Q&A – Virgin Trains
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For Virgin Trains, a single supplier strategy eases the management burden
The rail operator’s head of IT explains why it has renewed its decade-long outsourcing engagement with Capgemini
Virgin Trains was granted the franchise to operate the UK’s West Cost rail route in 1997, a few years after the national railway network was privatised. The company won the franchise again in 2006, and is now preparing its bid to renew its licence when it expires in 2012.
According to Francis Jellings, the company’s head of IT, the fact that the company can never be certain of its long-term future makes long-term IT investments difficult. Nevertheless, the company has since 1999 entrusted the lion’s share of its IT estate to a single outsourcing supplier, Capgemini.
As Jellings explains here, Virgin Trains recently announced that it had renegotiated its contract with Capgemini for another three years. That will take the engagement into its 14th year – testament to the fact that its experience has been a broadly positive one.
But there is always room for improvement, and although the company fared fairly well in 2009 – passenger volumes grew by 18%, driven in part by a move away from internal air travel – the contract renegotiation was an opportunity to strike a more cost-effective deal. It also provided an opportunity to recalibrate certain service level agreements.
Virgin Trains’ experience with Capgemini is interesting because it contradicts the perceived wisdom of ‘multi-sourcing’, whereby companies procure IT services from a number of suppliers in order to strike competitive deals and buy ‘best-of-breed’ services.
According to outsourcing advisory TPI, interest in multi-sourcing is growing, but other observers warn that managing multiple suppliers requires a degree of sophistication that many businesses still lack. If Jellings is to be believed, making a long-term and strategic commitment to a single supplier still has its advantages.
Information Age - What is the extent of your outsourcing engagement with Capgemini?
Francis Jellings - Capgemini looks after the whole of our IT infrastructure, including the IT service desk, server management and support, LAN monitoring and support, desktop services and database management. They also undertake any IT infrastructure projects at any of our stations or office locations up and down the West Coast mainline.
What IT staff have you retained?
I’ve got a team of five, who fulfil inward-facing roles to deliver business projects. There are three IT project managers, who I’ve positioned into the different segments of the business – marketing, operations and head office systems. They each speak to their internal customers on a regular basis, and that is how we generate any opportunities within the business to undertake IT development.
Anything that is technical, I give to Capgemini; anything that’s businesswise, I keep in-house.
How have you recruited your staff – from IT or from the business?
It’s horses for courses; I’ve recruited some of them from within the business, if I thought they were the best people, and trained them up on the IT skills. Or some have had IT skills and we’ve trained them in IT project management. Often we’ve recruited externally, when we’ve needed people with specific skills, like to do with booking office systems or retailing ticket systems.
Is there a concern that you don’t have your own internal IT workers coming up the ranks to fill the management roles of tomorrow?
I’m not concerned about that. I’ve built up the team so that it’s supporting the business more than it used to.
We do try to have succession planning within the organisation where we feel we are weak in the organisation. But if one of my project managers moved on I could recruit internally or externally, whichever the case may be.
How do you manage the relationship with Capgemini?
I have a supplier relationship manager who sits alongside the Capgemini service delivery manager in our Birmingham office, and they communicate with each other very effectively.
Unless there are issues that need to be resolved immediately, my supplier relationship manager monitors the service levels on a monthly basis. We have a monthly service review with the rest of my team to make sure that the contract is supporting the business in any initiative that it has under way.
How do you negotiate changes to your infrastructure with Capgemini?
The way that our contract is structured is based on the volume of calls to the support desk, and the number of PCs or servers that I need. So if the business decides that a new department is going to be set up, and another 30 PCs are will be needed, I know exactly what it’s going to cost me on an annual basis.
Similarly, if somebody needs a new system implemented and new servers deployed, I know exactly what that will cost. If extra resilience is needed because it’s business critical, we can cost it out.
Have you made any significant changes to your infrastructure during you engagement with Capgemini?
A while ago, I noticed that some of our remote locations, such as Glasgow and Edinburgh, weren’t receiving the same service level as people in our head office, which I didn’t feel was the right way to deliver the service.
So we worked with Capgemini on how to resolve this, and we came up with an IT transformation plan.
Continued...
