DERBYSHIRE COUNTY COUNCIL. Cabinet. 28th November Report of the Deputy Chief Executive and Strategic Director Corporate Resources

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1 DERBYSHIRE COUNTY COUNCIL Cabinet 28th November 2006 Report of the Deputy Chief Executive and Strategic Director Corporate Resources County-wide PC Commissioning Unit (Strategic Policy and Budget) 1. PURPOSE OF THE REPORT To seek approval to create a County-wide PC commissioning unit responsible for: Ordering and taking delivery of replacement PCs Set-up and deployment of replacement PCs Recycling and disposal of replaced PCs 2. INFORMATION AND ANALYSIS A number of sub groups were formed from a cross section of departmental and central ICT staff to consider the way the delivery of ICT services could be improved across the County Council. The procurement and installation of replacement PC s was identified as an area where it was thought possible to have improved service standards to ICT users, and also generate some efficiency savings Early consultation with users indicated that PC replacement/purchase procedures were seen to be in need of review, and did not always respond to user needs, whilst the cost of a PC appeared to be expensive when judged against many market prices. However the authority does make extensive use of information technology to support the services it provides to Council Departments and individual users, and to ensure this level of delivery of existing services is enhanced and the development of new services is facilitated, it is proposed that a commissioning unit is set-up to arrange and deliver replacement PCs within the County Council. Existing procedures for replacing or procuring PC s The existing method of PC procurement involves departmental staff purchasing one or more PC s via the County Council contract which is currently held by Elonex. This contract is now being reviewed in the light of Elonex going into administration, and short term contractual arrangements are in place. The existing contract price with Elonex of 607 includes delivery to desk, installation of standard image of Page 1

2 software, checking for dead on arrivals (DoAs), asset labelling, and installation. The PC then needs to have its machine specific data recorded onto the asset management system, labelling and security marking completed, installation of specific software undertaken, and attachment to the network. Some of the above processes may involve a number of engineer visits from IT Services and/or departments. In addition to the above activities, a County Council engineer (IT Services or Departmental) undertakes the following actions; check that the PC connects to the domain, set-up a local user account, set-up standard software that is not contained within the image e.g. activesync, and set-up standard departmental applications. These actions are undertaken before a PC is deemed to be fully operational, which is an additional cost beyond the 607 paid directly for the PC. The existing contractual arrangements allow for PCs to be purchased as an individual unit, or in batches, but the price remains the same regardless. The effect of this approach is that each PC is priced by the supplier as if it is an individual delivery, which means that there is little or no discount for ordering in multiples, nor is there any discount for delivering in multiples. This scenario is further worsened in that some of the biggest suppliers of mass market PCs will not offer a combined PC and engineering visit as they do not provide routine local engineering support. They operate a return to base service. Accordingly the opportunity to maximise procurement savings by involving mass market suppliers is reduced, as many mass suppliers do not even submit tenders for the DCC contract. Proposal It is proposed that an in-house PC commissioning unit be created to manage the ordering, delivery and installation of replacement PC s. It would initially consist of three staff plus a supervisor, and it is anticipated the unit would be accommodated as part of the anticipated relocation of County Hall post and delivery facilities. The PC commissioning unit would undertake all of the arrangements needed from ordering a replacement PC, to ensuring that it is operational for a user. Departmental staff would request or requisition replacement PC s as part of an annual replacement programme. A number of benefits and opportunities are created as a result of this proposal, including :- Utilising specialist skills Reductions in inefficient activities through economies of scale Page 2

3 Reduced procurement costs through ordering and delivering in bulk Opportunities to participate in nationally negotiated procurement contracts Improved service for users Opportunities for improved management of the County Councils PC stock Removal of time currently spent by in-house engineers undertaking installation tasks A PC commissioning unit would be strongly complemented by having a corporate PC replacement policy and an associated corporate programme of work, which would facilitate the County Councils annual service planning process, as well as enabling bulk purchasing decisions to be made. This process would need to be supported by agreement from all departments that all renewals of PC s are undertaken by this unit. The disposal of PC s could also be managed by this unit, and as part of a series of improvements in the disposal process it is envisaged that the PC commissioning unit could have procedures in place to ensure that information contained on the hard disk does not leave the authority and that the Waste Electrical and Electronic Equipment (WEEE) regulations are followed. This may involve the physical eradication of data from a hard disc, thus eliminating the possibility of highly confidential information being extracted from the PC s. Further developments Efficiencies are also anticipated for laptops, tablet PCs, printers and peripherals, and it is proposed to evaluate the opportunities to extend the commissioning unit s capabilities to include these items. Any such proposals will need to be carefully considered as there will be a need to review staffing levels, and include the consequential costs, in any further proposals. The operation of the PC commissioning unit needs to be sufficiently flexible to consider the long term requirements of the County Council and the possibility exists of supplying PCs to a broader community than the existing County Council outlets. The PC commissioning unit could well have its operational remit extended to include agencies and borough councils. Page 3

4 3. FINANCIAL CONSIDERATIONS Costs Year 1 Year 2 Year 3 Equipment and furniture for unit 10, Set-up costs 4, Staffing costs 1 107, , ,000 Transport 10,000 10,000 10,000 Total 131, , ,000 The costs of operating a PC commissioning unit would be mainly staff and are anticipated to be 117,000 pa. The Unit would be located at County Hall and would be integrated with ongoing proposals for consolidating County Hall reprographics, portage and postal arrangements. Initially a phased department by department implementation programme would be undertaken to enable the development of new working practises and routines. Around 950 PC s a year have been replaced in recent years, and if there was an introduction of a corporate planned replacement programme on a five yearly basis, this number could increase to 1300 PC s a year. It is however, considered prudent to base the proposal, and any consequential savings in the unit cost, on a maximum 1000 PCs per annum. Should the numbers of PC s exceed 1000 per annum then the savings generated would correspondingly increase, although at some stage additional staffing would be required. It is anticipated that the cost of a new PC would reduce from the current contract price with Elonex of 607 per PC, to a maximum of 485 for a PC, which would produce gross savings of 122,000 per annum. Furthermore, it is estimated that spread across a number of individuals in each department there are currently a total of 6 FTE County Council staff undertaking work in relation to the installation of PC s. This would be reduced to four staff operating the unit on a full time basis, which would generate a further saving of in-house engineer time of two posts and travel costs amounting to 60,000 per annum. The overall gross saving would therefore be 182,000 per annum, a net annual saving of 65,000. This will require a transfer of resources (virement) from departmental hardware and staffing budgets to Corporate Resources Department staffing, transport and equipment budgets, which can be dealt with in the Budget process. 1 3 staff and one supervisor Page 4

5 A further significant gain is the opportunity to develop better corporate management of the process, and also to generate additional indirect benefits, whereby the end user experience will improve as there would be less frustration and disruption from a single visit than multiple visits by different personnel. Costs & Benefits Year 1 Year 2 Year 3 Reduced purchase costs of , , ,000 PC s Reduced In-House Staffing costs 60,000 60,000 60,000 Gross Savings 182, , ,000 Costs 131, , ,000 Net Savings 51,000 65,000 65,000 It should be noted that the proposal more than breaks even based on the reduced costs of purchasing PC s alone and that obtaining the staff reductions (which is the more difficult element) can be achieved over a longer period (and combined with other initiatives if required). Any further proposals for including laptops peripherals etc, within the remit of the commissioning unit, will need to account for additional staffing costs, including ordering arrangements that may be required. County Procurement has been consulted on the potential savings to be obtained from changing the procurement methodology, and is supportive. It is proposed to allocate the costs on the basis of the numbers of PCs in each Department physically attached to the County Council s network, whilst savings will be reflected in lower prices for PC s purchased by departments. The proposed basis of the allocation is outlined below:- % PC s Corporate Resources (inc CE) 20 1,200 Culture & Community Education (excluding schools) 17 1,047 Environmental Services Social Services 37 2,282 Total 100 6,112 These figures reflect an earlier exercise that estimated the numbers of PC s by department, although the figures for Children s and Older Adults had not been reallocated from the previous departments. The commissioning unit will be able to purchase PC s on behalf of externally funded bodies, such as schools, or Connexions, and an Page 5

6 appropriate overhead will need to be calculated to reflect the true costs to the County Council. 4. PERSONNEL CONSIDERATIONS The four staff operating the unit would be appointed from existing staff currently doing this work. The relevant Trade Unions will need to be consulted over these proposals and a programme of communication to the staff will be undertaken. There will be a training and development requirement for staff that are appointed to the commissioning unit to set-up and deploy the PC equipment, as well as retraining for other IT staff impacted by the changes. Any further proposals for including laptops peripherals etc, within the remit of the commissioning unit, will need to consider additional staffing needs. 5. OTHER CONSIDERATIONS In preparing this report the relevance of the following factors has been considered: prevention of crime and disorder, equality of opportunity and legal, environment, health, respect for human rights and property considerations. 6. RECOMMENDATIONS That approval be given for : 1 the creation of a PC commissioning unit as outlined in the report 2 changes to the disposal policy and procedures as detailed in the report 3 a corporate PC replacement policy to be developed 4 further proposals to extend the coverage of the unit, to include laptops, tablets, printers and peripherals 5 a further report on the progress made on implementation, process mapping and subsequent service redesign changes 6 the PC commissioning unit to support approved external organisations, within the context of a shared service environment 7 consultations with Trade Unions and communication with staff. Gerald Tommy Deputy Chief Executive Peter Swaby Strategic Director Corporate Resources Page 6