Barclays Computer Operations was set up in January 1991 by Barclays Bank Plc to provide facilities management services to international banks and other financial organisations, as part of a company-wide restructuring. Headquartered in Nutsford, Cheshire, Computer Operations has four data centres, in Poole, Manchester, London and Gloucester. The company seems to be doing reasonably well. It doesn’t report financial results separately, but Barclays’ information services arm – Barclays’ Services Businesses Division – of which Operations forms a part, has just reported pre-tax profits of UKP18m. BCO’s turnover in 1993 was just over UKP166m. Nevertheless, its biggest customer, by a mile, remains the Barclays Group itself. Bruce Hotter, managing director of BCO, declined to state how much of the company’s business was with external companies, but confirmed it was still a relatively small proportion. In the UK, these external customers consist of financial institutions, government and utilities; internationally, the company’s only customer is the Barclays Group itself – BCO bids on a competitive basis for these accounts. One of the company’s most notable disappointments last year was its failure to win the facilities management contract to run DVOIT, the data processing arm of the Driver & Vehicle Licensing Agency in Swansea.
Disappointed
Hotter concedes he was disappointed, but says the decision was made for very specific reasons. We felt we were in a very, very strong position, but it turned out that the Department of Transport wanted people with in-depth experience of re-engineering work, and that’s why they went to EDS, he says. But Hotter is confident that the company’s external business will increase, as more and more companies move towards facilities management, driven by changes in technology. There’s going to be a rapid increase in the amount of on-line data held. StorageTek estimates that only 4% of current data is held on-line, but that will move across, partly because of cost, but also because of major driving forces from European Community legislation, he says. The rapid increase of affordable bandwidth is a further drive. Even the relatively conservative financial institutions are facilities management more and more, says Hotter, and it’s here that BCO can scoop more business. All the financial industry is much more focused on its skills base and re-engineering itself, and so many of our peers in the financial world are looking at facilities management things that previously they’d never have considered, he says. This view is backed up by recent research from Dataquest. The company’s annual survey of professional service trends finds that the worldwide market for professional services in 1992 stood at $46,500m, and has a compound annual growth rate of 18.8%. John Rogers, senior vice-president and managing director of Dataquest Europe, comments: The move towards facilities management is irreversible. The important thing about facilities management is that it cannot go back – once you’ve started, you’ve got to continue.
By Emma Woollacott
You cannot recreate all the individual skills in users. More importantly, he says, users’ perceptions of the advantages of facilities management are changing. While two or three years ago, the main perceived advantage of facilities management was cost savings, users are now keener on the increased expertise that facilities management can bring. The real power is moving from the suppliers to the user, he says. People are now realising that going outside is much more important in terms of improving their business than in cutting down on the 2% of revenue they spend on IT. And where the financial benefits of facilities management are still paramount, organisations are taking a broader view. Customers are no longer looking to computer services to simply cut costs, the Dataquest survey found, but rather to reduce the company’s total cost structure and enhance revenue growth. Finally, data processing is now being seen as a strategic tool for revitalising the entire
business, and one of the primary drivers for improved competitiveness. Indeed, the Dataquest survey found that customers are now tending to consider outsourcing all non-core activities – right up to management responsibility, which a few years ago would have been unheard of. Here too, says Rogers, once an area has been outsourced, it’s unlikely to come back in-house. If they’re going to do something they’ve never done before – some international network, for example – I don’t think they are going to recruit the people for that, and if they go outside for it, I don’t think they’ll go back, he says. Contracts today often have return clauses, but I think it’s something to be used as a threat in court, rather than an actual plan. This thinking applies particularly, says Hotter, when it comes to new technologies such as multimedia and image processing. Once these areas are outsourced, it can simply be too expensive for companies to cosider taking on people with the sort of expertise required to bring the work back in-house. This is why Barclays Computer Operations is so keen to manage future systems, says Hotter: Sure, we’ll take on legacy systems and manage them for you, but we are focussing on future systems, he says. And, given this tendency for corporates to hand over whole new areas of their data processing to outside organisations, BCO reckons it can exploit its position as part of a major bank to claim unshakeable security and financial stability. Packaged facilities management services are also increasing in popularity, says Dataquest, as they simplify the facilities management process for users. BCO is now offering a range of packaged services, including project management, storage management, technical support and consultancy. Outsourcing used to be like getting an extension for your house – you signed up and God knows what you were going to have to pay at the end of the day, says Hotter. The company has also formed a series of link-ups with outside partners, which it hopes will expand its business with external customers. In the last year, it has teamed up with IBM Corp to form Edotech, a specialist laser printing and data presentation services company, and with Deverill Computer & Communications Plc to launch Safe Guard PC Audit Services.
Comdisco
The most recent agreement is with disaster recovery company Comdisco Inc, which saw the creation of the jointly-owned London Workarea Recovery Centre. BS5750 certification is becoming increasingly vital for service organisations, and, like most of its competitors, BCO has recently won accreditation, for its computer services and Unix team. For the future, the company hopes to expand upon this, extending BS5750 accreditation to the rest of the company. It has also embarked upon a Total Quality Management programme, and has undertaken a continuous external assessment using the European Foundation for Quality Management. This reassures customers, says Hotter, as does the fact that more and more of the company’s contracts are on a shared-risk basis: Because BCO is dominated by the Barclays Group as a major customer, and will continue to be for some time, we have contracts of that nature – share the risk, share the benefit and we extend that to external customers.
