Computing talked exclusively to Scottish Water chief information officer David Brown about how managed services is helping increase efficiency.

What’s different about Scottish Water’s approach to outsourcing?

We’ve changed our development framework, choosing five companies ­- Atos Origin, Logica, Fujitsu, SAIC and Tata Consultancy Services (TCS) -­ that bid for contracts through a mini-competition. We expect the work to be spread evenly between them. Our contracts are not like traditional outsourcing because the original team management structure is still there. And we’ve built collaboration into the contract so that it’s part of an incentive to work together and focus on key performance indicators across the project.

It’s not enough to say: “I’m doing my bit” because there’s a joined-up responsibility for the project. We’re taking what’s good about us, putting it together with what’s good in the private sector, and creating something really special.

What are the benefits?

We’ve created a best-of-breed scenario in our managed services. Each company is placed where we think they will perform best according to their expertise.
I think of it as having the Manchester United midfield playing for me. These guys work in so many industries and one of the most important things is what they can bring to the business.

So we’ve consolidated managed services down to three of our suppliers, which will eradicate the need for additional subcontractors. Operating costs are down by £1m a year and we’ve increased service delivery to 24/7, 365 days a year.

What has technology’s role in the business been to date and what’s the plan now?

Scottish Water came through a huge transformation towards what seemed like an impossible target ­ to reduce operating costs by 40 per cent. Having achieved that, the opportunities for further efficiencies are narrower.

So we’re importing ideas from the partners that have been successful elsewhere. Targets are around operational performance, we want to reduce operating costs by a further £30m by 2010. Our IT department has performed fantastically well since 2002, now we are building on the team’s achievements.

What issues are coming up in the sector?

For us, telemetry is the next innovation; the electricity sector has been doing this very well. It is about having much more automated control of treatment plants and better performance information, which in turn helps the investment planning programme. And de-regulation has introduced retail competition into the business sector in Scotland, so we have had to open up the market.

It is a different way of operating and it is one of the biggest IT projects that I have been involved with ­ starting a year before the market opened on 1 April. We had to disentangle our integration, pick out the non-domestic billing systems and make them self-contained. And I think the English and Welsh companies could be asked to open up more if it is seen to be working in Scotland.

Scottish Water recently signed three major operational services contracts, running from 31st March 2008, to form the core of the company's new service delivery model:

An eight-year, £60m contract with TCS will give application management support and integration.

An eight-year, £40m contract with BT, for all data and voice communications.

A £28m, eight-year contract with Fujitsu will provide service desk support and infrastructure services to support 4,000 staff.

And under a separate devlopment contract, Atos Origin is designing a planning tool to supply information about the capacity of the water infrastructure in a particular area, ­what’s already there and what needs to be developed. The system, to be rolled out later this year, will link up the information flow from the separate methods of sharing the information collected by planning teams, giving the central planning team a complete picture.

With about five million customers in 2.3 million households, Scottish Water supplies 2.3 billion litres of drinking water a day, removing nearly a billion litres of waste water, which is treated before being returned to the environment.

A public sector organisation answering to the Scottish Parliament, it operates and maintains assets including more than 47,000 kilometres of water pipes, 49,000 kilometres of sewer pipes and nearly 2,000 waste water treatment works.

Scottish Water was formed in 2002, replacing East of Scotland Water, North of Scotland Water and West of Scotland Water.

It was charged with the task of turning around the Scottish water industry
following years of neglect, while meeting stringent European Union directives around water quality and environmental welfare and achieving new efficiency targets.

It employs just over 4,000 people across Scotland, with its head office in Dunfermline.