Croydon Council recently signed a contract with consultant Capgemini worth £83m over a five-year period. The organisation has completely outsourced all its IT services to the firm, leaving only a small client team in-house.

As well as providing consultancy, Capgemini will support all the council’s IT and telecommunications infrastructure, including 4,000 desktop PCs and key finance, procurement and customer service applications.

“Instead of having nerdy IT people running around, we have effectively mainstreamed IT services provision to enable business transformation at a much faster pace,” says Nathan Elvery, director of finance and resources at Croydon Council. “Private sector companies do that all the time, but local government has a reputation for being a bit of a dinosaur in comparison.”

Elvery says consolidating large numbers of different business and IT operations into a single, outsourced IT services contract has made life considerably easier from a management and strategy perspective.

“In lots of ways life is much easier because the contract covers the basics and we are not bogged down in the minutiae of IT, such as whether or not we should replace servers,” he says.

“It means we can look at where IT is not working as well as it should be, or where we can make strategic investments to bring about efficiency changes.”

Outsourcing IT systems management to Capgemini has also delivered upgrades to the council’s existing IT architecture, which in turn have had an effect on application and service performance.

“Our IT infrastructure was not as solid as it should have been, and within the space of our relationship with Capgemini we have replaced all our internal IT systems with the latest state-of-the-art technology, which we have been able to pay for through the public finance initiative,” says Elvery.

Despite the outlay, Croydon Council expects the extended outsourcing contract to deliver cost savings of up to £1m per year during its term, as well as operational efficiencies that will improve the quality, consistency and management of support across some 700 different services offered by internal organisations.

Some firms worry about the security issues traditionally associated with outsourcing key IT systems to third parties, but Elvery says that this was not a concern for the council.

“If anything, having Capgemini as a major partner has improved our systems’ data integrity, as well as off-site arrangements around business continuity,” he says. “Before, our servers were based in the same building as the rest of the council departments, but they are now located separately ­ – which means we can be back up and running if the head office is down.”

Despite the scale of the outsourcing contract, no redundancies were necessary. Some staff were transferred to Capgemini and others were given roles on the client side of the business.

“We must maintain some knowledge within the organisation, and transfer some cultural knowledge to Capgemini so that it understands the way that Croydon Council does business,” says Elvery.