITS with awards Production of certificates Submission of data for awards to outside certification bodies (e.g. City & Guilds) Student Records Portal Configuration based on specification Development and initial testing of new online processes Student Withdrawal Creation and maintenance of online withdrawal tools Production of reports on withdrawal and retention Teaching and Learning KPIs Configuration based on specifications Development, testing and production of reports Interpretation of SLC/SAAS/SFC withdrawal policies Updating of student records as necessary Ensuring reports reflect KPI definitions and definitions are appropriate Ad-hoc analysis of live data in SITS Monitoring achievement outside the KPIs UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 142 Teaching staff mapping Configuration of SITS to hold teaching splits against modules Population of SITS with current teaching split data Flow of information to Finance for distribution of funds Timetabling/VC booking systems Hosting and configuration of UHI timetabling system (if purchased) Maintenance of SITS/Celcat links Integration of timetabling system with TMS (VC management system) for VC suite booking Collecting and validating annual timetable data Inputting and managing timetables Booking rooms and managing teaching resources SERVICE APPLICATIONS PROVISION Making available software applications that support particular aspects of UHI partnership business. A nonexhaustive list of some of the current applications in scope is given below. This section overlaps with some of the others. The systems may or may not be actually hosted on UHI hardware platforms. Scope Service Current application(s) Document management SharePoint * Email Office 365 e-portfolio Mahara UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 143 Interactive voting Turning Point Library management and catalogue Millennium myUHI Citrix Resource discovery MultiSearch Plus Service desk Webhelpdesk Student records SITS: Vision, e:Vision Video streaming for learning content HELIX Virtual learning environment Blackboard Web content management Plone [etc.] Service area Included Archiving Not included Notes Data retention policy Ensuring data is archived to specification and requirement Availability Maintenance and monitoring of service availability to SLA UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 144 Backup and restore Ensuring backups are kept and restores tested Data held outside UHI control (e.g. on individual devices) Configuration Configuration based on specification User requirements specification Interfacing Interfacing with other UHI systems Interfacing with third-party systems Provisioning Ensuring account availability based on having an identity in the UHI system Removal of account on cessation of entitlement Reporting Configuration based on specifications Development and initial testing of new reports Identification of need Specification of reports available and to whom Specification of look and feel End user training UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 145 Software portfolio Maintenance of a portfolio of licenced software to meet the needs of users Locally licenced and hosted software Provision of defined levels of technical and user support for the applications Ensuring compliance to licence agreements User Management Creation and amendment of user accounts User rights assignment User support Problem resolution Approval of new users and specification of user rights assignment Pedagogical advice on learning technology systems Advice on appropriate use Workflow Development and maintenance of tools, templates and processes to user specifications User requirements specification UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 146 HOSTED APPLICATIONS SUPPORT The support offered for systems underpinning the business the University and its Academic Partners that are primarily ‘owned’ and operated by their users or user communities, but which the shared services hosts and/or supports. These systems may include but are not necessarily limited to: Finance (Accounting, Payroll, Procurement, BACS) Human Resources Timetabling ID Card and Access Control CRM Research Management Estates Management The systems may or may not be actually hosted on UHI hardware platforms. Note that some of these systems may migrate to ‘service applications’ (as per Section 5 above) over time. Service area Included Not included Notes Archiving Ensuring data is archived to specification and requirement Data retention policy Full service only Backup and restore Ensuring backups are kept and restores tested Data held outside UHI control (e.g. on individual devices) Full service only UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 147 Convergence Support the technical and business process changes needed to converge business systems Specification of business requirements for convergence Full service only Loading and acceptance of ad-hoc transaction interface files (mainly finance systems) Full service only Specification of technical requirements Specification of business requirements Full service only Costing of impact of implementation and integration if non-standard system procured Final decision on chosen application Ensure coding structures/naming conventions are consistent across different business systems Interfacing Integration, where feasible with other UHI business applications and systems Resolving issues around loading and accepting interfaces Procurement UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 148 Provision of business applications Installation and hosting (internal or external) for business application Configuration and maintenance following supplier’s guidelines, including point and major releases. System performance monitoring Business user operations using the system interface, allowed by user access rights and the functionality of the business application. Full service only Business continuity planning for the whole business process End user training Data secured and available for business continuity and recovery to agreed standards and retention period of archives Recovery of systems in line with business continuity plans Reporting Configuration based on specifications Development and initial testing of new reports Identification of need Full service only Specification of reports available and to whom Specification of look and feel End user training Support Primary contact for UHI user for issues with system and provide Tier 1 (possibly Tier 2 or 3 depending on system) level support Supplier development of the application Full service only Liaise between end user and supplier to resolve system errors UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 149 User Management Creation and amendment of user accounts Approval of new users and specification of user rights assignment Full service only User rights assignment VIDEOCONFERENCING The provision, development, maintenance and support of UHI’s videoconferencing environment, including studio equipment, bridging, desktop VC software and VC recording. Scheduling, problem resolution, connection to external systems. Not including the provision of hardware for end-users, or responsibility for the physical environment of studios. Service area Included Not included Notes Desktop VC Provision, maintenance and support of desktop VC client(s) VC recording Provision, maintenance and development of VC recording service Management of recorded VC content Maintenance of appropriate access control and security environment for recorded VCs UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 150 VC studio endpoints Local provision decisions and associated costs are the responsibility of member organisations Installation and maintenance of VC endpoint equipment Provision of advice and support re local studio environment Full service only Procurement support for endpoint equipment Videoconferencing On-site support for specific events will be subject to availability and may be chargeable Provision of connectivity services – bridging, connection to external services and gateways Provision of VC event booking and scheduling services User support and problem resolution EMAIL AND COMMUNICATIONS Provision of email services to all users. Including calendaring, resource booking, and instant messaging. Service area Included Core email service Not included Notes Updating mailing lists Message transmission Junk mail filtering Mailing list capability UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 151 Scheduling Calendar tool Resource booking Instant messaging Messaging tool Service Desk Helpdesk services 24/7 (with external partner). Provision of helpdesk software platform. Service monitoring, reporting against SLA, major incident management. Service area Included Not included Fault resolution/request fulfilment Guidance/ advice Fix of unsupported software Standard first line fixes Notes Standard first line requests Escalation to second level/ other groups Helpdesk application Customisation Testing Reporting faults with software Upgrades and patches Future review/reprocurements System feeds/integration UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 152 Logging calls Incidents (faults) Requests Guidance Escalations Resource bookings System alerts. rd 3 party Complaints/Feedback Major incidents Reporting Global communication Resolution of root cause due to onsite facilities issues (power, flooding) First line analysis Monitoring Escalation Out of hours Handovers and data exchange Monitoring and contract management Call follow up Service level Reporting Monitoring Remediation of issues rd Monitoring of 3 party SLA Answering complaints UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 153 System monitoring Proactive system checking Reporting of checks Regional Service Delivery Those services that have to be delivered on-site. Local user support, installation and deployment of hardware, troubleshooting. Member organisations are responsible for deciding what equipment they want locally and paying for it. Service area Audio-visual equipment Included Not included Provision of procurement support Installation Configuration Notes Local provision decisions and associated costs are the responsibility of member organisations Full service only Covers: Consumables smartboards projectors digital cameras and video cameras digital signage webcams microphones, headsets Installation Full service only Supply of media UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 154 Licensing Running audits on devices for licensing etc. Full service only Reporting compliance issues Out of hours Providing onsite cover for out of hours classes Full service only PC support Hardware Funding/costing Mac support O/S Pat testing Mobile devices Agreed software Specialist devices Thin client terminals Builds/rebuilds Full service only Testing Images Guidance/advice specifications Printing and copying The provision of a common framework for printing and copying across the partnership, including a common contractual framework and common print management and charging systems. This will be a framework for members to migrate to as they are ready. Member organisations are responsible for deciding what equipment they want locally, and paying for it, and for copy charges. Specialist printing services are not included. Service area Included Not included UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Notes 155 Fax machine capability in multi-function devices Fax to email Printer copying tracking and auditing software & processes Standard cost per copy/print job Full service only Email to fax Printing allowance & billing to local college Full service only Type of printer Tracking software Printing from mobile devices Online payments Procurement Central procurement for printers, printing and contract Universal printing Universal printing Ability to print everywhere Printing at any academic partner Full service only Provision of paper consumables Full service only Full service only TRAINING Training is primarily provided through ensuring that appropriate training materials are available, which includes suitable user documentation. On-site training may be provided where a new system is being rolled out or there is another clear business reason, which includes adequate numbers attending. Service area Included Not included UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Notes 156 Commodity software, e.g. office applications Provision of printed/printable and online training materials where practicable Direct end-user training for all users Physical training presence at all sites Staff training events Ad-hoc helpdesk support as practicable Compliance and good practice For example, provision of training materials and good practice advice in areas such as data protection, information security Provision of printed/printable and online training materials Ad-hoc professional advice New service and major upgrade support Provision of printed/printable and online training materials Direct end-user training for all users Physical training presence at all sites Staff training events where numbers viable Telephone support, VC ‘dropin’ sessions Ad-hoc user support and problem resolution Ongoing and stable services Provision of printed/printable and online training materials Direct end-user training for all users Physical training presence at all sites Ad-hoc user support and problem resolution UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Staff training events may be held where there is a strong identified need/user skills deficit and where numbers are viable 157 STRATEGY, INFORMATION SECURITY AND COMPLIANCE Ensuring that services are the subject of proper strategic planning and are appropriately funded, and that they are operated in a secure and legally- and contractually-compliant manner. Service area Included Not included IT Strategy and investment plan Development of IT strategy, business case, multi-year investment plan, in association with member organisations Funding approval Accountability Transparent reporting to members Notes Consultation and communication Maintenance of appropriate governance Inclusive planning processes Information security policy Production and maintenance of standard policy set Local implementation and enforcement Advice and guidance on local implementation FoI (other than for UHI Shared Services Limited) General IPR issues Business continuity Maintenance of disaster recovery policies and procedures Non- IT business continuity plans UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 158 Compliance Copyright policies Data protection- service to comply Policies & guidance FOI(other than shared services FOI) IPR Enforcement of copyright breaches. Reporting function Training Provision Legal responsibility Responsibility to ensure all staff are trained. In general, enforcement of breaches to or noncompliance with defined processes and policies will lie outside shared services. Operations Management of change control processes Software management Auditing to ensure compliance Full service only Licence manager applications UHI-wide licence agreements Enforcement of local compliance Management of contracts Central reporting UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Those which enable UHI staff to carry out certain functions, e.g. CLA, ERA 159 Network security testing Automated tests and procedures ensuring that devices connected to the UHI network are compliant, patched etc. SERVICES PRIMARILY FOR EXTERNAL CUSTOMERS Services that generate revenue and add value to the core service. Translation memory service Translation Full service only Provision and maintenance of translation memory software service Training and documentation Curation of digital translation resources UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 160 APPENDIX A3: THE FORT AUGUSTUS 2 AGREEMENT 1 Preamble This Agreement reaffirms the commitment of its signatories (the ‘Partners’) to work together to develop a range of shared services supporting the whole UHI partnership. The aim is enhanced student experience, greater ability to deliver equivalence, greater efficiency and effectiveness and improved quality The partnership may choose to take cost savings where available or re-invest efficiency gains in improved service. In this Agreement, the University and its Academic Partners agree to collaborate to develop a range of shared services to be delivered for the collective good. They will operate on the principle of collective self-provision rather than outsourcing. The first services to be delivered will be ICT services and will be provided by a new shared services company, UHI Shared Services Limited, subject to the satisfactory conclusion of a due diligence process and the development of a business case acceptable to the partnership. Other models may be used for other shared services as appropriate in the future. The signatories to this document are the University Court and its Academic Partners. 2 The Shared Services Organisation The Partners agree to establish a shared services organisation, UHI Shared Services Limited, with the following characteristics: 2.1 ETHOS 2.1.1 Collectively owned and governed 2.1.2 Supporting the whole business of all members including HE, FE, research and other core activity 2.1.3 Acting and managed according to business disciplines 2.1.4 Flexible, adaptable and able to respond quickly to changes in the partnership or the external environment 2.1.5 A lean and cost-effective management structure with minimal bureaucracy 2.1.6 Not an outsourcing model, though, as now, specific elements of the service may be outsourced where appropriate 2.1.7 A distributed workforce 2.1.8 Development of a wider range of professional specialisms 2.1.9 Commitment to developing its staff UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 161 2.1.10 Full transparency to its members as to its financial, contractual and other arrangements 2.2 FORM 2.2.1 A Company Limited by Guarantee, owned by its members 2.2.2 All Academic Partners entitled become members subject to their legal eligibility 2.2.3 Established as a Cost Sharing Group under the terms of the Finance Act 2012, and subject to their eligibility, members may receive services from the company free of VAT. 2.2.4 Members of the Shared Services Board will be the initial Board of Directors, the membership to be reviewed during the first trading year 2.3 FINANCES 2.3.1 Recurrent costs apportioned amongst members according to a fair and transparent agreed methodology 2.3.2 A capital funding programme to be proposed to the FE Regional Board and HEPPRC 2.3.3 Partners retain the autonomy to develop local services at their own cost and risk. This may include a cost of integration into UHI systems or an inability to do so 3 Planning Parameters and Operating Principles The Partners agree that UHI Shared Services Limited will operate within the following planning parameters and operating principles: 3.1 PLANNING PARAMETERS 3.1.1 Provide a range of services defined in agreed statement(s) of scope 3.1.2 Initially operate within the current overall staffing and revenue cost envelope of the partnership, excluding any agreed transitional costs 3.1.3 Not seek to take over ownership of existing assets, which would by default remain in the ownership of current owners, though new assets purchased by UHI Shared Services Limited will become the property of the company 3.1.4 Confirm as out-of-scope decisions on investment in end-user equipment (PCs, laptops, peripherals, etc.) which remain under the auspices of individual partners, within the parameters of an agreed SLA 3.2 OPERATING PRINCIPLES 3.2.1 Operate on the basis of financial targets to be agreed on a rolling 3-year basis 3.2.2 Develop a strategic technology roadmap and investment plan UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 162 3.2.3 Establish appropriate consultative forums 3.2.4 Remain open-minded as to the appropriate structures and vehicles for delivering further shared services, which may not be within UHI Shared Services Limited 4 Commitment of Signatories 4.1 FURTHERING THE BROAD SHARED SERVICES AGENDA, BY: 4.1.1 Release of members’ staff to participate in short-life planning groups, as necessary 4.1.2 Agreement to participate at a senior strategic level in the forward planning of further shared services 4.1.3 Continued support for the aims expressed in the Outcome Agreements 4.1.4 Agreement to consider all new service developments as candidates for sharing, by default 4.2 ENDORSING THE OBJECTIVES OF THE SHARED SERVICES BOARD, WHICH ARE TO: 4.2.1 Determine how shared services will operate in the organisational environment in terms of governance 4.2.2 Ensure strong governance, programme and change management from the outset 4.2.3 Identify appropriate solutions and determine the optimum method for sharing each service. 4.2.4 Involve partners in building and realising the business case for each service 4.2.5 Align shared services with partnership business strategy, organisation models, IT and processes 4.2.6 Determine and allocate adequate resources 4.2.7 Simplify processes and maximise systems convergence 4.2.8 Set service standards and quality through development and agreement of the service definition/SLA 4.3 SUPPORTING THE ESTABLISHMENT OF UHI SHARED SERVICES LIMITED, BY: 4.3.1 Participation in due diligence programme as appropriate, including provision of information on financial spend, contractual commitments, licences, HR matters, to the reasonable timescales required by the Shared Services Board 4.3.2 Full disclosure of relevant information 4.3.3 Early disclosure of any issues which might prejudice their ability to sign final agreements, and attempting to resolve any such problems 4.3.4 Seeking common positions on service scope, financial parameters, SLA definitions etc. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 163 4.3.5 Membership of UHI Shared Services Limited (subject to eligibility) 4.3.6 Being represented at General Meetings of UHI Shared Services Limited 4.3.7 Release of staff members to contribute as appropriate as members of the User Group, as Directors of UHI Shared Services Limited, etc. 4.3.8 Provision of accommodation and local services to staff who are transferred or appointed to UHI Shared Services Limited 4.3.9 Communicating with their staff and supporting UHI Shared Services communications with their staff 4.3.10 Respecting their legal obligations in terms of consultation with staff who may be affected by TUPE transfers UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 164 APPENDIX A4: ISSUES LOG FROM THE FORT AUGUSTUS 2 SUMMIT ON SHARED SERVICES This ‘issues log’ was produced at the Fort Augustus 2 summit to record issues raised by delegates. It was slightly revised following the event in response to additional comments. Here the issues log is augmented by a column indicating where the issue is dealt with in the Business Plan. ISSUE INITIAL RESPONSE FROM THE SHARED SERVICES BOARD BUSINESS PLAN SECTION REFERS How would funds flow to the shared services company in the new model? The Shared Services Board envisages that there would be no top-slice, other than that which enables Executive Office to pay its share of the overall costs for the services that it receives itself. Funds would flow out to APs who would pay their share of the operating costs of the company (UHI Shared Services Limited). Chapter 19 Financial Model What model would determine the share of costs paid by each member of the company? This is yet to be agreed. However, it is envisaged that the shares of costs will be determined according to a transparent formula – turnover is one possibility amongst several, and has already been used for funding the procurement shared service. Chapter 19 Financial Model There is a need for clarity and comfort on the initial level of costs and that they will not escalate. Acknowledged. This will be addressed in the business plan. We assume that a transitional model will be needed between costs as incurred by APs currently and costs determined by formula. Chapter 19 Financial Model UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 165 What level of cost saving is anticipated? Projected efficiency gains will be included in the business plan. It is unlikely that these will be substantial in year 1, but from year 2 onwards we expect significant efficiency gains and it will be for members to determine the balance between cost reduction and service improvement. Chapter 8 Financial implications of moving ICT services into a shared services Company Will the company be able to benefit from funding sources that are available only to the partnership or the University as it currently exists? We anticipate that there are mechanisms available to deal with this issue. Similarly there are collective framework agreements etc. only available to HEIs and FECs and we will need a way to take advantage of these. Chapter 13 Operational Aspects How will elements of financial risk, e.g. major unanticipated costs, be dealt with? In general we are just shifting the locus of existing risk to the new company, and we acknowledge that the business plan/ contract with members will need to be explicit as to how this is dealt with. Appendix A5 Risk Register How will the costs be determined for members who do not buy in to the whole service, i.e. those who do not transfer their staff, contracts etc.? The costs for the services that form part of the core (i.e. that everyone takes, much as they do now for central IT services) will be calculated separately from other costs, and in line with the requirement on Cost Sharing Groups for ‘exact reimbursement’. At the moment we would expect the costs for these parts of the service to be distributed according to the same formula as for the whole service. Chapter 19 Financial Model Would there be only one shared services company, or multiple ones? Only one, unless others were needed for specific purposes (e.g. to handle external trading or joint ventures). Chapter 7 Business Objectives UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 166 How would the potentially competing requirements of FE, HE, research, specialist activity be resolved? How would University Court/FE Regional Board/HEPPRC strategy be aligned with that of the Company? We acknowledge that there is no easy answer for this. However we note that many of the requirements of the partnership are increasingly convergent across FE and HE. We also expect strategic investments to be agreed and funded at FE regional Board/HEPPRC level. Chapter 12 Stakeholder Groups What decision making capability will require to be retained within APs? Will the service scope include advice on local IT requirements and planning scope? Noted that this question particularly relates to the retention of decision making as to the provision of PCs, mobile and tablet devices, other peripherals etc. at member level. UHI Shared Services Limited will include planning, advice and decision support services, including reports on device utilisation, to its members. Chapter 10 Service Scope What are the intentions around pensions, in the case of transferring staff, and have the potential liability issues been taken into account? We have made initial enquiries as to the potential for gaining admitted body status in the LGPS for the shared services company, and will progress this further when UHI Shared Services Limited has been formed. We are aware of the potential significant issues around pension liabilities and will deal with these fully in the due diligence and business planning process. Chapter 17 Employment Matters UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Chapter 22 Investment Strategy 167 Do we need to establish the Company early in the process? Could we not wait until after a business plan has been agreed? It would be possible to defer creation of the company, but it would hamper us severely in discussions over pensions, advance negotiations with suppliers, taking of legal and professional advice, and a number of other areas. Members joining the company at this stage are making no commitments to taking service in future compared to non-members. As soon as the company is formed with whatever members are able to sign up initially, a process for adding new members from within the partnership will be made available. Appendix A3 Fort Augustus 2 Agreement There is a need for a project plan with specific milestones and dependencies clearly articulated. Agreed and this will be an early priority. There is a need for a comprehensive business plan to be developed before members are asked to sign up for the service. Agreed. The business plan will form the basis of the contractual agreements between the company and its members and there will need to be further dialogue as to what is included, but at a minimum, we anticipate full clarity on financial arrangements including schedules of costs to members, service scope, service level agreements, governance arrangements, provision for contingencies, etc. A Project Plan for the follow up to Fort Augustus 2 was developed and published in Mahara. Current schedule to the live service is at Chapter 4 Options Analysis Document as circulated for consultation on 8 October 2013 There is a need for a comprehensive ICT strategy to be developed, aligning with partnership and college strategies. Agreed, and the Shared Services Board considers this both a necessity and a priority. Its full development would however extend well past the initial operation of the company. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Chapter 9 ICT Strategy 168 There is a need for a comprehensive Service Level Agreement. Agreed. The nature of this needs more discussion, as the need for a robust agreement regulating service provision needs to be reconciled with the requirement for flexibility expressed by partners. Chapter 11 Service Level Agreements What formal commitments are being sought and in what sequence? We are seeking the agreement of partners to the Fort Augustus 2 Agreement now. This is an agreement in principle and a mandate to the Shared Services Board to proceed to the establishment of an ICT Shared Service operated by UHI Shared Services Limited – subject to the completion of satisfactory due diligence. It is also a commitment to engage with that due diligence. It is not a formal agreement to take the service offered, to transfer staff or any other contracts or liabilities. That will come as a formal contract proposition at the end of the process. At some stage, but separately from Fort Augustus 2 or the formal service contract, partners may be asked to consider entering into a form of agreement regulating the shared services process in a context broader than the operation of UHI Shared Services Limited. Chapter 4 Options Analysis The company should operate efficiently and have minimal bureaucracy. Agreed as a core operating principle. Chapter 13 Operational Aspects Will the Company be buying in any services (such as HR support) from the partnership? It is likely to do so and it will not want to duplicate functions unnecessarily. Noted however that supplies into a Cost Sharing Group from its members do attract VAT, so there is a driver to keep the level of these transactions low. Chapter 13 Operational Aspects UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 169 Would services be provided to subsidiaries of APs? It is unlikely that subsidiaries would qualify to become members of a Cost Sharing Group, or if they did, to receive services free of VAT. Chapter 20 Operating as a Cost Sharing Group What happens if an AP cannot meet the ‘85% criterion’ for the supply of services free of VAT? (85% of its activity being VAT exempt). Unless the ‘directly necessary’ criterion can be satisfied, which is unlikely for most ICT services, then provision will be subject to VAT. Chapter 20 Operating as a Cost Sharing Group Will the company be able to generate income by offering services outside the partnership? The Shared Services Board Chapter 21 recognises the appeal of Potential Funding Sources spreading the overhead, reducing costs, or improving quality by offering the company’s services more widely. It would however only do so if the service to partnership members were not compromised (ideally it would be improved) and partnership members’ interests in terms of control and direction of the company were not threatened. The latter proviso may be technically difficult to satisfy if members external to the partnership were admitted and it is our intention to seek professional advice on this issue after the company is formed. We do not think that there is any issue with continuing the current arrangements that EO LIS has in place for the delivery of service to a number of other HEIs. What is the position with library services? The Shared Services Board has been considering the position of library services within the shared services agenda and has undertaken a very positive consultation with the library practitioners. This engagement will continue but the initial priority is to establish the shared service for ICT. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Chapter 7 Business Objectives 170 There is a need for an effective communications strategy, especially with Principals. Agreed and this is an early priority for the Shared Services Board. Chapter 12 Stakeholder groups Gaelic - need to ensure opportunities for promoting Gaelic Interface in the shared services delivery, which would help meet the new Company's obligations to have a Language Plan under the Gaelic Language Act Agreed. Chapter 9 ICT Strategy UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 171 APPENDIX A4A: ISSUES LOG FROM THE FORT AUGUSTUS 3 SUMMIT Consultation questions – issues raised and responses from the shared services board We intend to use these questions to help structure discussion at the Fort Augustus 3 event; if you are able to feed back your preliminary thoughts on any of these – not necessarily all of them – in advance, that would be very useful. In particular, if there are any issues that would make it difficult for your institution to sign up, we’d be grateful to know as soon as possible and to hear your suggestions for what would be more acceptable. (Please note all page number references are to the pages in the original Business Plan released on 8 October 2013 for initial consultation.) The Company Q1 Are you content with the voting arrangements outlined on p79? If not, what alternative would you propose? (Note that this issue may need to be revisited anyway as a consequence of ONS reclassification, as majority control by incorporated colleges may have undesirable effects.) 2:1 seems fair from incorporated viewpoint but not the rest. More material, Perth + Inverness have a clear majority and could have their joint agenda always voted through. There is a concern that the larger colleges will have the majority of votes and therefore the smaller/specialist colleges will have little or no voice. The risk is then that the ICT services could become heavily weighted towards only teaching and therefore does not serve the needs of all partners. A revised voting model, taking into consideration the discussions at Fort Augustus and the risks associated with the different models, will be developed and included in the revised Business Plan. If I’m reading it all correctly, this means of around 29 (plus 5 external) votes the ‘big four’ of Perth, Inverness, Moray and NHC would have around 19 votes, leaving 10 AP’s with one vote each. Meaning the bigger AP’s, if in agreement, will have the vote. Having said that, how often will voting be used? Still something like 1 vote for £200k plus 1 for each subsequent £400k would balance it more. Do not agree that voting is proportional to spend. While acknowledging that larger partners are contributing more cash, and making greater use of the service, it is essentially the same service that is provided to each partner with just the scale of provision varies between smaller and bigger partners. An effective IT service is equally important to each partner and the ability of each to influence key decisions should reflect this. I would propose one UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 172 partner, one vote. Voting (example of APUC). Some support for 1 member 1 vote What would be matters appropriate for voting - level of annual subscriptions, budget decisions Q2 Are you content with the arrangements for appointing directors on p80? Currently the Articles do not provide for members to individually have the right to appoint directors, and we cannot have independent directors who are external to the membership. If you are not content, what amendments would you propose? Broadly content with the arrangements. Once operational, it would be good to see representation from the specialist colleges on the Board These comments will be fed into the process as Board membership is being reviewed. Board not currently representative – 2 Inverness, none Perth but should be fixed when Project moves to Service. Why restrict Directors to member organisations, non-execs could bring much needed skills/experience + no baggage. Rules re removal of a Director appear too weak – strengthen wording Generally OK but concerned to ensure that directors are not unduly influenced by their other roles in terms decision making that may impact on academic partners differently. i.e. important to ensure that appropriate declarations of interest are made and directors withdraw from matters where their own institution might benefit greater than another AP not directly represented on the Board. Q3 Do you have any comments on the organisational structure on p81? Potential for costly superstructure of up to Director + 5 HODS if internal candidates are weak – potentially up to c £500k, all at colleges risk i.e. straight onto annual subscriptions. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN The Shared Service Board has set up a workstream, under 173 Agreed on the grounds that where appointments could be combined that this should be considered. Need a grading structure and a clear set of job descriptions before TUPE process commences Appears to have a large number of senior managers. Question whether all of the strategic responsibilities should sit within the shared services company or should more direction be provided by UHI structures. Reflects my concern that that the cost of the service in future will be higher per annum than at present. i.e. no sign of attempts to rationalise management and hence make savings the leadership of Lindsay Ferries, to review the organisational structure of the ICT Shared Service and consider the pay policy and recruitment to the senior posts. The proposals will be included in the revised Business Plan. The organisational structure indicates that the role of Chief Executive would have long-term oversight of a range of shared services, not limited to the initial operation of ICT/LIS. In futureproofing we need therefore to take cognisance of the future skills requirements. This role is one of Chief Executive that has the capability to direct a range of services beyond this initial stage. The key skills required will be financial management of a complex range of services and UHI partnership experience and understanding. The indicative cost distribution circulated flags up potential issues that the Chief Executive will need to manage, not least being the needs and circumstances of smaller partners. The table outlining the responsibilities of the roles in the cost sharing group suggests that the Chief Executive position is not a fulltime role. Inverness College would propose therefore that this role is taken up by a Principal and Chief Executive of one of the smaller partners on a part-time basis and that the Academic Partner taking on this role is compensated for their time to enable back-fill. General thinking that the structure is top-heavy - needs more clarity of the roles Full vs part time positions at senior level Employment matters Q4 We propose that there be no compulsory redundancies associated with the move to a single shared service. Is this a commitment you wish to see made? UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 174 Not as a blanket guarantee. There may be circumstances where this is necessary in the pursuit of the overall objectives Should at least offer voluntary severance to reduce 80 FTE’s? Initially this will help provide stability and ease concerns of staff transferring across so seems sensible. However, it might be something that needs to be reconsidered in the longer term to ensure the service remains efficient and effective. The Shared Service Board will consider the issues raised around redundancy and will review the appropriate sections within the revised Business Plan Yes. Is there a time frame, say 1 year in when this will not apply or is it a case of wait and see? Could voluntary redundancy be an option? Business case indicates that there may be a voluntary severance scheme which would pay for itself within a year – I note from the information provided that a large number of staff in scope are over 50. They are likely to be in LGPS and therefore any severance would incur a strain on the fund cost…this could be significant – needs to be a risk and impact assessment of this. Is this the commitment really given? The paper refers to a post transfer restructuring, is the commitment that there would be no compulsory redundancies during this restructuring as this would surely be ‘associated with the move to the single shared service’. This is desirable at a personal level for staff affected but suggests that no effort is being made to achieve savings through rationalisation / removal of duplication. i.e. a key argument for joint services was initially to effect savings and achieve greater efficiency through removal of unnecessary duplication. With a commitment to no compulsory redundancy and no changes that would encourage voluntary redundancy it is unclear how a more efficient service will be achieved. The expectation that SFC will commit the level of funding proposed without a commitment to efficiency saving is naïve. It is highly likely that once formally considered at SFC Committee that SFC will require a business plan for 3-5 years that details cost saving and this is unlikely to be realised without redundancy. Inverness College would therefore propose that a 2 year commitment to no compulsory redundancy is more realistic and in line with UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 175 commitments made in other regions. General feeling that a commitment to No Compulsory Redundancies is not the most effective way forward and Voluntary Redundancies be considered at the least Has any work been done on profiling the in-scope staff? Need to understand any impacts of SFC conditions This would seriously impact upon the ability of the Company to make savings. (The Shared Service Company is about more than just ICT in the next x years) APs don't have a feel for the 'right size' of the Shared Service - 50, 80, 100? Q5 Nearly all those staff who would be candidates for transferring to the Company are current members of the Local Government Pension Scheme. We propose to seek Admitted Body status for the Company and to offer LGPS. Are you content with this? For this service, yes, as the impacted staff will be members of this scheme currently (unless not members of a scheme at all). Pension needs significant clarification as this matter would be hugely significant. Yes, provided that actuarial/legal advice is sought prior to such a move. Yes. Only concern is whether confirmation of this can reasonably be expected to have been achieved ahead of the intended staff transfer date. This is likely to be a concern for staff, especially those nearest retirement. The Shared Service Board is taking specialist advice on Pensions and will include any details available in the revised Business Plan up to the date of publication. Beyond that time all Partners will be kept informed of developments. Pensions – a fundamental issue which needs to be clarified This is a major concern - need more clarity on the immediate process and timing and possible outcomes - risk assessment esp on solvency UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 176 Q6 We propose that a principle of no compulsory relocation of staff should apply, even at the expense of compromising operational efficiency. Is this a commitment you wish to see made? No. Where expertise/experience is best deployed to another location this should at least be considered If the main argument is operational efficiency/ growth/ flexibility/etc. and not cost saving can’t see how the plan can state it will allow compromise on the former. This would seem sensible initially but might need to be reviewed in the longer term. The Shared Service Board will consider the issues raised around location of staff after the service goes live and will review the appropriate sections within the revised Business Plan Yes. Is there a time frame, say 1 year in when this will not apply or is it a case of wait and see? Could voluntary redundancy be an option? This would certainly assist in relation to the employee relations element of this and presumably would support the service to partners locally. In terms of staff this is clearly important but I would like to know if is anticipated that there would be any compromising of operational efficiency. If the anticipated impact is small then would support this proposition but could not do so at ‘any cost’ i.e. how big is this problem likely to be? Again, if we are cost sharing and seeking to provide an equitable experience across academic partners there will no doubt be some relocation involved. It is unlikely that any business can make this long term commitment and still adhere to business objectives. Commitment needs to be only for a reasonable period of time, then operational needs of business must take precedence Commitments must reflect the shared values of the Company and take cognisance of the willingness and ability to deliver future shared service initiatives Q7 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 177 Senior roles in the new organisation are identified in Figure 17, p81. In principle we have taken the view that these positions should be filled where possible from the pool of staff in scope for transfer. Do you have any views on this or on the mechanism for appointment to these senior positions? External candidates should also be considered where these posts are being created from new. Agree on the principle of appointing from within provided that the skills required are there. It might need to be a competitive process as it is entirely possible that there is more than one person suitably qualified for these senior roles across the partnership. Agree to the point that the posts should be filled with competent staff and if no internal person meets the criteria, then recruitment goes external. The Shared Service Board has set up a workstream, under the leadership of Lindsay Ferries, to review the organisational structure of the ICT Shared Service and consider the pay policy and recruitment to the senior posts. The proposals will be included in the revised Business Plan. These should be advertised internally in the first instance and appointed by competitive interview against a clear job role and person spec. If there are no suitable internal candidates then external appointments should be sought. Presumably it cannot be guaranteed at this stage that there are necessarily suitable internal applicants as the roles will be larger than at present and in some cases ‘new’. Although the majority of staff providing technical support will come under TUPE legislation in terms of transfer to the new organisation the very senior roles will be significantly differently roles and therefore should be open to application. This application process could be open to all staff of the partnership (see response to Q3) or alternatively closed – by partnership agreements. Both approaches have been taken in the rest of Scotland during the regionalisation. Any external appointments will add to the funding requirements Q8 Do you have any other comments about the employment issues addressed on pp84-86? I note that the business case that there is a proposal that other service such as HR will be sourced from a partner. This service will be supporting (potentially) 14 sets of terms and conditions – this could be significant especially at a time when system changes may UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Wherever possible the Company will seek to source necessary services from its 178 be taking place. Members. Where will detailed HR work be sourced from? The new company will incur the professional costs associated with employing people (OH presumably, advertising, emp benefits, PVG) – These will impact on Admin costs. I do think that the corporate costs of running the company require to be considered Will there be any employment liabilities retained with the Academic Partner following the TUPE transfer? (eg any unfair dismissal claims) As presented these appear to be a reasonable arrangement for staff who might be transferred in to the company but I would recommend seeking qualified HR advice on this. Terms and conditions of new company needs to be determined, given the following we would need to know more about this. SFEU have been through this recently and may have some lessons learned Additional costs of servicing the business have been estimated and these will be refined in due course. Specialist advice on TUPE matters will be sought and clarification given to Partners as it becomes available The Shared Services Board commits to strengthening the section on restructuring to respond to the issues raised. Need clarity on restructuring We have a duty to inform and consult with the staff and this consultation needs to include and intended ‘measures’. The Company will be required to provide the partners with information on the ‘measures’. The Business case refers to restructuring post transfer. Presumably the terms and conditions which apply following the restructuring will be the company’s terms and conditions. We therefore need to be provided with details of the restructuring and also the company terms and conditions. Will the reason for the intended restructuring constitute an economic, technical or organisational reason? It is unlawful to make changes to the terms and conditions of employment of the transferred employees if the sole or principal reason for the variation is transfer unless there is an ETO reason for the change. Timescales – as I understand it, pension still needs to be clarified, governance arrangements need to be agreed, corporate UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN The Shared Services Board commits to reviewing the 179 administration needs to be in place – partners need to review and sign up to the plan then consult and inform , undertake due diligence and agree liabilities across up to 14 partners. Is 1 April 2014 achievable? timescales and revising as necessary How do the current staff roles transfer in, in terms of job descriptions? The Shared Services Board commits to strengthening this section of the Business Plan Clarity of reporting arrangements needed as soon as possible The revised Business Plan will detail these arrangements Need to upskill people rather than recruiting where possible The Shared Services Board has detailed its commitment to Training and Development of staff in scope for transferring to the service as appropriate to the Business Appears to be an underlying message that there will not be sufficient people to deliver the service The Shared Service Board would like to state categorically that they feel this is unlikely given that the service will be delivered following the go-live date by essentially the same set of staff as have been delivering it in the lead up to that date. It is absolutely not intended that the Business Plan should read like this in any part. Finances Q9 As we discussed at Fort Augustus 2, we propose to base the first year’s budget on the total current spend. This is addressed on p93. Are you content with this as a principle, and if not, what would you propose instead? If you are content, does our methodology for arriving at the indicative budget of £5,962,232 seem reasonable? This is fine in principle; however, the inclusion of the amount for EO UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 180 for Business Convergence seems at odds with the rest of the expenditure being running costs. Plus it does not follow the proposal that major initiatives should be funded separately Still contentious in my book, in spite of the commitment at FA2. Agree should operate within the current overall staffing and revenue cost envelope. The Shared Services Board has set up a working group drawn from Partners, under the leadership of Alan Ashworth, to review the current financial model and develop a revised proposal. Concern that the additional overhead of setting up the company of £100,000 is charged to the ‘Core’ in the funding model and not to those partners who benefit from the whole venture through the ‘Optional’ Note: Income from Janet for the WAN of £421,542 is attributed as university income in table 5, page 89. My understanding is that some, or this entire amount, relates to the commitment by the Government/SFC? to FE colleges to provide a ‘free’ WAN connection. i.e. this is money paid centrally to the university to provide services to the Colleges so the cost of providing the WAN to at least one key location at each AP should not be seen as a cost that the FE part of college businesses need to pay towards. Incidentally should we ever move to becoming a single institution then we would loose much of this as there would then only be an obligation to have one government funded WAN link through Janet. Budget based on current spend is sensible – with the additional SFC transitional funding. However, the cost distribution remains inequitable. To have extreme winners and losers is unfair and unsustainable and runs the risk of de-railing the whole process. An alternative cost distribution formulae needs to be devised that take account of turn-over as well as RAM. EO, without the LIS service has the same turn-over as Moray College. It is unclear therefore, given the numbers of staff and ICT activity within that organisation, why the EO contribution should be less than Moray’s. As the cost distribution stands, North Highland College’s position is unsustainable. This has to be addressed. Starting off at £5.9m pa running cost is only sustainable if colleges provide an open cheque book and take all the risk. Costs need to be more in proportion with scale/size of business UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 181 APs can't pay more than they are paying now Q10 We propose to recover annual running costs from members according to a formula (rather than, for example, by transaction-based charging). Are you content with this general approach, and if not, what alternative would you suggest? Subscription is better than transactional. Generally happy in principle. General approach of formula rather than transactions is fine as using transactions would get overly complicated. Student nos and staff seem fair. Clearly a formulaic approach is necessary but the model as currently illustrated in the Business plan is extremely unattractive to Orkney College and smaller partners in general. The Shared Services Board has set up a working group drawn from Partners, under the leadership of Alan Ashworth, to review the current financial model and develop a revised proposal. Need to form a group to consider this. Q11 If you are content with the formula-based approach in principle, do you have any comments or alternative suggestions on the particular methodology suggested on pp95-96? The logic flow of the various models is to be commended. However the impact on “micro” APs i.e. those with very few incumbent IT staff and/or relatively low HE activity levels could be significant It is difficult to define one specific metric that will suit all so broadly content with those suggested. Individual partners should see their own calculations and metrics (student/staff no.s) in the spirit of transparency The Shared Services Board has set up a working group drawn from Partners, under the leadership of Alan Ashworth, to review the current financial model and develop a revised proposal. The current model doesn’t reflect the size of the elements that make it up. For example the partners with the highest share of wSUMs or HE students (and presumably staff) aren’t picking up proportionately the larger share of costs compared to the metrics used, so by the same argument the smaller partners are bearing more cost. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 182 Suggest a formula that is based on actuals for students nos not PPF predictions (accepting the current figures are for illustrative purposes). I am quite prepared to suggest (or work with others) on an alternative formula. Those working on the Business Plan have had a year to come up with a proposed formulaic approach. I’ve had seven days to consider an alternative, so forgive me if it takes a little longer. If I understand correctly both the additional £100,000 overhead cost of the shared services company in the first year and the full cost of ‘core’ and ‘optional’ for the central university costs are charged against the ‘Core’ for all partners. I recall that this is to ‘incentivise’ partners to sign up full. Maybe that is an argument but the overall impact is to hit some partners extremely hard. Conscious that it is easy to criticise, I am aware how the outcome depends strongly how you throw the dice, but also what kind of dice you throw. I would be happy to be involved in any group working on other options that might reduce turbulence. Q12 If we are keeping overall costs level in the first instance, but changing the funding methodology, it is inevitable that there are ‘winners’ and ‘losers’. On pp99-100 we propose a possible mitigation scheme. Do you think such as scheme is necessary? Do you have any other comments on this? The explanation of the figure in the table on page 98 ‘top-slice into RAM’ is slightly unclear therefore it is difficult to assess the levels of mitigation that might be needed. However, agree with the Board that some mitigation will be needed by some partners in order to be able to participate Don’t think mitigation should be necessary – can dilute/delay effort to have no losers. The Shared Services Board has set up a working group drawn from Partners, under the leadership of Alan Ashworth, to review the current financial model and develop a revised proposal. Option Cost Model seems equitable Core Cost Model transition arrangements whilst generous in year one (i.e. status quo) the drop off to 2/3, 1/3 and zero requires detailed scrutiny at a local level. Clearly mitigation is better than no mitigation. However the UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 183 mitigation scheme suggested is predicated on the funding model being correct. All the ‘mitigation’ scheme does is spread the pain of transition over three years. This makes it more palatable in year one but nevertheless three years down the line we would still be paying out considerably more per annum for IT services than at present. Mitigation scheme is suggestive of transitional relief. The formula itself needs to be re-thought in the light of the UHI partnership commitment to support the sustainability of smaller partners. Putting in place mitigating factors is often not equitable Q13 Is any more permanent mitigation necessary, e.g. for smaller partners facing an increase in their costs? In reality permanent mitigation may be needed to reaching tipping point for marginally sustainable colleges. Not healthy We believe so – as any model that increases cost is unlikely to be acceptable to local management. This will depend on the size of the gap for individual partners but may well be necessary to support the whole partnership The Shared Services Board has set up a working group drawn from Partners, under the leadership of Alan Ashworth, to review the current financial model and develop a revised proposal. Ideally the funding model could be improved to make mitigation unnecessary or at least reduce the level of mitigation. It is difficult to compare like with like for the Optional services but analysis of table 8 on page 98 shows that the impact on the ‘Core’ costs for partners varies significantly. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 184 The table above shows that the impact on partners (in relation to the Core) varies from an increase in cost of 244% at one extreme to being 11.5% better off at the other. It is critical that the percentage impact on academic partners is considered rather than just the absolute costs because of the massive differences in size of APs. The above has been arranged in rank order of impact and the adversely differential impact on smaller partners compared with larger partners is quite stark and I would suggest unacceptable as it currently stands. For some this mitigated in part by the cost of the ‘optional’ service reducing the overall impact but for others, such as Orkney it is actually made worse. Q14 Do you agree with the approach to major investment outlined on pp107-108, i.e. to seek funding for major developments, according to an agreed ICT strategy, on a top-sliced basis? Agree in principle that major investment should be agreed and funded outside the running costs/partner subscriptions. Top-slicing on top of subscriptions (which may already need some permanent mitigation) may be beyond the finances of some partners, so needs to be carefully considered. Yes, but illustrates the danger of 12 votes out of 20 vested in Perth and Inverness UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN The Shared Services Board commits to taking account of these concerns and reviewing the relevant sections within the Business Plan 185 Agree in principle and believe that the proposals would further enhance accountability and lead to more strategic procurement based on well consulted business cases. Not convinced about the top-sliced methodology – need further clarification. I fully support the creation of a shared ICT strategy for UHI in which all APs are stakeholders. On the basis that there is not yet a formulaic model that seems tenable I would support the top slice approach to major investments, hopefully combined with match funding where possible from other sources. As long as we have no recognition with the UHI funding model of the additional impact of remoteness and sparsity on some partners it is difficult to see how a simple activity related formulaic approach will adequately apportion the cost of shared services. The appointment of a smaller college principal as part-time Chief Executive will guard against the development of unaffordable investment plans. That said, the cost distribution should incorporate an on-going investment into infrastructure. Plans to negotiate investment in a ‘bid’ for top slice basis are not consistent with the planning processes required by the partnership and its increasing reliance on ICT. Concerns about use of the term top-slice. Q15 We have deliberately not projected ICT service costs beyond the first year, on the grounds that this becomes a matter for the company’s members to determine. Would you however wish to see any such projections made at this stage, and if so, what direction and quantum of travel might you propose? Early forecast would be desirable; an outline 3 year forecast would be appreciated. Should be at least 5 years not just 1. It may be worthwhile projecting an indicative budget for say the first 2 years, even if this shows nothing more than the inflationary increases stated in the business plan. Even if these then alter going forward, there is a baseline from which any changes can be UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN The Shared Service Board will review the sections on costs, savings and efficiencies and incorporate a section on Year 2 finances where appropriate 186 explained. For the document provided to live up to the title of ‘….Business Plan’ I believe it is necessary to model at least three and preferably five years ahead. When bidding for business start-up costs in Orkney College, whether that be OIC, HIE, UHI ESF etc. I would never have achieved success with only one year of financial projections and would go so far as to say I would have been laughed out of the room. It’s crucial, although I acknowledge there are a lot of unknowns, as in any new business venture. This is a naïve approach that we suspect will not be supported by the partnership or SFC (in terms of transitional funding). In itself, it creates an unnecessary barrier to Academic Partner support and should be revised asap. 3 year plan would be reasonable. Likely that SFC will prescribe. The Service Q16 Do you have any comments on the proposals for Service Level Agreements on p61-66? SLA – staffing considerations should be included – Eligibility and PVG checks, references etc P66 – what is the current SLA achievement performance The Shared Service Board agrees to provide further clarity and detail where requested. Service Availability - why do we aspire to monitor all systems? Should we not aspire to achieving system coverage commensurate with criticality? Service Performance – sounds challenging. Notice Periods – agreed Service Review Meetings – this section is inadequate. Quality Assurance cannot be managed in this way – please rethink this area. Presence – agreed UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 187 Generally OK with the proposal for Service Level Agreements as set out on these pages Detail that can be agreed at a later date once the basics are agreed. Request for Service – who will arbitrate? HelpDesk Support – appears commensurate with the scale and nature of operations proposed. Customer Satisfaction – can we examine a “rolling” survey rather than an annual snapshot? Service Catalogue – looks good. Nature of negotiations around the appropriate service levels Some further clarity required on exactly what is in and out of core. Q17 Is the division between ‘core’ and ‘full’ services on pp59-60 acceptable? The split appears to be very pragmatic. The option to offer members a “selective” opt-in to additional services is to be commended but will require vigilance to avoid “cherry-picking”. There was a question about why Wifi was in the full service and not in core. What if all the ‘core’ services are not required, is there any mechanism for reducing the costs? Wifi is shown as Full Service. Happy with running on this basis at present in terms of current Wifi technology but what would happen when there is a step change in Wifi technology. Would this then be dealt with as a Core item as it would be an infrastructure issue rather than just an end-point matter? Who would meet the cost of installing the WAN to new sites (e.g. learning centres) Would this still sit with ‘Core’? UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN The Shared Services Board commits to clarify the definition of ‘core’ and ‘full’ or ‘option’ service and also to review the position of Wifi within this, without giving any room for misunderstanding that there is opportunity to pick-andmix from the service offering. Further detail will be provided on the provision of services to new sites and to 188 Would ‘Core’ only members receive the same statistical monthly outputs on performance as at present? While acknowledging that maintenance of websites for ‘Core’ only partners would be with the AP locally will the current central lead on website architecture be maintained and be available to all APs? Would ‘Core’ only members be fully consulted and entitled to influence decisions over matters such as the introduction and implementation of Thin Client technology. This is an issue of particular concern in Orkney where we are reliant on microwave links and fibre optic connections alongside the A9 that are disrupted from time to time. I.e. need local facility to maintain functions when the WAN goes down. Members who are not fully opted in. Reinforce wording around it being a clear requirement for all partners, whether core only or full, to discuss any IT procurement/projects with the Shared Service, if only to ensure compliance and minimum specs, etc. Would expect universal printing / ability to print at any site to be a ‘core’ service rather than ‘optional’ although acknowledge managed locally. Q18 We have proposed that members remain responsible for decision-making and spend in respect of PCs, other end-user devices, classroom equipment etc. Do you agree with this? Not entirely. The company should reserve the right to mandate equipment procurement choices where circumstances indicate an overwhelming “corporate” benefit (volume discounts/commonstandards/ serviceability /adherence to the technology “roadmap” etc). Yes, although as at present welcome guidance and advice. The Shared Services Board commits to revising the wording associated with local IT spend to reflect the positive relationship between the Shared Service and its Members Yes with caveats. If we are to achieve efficiencies then some degree of uniformity will be required regarding: Devices supported and expertise required; Depreciation and replacement of hardware (which will have an impact of required support); Innovation (and its impact on future networked delivery); ICT Strategy UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 189 Q19 On pp49-57 we outline a draft ICT strategy for the delivery of ICT services to the Company’s members. Do you have any comments on this? Again comprehensive. If this is the appropriate section, would like to see more consideration of “partnering”/”piggy-backing” with similar ongoing or emerging programmes in aligned sectors e.g. secondary sector, LAs, other public sector initiatives It is important to remember that this strategy needs to support the whole business (including the specialist areas) and therefore it is encouraging to see research mentioned on page 53 under work streams. The Shared Services Board commits to reviewing the relevant sections as identified. Details that should be agreed later. On page 55 it is stated that “A single service will allow an overarching dialogue, which is not currently possible, with individual APs, the FE Region and the University to determine where strategic development……. At present Orkney College is not able to sign up for the ‘Full Service’ due to a) being part of Orkney Islands Council with no mandate to transfer staff; b) the current financial model makes the ‘Full Service’ and incidentally the ‘Core’ service financially untenable. Nevertheless the College would be committed to achieving the principles of the shared service in terms more joined up working, convergence of systems etc. The College would wish to be an active partner in the dialogue referred to on pg 55. What is the difference between IT Strategy (Business) and IT Strategy (Technical)? Is the latter a full time role? How is the ICT Strategy developed, articulated and implemented with and for the University? Concluding Q20 Are there any other areas of the Business Case/Business Plan that you’d like to comment on? Whilst the detailed risk register has been included in the appendices it was a little surprising that there was nothing in the main business UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN The Shared Services Board commits to reflecting key 190 plan. risks within the body of the Business Plan This is a comprehensive and well-argued Business Case/Plan and the team are to be commended for their thoroughness. However, strip away all the logic and wiggly-amps and this proposal has at its core a significant change management programme that faces some serious hurdles (as evidenced by the heel-dragging and passive resistance already encountered in parts). Would like more evidence as to how this vital aspect will be managed as the Winning Hearts and Minds will be crucial to success. The Shared Service Board commits to emphasise the sections on training and development, communications and change management within the appropriate sections of the Business Plan There are some comments within the Business Plan that do not need to be said within the context of the ICT service regarding external factors The Shared Services Board commits to reviewing the Chapter on Regional Developments What about contingency for delays in relation to the timescales, e.g. in particular Pensions? The Shared Services Board commits to reviewing the timescales and revising as appropriate Where do Libraries sit? The Shared Service Board has commissioned some exploratory work from an AP Librarian which will be able to inform consideration by a Commissioning Board, should that be established as per the proposals. What are the communications channels between the Board and the University/APs The Shared Services Board commits to clarify how it intends the Company should align with the academic governance model of the partnership. Need milestones for the 2 year period following the live service date. (Bus Plan projection period?) The Shared Services Board commits to review and update the Project Plan and UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 191 upload this into Mahara Q21 Is there anything in the Business Plan – or omitted from it - that would make it difficult for your institution to sign up for the shared service, and if so, how could we address that? Should be more detail as to efficiency gains/growth/flexibility etc, in particular general initiatives proposed to realise them. The Shared Service Board commits to strengthening the Business Plan to incorporate further details around these. The logic is clear and supported. The concern from smaller (and more distant) AP perception is that we could end up paying more for a service that, whilst overall more efficient and effective, could potentially be remote and fail to meet our local needs. Revision of the Financial and Voting Models and the makeup of the Board after the ICT shared service goes live will in part address this. Continued engagement with all stakeholders and communities within UHI will also ensure an efficient and effective service across all Members. Still feel there should be some acknowledgement of the desirability of cost savings/method of achieving and some basic forecast numbers The Shared Service Board commits to strengthening the Business Plan to incorporate further details around efficiencies as well as cost savings. The financial commitment is a concern at the moment so we would need to see the subscription calculations and understand if we are a ‘winner or loser’. If a ‘loser’ by how much and what mitigation if any would be available. Revision of the Financial Model will address this – see Finance Section above We would also like to see more representation from the small/specialist colleges in the major decisions, either through membership of the Board or the voting rights. This will be addressed as set out above under the sections on Voting and Directors UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 192 As part of Orkney Islands Council the College does not have a mandate to enter in to negotiations to transfer staff to the UHI Shared Services company. I would never say never on this matter but it is almost inconceivable that the College could go down this path following the current timeline that is set. Noted Our proposals and those anticipated by SFC: Noted A 3-5 year projected income/expenditure plan; A governance/staffing model that takes account of UHI partnership commitment to support smaller partners The financial model causes serious concerns as it is set out at present. Although not published in the Business Case and Plan (which is actually unfortunate) the cost of the ‘optional’ services would be circa £30k per annum higher than the current in scope spend. The financial position regarding the ‘Core’ is also extremely concerning as given by the indicative figures in the Business Plan. The ‘Core’ services as set out in table 1, pg 19 would cost the College an additional £30k per annum. Combining the additional ‘Optional’ cost of £30k per annum and the additional ‘Core’ cost of £30k per annum would mean a total increase in annual spend on IT services of £60k per annum. As it stands this is an untenable additional cost. The current IT service in the College operates more efficiently and reliably than it has ever done in the past. Revision of the Financial Model will address this – see Finance Section above Unknown costs of Pensions The Shared Service Board is taking specialist advice on Pensions and will include all details available in the revised Business Plan up to the date of publication. Beyond that time all Partners will be kept informed of developments. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 193 Potential insolvency The Shared Services Board will seek advice from the Financial Directors of the partnership with respect to financial processes and operation of the Company The following from the perspective of a College which cannot opt in. Infrastructure, Network and Telephony – LAN cabling/ patching/ switching – if we were to e.g. add another site by leasing a building where would we stand with getting the LAN installed? There will be greater clarity regarding the situation of non-opted-in Members in the revised Business Plan Infrastructure, Network and Telephony – Wifi – as above Infrastructure, Network and Telephony – server platform for noncore services – can we add applications to e.g. myuhi ourselves? (assuming they are compatible) Infrastructure, Network and Telephony – web analytics/ design/ development or Hosted Applications Support – convergence – using these as examples of areas we might need assistance with in future. Is there an indication what the charge rate would be? Training – would staff not transferred in be able to access the training? Would there be a cost? IT Meetings – as above UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 194 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 195 APPENDIX A5: UHI ICT SHARED SERVICES RISK REGISTER Risks numbered 1.x are for the period prior to launch (i.e. before 1 April 2014) Risks numbered 2.x are for the first year after launch (i.e. after 1 April 2014) No. Risk descriptor Root cause Implications Rating (Likelihood x Impact) Proposed mitigation/controls 1.1 VAT exemption proves unworkable in practice Further guidance/case law makes (e.g.) ‘exact reimbursement’ impracticable to implement CSG unviable in its intended form 1x5 Note: updated guidance from HEFCE suggests this even less likely. Monitor via HEFCE, BUFDG, UCISA, APUC etc. 1.2 Impracticable to transfer LGPS pensions Employer contributions unaffordable, bond requirements unfundable, or other Major industrial relations difficulty in establishing CSG 2x4 Take professional advice as soon as practicable (currently in process Oct 13) 1.3 Insufficient AP buy-in for critical mass Proposition is not appealing or convincing enough; financial model disadvantages key APs; unacceptable governance model Delay in establishing CSG 2x4 Extensive engagement with APs on business plan/partnership agreement Development of acceptable financial model, if necessary including transitional relief 1.4 University does not buy in Perceived loss of control, failure to demonstrate how HE interests protected, unacceptable governance model Delay in establishing CSG 2x4 Ensure that there is a suitable model for strategic influence at HEPRC and FE Regional Board level – capital investment determined at this level on the basis of agreed strategic plan(s) 1.5 Failure to agree financial model Irreconcilable vested interests Delay in establishing CSG 2x3 See 1.3 1.6 Transition The emergence Delay in 2x3 No relocation costs UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 196 costs unaffordable of unexpected or unpredictable costs/liabilities establishing CSG No compulsory redundancies in Year 1 Seek SFC funding See also 1.2 1.7 1.8 Industrial relations problems Poor consultation processes; failure to offer guarantees on location, job security, pensions Delay in establishing CSG 3x3 LIS shared service caught in broader planning blight APs not willing to sign up to broader process Delay in establishing CSG 3x3 See also 1.6 Constructive engagement with trade unions at early opportunity See 1.3 Position CSG as stable option through organisational change Articles etc. kept under review 1.9 ONS issues compromise model Company becomes subject to ONS strictures Delay in establishing CSG 1x4 Articles and governance kept under review with contingency plan 1.10 Inadequate capitalisation APs/EO unwilling to commit upfront CSG has no operating funds, cannot take on liabilities 3x4 See 1.3 1.11 Legal challenge From APs who are ‘forced’ to take core services at prices they cannot control Delay in establishing CSG (at least), further impact on partnership 1x5 Ensure transparency of cost model at suitably granular level necessary in any case to meet audit requirements of VAT exemption 1.12 Not all APs buy in (less serious version of 1.3) Various reasons More complex operating model, reduced efficiencies 5x1 Effect of compromising the model in order to get apparently complete buy-in would compromise core objectives. No specific action proposed. 1.13 Failure to secure necessary operating agreements Inability to offer/agree acceptable terms Delay in establishing CSG, increased costs 2x2 Short internal ‘procurement’ timescale to reveal potential problems; have effective plan B UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 197 with APs (provision of services to CSG) 2.1 Cash flow failure for selfprovision/outsourcing. Inadequate capitalisation, poor profiling, unexpected liabilities, members late paying their bills At worst, CSG failure. More likely, severe loss of credibility 3x3 Ensure that contracts with APs protect against inheritance of unsustainable liabilities. Put effective financial management in place. Explore underwriting arrangements with University/HEPPRC and FERB. 2.2 Member default Failure of AP Unlikely to lead to complete failure but could have significant to severe financial consequences 1x5 Develop contingency plan 2.3 Legal challenge From industry re Teckal compliance CSG cannot operate 1x5 Don’t provoke them. Ensure that CSG Articles and protocols are as compliant as possible. 2.4 Failure to operate within budget Management failures; unbudgeted liabilities At worst, CSG failure. More likely, severe loss of credibility as members have to bail it out 2x4 Ensure that contracts with APs protect against inheritance of unsustainable liabilities. Put effective financial management in place. Effective Board oversight. 2.5 Loss of confidence of members in service Perceived and unremedied drop in service standards Lobbying by opponents Business disruption, unwillingness to progress shared services agenda further 2x4 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Effective monitoring of user satisfaction and intervention as necessary Effective Board oversight. Relationship and expectations management. Solid SLA 198 2.6 Sabotage by disaffected CSG staff Failure to address issues with disaffected staff Significant service disruption, loss of confidence 2x4 Inclusive management approach Effective HR procedures Possible VR offer for staff who would not want to be part of new service 2.7 Key staff overload Failure to distribute workload widely enough – limited number of staff with key expertise Significant service disruption, loss of confidence, loss of key staff 3x4 Ensure that workload is well-distributed and does not (e.g.) just fall to current University staff Engage all staff in process of change Well-planned and funded retraining programme Do as much work as possible prior to ‘hard’ launch 2.8 2.9 2.10 2.11 Legal challenges to post-TUPE reorganisation Non-compliant approach, IR failure Compliance failure inherited by CSG Failure to secure capital investment Loss of CSG status Significant service disruption, inability to manage change 1x4 For example, major ongoing licence breach in relation to novated contract Significant financial liability, reputational damage 2x4 Failure to convince FERB/HEPPRC on capital investment plan (or failure to produce an effective plan) Inability to maintain and develop IT infrastructure in support of the business 3x5 Failure to comply with terms of VAT exemption Although it should be possible to recover from a breach, a Robust principles of fairness embedded Take good legal advice Appropriate contracts with APs in relation to inherited liabilities Appropriate due diligence Early engagement with FERB/HEPPRC (do not just present ultimatum demand) Make sure plan reflects business needs Seek SFC support 1x5 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Effective audit and risk management Proper due diligence before taking on major new business 199 major VAT liability could be incurred in the interim 2.12 VAT exemption proves unworkable in practice (but we find that out postlaunch) OR becomes unavailable because of changes in legislation Further guidance/case law makes e.g. ‘exact reimbursement’ impracticable to implement OR EU takes infraction proceedings against UK (probably well past Year 1) Possible complete CSG failure 1x5 Have a plan B for the event in which a CSG becomes impossible to maintain (e.g. revert to top-sliced funding, direct grant from SFC, etc.) 2.13 AP member or members withdraw from CSG Multiple possible root causes Loss of efficiency or even viability 2x4 Properly structured agreements between the CSG and its members Also see 2.5 2.14 Services to individual APs under pressure Increased visibility of internal crosssubsidy Loss of coherence and unity in partnership 2x3 Ensure that there are operating principles put in place early on and agreed to 2.15 Failure of CSG internal business function Internal supplier failure (e.g. AP contracted to deliver financial services to CSG deprioritises that work) Service disruption 2x3 Effective business continuity function, and contracts/SLAs that allow for exit in case of failure UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 200 APPENDIX A6: ARTICLES OF ASSOCIATION OF UHI SHARED SERVICES LIMITED UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 201 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 202 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 203 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 204 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 205 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 206 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 207 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 208 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 209 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 210 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 211 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 212 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 213 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 214 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 215 UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 216 APPENDIX A7: BUSINESS SYSTEMS CONVERGENCE STRATEGY University of the Highlands and Islands Business Systems Convergence Strategy Version Draft 1.0 1.1 Author John Maher John Maher John Maher 1.2 John Maher Date 30/11/2012 10/12/2012 29/01/2012 Notes Initial draft to Alun Hughes Reviewed and comments from AH incorporated Expansion of ERP v Best of Breed (Solutions Types) and AP application refresh plans (Systems Audit) 11/04/2013 Minor corrections UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 217 Executive Summary UHI’s HE and FE outcome agreements contain an objective to review and develop a strategy for the convergence of its business systems. The benefits of business system convergence include: Improved processes and functionality Culture change towards greater partnership sharing of knowledge and expertise Self-service online services delivering cost savings, greater productivity and better data quality Better management information Informed decision making There are a number of single instance business systems supporting partnership wide services e.g. student records, VLE, library and research. However these are high-end expensive systems capable of managing the individual business processes of each academic partner. If UHI is going to benefit from further business system convergence and reduce costs common business processes need to be adopted. An audit has highlighted a diverse range of systems in use, often small and lightweight and therefore lacking in certain functionality. Where there are predominant systems these have been implemented and configured individually. By combining the partnership’s annual spend on business systems it should be possible to access quality business systems with a wide range of functionality, including online self-service processes and quality management information. There has been much discussion in Scotland and across the UK regarding the development of shared services. Currently APUC are developing a framework for the procurement of finance and HR business systems for the education sector in Scotland which UHI will be able to access. However, despite strong encouragement from government there is little indication of the development of shared business systems services, especially in the education sector in near future. Therefore UHI needs to look at either extending one of its current business systems or procure a new one for HR, Finance and Timetabling. To avoid implementing inappropriate business systems it is imperative that each functional area develops a partnership wide strategy with supporting business processes. These are needed as a reference for creating the functional requirements specification which will be used in any business system assessment or procurement. Any assessment should also take into account the full cost of providing the business systems in-house including hardware and staff, who often need to be highly skilled. These should be compared against the potential benefits of procuring a business system that is managed externally e.g. hosted in the cloud. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 218 To manage the process of business system convergence a series of 12 month projects will be necessary, coordinated under a programme structure. It is proposed the Shared Services Board acts as the programme board with strategic practitioner groups developing the strategies, business processes and requirements specifications for the supporting business systems. Finally teams made up of business users, IT and vendors will implement the chosen solution. It is essential that during this process the Shared Services Board, the practitioner strategy groups and senior management support the redesign of business processes and ensure they are consistently implemented. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 219 Introduction The UHI Shared Services Board commissioned a report that would satisfy the following objective contained in both the HE and FE outcome agreements for the University of the Highlands and Islands. “Undertake a review of the existing IT systems for functional areas such as Finance and Human Resources with a view to developing a plan for these to be converged.” The terms of reference for the review were to: Prepare an inventory of the finance, HR, and any other major administrative systems in use across the UHI partnership Present an initial options appraisal for the methodology by which these might be converged, including options such as: extending one or more of the existing systems to cover the entire partnership procurement and installation of a new system or systems to cover the entire partnership procurement of a cloud-based solution with simultaneous migration of all partners to it procurement of a cloud-based solution with phased migration over time Take account of the broader Scottish and UK IT strategic context including an assessment of whether there are collaborative opportunities with other institutions. Present an outline draft project plan for the implementation of the preferred solution Present any evidence that might be available about the potential costs of the preferred solution. Existing Convergence Despite the implication of the objectives within the two outcome agreements, it is important to note that UHI has a number of partner wide services that already use a single instance of a business system. These include: Student Records System (SITS) o Used by all academic partners for FE and HE student administration VLE – Blackboard o Used by all academic partners for HE and some FE delivery Library Management System(LMS) – Millennium Research Information System(RIS) – PURE However there is no similar convergence in HR or Finance. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 220 Figure 1 Joined Up Management Reporting Figure 1 shows the main components needed to create an effective management reporting model for UHI. However, two of those components are currently missing, namely Finance and HR data. The Student Accounting Model in SITS provides some student finance data, for those academic partners currently using it for fees and funding: Perth, Moray, Inverness and North Highland. However, there is no access to additional staff or cost data, including staff numbers, staff costs etc. This data can be collected and added manually but this is a laborious process making the production of timely management information almost impossible. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 221 Expected Benefits Figure 2 outlines some of the expected benefits of converged business systems. Figure 2 Expected Benefits Self-service online services replacing paper Better management information Informed decision making Culture change Improved processes and functionality Improved Processes and Functionality Some partners have some good business systems that have the functionality they need, but generally this is only in one or two of their systems. The audit has shown that most are lacking at least some key aspect of functionality e.g. self-service, reporting etc. Pooling license expenditure brings with it a wider choice of products, often richer in functionality, than can be sourced individually especially for smaller Partners. Being part of a collective agreement makes this functionality accessible to all, giving administrators more tools to do their jobs better and partners better data to analyse. Culture Change A converged business system will allow greater sharing of best practice across the partnership and allow practitioners from different partners to support one another in performing administrative functions. It also gives a solid platform on which to develop new, more efficient ways of working, possibly as a shared service with professionals developing specialisms in different areas. Self-service Online Services A key component of any new business system will be its ability to provide online self-service functionality to staff. This will improve business processes in terms of time, cost and data quality. Staff being able to manage aspects of their own data and perform key processes online (e.g. leave UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 222 requests, absence notification, expenses, performance review etc.), without the need for paper forms, will make these processes more efficient and the data more accurate and timeous. Better Management Information Having all the data for each functional area in one system, in the same format will allow better management information reporting at a partner and partnership level. As there the will be only one interface to maintain the costs of providing that information will also reduce. Informed Decision Making Better management information will support UHI in making informed planning decisions and allow better on-going performance monitoring across a range of KPIs. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 223 Strategic Context External Environment There has been a lot of discussion in the UK and in particular Scotland, at both sector and government level, in terms of shared services and making better use of IT resources. Principles of McClelland The Scottish Government commissioned John McClelland to review ICT usage in the public sector in Scotland (McClelland 2011). Some of the key principles he identified are relevant to UHI: Although “information management” is a core activity it is not essential to operate totally self-sufficient local information processing, support and development. Excess resources and cost are being created by the existing operating mode of “standalone self-sufficiency” including the operation of many separate data centres and local systems development. The existing clusters of nearly common applications should be built upon by selecting the best single application implementation and associated business processes and then from there achieve a reconciling of and, agreement on common business processes so that the number of separately hosted instances can be rationalised and reduced. Order of merit should be to first re-use, then buy and build only as a last resort. Griggs – Regionalisation At the same time Russell Griggs’s review of further education (GRIGGS 2012) has moved the Scottish Government to restructure the FE provision through a smaller number of regions. This has resulted in the majority of colleges merging within these regions, with the main exception being UHI, which will operate with activity and funding being coordinated through a regional board. This brings with it the need for tighter cost control, greater cooperation and a need for much better management information to support planning, performance measurement and the distribution of funding. Collaborative opportunities with other institutions Although there has been some discussion about shared services across the Scottish and wider UK education sector, there has been little tangible evidence of effective shared services being developed, especially in relation to core business systems. The HE Information Directors Scotland’s (HEIDS), in conjunction with Scotland’s Colleges, report (HEIDS, July 2011) and the FE&HE Oversight Board’s initial strategy both mention business system convergence, but it is either at the far end of the road map, or in the case of the Oversight Board the priority is to support it in the context of the numerous regional college mergers that are taking place. Therefore it must be concluded that there will be no sectorial development of a business system shared service in the short term. APUC is currently in the process of creating a framework for the purchase of finance and HR systems, through its work with the new Edinburgh College. UHI will be able to benefit from this service once Edinburgh’s procurement has been completed. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 224 Internal Environment Options for Change and Regionalisation The Capita review of UHI structures and governance, and the regionalisation changes prompted by the Griggs report have created a need for better management information to support the University and the new FE region. Currently the disparate business systems in use across the partnership create data silos that are almost impenetrable, making the collation of data for any cross-functional analysis, either within the individual institution or at a UHI level laborious if not impossible. Shared Services UHI is very close to creating the LIS shared service and it is assumed that by doing so, there will be savings made in the consolidation of software licensing and application hosting. The new service will have the responsibility of hosting the current range of disparate business systems. Their variety in terms of numbers of applications, versions, operating systems and database platforms will present an immediate challenge, both physically and financially. Estates Management and Timetabling The ability to coordinate the network delivery of HE and now due to regionalisation FE activity, particularly the video conferencing estate makes the creation of a global timetable highly desirable. Pressures on funding also create a need to provide better audit evidence, at a regional level, of estate provision and usage. Existing Business Systems Fit For Purpose? During the audit exercise is was apparent that a number of academic partners and executive office do not rate some of their business systems as fit for purpose. They are either at the end of their version cycle and need upgrading, lack functionality or do not have some of the new features that users and staff expect e.g. self-service of your HR record, online leave requests etc. Some academic partners are actively planning to either upgrade their existing system or purchase a new one. There are a few examples where partners have procured the same finance, HR system or estates system (see Audit of UHI Partnership Business Systems). In each example, although it is the same system, and on the face of it performs the same functions, they have been implemented in very different ways to fit each academic partner’s business process. Business Process Convergence The strategy for the convergence of business processes in the service areas covered by the systems (HR, Finance, Estates) under review has yet to be defined. Consideration also needs to be given for processes that sit between the interface between functional areas but which do not sit consistently in one or other of these functions across the partnership e.g. payroll which in the partnership either sits in HR or Finance. An important distinction needs to be made between the common definition of a business process and its implementation. An example, requesting and authorising a leave request online, can look on paper or in a requirements specification like a common process but if each partner implements it UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 225 differently, for example in the workflow over who approves it (e.g. line manager, HR or department manager) the benefits of convergence are lost. It is unlikely there will be an immediate 100% acceptance of any proposed business system convergence, and not just Orkney and Shetland who have their systems provided for by their respective island councils. The consequences of a partial take up will be that the full benefits of convergence will not be realised and certain processes will remain manual e.g.: Joint staff and estate returns Compiling a consolidated set of accounts Provisioning of IT accounts for staff Work has already been started on assessing what business processes within in a functional area may be considered for a future shared service. While strategic elements of a function may remain separate the common elements need to be implemented in a converged business system in a common manner. As an example, in the finance area would be the following could be included: Accounts Payable Accounts Receivable Debt Recovery Sales Invoicing General Ledger Accounting and Financial Reporting Fixed Assets/Asset Accounting Tax Treasury Management Internal Audit Payroll5 Partner Size The small size of some partners means they have not implemented enterprise level business systems, either because they cannot afford to, or it is not warranted. Implementing a single business system of a particular business area/process across UHI may have two opposing outcomes. First, it may give access to functionality and reporting at a cost that may not be available to the individual partner. Second, conversely, it may make the process or system more expensive for a particular academic partner, either in terms of license cost or additional staff effort. Audit of UHI Partnership Business Systems An initial review of the business systems across the UHI partnership was undertaken. Its scope was HR, Payroll, Finance, Estates, Timetabling and CRM. Partners were asked to provide a breakdown of software used, versions, licensing arrangements and total spend (see Appendix 1 – Business System Audit). There was no return from NAFC and Shetland and Orkney are excluded from Finance, HR and Payroll as they have these provided by their respective island 5 With reference to its interface with HR UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 226 councils. Due to the short timescales an in-depth data collecting exercise or detailed analysis could not be performed but it was sufficient to highlight some key points: The business systems used across the UHI partnership are mainly hosted in-house. Very little use is made of the cloud, with the exception of Argyll and WHC who have their HR system hosted externally. Perth is currently investigating this option with their HR platform. There is a wide range of systems in use reflecting size of each academic partner and executive office although there are a few predominant systems. However, these “common” systems are all individual installations, with different components purchased, with separate licensing arrangements and seemingly no consistent pricing formula. Common systems include: o o o HR - CIPHR - 3 instances Finance – Sage 50 – 4 instances; SUN – 3 instances Timetabling – Celcat - 5 instances, possibly 6 in the near future Some academic partners and executive office do not have dedicated business systems due to their size, often utilizing spread sheets instead. A number of academic partners indicated that they need or would like to, replace or significantly upgrade one or more of their business systems. This included four who would like to replace their finance system in the near future. No academic partner was forthcoming regarding the budget they had allocated to this. There were no examples of academic partners sharing an application although there are currently discussions between Perth College and executive office about entering into a joint service for CIPHR, hosted externally by Computers in Personnel. Licensing for specific numbers of administrators (power users) is higher than for an organisation of the combined size of UHI, reflecting the multiple teams across the partnership in each functional area doing the same type of work. Total reported annual license6 spend on systems (including VAT) is approximately: o o o o o o HR – £55,000 Finance – £120,000 Payroll7 - £16,000 Timetabling - £55,000 Estates - £4,000 CRM - £6,700 Given the levels of spend on HR, Finance and Timetabling, and their criticality to UHI’s development they should be the focus of any future business system convergence. 6 7 This does not include consultancy or internal hosting costs. Payroll costs maybe higher as they are often included in the license of either the HR or Finance system. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 227 Options Appraisal Solution Types UHI has historically bought large, heavyweight, and consequently expensive software solutions to meet the multiple business process needs of its partners. Experience has also shown that some vendors find it hard to accommodate the complex licensing models UHI has demanded in the past e.g. to price UHI as a single entity but provide 14 individual instances. The insistence on needing solutions that can manage the myriad of business practices within UHI has two outcomes: 1. UHI pays more than a single institution of a similar size 2. Often a wide range of software solutions are excluded from the selection process In-house or Cloud Cloud solutions, while sometimes costing more in license terms than those managed in-house, have the benefit of reducing an institution’s resource costs, both human (people and expertise) and hardware. This simplifies the technological environment freeing the institution from maintaining a high skill level in particular niche technologies e.g. Oracle database administration. However, consolidation may deliver economies of scale that make an in-house hosted system justifiable. It is important that any cost benefit analysis takes into account all costs (tangible and intangible). The cloud solutions market has also matured considerably and SaaS (Software as a service) providers can often offer much better scalability, performance and reliability. With all outsourced solutions there is a loss of control but this can be an advantage, as any configuration change comes at a cost, which allows the institution to make a disciplined decision on whether the change is really worth it. The choice facing UHI is to either extend one or more of the existing systems or procure and install new systems to cover the entire partnership. This can only be decided when a requirements specification for each functional area has been drawn up. This can then be used along with other factors including cost of ownership, depreciation and where the systems are on their lifecycle, to assess the existing systems and measure these against the cost of procuring new ones. ERP or Best of Breed ERP (Enterprise Resource Planning) systems concentrate on data integration across a range of business applications from the same supplier, the core normally being the general ledger, accounts payable, accounts receivable and payroll. Common add-ons include HR, CRM and Business Intelligence. A Best of Breed methodology is about selecting the most appropriate application for each business function, not necessarily from the same supplier, and then integrating it into your already existing set of applications. The traditional argument for ERP versus Best of Breed is that you choose between having integrated data across a range of applications, but with varying degrees of functionality against having specialist applications that perform one function very well but were harder to integrate. Investment by ERP vendors in developing application functionality, new easier to use SOA (Service-orientated Architecture) integration technologies and SaaS for both ERP and Best of Breed solutions has blurred these differences. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 228 When looking at the choice between integrated solutions and Best of Breed the following points should be considered: Does UHI really need the rich functionality provided by specialist business systems? There is a balance to be struck in being confined by the possible limitations of an individual component, or the inherent business process of an integrated solution and being able to cater for specific business processes through specialist applications. Making a commitment to use one provider, in principle, to provide all of UHI’s business systems can make the procurement process less labour intensive. There is no need to have multiple competitions to procure the separate business applications of a of a Best of Breed approach. Is the range of applications on offer from a single integrated supplier truly integrated or the product of a strategic acquisition to bolster their product range? Implementing an ERP solution can be complex due to the high levels of integration inherent in these systems. This often requires reengineering the business processes across all business areas, and in UHI’s case across all in scope Partners, at the same time. Having a single supplier can make relationship management easier but it also puts them at a significant advantage when dealing with the institution. The integrated nature of an ERP solution can make the exit costs higher as dismantling it impacts all areas of the business. Choosing Best of Breed solutions allows individual systems to be changed with minimal impact to the running of other core business applications. There are broadly four different models for a business system implementation in UHI: 1. Multiple Systems/Multiple Instances This is the status quo. Each partner has their own instance of the system of their choice. Additional hardware and staff costs are incurred hosting and maintaining a variety of systems on a variety of platforms. This requires maintaining a diverse range of staff skills. The potential for combined management information is very low due to the number and variety of interfaces that would need to be maintained 2. Single System/Multiple Instances Each partner has their own instance of a single system based on a best fit to a set of collectively agreed requirements. Additional costs are incurred maintaining multiple instances in applying software upgrades, configuration changes, disaster recovery and backups. This option makes the convergence to a single instance at a later date easier as long as common business processes have been agreed and maintained. There is some potential for combined management information but multiple interfaces would need to be maintained, albeit of the same format. 3. Single System/Single Instance Each partner uses the same system with discreet areas of data managed by different partner administrators. This has the lowest cost in terms of hosting and maintenance. The potential for UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 229 combined management information is very high including individual partner and partnership reporting. 4. Single System/Federated Instance This is the classic ERP model for an organisation separated into discreet divisions. Individual partner and partnership views of the data can be achieved. This model often has significant costs attached to it as it is the preserve of some of the bigger solution providers. The potential for combined management information is very high. Appraisal Factors Each requirements specification and software solution needs to be measured against the following appraisal factors: Cost and Funding Mechanism “Order of merit should be to first re-use, then buy and build only as a last resort.” “Excess resources and cost are being created by the existing operating mode of “standalone selfsufficiency” including the operation of many separate data centres and local systems development.” (McClelland 2011) Any costing model of convergence should include the value to UHI of the potential savings in IT and business user time spent across the partnership supporting individual systems, producing and maintaining separate procedure guides, training users and liaising with multiple suppliers. In looking at requirements for new systems there is always the potential of scope creep as the “blue sky” thinking exercise becomes a shopping list of everything ever wanted from a system. There can also be the desire to specify a fully flexible system to accommodate multiple business processes rather than make the hard decisions about changing working practices. These two factors drive up complexity and cost. Software purchases normally involve a large capital invest upfront followed by an annual maintenance payment for the duration of the license. Given the current indications from the SFC it is unlikely the partnership will be able to access large capital sums for the purchase of new software although this should be investigated further. A second option and one that is increasing in popularity given the rise of cloud services, is the subscription model. There is no large capital investment upfront but higher monthly or annual fees for the lifetime of the contract. If priced over a 5 year software renewal cycle it is very attractive especially if access to capital is restricted. Management Information “Although “information management” is a core activity it is not essential to operate totally selfsufficient local information processing, support and development.” (McClelland 2011) UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 230 The effective consolidation and integration of disparate business systems makes it easier for information to be entered once and then promulgated to other relevant systems. This ensures that all systems are updated simultaneously, reducing administration, duplication of effort and the potential for error. Consideration needs to be given to data protection and confidentiality issues, especially as each partner will remain an employer in their own right. Any solution will need to be able to separate data into discreet areas only accessible by those that have the rights to see it. Having the data in one system, as long as it is structured in a consistent manner, allows for much more coherent and rapid management information. Having one instance of each core business system reduces the number of interfaces needed to bring the information together, to be able to produce cross-functional management information for planning, analysis and performance measurement. Reducing Complexity “The existing clusters of nearly common applications should be built upon by selecting the best single application implementation and associated business processes and then from there achieve a reconciling of and, agreement on common business processes so that the number of separately hosted instances can be rationalised and reduced.” (McClelland 2011) The objective is to increase convergence and reduce complexity. This involves adopting common business processes and single, simpler software implementations. Self-service Learners and staff should be able to access and update a reasonable level of information held about them through self-service portals, thereby ensuring it is accurate and up to date, and reducing costs of producing paper copies e.g. salary slips. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 231 Appraisal Factors Summary In summary any consolidation of business systems should satisfy these key objectives: High •Convergence •Management Information •Self-service Medium •Cost Low •Capital Intensity •Complexity •Number of Instances Table 1 Software Solutions Matrix Complexity Cost Management Information No. of Instances Convergence Multiple System Multiple Instances High High Low Single System Multiple Instances Medium High/Medium Medium Single System Single Instance Low Medium High Single System Federated Instance High High High 14 Zero 14 Medium 1 High 1 High Table 1 assesses the four models of business system implementation against the appraisal factors outlined above. Self-service and low capital intensity have been omitted as these can be delivered across all the models. The optimal solution for UHI is the Single System – Single Instance model. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 232 Guiding Vision and Key Principles Throughout this business change process a guiding vision and set of key principles need to be adopted by which to assess any of the programme outputs: The Vision: Adopting a common and integrated set of business processes, supported by services from a set of commercial best-of- breed systems. The Principles: 1. 2. 3. 4. 5. 6. Review existing business processes – looking ahead to 2017 – and adopt common ones Compromises will need to be made to meet the needs of the whole Replacement of paper-based processes and local systems Once Only – no duplication of master data sources, of processes, or of systems Adopt ‘Out-of-the-box’, best-practice implementation using common standards Easy web-based user access from on and off campus with appropriate security levels UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 233 Potential Costs Without a detailed requirements specification and supporting business strategy it is hard to elicit real costs from software suppliers. The following are estimates based on informal conversations with various suppliers: HRMS A best of breed HRMS including: HR, Payroll, HESA, Recruitment, Web Recruitment, Learning, Development, Health & Safety, ESS, MSS, Eslips, Performance Management, Reporting Layer and GL interface. Over 5 years, based on 2000 staff records - £234,943 (excl VAT). Additional costs can include: External hosting Consultancy (100 days) Project Management (20 days) £55,870 £87,700 £17,540 Finance No costs are available but it is assumed that a solution can be realised within the limits of current license expenditure. Timetabling A best of breed timetabling solution - £32,000 (excl VAT) p.a.: Core includes base timetabling option and room booker Optional extras can be purchased either individually or as a Partnership: o Attendance Monitor - £28,000 (excl VAT) o SITS plug-in - £6,000 (excl VAT) o Online timetables - £14,000 (excl VAT) UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 234 Project Plan Programme Governance A programme of several projects is needed to coordinate the level of change required to deliver the business system convergence outlined above. Where there is functional and business process crossover joint project teams will need to be formed. Figure 3 Programme Structure Programme Board Shared Services Board Functional Strategy Groups Chair: SSB Member Functional Project Team: Business, IT, Supplier Finance & HR HRMS Pay-roll Estates & Timetabling Finance Estates Timetabling Programme Board The Shared Services Board is the natural locus for the programme board which will coordinate all the project strands, ensuring they are delivering their objectives to the agreed timescales, cost and quality. A key task will be the review of the requirements specification and project briefs developed by the functional strategy groups. It’s essential the programme board maintains its focus on the core objectives, key vision and principles to help steer the functional strategy groups’ strategy development, business process design and business system selection. It will be necessary to provide dedicated project management resource from a skilled project manager to support the programme and the individual project strands. Deliverables: Programme governance and programme/project management Budgetary control Programme level RISK management Sign off of new business processes Sign off of the business system requirements specification Sign off of the procurement process UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 235 Functional Strategy Groups The functional strategy groups will be made up of practitioners with the relevant responsibility and experience to develop the functional area’s strategy. To minimise the risk of implementing an inappropriate system, it is essential that the area’s strategy is developed as a matter of priority. From this they can develop the new business processes needed to support the strategy and the requirements specification for an appropriate business system. Each group should be chaired by a member of the Shared Services Board to ensure coordination across the whole programme. Appropriate IT resource will be needed to complete the technical aspects of the requirements specification. Where there are cross-functional interdependencies (e.g. payroll) two or more functional strategy groups will need to form a joint group. This will ensure that the business needs of both areas are represented and a coordinated business process can be developed. These groups will be responsible for tendering and selecting the eventual business system solution based on the requirements specification. Strong procurement expertise will be needed to ensure UHI gets the best license terms, phased in over the implementation period as partners adopt the systems in stages. Deliverables: Project brief Project level RISK management Functional area strategy Business process redesign Management information requirements specification Business system requirements specification Business system procurement Project Teams These are the implementation teams made up of business unit team members, internal IT and the supplier of the chosen software solution(s). These teams will be responsible for the embedding of the new business processes, the implementation of the new software solution to support these, and the creation of training and procedure guides. Each team will utilise a project manager tasked with managing the project to agreed timescales, quality and budget. It is important that the relevant strategy group and Shared Services Board actively support these teams to ensure implementation of the business process changes necessary to make the projects a success. Deliverables: Implementation of new business processes Implementation of selected business system Testing Training Procedure Guides Phased Approach UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 236 JISC’s Regional Support Centre, that has been supporting some of the college mergers, has indicated that business process rationalisation and system implementation has been achieved in up to 6 months. However, this is based on a model where a number of factors considerably reduce the complexity of the project: An existing system from one of the colleges was extended Additional data needed from the other merged colleges’ systems was migrated to the existing system An existing business process was selected and adopted within the new single functional team Given UHI’s federated structure and geography a similar transition will not be so easy to achieve. There will need to be greater consultation regarding business process redesign, their adoption and the requirements capture exercise for a supporting business system. Phase 1 (see below) could take up to 6 months alone but only if it remains focused, is well managed and is positively supported by the Programme Board, the functional strategy groups and senior management. It is also unlikely that UHI will be able to utilise all of its existing business systems meaning a procurement exercise will need to be completed. This normally takes 3 months to complete with a further 3 months implementing the new system. The timing of the implementation will also need to be sympathetic to the business cycle of the functional area e.g. it will probably not be acceptable to introduce a new finance system mid-way through a financial year and certainly not near a year end. Figure 4 UHI Business System Convergence Phases Functional working groups Project Governance In-depth audit Budgetary controls RISK assessment Regional Strategy Vision Objectives Business process redesign Requirements Functional requirements Project briefs Supplier engagement Options assessment Procurment and Implementation Procurement Business process changes Data migration MIS developed Project management Testing Training This activity is not necessarily linear as Figure 4 indicates. UHI’s capacity of change, given that many of the same people will be needed on the cross-functional projects, may require that the different projects do not run exactly simultaneously. It may also be the case, either due to project capacity or partner specific reasons, that each partner may not implement the new business system at the same time. This will mean the Procurement and Implementation phase may have concurrent strands for the data migration, testing and training stages. However, the longer this process takes, the longer it will be before the full benefits of the business system convergence can be realised. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 237 Phase 1 – 6 months Programme governance and practitioner groups set up In-depth audit and due diligence performed on existing business systems and business processes Practitioner groups formulate regional strategy for convergence of business processes New business processes for each functional area developed Business system requirements specifications and project brief for each area developed Project briefs and requirements specifications reviewed Budgets set Phase 2 – 3 months Suppliers engaged Requirements refined Systems procured Phase 3 – 3 months Phased implementation of new business processes Phased implementation of new business systems to support business processes o Data migration o Procedures o Training o Testing Management information implementation UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 238 Appendix 1 – Business System Audit Table 2 Business System Audit Summary Shetland NAFC Orkney NHC LCC HR N/A ? N/A CHRIS 21 None Payroll N/A ? N/A CHRIS21 None Finance N/A ? N/A SUN Access Accounts HTC Inverness Moray SMO WHC Perth SAMS None CIPHR HR World Service Sage 50 HR Cascade CIPHR CIPHR Sage 50 Payroll CINTRA HR World Service Sage 50 Payroll Sage 50 Payroll PAYRITE PAYRITE Sage 50 Accounts SUN Symmetry Sage 50 Accounts Sage 50 Accounts Symmetry SUN Argyll Cascade Cascade Sage 50 Accounts Estates None ? None ? Trend 963 Supervisor None None CAFM Spreadsheet None None None – possibly CAFM None EO None – possibly CIPHR Resource Central Aptos None UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN Timetabling None ? MS Outlook Celcat Celcat CRM None ? None ? None None Celcat Celcat ASC Timetables None Celcat MS Outlook None None None Spreadsheet None None Sage ACT None – possibly Celcat None None Raiser’s Edge 239 Table 3 HR Management Systems Audit AP Product Name NAFC NHC LCC HTC Inverness Moray SMO WHC Perth SAMS Argyll EO Shetland Orkney CHRIS21 NONE NONE CIPHR HR World Service Sage 50 HR CIPHR CIPHR Cascade CIPHR N/A N/A 2009 V5.1.0 SU 12022 Compute rs in Personne l Windows Server 2003 10505 r 1 V4.0 Cascade HR Module V4.5.110 902.102 Software for people Sage Windows Compute rs in Personne l Windows 2008 R2 Compute rs in Personne l Windows 2008 R2 Cascade Windows Server 2000 Cascade Human Resource s Ltd Windows Decisions & Org Plus 750 records, others 1500 records, Ciphr report writer 2 users 8 users + 11 Employee self service 2 User/1 Company Max employee s 150 750 concurre nt + 8 system admin 4 concurre nt client licences (admin) covers 250 employee s Site Licence (up to 600 users). 3 Admin (2 full, 1 limited) 8,441.80 5,838.00 300.00 2,160.00 18,840.00 3,408.00 9,576.00 N/A MS SQL N/A ? In-house Hosted SQL Server Not known Hosted Version Supplier Frontier Software Platform License Arrange ment License/S upport Cost p.a. Database Platform DB Version Inhouse/ Hosted 2009 v6 2009 Windows Compute rs in Personne l Windows 2008 R2 Licenced/ Hosted ? 4,862.70 - - MS SQL SQL 2000 In-house In-house UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN SQLserve r 2000 SQLserve r 2000 In-house MS SQL SQL 2008 In-house Hosted - - SQL Server Not known Hosted 240 Table 4 Finance Systems Audit AP NHC LCC HTC Inverness Moray SMO WHC Perth SAMS Argyll EO Shetland Orkney Product Name Sun Systems Access Accounts Dimensio ns Sage Line 50 Accounts Plus Infor Sun Systems v4 Symmetr y Sage 50 Accounts Sage 50 Accounts Professio nal 2009 Symmetr y Infor FMS SunSyste ms Infor Q&A ALBANY ePay SAGE Line 50 N/A N/A Version v4.4 v2.50b 19.00.11. 0263 V4.3.3 9.12.0 Accounts Professio nal 2012 15.01.20. 0191 9.11.5 v4.3.2 v10 Supplier Castle Compute r Services Windows Access Accounti ng Windows Sage Symmetr y Sage Sage Symmetr y Windows Server 2003 Windows Windows Windows Server 2003 Castle Compute r Services Windows Server 2003 Aptos and EAS reporting Aptos web Services (Time & Expenses and other reporting tools) Version 9 (current patch level 23) B-Plan Platform NAFC Windows 7 Castle Compute r Services Windows Server 2008 R2 Standard UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 12 Phoenix Software Windows Windows 241 License Arrange ment License/S upport Cost p.a. Database Platform DB Version Inhouse/ Hosted 8 client and 5 vision (excel reporting ) 10,852.00 Per Annum 2 User/2 Company 4,985.00 - MSSQL 16 concurre nt 20 users 12,219.31 26,886.00 MS SQL Oracle Unlimited /10 Compani es No set licence arrangem ents 1,600.00 - N/A ? 32 users plus 6 system users 15 Connecti ons 15 Connecti ons 1 concurre nt 27,736.00 12,000.00 Oracle MS SQL 3 user license (not networke d) Renewal is 1st August. Different licences for each module of the database. Header system concurre nt 15, each module then has 10, develope r licences 1. Aptos web Services unlimited . 600.00 20,642.40 SQL My SQL In-house 2008 SP3 x64 In-house In-house SQL2008 R2 In-house UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 10.1.2.3. 0 In-house N/A In-house ? 10.2.0.3. 0 In-house 2005 200 In-house In-house In-house 242 Table 5 Payroll Systems Audit AP LCC HTC Inverness Moray SMO WHC Perth SAMS Argyll EO Shetland Orkney NONE Line 50 Payroll 2011 18.00.03 1 CINTRA HR World Service Sage 50 Payroll Sage 50 PAYRITE PAYRITE Cascacde Resource Central N/A N/A 20.2 10505 r 1 Payroll Professio nal 2012 18.00.03 1 2012v01r 1.0 v1R1.8 Supplier Sage CINTRA Sage Sage Cascacde Northgat eArinso Windows Windows XP SP3 x86 Windows Windows W7 Windows Windows , Firefox License Arrange ment 1 User/1 Company 5 Concurre nt 8 users + 11 Employee self service 1 User/3 Compani es No set licence arrangem ents Bond Internati onal Windows Server 2003/Wi ndows 2008 R2 2 users CIPHR Platform Software for people Windows Server 2000 1 concurre nt. Site Licence (up to 600 users). 3 Admin (2 full, 1 limited) Same as HR 3 year license due to expire Feb 13 Product Name NAFC NHC Version License/S upport Cost p.a. Database Platform DB Version Inhouse/ Hosted See Note - 350.00 3,948.01 Pervasive SQL In-house In-house UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 1,500.00 SQLserve r 2000 SQLserve r 2000 In-house 1,200.00 4,002.00 N/A ? none N/A ? N/A In-house In-house In-house Included in Ciphr pa Propriety In-house 4,608.00 - - SQL Hosted Hosted 243 Table 6 Timetabling Systems Audit AP Product Name NAFC NHC LCC HTC Inverness Moray SMO WHC Perth SAMS Argyll EO Shetland Orkney CELCAT CELCAT NONE CELCAT CELCAT Asc Timetabl es 2009.10. 4 Applied Software Consulta nts NONE CELCAT OUTLOO K CELCAT? NONE NONE WORD, OUTLOO K - - - - - Version 7 Supplier Corbett Engineeri ng CELCAT CELCAT Platform Windows Windows Server 2008 R2 Windows Server 2008 R2 Windows Windows Server 2003 License Arrange ment Per Annum Site licence for 2,500 FTE students Site Licence multicomputer Licenced/ Annual maintena nce and support 18,452.40 10,400.00 - MSSQL MS SQL N/A SQL Server DB Version 2008 SP3 x64 SQL2008 R2 N/A Inhouse/ Hosted In-house In-house SQLSERV ER 2008 R2 SQLSERV ER 2008 R3 In-house SQL Server 2008 In-house License/S upport Cost p.a. Database Platform 6,580.80 4,396.80 7.2 - UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 7.2.700.1 In-house 6.4.98 CELCAT - 14,602.00 244 Table 7 Estates Systems Audit AP Product Name NAFC NHC LCC HTC Trend 963 NONE Supervisor Inverness Moray NONE CAFM Spreadsheet NONE Explorer Quantum () Version SMO 11.2.0.0 Excel 2010 Microsoft Supplier Redrew FMX ltd Platform Windows Windows Windows Server 2003 License Arrangeme nt Per Annum 2 Licences License/Sup port Cost p.a. 3,141.00 - - Perth SAMS Argyll EO Shetland Orkney NONE NONE but looking at CAFM Explorer NONE NONE NONE NONE Campus 838.24 Campus/£3 8.33 per FTE Database Platform MSSQL SQLSERVER N/A 2005 DB Version 2005 Express SQLSERVER N/A 2006 In-house/ Hosted In-house In-house UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN WHC - - - - - - - In-house 245 Table 8 CRM Systems Audit AP Product Name NAFC NHC LCC HTC Inverness Moray SMO WHC Perth SAMS Argyll EO Shetland Orkney NONE NONE Dynamics NONE Spreadsh eet Mail Chimp Excel 2010 Microsoft Rocket Science Group NONE NONE SAGES ACT NONE Raiser's Edge NONE NONE Version Supplier Alchemy Platform Windows Server 2008 Standard SP2 x86 10 user license License Arrange ment License/S upport Cost p.a. Database Platform DB Version Inhouse/ Hosted - - - 7.92.550 8.5 Blackbau d Eureka Ltd Windows Browser W7 Windows . Mobile Devices Campus 6 concurre nt Annual renewal. Feb- Feb. - - MS SQL N/A SQL 2005 In-house UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 13.0.401 - - 720.00 - 5,932.13 SQL N/A MS Access 2010 In-house In-house In-house - - 246 Bibliography Putting Learners at the Centre: Delivering our ambitions for Post--‐16 Education. (Scot Gov, Sept 2011) ISBN: 978--‐1--‐78045--‐379--‐8 Report of the Review of Further Education Governance in Scotland. (Prof Russell Griggs OBE, January 2012) Above Campus IT Services for Scottish Universities and Colleges --‐ A Shared Road Map for Local Benefit and Collective Opportunity. (HEIDS, July 2011) Review of ICT Infrastructure in the Public Sector in Scotland by John F. McClelland C.B.E. (Scot Gov, June 2011) ISBN: 978--‐1--‐78045--‐229--‐6 Scottish Government Response to the McClelland Review of ICT Infrastructure in the Public Sector in Scotland. (Scot Gov, Sept 2011) ISBN: 978--‐1--‐78045--‐414--‐6 Joint Consultation Paper: College Regionalisation: Proposals for Implementing Putting Learners at the Centre. (Scottish Government, Scottish Funding Council, Nov 2011) UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 247 APPENDIX A8: DRAFT JOB DESCRIPTIONS – CHIEF EXECUTIVE AND DIRECTOR, ICT Post Title: Chief Executive Grade: Insert grade (would suggest £80 to 90k) Accountable to: Board of Management UHI Shared Services Company The shared services company is a company collectively owned and governed by its members, supporting the whole business including HE, FE and research. The job description is not intended to be exhaustive and is indicative of the nature and level of the responsibilities associated with the post. Such duties may vary from time to time without changing the general character of the post or the level of responsibility entailed. Such variations are a common occurrence and cannot of themselves justify a reconsideration of the terms and conditions of employment associated with the post. Job Purpose To provide active strategic leadership and direction to the UHI Shared Services Company, including embedding the initial ICT Shared Service and the development and extension of its business to other areas of shared service. Key Accountabilities Strategic Leadership Sustainability Managing relationships with Internal and External Stakeholders UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 248 Strategic Leadership Through strategic leadership, ensure improvements to student experience, greater ability to deliver equivalence, improved efficiency and effectiveness of services and therefore improved quality in the development of shared services. Accountable to the Board, develop and deliver the business strategy ensuring sustainability and efficient operation of the Company. Ensure Services and Operational Plans are aligned and the Company meets its obligations in line with agreed service levels. Ensure Company Policy is implemented in line with strategic aims. Build and maintain an effective management team. Sustainability Ensure financial integrity of the business by putting in place appropriate plans and financial control systems. Closely monitor and report operating and financial results against agreed plans and budgets. Reporting to the Board, anticipate and identify remedial action where necessary. Ensure legal, financial and regulatory compliance Managing Relationships with Internal and External Stakeholders Review the business structures on a regular basis to ensure it meets the requirements of members, customers and other stakeholders as the Company develops and grows Manage the relationship with external stakeholders and the extenstion of the Company to other members as the company develops. Ensure all grant and project funding attributable to the Shared Services Company is fully auditable and in line with conditions associated with the funding. Ensure the continuous improvement and development of staff and support an ethos that motivates and drives the Company to achieve. Actively promote and ensure that best practice is followed in the development of all activities, and that best value is achieved. Report on internal and external quality and service audits to the Board, members and customers. Represent the shared services company externally keeping abreast of sector developments. Any other relevant duties (standard term in all job descriptions) Uphold and ensure compliance with Health and Safety, safe guarding and Equality and Diversity arrangements. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 249 Abide by all approved procedures and perform any other duties not specifically detailed but which may fall within the overall job purpose and within the expected competence and ability of the post holder. Core Management Competencies (this is optional and may be better embedded in the personal spec) Making a Personal Impact: Is committed to the priorities and values of the Company. Takes a wide corporate view, and works with established protocols. Sustains effort in the face of difficulties and set backs Giving Direction and Purpose: Personally contributes to, shapes and champions the vision and goals. Has the capacity to provide originality of thought as well as measured judgment. Creates a shared understanding of what has to be achieved. Delivering Outcomes: Engenders a culture of achievement. Displays drive, energy and determination and the capacity to mobilise people and resources to greatest effect. Responds flexibly to changing demands. Is prepared to challenge exiting ways of thinking/behaving in a continuous search for ways of improving performance and services. Getting the Best from People: Develops a positive working environment, and builds effective teams which achieve results. Supports an ethos of continuous learning and improvement Building co-operation: Listens actively, demonstrates respect for and considers the differing views and experiences of stakeholders internal and external to the college. Works with and helps others to achieve common standards and goals. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 250 Post Title: Director, ICT Grade: Insert grade Accountable to: Chief Executive Draft outline job description for a Director, ICT The Director of Information and Communication Technology (ICT) Services will be responsible for managing the University’s IT infrastructure and services. Main duties will include the development of policies for the management, operation, procurement as well as the maintenance, development and improvement (where appropriate) of: Corporate and enterprise systems (Finance, HR, Student Administration and related other systems and databases) as well as web-based applications and selected bespoke software developments Corporate servers and associated software, and the maintenance of a virus-free environment ICT equipment (not end-user), including provision and support of the desktop environment and office applications Network and related functions, including the delivery and provision of broadband connections as well as the wireless domain Email and related web-based services and environment as well as remote access Customer support, helpdesk and on-site services Technical support of AV systems, including personal VC and teleconferencing Support for the Virtual Learning Environment (VLE) and other related technologies and systems UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 251 Support for research and enterprise related ICT requirements Procurement of ICT software and equipment, including establishing and servicing of procurement contracts, software licences and maintenance contracts, through APUC where appropriate Assessment and evaluation as well as the adoption of appropriate emerging technologies Data security, business continuity and disaster recovery as well as audit trails Risk management pertaining to the ICT environment and the ICT service Physical environment and accommodation for the Shared Service throughout the partnership, ensuring a pleasant work environment as well as functional and safe operation of the equipment and personnel To lead, manage and motivate Information and Communication Technology Service staff to deliver the highest service standards that enhance the student and staff experience and support the University’s strategic plan To deliver operational and strategic development of these areas to optimise opportunities available whilst recognising the contribution to the overall student experience and reputation of the University To establish customer focused relationships with key stakeholders and external businesses To develop an appropriate commercial focus to these operations To create and implement a strategic business plan for the development and marketing of the full portfolio of Information and Communication Technology Services to internal and external customers To be responsible for the development and delivery of strategic, operational objectives and day to day management of the Information and Communication Technology Services team To provide leadership to the staff within the Information and Communication Technology Services including the effective management of performance, conduct, capabilities, staff training and development To manage the Information and Communication Technology Services team within the context of the Shared Service Company’s core values and strategic plan To continuously review business processes and staffing levels to optimise financial and operating performance and provide a seamless delivery across all areas To maximise opportunities for cost reduction and efficiency whilst recognising student experience and core strategies of the Shared Service. UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 252 To be the budget owner for the areas within Information and Communication Technology Services and prepare an annual budget and business plan in line with the annual planning process To ensure good financial controls, processes and management reports are in place To identify possible operating improvements through external partnerships and alternative and appropriate service delivery budgets To ensure legal compliance in all aspects of the operation of Information and Communication Technology Services including food safety, health and safety and COSHH To be responsible for identifying and specifying projects to improve existing IT infrastructure To lead projects or undertake other duties as may reasonably be expected at this level as requested by the Chief Executive To work closely with the Chief Executive, Shared Services and the Board To ensure customer focused services are provided through the use of effective customer relationship management To develop and implement customer care, service level and performance objectives for the department and instil a culture of service excellence To put in place formal processes for regular student and customer liaison To attend workshops, exhibitions, conferences etc to represent the Shared Service on external bodies in order to promote the image, reputation and facilities of the Service To ensure that the identification and mitigation of risk is an embedded management process UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN 253