Swiss Federal Office competing as service provider
Nowadays there is competition in the public sector too. The Swiss administrative authorities want to structure their work in a more efficient and cost-effective manner. As early as 1999, they centralised their decentralised IT systems within seven IT units, one of which was the Federal Office for IT and Telecommunications (“BIT”), with around 600 employees. As a service centre for the federal administrative authorities, cantons and local authorities, the BIT provides cross services in the areas of SAP and telecommunications in addition to comprehensive IT services. Examples of these are the electronic system used to help find work for the unemployed, the creation of electronic office counters (cGovernment) and language, data and mobile communications.
In the future the Swiss administrative authorities individual IT units are to function in a more entrepreneurial manner and to be priced. In other words, they have to face the competition from external service providers. The BIT was thus faced with a challenge. “One cannot price one’s services without cost transparency,” says Thomas Jost, Head of the BIT operations centre. As regards determining the situation with regard to costs and IT efficiency, the BIT commissioned Maturity with benchmarking of the operating centre, including the call centre with 272 employees.
After collecting the data Maturity checked its plausibility, calculated key performance indicators (KPI) and created a proposal for the comparison groups. The peer group contained two insurance companies, three financial services providers and three IT service providers from Central Europe.
Potential for improvement identified
After a period of three months the team from Maturity presented the initial results. The core statement was that, overall, the BIT was below the costs rate and above the productivity rate for the peer group. However, there is potential for optimisation. For one, the large amount of hardware and software suppliers should be reduced. This would result in better scope for negotiations in relation to the terms and conditions of delivery/supply. Furthermore, migration of old systems will result in significant longterm savings even if money initially has to be invested. The same applies to the structuring of new organisational processes – short-term investments are offset by a high rate of operational security and quality. According to the analysis, there is also high potential for savings in the area of staff numbers. The share in external employee costs (41%) resulting from undercapacity is causing significant financial expenditure because these external employees are comparatively expensive and less productive. If the external capacities were converted into internal capacities, this would have significant positive effects on the BIT’s cost structure.
“For us, those were valuable suggestions,” says Jost. The operating centre will now draw up corresponding plans and implement them in succession. Once the restructuring process has been finished, further benchmarking in 2 years’ time is to test the efficiency of the implemented plans.
Download the case study IT benchmark at BIT as a PDF file