uhi ict shared services business case and business plan

Transcription

UHI
ICT SHARED SERVICES
BUSINESS CASE AND BUSINESS PLAN
University of the Highlands and Islands Network
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Revised 19 November 2013
ACKNOWLEDGEMENTS
PREPARED UNDER THE SUPERVISION OF THE SHARED SERVICES BOARD
Iain Macmillan (Chair)
Alan Ashworth
Lindsay Ferries
Dawne Hodkinson
Alun Hughes
Anne Lindsay
Niall McArthur
John Maher
AUTHORS
Julie Cribb
Alun Hughes
John Maher
THANKS TO THOSE WHO PROVIDED INFORMATION, HELP AND SUPPORT
Ray Aitken
Alan Ashworth
Susan Bald
Mark Beattie
Rosemary Beaudoin
Jeanne Boyd
Andy Brown
Ray Crabb
Bob Cree-Hay
Stuart Cruickshank
Tracey Cruickshank
Mike Devenney
Steve Douglas
Anna Enos
Lindsay Ferries
Roddy Ferrier
Robert France
James Garrow
Mhairi Glen
Steve Gontarek
Iain Gordon
Laura Henderson
Dawne Hodkinson
Richard Hughes
Fraser Hutcheon
Duncan Ireland
Carol Kirk
Deborah Lally
DJ Lamont
Fiona Larg
Elaine Laurenson
Anne Lindsay
Paula Lister
John McAlpine
Niall McArthur
Donald MacBeath
Lorna MacDonald
Marion MacDonald
Martin MacDonald
Mike MacDonald
Tony McGregor
Elizabeth McHugh
Gary Mackenzie
Donald Maclean
Lorraine MacLennan
Iain Macmillan
Jacky MacMillan
Murdo MacMillan
John Maher
Ian Martin
Elaine Munro
Fiona Mustarde
Ian Neilson
Jane Ollerenshaw
Thomas Redmond
Danny Richardson
Gary Ryan
Christine Scott
Chris Sellers
Gerard Sheal
Jill Sinclair
Donna Smith
John Smith
Sue Smith
Roray Stewart
Jem Taylor
Darryl Thompson
Carolyn Thomson
Gary Tooke
Lewis Vernal
Craig Walker
David Wood
Joe Wright
and the Principals/Directors of all Academic Partners and the University
UHI ICT SHARED SERVICES FINAL BUSINESS CASE AND BUSINESS PLAN
CONTENTS
Acknowledgements ................................................................................................................................................ 2
List of figures .......................................................................................................................................................... 6
List of tables ............................................................................................................................................................ 7
Introduction to the revised Business Plan .............................................................................................................. 8
Fort Augustus 3 and the changes in this revised version ................................................................................... 8
What happens next? ........................................................................................................................................... 8
1 EXECUTIVE SUMMARY ...................................................................................................................................... 10
1.1 Current Status ............................................................................................................................................ 10
1.2 Introduction ............................................................................................................................................... 10
1.3 Options Analysis ......................................................................................................................................... 10
1.4 What kind of organisation would it be? .................................................................................................... 11
1.5 Growth ....................................................................................................................................................... 11
1.6 Governance – A ‘Commissioning Board’ .................................................................................................... 12
1.7 Additional Costs ......................................................................................................................................... 12
1.8 Savings ....................................................................................................................................................... 12
1.9 ICT STRATEGY ............................................................................................................................................. 13
1.10 Scope – Core And Full .............................................................................................................................. 14
1.11 Service Level Agreements ........................................................................................................................ 16
1.12 Operational Aspects ................................................................................................................................. 17
1.14 Corporate Governance ............................................................................................................................ 18
1.15 Directors .................................................................................................................................................. 19
1.16 Organisational Structure And Management ............................................................................................ 20
1.17 The Company As An Employer ................................................................................................................. 21
1.18 Current Financial Position ........................................................................................................................ 22
1.19 Proposed Funding Model ......................................................................................................................... 22
1.20 Next Steps ................................................................................................................................................ 25
2 MANDATE ......................................................................................................................................................... 26
1
3 CURRENT STATUS AND CONTEXT ..................................................................................................................... 28
Geography ........................................................................................................................................................ 28
Wide Area Network .......................................................................................................................................... 29
Wifi ................................................................................................................................................................... 30
Videoconferencing ............................................................................................................................................ 30
E-mail ................................................................................................................................................................ 32
Virtual Learning Environment ........................................................................................................................... 33
Library And E-Resources ................................................................................................................................... 34
Helpdesk ........................................................................................................................................................... 34
Servers and Storage .......................................................................................................................................... 35
Telephony ......................................................................................................................................................... 35
ICT Service Support ........................................................................................................................................... 35
External Context ............................................................................................................................................... 37
4 OPTIONS ANALYSIS ........................................................................................................................................... 38
Options ............................................................................................................................................................. 38
Analysis ............................................................................................................................................................. 38
Recommendation ............................................................................................................................................. 40
Conclusion ........................................................................................................................................................ 42
Timescale .......................................................................................................................................................... 43
5 CURRENT FORM AND STATUS OF THE COMPANY ........................................................................................... 44
6 VISION AND MISSION ........................................................................................................................................ 46
7 BUSINESS OBJECTIVES ...................................................................................................................................... 48
Growth .............................................................................................................................................................. 48
Governance - Commissioning Board and UHI Shared Services Limited............................................................ 49
External Services and Income Generation ........................................................................................................ 49
For-Profit Trading ............................................................................................................................................. 50
Members External to the UHI Partnership ....................................................................................................... 50
8 FINANCIAL IMPLICATIONS OF MOVING ICT SERVICES INTO A SHARED SERVICES COMPANY .......................... 51
Additional Costs of the Shared Services Company ........................................................................................... 51
2
Transition Costs ................................................................................................................................................ 52
Technology Changes ......................................................................................................................................... 52
Expected Efficiency Gains ................................................................................................................................. 53
9 ICT STRATEGY ................................................................................................................................................... 55
The Environment .............................................................................................................................................. 55
Strategic Themes .............................................................................................................................................. 56
What does this mean? ...................................................................................................................................... 56
Work Streams ................................................................................................................................................... 59
10 SERVICE SCOPE - FULL AND CORE SERVICES ................................................................................................... 64
Core Services – Available to All ......................................................................................................................... 65
Full Service – Available to Fully Opted-In Members Only ................................................................................. 66
11 SERVICE LEVEL AGREEMENTS ......................................................................................................................... 68
Service Availability ............................................................................................................................................ 68
Service Performance ......................................................................................................................................... 69
Notice Periods................................................................................................................................................... 69
Service Review Meetings .................................................................................................................................. 69
Complaints ........................................................................................................................................................ 70
Presence ........................................................................................................................................................... 70
Requests for Service ......................................................................................................................................... 71
Helpdesk Support ............................................................................................................................................. 71
Customer Satisfaction ....................................................................................................................................... 72
Audit ................................................................................................................................................................. 72
Service Catalogue ............................................................................................................................................. 72
12 STAKEHOLDER GROUPS .................................................................................................................................. 74
13 OPERATIONAL ASPECTS .................................................................................................................................. 76
Physical Presence.............................................................................................................................................. 76
The IT Estate ..................................................................................................................................................... 77
Facilities ............................................................................................................................................................ 80
Structure of Service Delivery ............................................................................................................................ 81
3
Licence and Contract Management .................................................................................................................. 83
Procurement ..................................................................................................................................................... 83
Assets ................................................................................................................................................................ 83
Insurance .......................................................................................................................................................... 84
Premises ........................................................................................................................................................... 84
Servicing the Service ......................................................................................................................................... 85
14 CORPORATE GOVERNANCE ............................................................................................................................ 86
15 DIRECTORS ...................................................................................................................................................... 88
16 STRUCTURE OF THE COMPANY ...................................................................................................................... 90
Organisation ..................................................................................................................................................... 90
Senior Management ......................................................................................................................................... 91
17 EMPLOYMENT MATTERS ............................................................................................................................... 93
General ............................................................................................................................................................. 93
TUPE.................................................................................................................................................................. 93
Training and Staff Development ....................................................................................................................... 94
Future Employment and Terms and Conditions ............................................................................................... 95
HR Activities ...................................................................................................................................................... 95
Pensions ............................................................................................................................................................ 96
18 CURRENT FINANCIAL POSITION ...................................................................................................................... 98
Summary Results .............................................................................................................................................. 98
Variation across Partners ................................................................................................................................ 101
Staffing ............................................................................................................................................................ 102
19 FINANCIAL MODEL ........................................................................................................................................ 104
General Approach to Charging ....................................................................................................................... 105
Subscription Metrics ....................................................................................................................................... 106
Operating the ‘Exact Reimbursement’ Criterion ............................................................................................ 106
Division of Recurrent Costs Amongst Members - Methodology .................................................................... 107
20 OPERATING AS A COST SHARING GROUP - THE VAT EXEMPTION ................................................................ 110
The Conditions and HMRC's Guidance ........................................................................................................... 110
4
Further Implications ....................................................................................................................................... 111
Member Eligibility ........................................................................................................................................... 112
21 INVESTMENT STRATEGY ............................................................................................................................... 114
22 FINANCIAL STATEMENTS .............................................................................................................................. 116
Cash Flow ........................................................................................................................................................ 116
Balance Sheet ................................................................................................................................................. 117
23 POTENTIAL FUNDING SOURCES .................................................................................................................... 118
SFC .................................................................................................................................................................. 118
Janet ............................................................................................................................................................... 118
European Funding........................................................................................................................................... 119
External Commercial Services......................................................................................................................... 119
ICT-Related Income Currently Generated by Academic Partners................................................................... 119
24 REGIONAL DEVELOPMENTS .......................................................................................................................... 120
APPENDIX A1: DETAILED FINANCIAL DATA RETURNS ......................................................................................... 122
APPENDIX A2: UHI ICT SHARED SERVICE SPECIFICATION ................................................................................... 123
APPENDIX A3: THE FORT AUGUSTUS 2 AGREEMENT ......................................................................................... 161
APPENDIX A4: ISSUES LOG FROM THE FORT AUGUSTUS 2 SUMMIT ON SHARED SERVICES ............................. 165
APPENDIX A4a: ISSUES LOG FROM THE FORT AUGUSTUS 3 SUMMIT ............................................................... 172
APPENDIX A5: UHI ICT SHARED SERVICES RISK REGISTER .................................................................................. 196
APPENDIX A6: ARTICLES OF ASSOCIATION OF UHI SHARED SERVICES LIMITED ................................................ 201
APPENDIX A7: BUSINESS SYSTEMS CONVERGENCE STRATEGY ......................................................................... 217
APPENDIX A8: DRAFT JOB DESCRIPTIONS – CHIEF EXECUTIVE AND DIRECTOR, ICT .......................................... 248
5
LIST OF FIGURES
1
Proposed organisational structure
20
2
Academic Partner and Learning Centre locations
28
3
Network services
29
4
Wifi activity
30
5
VC bookings by activity
31
6
Predicted VC usage for teaching to 2017
31
7
Predicted total VC bridge usage to 2017
32
8
Typical VC system usage by month and by event
32
9
Average active courses on the VLE per month, 2011-current
33
10
Growth in average number of VLE users per day, 2011-current
33
11
UHI Helpdesk logged calls and resolution
34
12
Number of ICT staff by Academic Partner
36
13
Options Analysis
38
14
Helpdesk priority levels and responses
72
15
Service catalogue entry example – MyUHI
73
16
Location of ICT shared service staff and the services they provide
82
17
Structure of the Company and the ICT service
90
18
Range of ICT projected spend as a proportion of turnover
101
19
Range of printing and copying projected spend as a proportion of turnover
102
20
Staff age profile
103
21
Staff salary range
103
22
Location of all staff
103
6
LIST OF TABLES
1
ICT Shared Service Budget 14-15
24
2
Transitional Scheme
25
3
Site list
76
4
Total ICT planned spend (2013/14)
99
5
ICT non-staff projected spend by category
99
6
Summary of University income
100
7
ICT staff projected spend and numbers
100
8
Categories of zero spend
102
9
ICT Shared Service Budget 14-15
108
10
Transitional Scheme
109
11
SFC funding bid
118
7
INTRODUCTION TO THE REVISED BUSINESS PLAN
Fort Augustus 3 and the changes in this revised version
The first version of this Business Plan (‘version 1’) was released on 8 October 2013. It was discussed in detail at
our third summit meeting in Fort Augustus on 30/31 October. We are very grateful to delegates for their
support and positive approach to moving the project forwards. In this revised Business Plan we have, limited
timescale available, attempted to address as far as possible the main issues identified.
The financial model proposed was considered too turbulent, and too disadvantageous to too many APs
including a number of the smallest. A working party was proposed to consider alternatives, established under
Alan Ashworth’s chairmanship, and its deliberations are reflected in a much revised Chapter 19 and
summarised in the Executive Summary at 1.19. It would be fair to consider this work in progress, as although
the working group expressed a clear view as to the principles to be followed in the new model, it has not had
an opportunity to review the detailed outcomes.
There was renewed debate around the voting model for UHI Shared Services Limited. We detected a higher
degree of support than previously for a one-member, one-vote solution and we have proposed a revised
voting model in Chapter 14, summarised in the Executive Summary at 1.14. This is not quite 1M1V but we
think it embodies the spirit of that approach and has the extra benefit of making it easier to take on members
external to the partnership.
Pensions were discussed at length and it is clear that the feeling of delegates was that a commitment to offer
LGPS to transferred staff was key to the success of the initiative. The initial pensions advice that we received
after the issuing of version 1 is now summarised in Chapter 17.
Between the publication of version 1 and this revision we have received confirmation from SFC that, subject to
clarification of costs and agreement of conditions of funding, they have agreed to fund the initiative to the full
extent of the £2.16m that we requested. There are no substantive changes in this version because of that, but
we have updated the language to reflect the much improved position.
Delegates expressed a range of views about the senior staffing structure, and more broadly, about
employment practices within the new Company. A HR workstream has been established, led by Lindsay
Ferries, to address these issues and its programme of work is outlined in Chapter 17. A revision of the staffing
structure, removing one of the ‘Head’ posts (enterprise architecture and strategy) and incorporating that
activity within the ‘Infrastructure’ section, is proposed and the revised organogram can be seen at Chapter 16
and in the Executive Summary at 1.16.
We were advised not to be too extravagant as to the language we used around redundancy and relocation of
staff, though it remains the situation that no compulsory redundancies are planned in the formation of the
new service and the intent is that the organisation will remain distributed. References to these issues have
been revised at a number of locations in the document.
We made some other changes, typically for extra clarity, in a number of areas including the definition of
service scope, the ICT strategy, and issues around cash flow.
What happens next?
We are now hoping that Academic Partners and the University can agree to commit to the shared service on
the terms outlined in this Business Plan. We recognise that there are unresolved issues, not least around
8
pensions, and that these will need to be worked through to general satisfaction before agreements can be
finalised. However even addressing these issues has a high level of commitment as a prerequisite, and
therefore, by the target date (19 December 2013) Academic Partners and the University are asked to:

Become members of the Company if they are not already members, and

Commit to participating in the shared service, specifying whether as 'full' members or members
taking the core service only. In committing to participating we recognise that there are some
fundamental and some detailed issues still to be resolved and that the decision to commit is based on
satisfactory resolution of those issues:
o
o
o
o
o
confirmation of acceptable first-year costs to each member
acceptable arrangements for the transfer of pensions being achieved
detailed agreement as to the mechanism of apportionment of running costs in future years
being achieved
the conditions of funding specified by the Scottish Funding Council as applicable to members
being acceptable
suitable arrangements for ensuring the ongoing liquidity of the Company being agreed
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1 EXECUTIVE SUMMARY
1.1 Current Status
A core set of ICT services is provided to the Partnership, funded by top-slice from the HE funding
stream. Academic Partners themselves provide local services which vary very significantly. Much
activity is duplicated or operated in parallel across the Partnership and the overall ICT infrastructure
is as a result complex and heterogeneous with many points of failure.
It is not obvious that we are collectively spending too little or too much on ICT (especially when we
take European funding into account) but the growth in common services has not led to Partners
taking commensurate savings, and the overall ICT environment is clearly inefficient with insufficient
value being returned for the Partnership’s investment.
1.2 Introduction
At the Fort Augustus 2 summit on shared services in April 2013, it was agreed that:
the University and its Academic Partners agree to collaborate to develop a range of shared services to
be delivered for the collective good. They will operate on the principle of collective self-provision
rather than outsourcing.
The first services to be delivered will be ICT services and will be provided by a new shared services
company, UHI Shared Services Limited, subject to the satisfactory conclusion of a due diligence
process and the development of a business case acceptable to the partnership.
The Shared Services Board here sets out a Business Case/Business Plan which we believe meets that
requirement and which we commend to the partnership.
1.3 Options Analysis
It was agreed at Fort Augustus to establish UHI Shared Services Limited as a Company Limited by
Guarantee, to operate as a Cost Sharing Group under the terms of the Finance Act 2012, thereby not
having to charge VAT on services to its members. ICT staff currently employed by the University and
its Academic Partners would be transferred to it. Outsourcing the whole service was explicitly ruled
out.
In the Business Case/Business Plan we validate that conclusion by offering an options analysis across
four different futures – retaining the status quo, operation of the shared service directly by the
University or one of its Academic Partners, delivery via the Cost Sharing Group and whole-service
outsourcing.
We conclude that the approach agreed at Fort Augustus was the right one. In particular we thought
that the requirements for flexibility, adaptability and responsiveness and the ability to operate more
as a business, were best satisfied by the establishment of the Cost Sharing Group. Even if the setting
up of a separate legal entity turned out not to be strictly necessary for the avoidance of VAT, we
would still prefer this option.
10
1.4 What kind of organisation would it be?
The aims of the Company can be taken directly from the Fort Augustus 2 agreement - enhanced
student experience, greater ability to deliver equivalence, greater efficiency and effectiveness and
improved quality. We take from the same document the ‘ethos’ points that will guide the company
in its operation and development:










Collectively owned and governed
Supporting the whole business of all members including HE, FE, research and other core
activity
Acting and managed according to business disciplines
Flexible, adaptable and able to respond quickly to changes in the partnership or the external
environment
A lean and cost-effective management structure with minimal bureaucracy
Not an outsourcing model, though, as now, specific elements of the service may be
outsourced where appropriate
A distributed workforce
Development of a wider range of professional specialisms
Commitment to developing its staff
Full transparency to its members as to its financial, contractual and other arrangements
Stakeholders have made it clear that while efficiency and effectiveness is expected, and indeed
required, what is of prime importance is quality of service.
1.5 Growth
There may seem to be a contradiction between the expectation that a shared services organisation
should save money for its members, and therefore reduce its economic footprint, and the normal
drive for growth which is part of the sustainability agenda for many companies.
The Company will need to grow from its original establishment delivering ICT services. Common ICT
services are the necessary underpinning for the shared services in transactional areas which present
greater opportunities for savings. The Capita Report (Outline Business Case for a new operating
model. University of the Highlands and Islands. January 2012) indicated that ICT services in
themselves were not of sufficient volume to sustain a shared services organisation. We are not
necessarily convinced that that is the case, but the new organisation will have overheads that will be
proportionately smaller if more functions are taken on board.
The most desirable form of growth is through taking on new functions from member organisations,
delivering improved efficiency and effectiveness and proportionately reducing the overhead. In
addition, this allows improved synergies across areas of service, improving efficiency and quality of
service even further.
The Shared Services Board has considered the range of support services currently delivered within
the partnership and assessed the extent to which they are suited to be taken into the shared
services organisation. The current list of 'Priority 1' areas, i.e. those judged to have the greatest
11
potential for cost savings and/or improved service, includes admissions/registry/student records,
finance and HR (transactional activities) and library services. Incorporating these services is not part
of this business plan, but creating a vehicle that has that potential is.
1.6 Governance – A ‘Commissioning Board’
We think that in considering future shared services beyond ICT, it will be necessary to separate the
'commissioning' function from the delivery function. In particular we would like to see the
establishment of a 'commissioning board' with very senior representation from the partnership,
whose function would be to:



determine which services are priorities for sharing and in what way (i.e. via shared services
company or by another means)
for those services to be transferred to UHI Shared Services Limited, to engage in a
commissioning dialogue in which, inter alia, issues of cost vs. quality of service are
considered
offer continuing guidance on the balance of expenditure and service levels across the
different areas of activity.
The Commissioning Board would act as a representative body of the UHI membership of the
Company. However the contractual relationship would remain between the Company and its
members.
1.7 Additional Costs
We estimate the additional running costs of the Company at £100,000 per year, or approximately
1.7% of its initial anticipated turnover.
A range of transitional costs has been identified, including additional staff training and development,
travel and subsistence and technology investment to provide something closer to a common playing
field. We understand that SFC funding will be forthcoming to covering these costs subject to final
confirmation.
Work is being commissioned on the pensions implications, which remain to be clarified in detail.
1.8 Savings
In most cases these can only be broad estimates, when we can make estimates at all. They do not
necessarily relate to cash savings – in particular, we expect to make very significant improvements in
the way in which staff are collectively deployed, with reductions in redundant and duplicated work
and efficiencies achieved through automation of routine tasks, but the anticipated consequence is a
redeployment of staff to work that has more value to the end-user, rather than a reduction in overall
staffing costs.
12
In our submission to SFC we have used a consultant’s figure of £376,100 as the saving that we might
make from the implementation of a standard thin-client based technology for applications delivery.
Much of this saving accrues to Academic Partners through lower costs of procurement and
replacement of end-user devices such as PCs and terminals, and lower energy costs where that
equipment is deployed.
There is acknowledged scope for software rationalisation and we think a saving of around £170,000
may be possible in the short to medium term.
We do not propose that physical assets should transfer to the Company. The Company may however
acquire assets after it begins trading.
Delegates at Fort Augustus 3 were interested in the likely future costs of the ICT service beyond the
first year. The first point to make is that this is a matter for the membership to determine - there
may be a requirement for investment to achieve strategic aims or efficiency gains elsewhere in the
business, or conversely there may be an overriding imperative to reduce costs.
Our expectations on costs assuming, broadly, a steady state in terms of ICT provision, are as follows:
In the first year, as indicated, we expect to hold expenditure at a level equivalent to current spend,
adjusted for inflation.
In the second year, we expect to take efficiency gains sufficient to cover the loss of the temporary
(first year) funding support from SFC. In the third year, we would hope to make efficiency gains of
between 3% and 5%. These figures do not account for inflation.
1.9 ICT STRATEGY
ICT is now fundamental to the delivery of any organisation's operational and strategic goals. The
University and its Academic Partners is a modern, widely dispersed organisation, operating in a
highly competitive and fast moving sector. It's customers are increasingly "tech savvy" with high
expectations when interacting with the services they are consuming. To fulfil its potential the
partnership needs a modern, coherent and effective ICT service.
In the current economic and funding climate any new investment in ICT needs to be based on sound
academic and business reasons. Operational efficiencies need to be maximised and services
improved. The proposed shared service puts the partnership in a position where, for the first time, it
can realistically achieve a unified ICT strategy. This will allow it to make informed technology choices
that can be implemented in a coherent and efficient manner across the partnership, ensuring an
equivalence of experience and quality of service.
The Business Case/Business Plan contains a comprehensive, though draft, skeleton of such a
strategy, with a set of strategic themes around:



Our customers
Our people
Distributed capacity and local resilience
13

Environmental and operating efficiency
1.10 Scope – Core And Full
The Business Case/Business Plan is predicated on the assumption that the majority of Academic
Partners, along with the University, commit fully to the shared service, including transferring their
ICT staff to the Company. We know already that a smaller number do not intend to do so – currently
these are SAMS, Sabhal Mòr Ostaig and Orkney College. (In the case of Orkney College the local
authority’s policy will not permit the transfer of staff.)
It is recognised that effective participation in the UHI partnership is contingent on the ability to use
some common information systems, such as the VLE and student records system, and therefore a
core set of services, broadly equivalent to those currently provided by the University’s LIS
department, will be available to all UHI members of the company. The basket of core services will be
charged separately from the ‘option’ services.
14
CORE SERVICES – AVAILABLE TO ALL
Admissions and enquiries platform
Multimedia content hosting
Backup and data recovery
MyUHI thin client platform and any successors
Business continuity support (system-wide)
Network security testing (automated)
CLA Copyright Web Based Register
Online enrolment environment
Course database
Online fee payments support
Desktop VC (Jabber)
Online module selection system
Document management and collaboration
platform
Online student feedback system
Domain and URL management
Email, calendar, instant messaging
Podcasting service
Reading list management
e-portfolio system
Research information management platform
(PURE)
e-Resources provision and management
Resource discovery tools
FES return support
Security (WAN environment)
File store
Service desk (Helpdesk)
Helpdesk platform
Service desk (Helpdesk) – out of hours
HESA KIS return and NSS support
Service level reporting
HESA Returns
Statutory returns support
Information security policy maintenance
Student and staff badges – software
environment
Interactive voting system
Inventory and asset management platform
IT compliance management (system-wide)
Janet
Learning analytics
Learning content – hosting and technical
advice
Student attendance platform
Student records core reports
Student records accessibility platform
Student records fees environment
Student records portal
Student withdrawal tools
Library management system
Telephony – UHI internal, desktop
Module Catalogue platform
Timetabling/VC booking systems platform(s)
15
Training materials provision (generic)
UHI Toolkit platform
Videoconferencing – bridging, connection,
booking, scheduling, user support
User account provision
Virtual learning environment (Blackboard,
Blackboard Mobile, Collaborate)
VC recording
Web content filtering
Video streaming service for learning content
(Helix)
Web – One Web development and
infrastructure
Wide Area Network
Wi-Fi
FULL SERVICE (OPTION) – AVAILABLE TO FULLY OPTED-IN MEMBERS ONLY
Apple device support
AV equipment – procurement support,
installation, configuration
IT classroom and laboratory support
Business continuity support (local)
IT compliance management (local)
Business systems convergence project
LAN management
Comms room management
Licensing audit services
CRM software platform (as developed
through business systems convergence
strategy)
Mobile device support
Desktop applications delivery, other than via
thin client
Out of hours class support
Equipment disposal (compliant)
Printing and photocopying management
Finance software platform (as developed
strategy)
Server platform for non-core services
HR software platform (as developed through
business systems convergence strategy)
VC studio endpoint management and support
Mobile telephony
PC support
Terminal (thin client) support
Web analytics, design, development
1.11 Service Level Agreements
During consultation, many stakeholders emphasised the importance of 'robust' service level
agreements. At the same time we also heard, sometimes from the same people, about the
importance of maintaining flexibility, particularly at the local level. We agree with both positions. It
16
is important to set clear expectations in the minds of both service providers and consumers as to the
services being provided, but it is also important that we don't lose what people value about their
local services in the transition to the single service.
The Business Case/Business Plan sets out an approach to the development of new Service Level
Agreements focussed around:




service availability targets which more closely reflect impact on users, e.g. higher availability
targets during critical period such as enrolment
development of performance measures, e.g. system response times
improved communications, including notice of changes
customer satisfaction as a key performance indicator
1.12 Operational Aspects
The proposed service would remain distributed with a strong emphasis on local presence. The
contract that the Company will have with each of its members will include a definition of where that
service will be provided as well as its scope. Over time, we expect that the rationalisation of the ICT
environment and the continued development of remote technical support capability will free up
locally-based staff to provide for more face-to-face user support, enabling the service to cope better
with the changing demands on the service and a more mobile user base. Increasing use of
intelligent systems will help maximise resource usage and could lead to reduced investment
requirements for end-user equipment, which also has the potential for releasing IT staff to spend
more time on supporting the users rather than dealing with the equipment.
The ICT service will be structured into a number of sections each with a head of service, and in
addition there will be a key contact or Relationship Manager at each Partner who will be responsible
for the end user experience across all services at all sites for which they have responsibility. Regular
Service Review meetings will take place which will afford the opportunity for feedback and
continuous improvement as well as noting matters in relation to the SLAs with respect to each
service.
As the shared service is embedded, in all cases staff, regardless of location, will work in virtual teams
based on the functions they provide to ensure efficient use of resources and deployment of common
solutions and standards. Disentangling the service over the first year will enable best use of people
within the Company to provide a much stronger and resilient service, with team working providing
the strength and depth which is much harder to achieve within the current status, resulting in fewer
single points of failure (SPFs) and providing greater flexibility to cover for peaks and troughs.
An early opportunity for savings, more efficient working and a better quality of end user experience
is in the consolidation of software applications and the negotiation of new contracts, managed by a
small team of staff with relevant expertise and negotiating skills, focussing on customer needs and
not purely on the potential for cost savings.
We do not propose that physical assets should transfer to the company. However, in order to carry
out its functions, the company will need to deploy and control equipment owned by its members,
and we propose that a part of the formal agreement entered into by each member should detail the
17
assets owned by the member (if any) that the company has the right and obligation to manage. New
assets acquired by the company will be company assets unless procured for, and recharged to,
members.
In order to support the principle of remaining distributed in terms of staff location, we propose that
it be part of the contractual relationship between UHI Shared Services Limited and its members that
staff located at Academic Partner or University premises be accommodated free of charge. This is
consistent with a general principle of minimising transactions where the Company procures services
from its members on a paid-for basis. These services are likely to be subject to VAT and the net
result is simply a transfer of funds out of the partnership to HM Treasury.
As the service goes live the Shared Services Company will employ around 80 people and be
responsible for its own financial and legal affairs as well as other functions as outlined in the
Corporate Services Department shown in the Organisation Chart in Chapter 16. Additional resource
will be required to provide these functions, in particular financial expertise. In the short term a bid
has been put to SFC which includes £100k to allow for acquiring these services in the transitional
period, which we understand will be forthcoming subject to final confirmation. Once the service is
established and the nature and extent of the ongoing requirements are clearer the resulting
overhead will need to be built into the shared service budget for future years.
1.14 Corporate Governance
UHI Shared Services Limited is established as a Company Limited by Guarantee, Company No.
SC457396, with its registered office at Synergie House, Fairways Business Park, Inverness IV2 6AA. It
is owned by its members. All UHI Academic Partners, including the University, are eligible to become
members.
As the Articles currently stand, members have voting rights which vary according to their financial
contribution to the company. Each member has the greater of:


one vote; or
one vote for every complete £200,000 of annual subscription payable by that member in
respect of the then current financial year.
'Annual subscription' means that part of the total running costs of the Company contributed by the
member in that financial year.
In the first version of this Business Plan, the Shared Services Board proposed no change to these
arrangements, though there had been some discussion at the Fort Augustus 2 summit of a onemember, one-vote alternative. The issue was raised again at Fort Augustus 3 and there seemed to us
to be a greater consensus this time for such an approach. We are therefore proposing the variant
that follows.

Each member who subscribes for the full range of services offered: 10 votes

Each member who subscribes to a 'core' bundle only, or a set of services greater than the
‘core' but less than the full range: 5 votes
18

Members who take specific services only, less than the 'core' provision: 1 vote
The third category would typically apply to members outwith the UHI partnership.
Members would only fall into one of the above voting categories at any one time, i.e. they have 10, 5
or 1 vote(s) in all circumstances.
Obviously the model is intended to encourage maximum participation. The scenario in the second
category - where a member takes a range of services somewhere between 'core' and 'full' - is not
intended to suggest that a pick-andmix approach is available to the services described as 'option' in
respect of the ICT service, but accommodates a future, when we have brought on additional
services, in which perhaps some members are taking the 'core' option for some areas of shared
service and 'full' for others. We would need to take some care in drafting to future-proof the
wording.
This approach deals comfortably with the concern that it is difficult to bring in new external
members, and thereby grow the business, with 1M1V. There should also be no issue with Teckal
compliance and the requirements for Cost Sharing Groups. What it does not provide for, in itself, is
stability in governance for the Company if there are very major changes in the structure of the
membership, e.g. through substantial mergers. At this stage we simply note this as a risk, which the
membership would need to deal with if it became a practical problem.
Note also that this proposal would result in the incorporated colleges not having a collective
majority of votes, nor would any individual member have anything approaching a 20% level of
control of the Company.
Members delegate the day-to-day management of the Company to the Board of Directors, who
delegate the operational management of the Company to the executive.
1.15 Directors
The Articles of Association of UHI Shared Services Limited provide that there must be a minimum of
five directors. Eligibility to be a director of the Company has been limited to employees, directors or
trustees of member organisations, and employees of the Company. In the event that a director
ceases to satisfy one of these conditions, he or she ceases to be eligible to be a director.
The term of office of directors is three years, renewable for two further consecutive terms of three
years. Directors who are not employees of the Company are unpaid.
The Board of UHI Shared Services Limited is currently:






Iain Macmillan, Lews Castle College UHI (Chair)
Alan Ashworth, West Highland College UHI
Lindsay Ferries, Inverness College UHI
Alun Hughes, University of the Highlands and Islands
Anne Lindsay, Moray College UHI
Niall McArthur, Inverness College UHI
19
The current members of the Board are drawn from those members of the Shared Services Board
eligible to be directors at the current date. The Board is of the view that its membership is likely to
need to change in the relatively near term, reflecting the transition of the shared services initiative
from project to service, and the need to separate the functions of identifying and prioritising
candidate activities for shared service from the governance and management of operational
services.
The Board recognises that the Articles in themselves do not provide for a balanced or representative
Board membership. While not wishing to hard-code such provisions into the Articles, the Board
would propose to adopt a set of principles of corporate governance which would, inter alia, provide
that appointment of directors should be informed by the following criteria:



appointed from a suitably wide range of member organisations
bringing an appropriate range of skills and experience to the Board
where appropriate, ability to provide through cross-representation links with the
governance structures of the University.
1.16 Organisational Structure And Management
Figure 1 shows the proposed organisational structure of UHI Shared Services Limited at the time that
it begins trading.
The structure provides for the appointment of further Directors of service areas in future, but only
the Director, ICT is proposed to be appointed at this stage.
Figure 1: Proposed organisational structure
UHI SHARED SERVICES LIMITED
Board of Directors
Chief Executive
Corporate Services
Finance, Administration, SLA monitoring, documentation, change
management, compliance, procurement, environmental, project
management, business continuity, information security
Director, ICT
Director, Service 2
Director, Service 3
Director, Service 4
Head of Service
Delivery
Head of Infrastructure
Head of Corporate
Systems
Head of Learning,
Teaching & Research
Support
Service desk, local ICT
support, desktop &
mobile devices,
incident support,
installation & service
rollout, VC
Studio/Endpoint
support
Network
(WAN/LAN/wifi),
system architecture,
ICT Strategy, servers,
directory services, thin
client, filestore, DBMS,
telephony, server
rooms, R&D, video
infrastructure, backup
SRS, BI & Reporting,
UHI Records, IDM,
systems development
& integration, business
systems, SharePoint,
web development,
TOMAS
VLE, LMS, e-Resources,
VC service, email,
collaboration tools,
timetabling, PURE,
generic applications,
usability, academic and
research liaison,
assistive technologies
20
The structure of the ICT service proposed is relatively conventional and parallels that found in many
other UK universities. Adopting a standard and well-understood structure should help mitigate risk
in moving to a different operating environment.
The Chief Executive will be appointed by the Board at such time that there is sufficient commitment
from members that the Board can be certain that the company will trade.
The Chief Executive is responsible for overall strategy and management of the company, its financial
integrity, compliance and the overall management of its relationship with its members and external
stakeholders. Critical activities at start-up will include working with the Director, ICT to embed the
shared service within the new Company. An important element of the role in the early years of the
company will be the extension of its business into other areas of shared service.
There is a general presumption that posts will be filled from within those staff in scope for transfer
unless in the opinion of the Board this is not appropriate. The Board recognises that if external
appointments need to be made then a contingency is likely to need to be invoked for the additional
cost of doing so, and this will be addressed in fine-tuning the budget plan.
1.17 The Company As An Employer
We believe on the basis of advice that TUPE regulations apply to the transfer of staff from the
University and its Academic Partners to UHI Shared Services Limited. These regulations provide for
the protection of salary and terms and conditions of employment for transferring staff. We will of
course ensure full compliance with the regulations, including the recognition of Trade Unions being
carried over to the new employer.
The Company intends to seek Admitted Body status in the Local Government Pension Scheme (LGPS)
in order to be able to offer these pensions to transferring staff, the vast majority of whom are
already members of the LGPS. We are currently taking professional advice on the implications of
this.
The Company is committed to remaining distributed. There will therefore be a principle applied that
there will be no compulsory relocation of staff as the shared service goes live.
No compulsory redundancies are envisaged associated with the move to the shared service.
However, as the service faces disentanglement and restructuring following the move to the shared
service some staff may prefer to apply for voluntary severance. The Company will consider
providing this option where it makes business sense to do so.
As the staffing of the new, shared ICT service be made up as far as possible from the staff
transferring to it from the University and its Academic Partners, we anticipate a major staff
development and training requirement.
No position has yet been taken as to the exact nature of employment policy or terms and conditions
in the new company. That will need to be determined in advance of trading and at least in advance
of making any new appointments.
21
We note the Fort Augustus 2 Agreement provision that the company will have an ethos of 'acting
and managed according to business disciplines' and will be 'flexible, adaptable and able to respond
quickly to changes in the partnership or the external environment'.
To us this suggests that the Company should certainly not be constrained to the standard
employment practices of universities and colleges, which is not to say that inferior conditions are
envisaged.
1.18 Current Financial Position
The data collection exercise underpinning this Business Case/Business Plan collected staffing and
non-staffing spend and budget over three financial years. We have based our plan on 2013/14 data
as being somewhat more reflective of the current position than previous years’ data and we are as
comfortable with its accuracy as we are for other years. The figures do not include spend at SAMS,
Sabhal Mòr Ostaig and Orkney College, or out-of-scope expenditure such as that on PCs, laptops,
smartphones, tablets and other items of end-user equipment – purchasing decisions on these
remain the responsibility of individual member organisations, subject to caveats regarding minimum
specification – Chapter 13 Procurement.
The total budgeted expenditure, net of income, is £5,962,232. The staffing element of this is
£2,894,417. There are 80.13 FTE ICT staff in total in scope, made up of 82 individuals.
1.19 Proposed Funding Model
Based on the current funding envelope (slightly adjusted as explained in the Business Plan) we
propose a net operating budget of £5,962,232 in the first year, which would run from 1 April 2014 to
31 March 2015.
The proposal is that predictable annual running costs be recovered from members on a formulaic
basis and that major strategic investment, according to an agreed ICT investment strategy, should be
sought from the University Court via the FE Regional Board and HEPPRC.
In the first version of this Business Plan we outlined a proposal whereby ‘core’ costs were divided
amongst members according to weighted student and staff numbers, and ‘option’ costs according to
turnover. We further assumed that the current top-slice for EO LIS services would be discontinued
and the funds distributed to APs, and we took the effect of this distribution to be a general uplift in
the unit of resource.
The consequences of this in terms of the impact on individual AP finances are broadly as follows:


distribution of top-slice with the RAM risks not putting individual APs in enough funds to pay
their ‘core’ subscription. In particular, APs with small proportions of HE do not do well from
this model, and generally, smaller APs are disadvantaged relative to larger ones.
allocating ‘option’ costs by formula has the effect of bringing all members’ contributions
towards an average unit cost. This benefits those with a relatively high level of current spend
and ‘penalises’ those with lower current costs.
22
Overall, the model tended to disadvantage smaller APs. Smaller APs include those with the lowest
proportion of HE, and probably because of economies of scale issues, smaller APs tend to benefit
from top-slicing relative to larger ones.
Also, lower unit costs at some smaller APs are not necessarily reflective of poor provision or
inadequate investment – they often reflect a no-frills approach to ICT provision and an absence of
some of the infrastructure and management costs that come with operations on a larger scale.
At Fort Augustus 3, we agreed to set up a working group to examine the financial model and to
produce recommendations on an alternative which would be more generally acceptable. That group,
chaired by Alan Ashworth, has met twice and at its second meeting commended a model with the
following characteristics:


for ‘core’ costs, preserving the effect of the current top-slice (whether or not the funds were
actually distributed to APs) – i.e. there would be no financial impact on APs from introducing
the shared service for ‘core’
for ‘option’ costs, modelling the cost allocation in the way that ‘core’ had been in the initial
proposal, i.e. using weighted FE WSUMS, HE FTEs, and staff numbers
An illustration of the application of this revised model follows. In this table, we have only modelled
the ‘option’ costs as we are proposing that there be no financial impact on APs in respect of ‘core’
costs. The ‘variance’ column shows the financial impact on each AP, at this stage without any
transitional scheme.
It would be fair to consider this work in progress, as although the working group expressed a clear
view as to the principles to be followed in the new model, it has not had an opportunity to review
the detailed outcomes.
23
Table 1. ICT Shared Service Budget 14-15
Total service running costs
Core Service
Option Service
£5,962,232
£3,812,442
£2,149,790
wSUMs Data Year
HE Data Year
Staff Data Year
2011/12
2012/13
2012/13
wSUMs Weighting
UG Weighting
PGT Weighting
Staff Weighting
Budget inscope spend Variance
Option cost distribution model
Argylll College
University
HTC
Inverness College
Lews Castle College
Moray College
NAFC
Orkney College
Perth College
SAMS
Shetland College
SMO
Totals
wSUMs
9,788
0
0
44,183
8,430
26,318
0
17,584
5,128
33,021
0
6,663
896
5,669
157,681
UG FTE
54
0
62
1,154
289
808
26
377
172
1,476
72
151
104
90
4,834
PGT FTE
0
23
2
8
24
0
0
3
24
11
0
1
2
0
98
Staff
71
181
18
260
112
225
50
198
87
323
148
67
90
74
1,904
1
50
50
100
Weighting Option Cost
19,606
£78,413
19,227
£76,898
4,988
£19,950
128,320
£513,225
35,272
£141,071
89,201
£356,764
6,315
£25,257
56,352
£225,383
0
£0
139,684
£558,675
0
£0
20,957
£83,820
0
£0
17,586
£70,334
537,507 £2,149,790
£126,454
£49,534
£27,479
£443,186
£154,605
£298,434
£88,002
£214,963
£0
£627,149
£0
£80,602
£0
£39,381
£2,149,790
-£48,041
£27,364
-£7,529
£70,039
-£13,534
£58,330
-£62,745
£10,420
£0
-£68,474
£0
£3,218
£0
£30,953
£0
The range of the individual financial impacts on APs is considerably lower in this model, though it
also has the effect of turning ‘winners’ into ‘losers’ and vice versa. It probably serves to illustrate
that there is no one ‘right’ answer. We hope that this model or a close variant of it is reasonably
acceptable to APs and the University though of course it could be refined or developed further as
necessary.
The figures are still based on 2013/14 budget as per the previous version of this Business Plan; they
may look different when we have 2012/13 out-turn figures available. Individual variances will still be
quite sensitive to the quality of the declaration of in-scope costs – in particular, any significant
under-declaration would have the effect of increasing any apparent ‘deficit’.
Note also that any decisions by individual Academic Partners to take the ‘option’ package or not will
affect the overall envelope and therefore the level of cost for each other member. In the case of
smaller APs the effect would in all probability not be large.
We think that a transitional scheme is still likely to be required even though the impact of this new
model is considerably less. At this stage we propose a scheme similar to that contained in the
previous version of the Business Plan, i.e. a smoothed transition from ‘historical’ in the first year to
the full application of the model in year 4.
The following table makes the unrealistic assumption that the overall cost will be absolutely flat in
cash terms and that the scope of the service does not change over the four years. It is illustrative of
the effects of a transitional scheme rather than a prediction of the precise bill to individual APs over
a number of years.
24
Table 2. Transitional funding support
Transitional Funding Support (without inflation)
100%
67%
33%
0%
Member
Argyll
EO
HTC
Inverness
LCC
Moray
NAFC
NHC
Orkney
Perth
SAMS
Shetland
SMO
WHC
Total
Option Cost Option Cost Option Cost Option Cost
Year 1
Year 2
Year 3
Year 4
£126,454
£49,534
£27,479
£443,186
£154,605
£298,434
£88,002
£214,963
£0
£627,149
£0
£80,602
£0
£39,381
£2,149,790
£110,442
£58,655
£24,970
£466,530
£150,094
£317,876
£67,089
£218,436
£0
£604,327
£0
£81,675
£0
£49,698
£2,149,790
£94,425
£67,777
£22,459
£489,881
£145,582
£337,322
£46,170
£221,910
£0
£581,498
£0
£82,747
£0
£60,018
£2,149,790
£78,413
£76,898
£19,950
£513,225
£141,071
£356,764
£25,257
£225,383
£0
£558,675
£0
£83,820
£0
£70,334
£2,149,790
1.20 Next Steps
We hope that the broad proposals contained in this Business Case/Business Plan can be agreed at
Fort Augustus on 30/31 October. If they are, then the anticipated timetable thereafter, through to
the agreed go-live date of 1 April 2014 will be as follows:









Internal Partner Consultations
Fort Augustus 3 Summit
Business Plan revision and contract/SLA preparation
TUPE consultations within Partners
Publication of final Business Plan
Partner agreements and SLAs issued
Partners return signed agreements
Transition planning and preparation
Shared Service goes live - staff transfer into Company
9 – 29 October 2013
30 – 31 October 2013
1 – 18 November 2013
November
19 November 2013
25 November 2013
19 December 2013
6 January – 31 March 2014
1 April 2014
25
2 MANDATE
The first Fort Augustus summit meeting held in May 2011 culminated in an agreement which gave to
the UHI Shared Services Project Board the mandate to build on significant current shared service
activity by further developing shared services across a range of IT areas and implementing standard
platforms, a common application set and minimum specifications appropriate to purpose across the
range of IT services.
There was a feeling at the time that significant cost cutting could be achieved in this way and a topdown target for this was set.
The agreement coming out of the summit included establishing a Programme Board to take on the
responsibility for:
·
·
·
·
·
·
·
·
governance of the shared service(s)
strategy including the development of a strategic roadmap
ensuring delivery of projects within the roadmap
prioritisation of developments and services
finance and resources
setting and assurance of service standards and quality
development and agreement of the service definition/SLA and definition of common
platforms, and the
communications and consultation strategy.
A first pass data collection exercise took place alongside a comprehensive consultation with
Academic Partners. The overwhelming message from this was that very little in the way of cost
savings could be achieved by bringing together IT across the Partnership without damaging the
service and indeed some investment would be likely to be necessary in order to establish a common
standard of infrastructure at an appropriate level. However it was foreseeable that efficiencies
could be gained in the future as a result of forming a shared ICT service and building on this by
bringing other services together.
During 2012 the Programme Board continued to progress activities and workshops were held to
identify the scope of an ICT Shared Service from which a staffing envelope could be determined and
a total cost model developed. By early 2013 it became evident that dedicated Project staff would be
necessary and a Project Director and Project Manager were recruited.
In April 2013 a second Fort Augustus summit was held to note progress so far, to reaffirm
commitment to the development of Shared Services which would support the whole business of
UHI, but which prioritised the ICT Shared Service as a critical enabler to realise the potential for
further shared services development. It was also confirmed that the focus would be on maintaining
and improving the quality of service. Following this event UHI Shared Services Limited was
established as a vehicle for taking forward the shared service as a Cost Sharing Group and the
Programme Board members became the Directors of the Company with responsibility for developing
26
the ICT Shared Service by 1 April 2014. The Fort Augustus 2 Agreement sets out the characteristics
and principles of the Shared Service.
27
3 CURRENT STATUS AND CONTEXT
Geography
The region that UHI serves is not only significant, it is also geographically diverse and much of it is
very remote and difficult to access easily or quickly.
There are nearly 90 people working in 14 Partners supporting the ICT service across this area and the
service is delivered through a single infrastructure and telephone network serving 87 individual sites
located across the Highlands and Islands as shown in Figure 2.
Figure 2. Academic Partner and Learning Centre locations
28
These sites range from small campuses with no permanent IT staff presence, to main College
Campuses with large Learning Resource Centres that include dedicated computer and
videoconference facilities and a team of on-site IT technicians.
Major European investment, totalling over £7m, enabled a complete refresh of the Wide Area
Network (WAN), wifi and videoconference facilities throughout the partnership between 2008 and
2010 and many Partners took the opportunity to enhance their own facilities at the same time.
Wide Area Network
As of April 2013 the wide area network services, operated with financial support from Janet, serves
the 87 UHI locations plus a number of external organisations.
Figure 3. Network Services
University of the Highlands and Islands Network
Latest Revisions - April 2013:
EMEC
VPN over The Highland Council
Bandwidth increases at LCC & Ness Walk
Shetland Islands
Council
Orkney Islands
Council
Islesburgh
Learning Centre
Heriot-Watt
University
© 2013 University of the Highlands and Islands
NAFC Marine Centre
Scalloway
Castle St (ERI)
Sandwick
Learning Centre
Open
Fibre
Stromness
Thurso
Orkney College
Kirkwall
Shetland College
Lerwick
Wick
Dornoch
Burghfield Dornoch
Ross Hse
University of
Aberdeen
Highland
Theological
College 20M
(Dingwall) MPLS
Alness
University of
Stirling
10M
MPLS
100M
MPLS
JANET
& Dental Unit
5M
MPLS
8M
100M
LES
45M
MPLS
JANET
45M
MPLS
JANET
Inverness Campus
Beechwood
University of
Aberdeen
Midmills
Open
Fibre
100M
LES
Raigmore CfHS
100M
LES
10M
MPLS
InvernessOpen
College Fibre
10M
MPLS
10M
MPLS
Benbecula
Forestry
LIS
Fairways
Strontian
200M
MPLS
JANET
2M
Lews Castle College
Lochmaddy 8M Stornoway
Portree
High School
Ness Walk
Portree
Kings House
300M
MPLS
JANET
90M
MPLS
JANET
Plockton
High School
Barra
UHI Regional Network
MPLS VPN
45M
MPLS
JANET
HEBNET
Sabhal Mor Ostaig
Isle of Skye
Buckie
10M
MPLS
Keith
200M
MPLS
JANET
5M
MPLS
Forres
Nairn
Open
Fibre
Linkwood
JANET
Mallaig
20M
MPLS
JANET
The
Highland
Council
200M
MPLS
JANET
Moray College
(Elgin)
Private
ADSL
100M
MPLS
Perth & Kinross
Council
20M
MPLS
Fort William
5M
MPLS
Perth College
100M
LES
Private ADSL
100M
LES Blairgowrie
Kinross
100M
LES
Pathways
Argyll College
Oban
Scone Airfield
Dunstaffnage Marine Lab
(SAMS)
Argyll & Bute
Council
Learning Centres
x50
Rothesay
Dunoon
10M
LES
Islay
Hazelburn
(Campbeltown)
Public Internet
Kilmory
Tobermoray
Helensburgh
Learning Centre Learning Centre
Arran
Lochgilphead
Dumfries
29
Wifi
A major development has been the move to a ubiquitous wifi service which:



brought together 11 different Wireless Services
established 13 Wireless LAN Controllers (WLCs) hosting 650 wifi Access Points (WAPs), and
provided a management suite to overview the service and drill-down to details of operation
and usage.
Typical usage as shown in Figure 4 is

Up to 1,750 wifi users at peak time (11:00 to 12:00 midweek)
Figure 4. Wifi activity
Since this service was brought on-stream it has been possible to introduce a Bring Your Own Device
(BYOD) wireless registration service which has been enthusiastically taken up throughout the
partnership, especially by students who benefit from a streamlined learning experience between
home and College. Since introduction statistics show that there are:
o
o
6112 registered users since installation
5419 current registered devices
Videoconferencing
The other main service which received major investment as part of the SDB Programme was
videoconferencing. Almost everyone in UHI uses this service for learning, teaching or administration
without needing to consider what is ‘behind the scenes’ and perhaps without realising that in 2011
UHI was shortlisted for the Times Higher Education Award for the Outstanding ICT Initiative of the
Year for the developments carried out across our videoconference service.
30
The investment provided for replacement of the VC Bridge with High Definition (HD) capability and
greatly increased capacity to cater for the growing demand on the service, as well as enabling the
upgrade and refurbishment of 166 studios and lecture theatres with HD end-point equipment. The
control room in Shetland is managed by a team of three staff dedicated to the service who have a
comprehensive management system with which to run the studio environment. This has enabled
the service to support over 12,000 conferences last year, and the 15-channel VC recording facility
has provided over 2880 recordings since introduction in 2012/13.
Figure 5 show the typical spread of VC events over the year with the proportion of teaching to
administrative meetings facilitated.
Figure 5. VC bookings by activity
Figures 6 and 7 illustrate how this number has risen over the years, and is forecast to increase
significantly over the next two years, for both teaching purposes and total usage:
Figure 6. Predicted VC usage for teaching to 2017
31
Figure 7. Predicted total VC bridge usage to 2017
Figure 8 shows typical monthly usage of the VC system broken down by type of event.
Figure 8. Typical VC system usage by month and by event
However, with the growth in 1-1 and small meetings taking place over the VC it has also been
necessary to introduce personal videoconferencing where individuals can dial into a meeting from
their desktops, laptops and other devices using the Jabber system. Since its introduction ‘Jabber for
Telepresence’ PC / MacOSX / iPad client software for personal videoconferencing has enabled:


Up to 15,000 user registrations
Up to 625 concurrent sessions.
E-mail
Another key system underpinning the whole range of activities across UHI is the e-mail service.
During 2012 over 57,000 staff and student accounts were successfully moved from Groupwise to
Microsoft Office 365 with a minimum of disruption to the service. Currently 2.7 Petabytes (1 000
000 000 000 000 bytes!) are allocated to UHI based upon an allocation of 50GB per mailbox. This
32
service is now outsourced to Microsoft though specialist staff are still required to support the
University’s operation of the service and be the main contact between UHI and our supplier.
Virtual Learning Environment
Central to the delivery of learning and the support of teaching in UHI is the Virtual Learning
Environment (VLE) Blackboard. This was the other main service to be upgraded during 2012 and
migrated to Blackboard as a managed service.
Figures 9 and 10 show how essential the VLE service now is for learning and teaching. Figure 9
shows that there are more than 3,500 courses on the system, of which around 2,000 are currently
active.
Figure 9. Average active courses on the VLE per month, 2011 - current
Figure 10 highlights the growth in demand on the service over the past 18 months to a current
average level of some 60,000 users per day.
Figure 10. Growth in the average number of VLE users per day, 2011 - current
33
Library And E-Resources
Access to e-Resources is critical for staff and students, many of whom are studying in remote
locations, in an environment where the bookstock is distributed throughout Academic Partner sites
and the nearest physical Library may be a significant distance away. To date there are some 44,000
eJournal titles and 48,000 eBooks accessible through the electronic Library Management System
receiving something in the order of 36,000 searches per month.
The Rowan Partnership is a partnership to deliver a shared library management system (LMS) using
the Millennium LMS that was already operational at UHI. It was formed in 2011 between UHI, the
University of the West of Scotland (UWS) and SRUC. The shared LMS went live February 2013. It has
enabled the sharing of system costs across three partners, and the appointment of a full-time
systems librarian. In future, it may provide the underpinning for the sharing of other library
functions. It was selected as a case study in the Universities Scotland/Ernst & Young An Assessment
of Shared Services in Scotland’s Higher Education Sector, August 2013.
Helpdesk
With the range of and continual demand on these key services it is inevitable that users have
problems from time to time. Much has been done over the past year to improve the UHI Helpdesk
service including an upgrade to the Web Helpdesk providing a number of ways of fault reporting and
the ability for users to track the response to the reports, as well as providing a 24/7 service by
introducing the NorMAN out-of-hours service.
The number of calls to the UHI Helpdesk was over 20,500 for the year to the end of Augusts 2013,
averaging over 1,700 per month, peaking at 2,478 in September 2012.
Figure 11 shows the volumes of call by month as well as the number of first time fixes during that
time:
Figure 11. UHI Helpdesk logged calls and resolution
Call Volumes
UHI Helpdesk - Logged Calls
3000
2000
1000
0
Total Calls Logged
Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug12 12 12 12 12 13 13 13 13 13 13 13 13
2451 2478 1707 1638 1099 2016 1705 1452 1288 1690 1755 1435 2248
First Time Resolved 620 535 405 446 268 436 404 389 464 602 526 528 754
34
Since its introduction in November 2012 there has also been a steady, if low, level of calls to the outof-hours service.
The helpdesk service, perhaps moreso than any other, depends upon a close working relationship
with the Partner IT staff distributed throughout the partnership to resolve many local issues
requiring a hands-on presence.
Servers and Storage
The university runs many of its services in a virtual computing environment that allows the efficient
use of storage and hardware. This saves many tens of thousands of pounds on power, hardware
maintenance and simplifies its management and deployment.
Using a sophisticated configuration of diverse comms rooms in Inverness Longman and Ness Walk
Inverness the core services are protected from single site failure.
The whole virtual infrastructure which supports over 300 live servers is distributed at three sites and
is ran on only 18 physical servers. Underpinning this is some 180TBytes of storage distributed in the
server clusters at Perth and Inverness.
Further developments are planned for the Perth cluster in collaboration with the college IT
department and the creation of a resilient mirror of services in the same way as those used at
Inverness.
Telephony
The UHI Telephony service currently supports some 3300 extensions across the whole partnership
and its 87 sites.
From a single IP handset in a remote Learning Centre to a large campus supporting hundreds of
extensions the service allows all users to access the same level of service. Any academic partner can
deliver its numbering range to any site and divert its extension to anywhere in the network at the
press of a button.
All the extensions are able to take calls directly from outside the organisation and using an
integrated internal directory any handset can call any other using its five digit number. All internal
calls are at no additional cost as they utilise the existing data network.
An audio conferencing facility is available to all users and is widely used on some courses where
video is less important than the audio.
The system also connects over 2000 users to an integrated voicemail facility allowing a user to be
left messages when they are away from their desks.
ICT Service Support
Apart from the University’s IT infrastructure and services, Partners have an extensive IT estate
planned, operated and maintained on their own sites by IT staff employed by them. The equipment
and facilities at Partner sites range in quantity and quality as highlighted by an IT Estate survey
35
carried out during the summer of 2013 and the high level outcomes of which are presented in
Chapter 13.
The ICT services have been converging over time. In comparison with a snapshot from 2006, there
has been considerable progress in harmonising:





Desktop video communications
Directory services
Helpdesk systems
VC studio environments, through the SDB NGV project
Wifi
In addition, systems at Argyll College and North Highland College have become significantly more
aligned with the rest of the Partnership over that period.
An overview of the systems that remain unconverged can be gathered by reference to the ‘Full
Service (Option)’ listing of services in the Executive Summary and in Chapter 10.
The Business Systems Convergence project has the potential to accelerate the provision of common
systems particularly in finance and HR.
The University employs 40 largely specialist staff - one-third of whom are located at Partner sites
outwith Inverness - developing, maintaining and operating these key ICT services and providing the
helpdesk function to the University’s 47,000 staff and student users.
However, more than half of the staff working in ICT across the University are currently employed by
Partners working either singly or in small teams, supporting the whole range of campus based
operations at the user interface and undertaking many of the Partner based activities where local
need and demand dictates.
The number of staff available to perform these activities at Partners varies widely, as shown in
Figure 12.
Figure 12. Number of ICT staff by Academic Partner
36
External Context
The McClelland Review (Review of ICT Infrastructure in the Public Sector in Scotland, 2011) suggested
that there has been too much of a culture of self-sufficiency in ICT infrastructure provision in the
public sector, leading to increased costs, and while the specific estimates of the savings available to
the public sector through sharing need to be treated with great caution, the general message around
sharing of common applications platforms and rationalisation of data centres is valid and has
informed Government policy. A review of shared services potential in HE conducted by HEIDS at
much the same time showed that there was an increased appetite for shared services at what
become known as the ‘above campus’ level – for the rest of the sector, this still falls well short of the
development of combined services, though this has happened to a degree where institutions share
physical premises, e.g. at the Crichton campus.
The Scottish Government’s Digital Public Services strategy is articulated through a set of sectoral
strategies – for these purposes further and higher education are treated as a single sector, and again
the development of further shared services is a major theme in the FE&HE strategy. A new ‘catalyst’
unit to help bring forward new shared services initiatives is to be funded within APUC and may turn
out to be a valuable sectoral resource for us to draw on.
Elsewhere in Scotland, the FE regionalisation agenda has led to a rapid convergence of information
systems in some of the new institutions. There are likely to be some very useful lessons to be taken
from these experiences, especially as the pace of change will not have allowed for a leisurely process
of detailed requirements gathering, specification and phased implementation with parallel running.
We are aware of the number of shared services initiatives elsewhere in the public sector which have
had mixed levels of success. In particular those mandated by central government, and therefore
perhaps insufficiently owned by their members and customers, have seemed to be problematic.
High set-up costs – to the extent that they may never be recovered through savings – seem to be
common. Some of those cost elements are: the cost of major staff restructuring and relocation; new
premises; the implementation of high-end, and very expensive, ERP (Enterprise Resource Planning)
systems. In the more successful initiatives, the concept of the ‘intelligent customer’ seems to have
been very important – that is, customers who are willing to accept a standardisation of service
offering and business process across the customer base in return for greater efficiency and reduced
cost.
37
4 OPTIONS ANALYSIS
Options
There is a spectrum of models which would achieve the delivery of a single ICT shared service.
During consultation with Partners and in the UHI Shared Services Board however it emerged that
there were four main options identified for further analysis including, as a baseline, the ‘no change’
option:
A – NO CHANGE
The University continues to provide a core set of ICT services to the Partnership funded through the
HE element of SFC funding. Academic Partners continue to self-provide services on a local basis
according to their individual needs.
B – A SINGLE SERVICE PROVIDED BY THE UNIVERSITY (OR ONE OF THE ACADEMIC
PARTNERS) AND FUNDED THROUGH TOP-SLICE
Staff would transfer to the University (or an Academic Partner) which would be fully funded to
provide the service to the rest of the Partnership.
C – A SINGLE SERVICE OPERATED BY A NEW ORGANISATION STRUCTURED AS A COST
SHARING GROUP
Staff would transfer to the new company, which would be funded by subscription payments from its
members (the University and its Academic Partners)
D - OUTSOURCE THE WHOLE SERVICE
The entire ICT service to be provided under contract by a commercial operator.
Analysis
These options were considered against a set of desired characteristics taken largely from the Fort
Augustus 2 Agreement and the results shown in Figure 13.
N – Not achievable within the Option
P – Only partially achievable within the Option
Y – Achievable within the Option
Figure 13. Options Analysis
Characteristics
A
B
C
D
Notes
Fulfil the targets of the Regional
Outcome Agreement relating to an
N
P
Y
N
A – does not meet ROA
requirement
38
ICT Shared Service within the agreed
timescale
B – would require re-planning
and new consensus
“By the end of 2013-14, implement the
project plan that will see the Learning and
Information Services shared services project
through to full implementation”
D – could not be specified and
tendered in time
(Fort Augustus 2 Agreement, 2.1.1)
N
B – could be collectively
governed but not owned
C – P because the Company
would still be somewhat
constrained by the cultural
expectations of its members
N
P
Y
Acting and managed according to
business disciplines (FA2, 2.1.3)
We assume in interpreting this criterion that
the organisation should be free to set
operating parameters such as employment
policy with reference to industry
comparators
Flexible, adaptable and able to
respond quickly to changes in the
partnership or the external
environment (FA2, 2.1.4)
N
N
P
Y
N
P
Y
N
A lean and cost-effective
management structure with minimal
bureaucracy (FA2, 2.1.5)
N
P
Y
P
Enhanced student experience,
improved quality (FA2, Preamble)
N
P
Y
Y
Y
Y
Y
P
Development of a wider range of
professional specialisms (FA2, 2.1.8)
N
Y
Y
N
Not an outsourcing model (FA2,
2.1.6)
Y
Y
Y
N
D - P because of the
requirement to retain
significant contract
management capability
Distributed workforce (FA2, 2.1.7)
39
Greater ability to deliver
equivalence (FA2, Preamble)
N
P
Y
Y
Ability to address environmental
and sustainability issues
P
P
P
P
Greater efficiency and effectiveness
(FA2, Preamble)
N
P
Y
P
Full transparency to its members as
to its financial, contractual and
other arrangements (FA2, 2.1.10)
N
P
Y
N
Affordability
C – P because although technologically
a range of environmental initiatives are
possible, many of these would be
dependent on the cooperation and
assistance of Estate Managers at
Partner sites being outwith the control
of the Shared Services Company
A – N because current level of
duplication unaffordable
Score
N
Y
Y
N
5
17
26
10
D – N because of effect of
paying VAT, profit etc.
Based on Y=2, P=1, N=0
Recommendation
Considering each of the Options against the characteristics identified highlights the following:
OPTION A – NO CHANGE
This option has been discounted. Not only does it fail to deliver against the targets set out in the
Regional Outcome Agreement, retaining the status quo continues the inefficiencies of duplication,
perpetuates the range of service quality and end user experience, has the potential to delay the
implementation of technology developments, has little influence in strategic planning and
investment and offers little to Academic Partner staff in the way of career development or
progression. The only real benefit of retaining the status quo would be in having the distributed
workforce, thereby building on the local knowledge and relationships developed across the
Partnership over many years. However, this positive feature is carried through to Options B and C.
40
This option contains the least transitional risk, as there is no transition.
OPTION B – A SINGLE SERVICE PROVIDED BY THE UNIVERSITY (OR ONE OF THE ACADEMIC
PARTNERS) AND FUNDED THROUGH TOP-SLICE
This option has the second-highest score and while not preferred, has some desirable
characteristics. It is possible that a model such as this would be appropriate for some future shared
service.
This option removes the requirement to establish a separate legal entity, but equally eliminates the
opportunity to create an organisation with a complete service focus and with greater freedom to act
flexibly and responsively.
We have some concerns about the VAT issues within this model, as partners would effectively
betransferring their internal services to an external provider without paying VAT, and without using
the model of a Cost Sharing Group now provided within legislation for the purpose of avoiding VAT.
It would also not be able to avoid charging VAT on services outside the top-sliced element.
The only comments on the Options Appraisal were received from Executive Office, in a paper by
Lorna MacDonald, Director of Finance. In her paper, the Options Appraisal is re-presented and rescored. 'Option B' is expanded into two options:


B - a single service provided by the University and funded through 'top-slice'
C - a single service provided by one of the Academic Partners
In the re-score, the new Option B is scored highest, the Cost Sharing Group option next, and the new
Option C third. The higher score for the new Option B over the CSG model (new option 'D') is
achieved by higher scores in these criteria:




'Flexible, adaptable and able to respond quickly to changes in the partnership or the external
environment' - Y vs P
'A lean and cost-effective management structure with minimal bureaucracy' - P vs N
'Greater efficiency and effectiveness' - Y vs N
'Affordability' - Y vs P
The one criterion on which the CSG option is rated higher is:

'Collectively owned and governed' - P vs Y.
The Shared Services Board has considered the alternative options appraisal as well as the other
issues raised in the paper, some of which are addressed elsewhere in the revisions to this Business
Plan. We were not entirely convinced about the separation of new options 'B' and 'C' as within a VAT
group, as is being suggested, any member might supply services to another without incurring VAT.
Also, not all members might be included within a VAT group. It also seemed to the Board that the
administrative overhead of operating the Company, while not a negligible consideration, seemed to
impact disproportionately on as many as three of the criteria where the 'EO' option was scored
above the 'CSG' option. We also felt, on the basis of feedback from stakeholders, that the scoring of
the EO option as preferable on grounds of flexibility, leanness, efficiency and effectiveness was
41
unlikely to be supported by the majority of the Partnership. It remains our view that it would be very
difficult to achieve a significant level of support for this option.
OPTION C – A SINGLE SERVICE OPERATED BY A NEW ORGANISATION STRUCTURED AS A
COST SHARING GROUP
This is the Shared Services Board’s preferred option. It is perhaps not surprising that this is the case,
given that elements of the Fort Augustus 2 Agreement which inform the evaluation criteria
effectively assume this outcome. We do however believe that this is validated through the
assessment against other options, and we also believe that it is the option preferred by the majority
of Academic Partners. Not only is it the best fit for the governance requirements expressed by APs
and recorded in the Fort Augustus 2 Agreement, Option C also meets the criteria for all staff,
resource, financial, service quality, strategic and business characteristics identified as necessary by
all Partners during consultations throughout the process so far.
It involves the overhead of establishing a separate organisation, which later in this document we
estimate initially at 1.7% of turnover. The Shared Services Board believes however that this should
not be a barrier to setting up a service company which has the freedom to operate outwith the
constraints of its member organisations.
This option addresses the VAT risk by adopting the model set out in legislation.
Establishing a shared service in this way also provides a model and a firm foundation for bringing
together other services which have the potential not only for sharing and service improvement, but
also a greater potential for efficiency savings as outlined in the Regional Outcome Agreement 2013.
OPTION D – OUTSOURCE THE WHOLE SERVICE
Delegates at Fort Augustus 2 agreed that this was not an appropriate way forward and therefore it is
not surprising that it fails the options analysis. There is no discernible appetite in the Partnership for
this approach. It would be extremely difficult. The specification and procurement process alone
would be long-drawn-out if it could even be concluded – agreeing a common specification across
this number of partners would be a major challenge.
If that could be overcome, we doubt that it could be done cost-effectively. A commercial provider’s
requirement to charge VAT and retain a profit would mean that they would have to take massive
efficiency gains to make a suitable financial case. Especially as there is no mature market in UK HE
for whole-service outsourcing, we find this unlikely without the impact of such savings falling heavily
on the customer.
We would also be concerned about the Partnership’s ability to collectively manage such an
outsourcing agreement. For these reasons (and no doubt others) the option is discounted.
Conclusion
42
This Business Plan is therefore predicated upon the choice of Option C as the preferred operating
model.
Timescale
Assuming that Partners accept the recommendation of the Shared Services Board and agree to go
forward with Option C, the schedule through to the agreed go-live date of 1 April 2014 will be as
follows:









Internal Partner Consultations
Fort Augustus 3 Summit
Business Plan revision and contract/SLA preparation
TUPE consultations within Partners
Publication of final Business Plan
Partner agreements and SLAs issued
Partners return signed agreements
Transition planning and preparation
Shared Service goes live - staff transfer into Company
9 – 29 October 2013
30 – 31 October 2013
1 – 18 November 2013
November
19 November 2013
25 November 2013
19 December 2013
6 January – 31 March 2014
1 April 2014
43
5 CURRENT FORM AND STATUS OF THE COMPANY
UHI Shared Services Limited was incorporated on 22 August 2013 as a Company Limited by
Guarantee, company no. SC457396. Its registered office is at Synergie House, Fairways Business
Park, Inverness IV2 6AA.
The initial members of the Company are:






Board of Management of Inverness College
Board of Management of Lews Castle College
University of the Highlands and Islands
West Highland College UHI
Board of Management of Moray College
Board of Management of Perth College of Further Education
Other Academic Partners of UHI are eligible to become members and may do so on application.
The initial Board of Directors of UHI Shared Services Limited is as follows:






The Articles provide that Directors must be employees, directors or trustees of a member
organisation, or employees of the Company. Directors who are not employees of the Company are
not remunerated.
The Company is not currently trading and holds no funds
The Company is established with the intention of operating as a Cost Sharing Group under the
relevant provisions of the Finance Act 2012.
The objects for which the Company is established are (as defined in the Articles):


(a) the co-operative supply of services by members through the Company primarily but not
exclusively to members in pursuit of the members’ municipal interest and co-operative
benefit; and
(b) anything incidental or conducive to any of those objects listed at sub-article (a) above.
The Articles also provide that:

The income and property of the Company shall be applied solely in promoting the object of
the Company as set out in article 2
44

No dividends or bonus may be paid or capital otherwise returned to the members
Apart from UHI and its Academic Partners, any other member must be "another United Kingdom
Contracting Authority which is approved by resolution of the directors and which in each case carries
on a “relevant activity” for the purpose of sub paragraph 1 (a) of Part 2 (Group 16) of Schedule 9 to
VATA 1994 as inserted by Section 197 (2) of the Finance Act 2012 and receives or intends to receive
from the Company the supply of services which are directly necessary for the relevant activity" which essentially covers the requirements which any member would need to satisfy to be a valid
member of a Cost Sharing Group. The potential admission of new members who are not part of the
UHI partnership is discussed in Chapter 7. There are no current plans to admit any such members.
The full Company Articles are at Appendix A6.
45
6 VISION AND MISSION
UHI Shared Services takes its core remit from the agreement at the Fort Augustus 2 summit:
"The aim is enhanced student experience, greater ability to deliver equivalence, greater
efficiency and effectiveness and improved quality"
“ … the University and its Academic Partners agree to collaborate to develop a range of
shared services to be delivered for the collective good. They will operate on the principle of
collective self-provision rather than outsourcing.”
Not all future shared services will necessarily be operated by the Company. There are likely to be
services better suited to delivery through collaborative agreements, in which work is distributed
amongst partners, rather than transferred to a separate company. Also, UHI Shared Services would
be cautious about extending its activities into services which were essentially regulatory, and
certainly does not expect to develop into the delivery of academic programmes.
This is not to say that the company will not deliver training in support of its services, nor that it will
not engage in applied research intended to generate evidence to inform investment decisions. It
exists to support the core business of its members, not to take it over.
This is not an outsourcing initiative, however the company needs to be able to operate in a way that
would enable it to be competitive with outsourcing companies should the service(s) be markettested at some time in the future. We note that (in contrast to the US, for example) there is as yet
no mature market for whole-service outsourcing in UK tertiary education.
The 'ethos' as captured in the Fort Augustus 2 agreement will guide the company in its operation
and development:










activity
environment
Not an outsourcing model, though as now, specific elements of the service may be
Full transparency to its members as to its financial, contractual and other arrangements.
Our stakeholders have made it clear that while efficiency and effectiveness is expected, and
required, what is of prime importance is quality of service.
46
The Shared Services Board believes that the requirements for collective ownership and governance,
businesslike operation, flexibility and agility, low overhead and bureaucracy all point towards the
creation of a separate entity with its own governance arrangements. As things stand, the
appropriate entity appears to be a Cost Sharing Group, though the Shared Services Board also
recognises that changes in the external environment and the make-up of the UHI partnership could
have the effect of making an alternative legal form more appropriate.
47
7 BUSINESS OBJECTIVES
This chapter deals with issues around the future development of UHI Shared Services Limited
beyond the scope of its initial ICT offering to the University and its Academic Partners. Plans for the
development of the ICT shared service are addressed in Chapter 9.
Growth
There may seem to be a contradiction between the expectation that a shared services organisation
should save money for its members, and therefore reduce its economic footprint, and the normal
drive for growth which is part of the sustainability agenda for many companies.
UHI Shared Services will need to grow from its original establishment delivering ICT services.
Common ICT services are the necessary underpinning for the shared services in transactional areas
which present greater opportunities for savings. The Capita Report, “Outline Business Case for a new
operating model. University of the Highlands and Islands. 10 January 2012”, indicated that ICT
services in themselves were not of sufficient volume to sustain a shared services organisation. We
are not necessarily convinced that that is the case, but the new organisation will have overheads
that will be proportionately smaller if more functions are taken on board in the future.
The most desirable form of growth is through taking on new functions from member organisations,
delivering improved efficiency and effectiveness and proportionately reducing the overhead. In
addition, this allows improved synergies across areas of service, improving efficiency and quality of
service even further.
The Shared Services Board has considered the range of support services currently delivered within
the partnership and assessed the extent to which they are suited to be taken into the shared
services organisation.
The following is the current list of 'Priority 1' areas, i.e. those judged to have the greatest potential
for cost savings and/or improved service:
ADMISSIONS/REGISTRY/STUDENT RECORDS
All aspects of student and course data handling, reports, data analysis
FINANCE INCLUDING PAYROLL
Common technology platform, shared policies and processes, transactional activities
HUMAN RESOURCES
Common technology platform, shared policies and processes, transactional activities, reporting,
analysis
48
LIBRARY
The Shared Services Board is commissioning a report (from an existing College Librarian within the
UHI partnership) which will be based on consultation with the practitioner community and other
stakeholders and which will propose an appropriate way forward in the shared services context.
STUDENT SUPPORT FUNDS
Complete service except some student facing support
Incorporating these services is not part of this business plan, but creating a vehicle that has the
potential to do so is.
Governance - Commissioning Board and UHI Shared Services Limited
The Board of UHI Shared Services Limited believes that it will be important to separate the
'commissioning' function from the delivery function. In particular we would like to see the
establishment of a 'commissioning board' with very senior representation from the partnership,
whose function would be to:



determine which services are priorities for sharing and in what way (i.e. via shared services
company or by another means)
for those services to be transferred to UHI Shared Services Limited, to engage in a
commissioning dialogue in which, inter alia, issues of cost vs. quality of service are
considered
offer continuing guidance on the balance of expenditure and service levels across the
different areas of activity.
The Commissioning Board would act as a representative body of the UHI membership of the
Company. However the contractual relationship would remain between the Company and its
members.
External Services and Income Generation
A frequently asked question is whether the Company expects to offer services outwith the UHI
partnership. Our answer at this stage is that this is not a high priority, though the Company Articles
allow for it. We need to ensure that this kind of activity does not detract either from the quality and
focus of services to the UHI partnership, nor from UHI partnership members' ability to control and
direct the services that they receive. Insofar as services can be delivered to such third parties
without compromising UHI members' interests, such growth can be positive, though unless it is
particularly profitable (and therefore delivered outside the scope of the VAT exemption) it is unlikely
to dilute the overhead very much, and therefore is unlikely to offer much in the way of cash savings
to the membership as a whole. In these cases we would normally seek an opportunity to enhance
services as part of the deal.
49
For-Profit Trading
For-profit trading is explicitly allowed for in the HMRC guidance on the cost sharing exemption. The
issue has been raised as to whether the requirement not to 'distort the market' applied to cost
sharing groups is a problem; according to the recent HEFCE guidance it would seem not, but we
would probably wish to take more detailed advice on this. There is a further potential benefit: given
that the company will spend a significant amount on VATable services, significant external trading
could have the effect of improving its VAT partial exemption position, further reducing costs to
members.
Members External to the UHI Partnership
The Articles provide that members external to the UHI partnership may be admitted if it is:
“another United Kingdom Contracting Authority which is approved by resolution of the
directors and which in each case carries on a “relevant activity” for the purpose of sub
paragraph 1 (a) of Part 2 (Group 16) of Schedule 9 to VATA 1994 as inserted by Section 197
(2) of the Finance Act 2012 and receives or intends to receive from the Company the supply
of services which are directly necessary for the relevant activity.”
UHI currently supplies services to five other HEIs, including the University of the West of Scotland
and SRUC in respect of the shared library management system. If these organisations were brought
into membership we would be able to supply them with services free of VAT, at cost. We would
need a clear methodology to apportion a real cost including a realistic share of overheads.
'External' organisations admitted in this way would have voting rights in the company, likely to be at
the lowest level – in the voting rights proposal contained in this revised version of the business plan,
1 vote compared with 10 votes for members who participate fully. Non-voting membership does not
satisfy the HMRC criteria for membership of a cost sharing group and a negligible level of control
(e.g. one vote in 10,000) would be likely to fail the public procurement Teckal test, making such
arrangements non-compliant in EC procurement terms.
In determining whether to offer membership to external organisations, the Board will need to weigh
the benefits of being able to offer VAT-free services against the loss of flexibility in charging
arrangements and the dilution of UHI members' voting rights.
50
8 FINANCIAL IMPLICATIONS OF MOVING ICT SERVICES INTO A SHARED SERVICES
COMPANY
Here we examine the additional costs of operating a separate company as a Cost Sharing Group
against the operational efficiencies that might be expected. Clearly if the overhead of operating a
separate company were excessive in relation to the anticipated benefits we should re-examine the
proposed delivery vehicle.
We think however that it is important to distinguish between the cost implications of this particular
shared services approach and the required investment in ICT which would be required whatever the
organisation structures involved. We have therefore largely separated discussion of the latter into a
later section, i.e. Chapter 22, ‘Investment Strategy’. However we strongly believe that the creation of
a single ICT service puts us collectively in a better position to address investment requirements
rationally.
Additional Costs of the Shared Services Company
We would first like to note all the things that we do not propose to do, which in many other
instances have caused major financial issues for new shared services organisations.

There is no staff reduction programme associated with the move to the single service, and
therefore no substantial upfront cost. If there is a voluntary severance scheme made
available at entry, it will be such as to pay for itself in-year.

There is no physical relocation of staff involved, and no new building costs.

Many shared services organisations have invested in very high-end, and very expensive,
commercially-orientated Enterprise Resource Planning (ERP) systems. This turns out to be
very expensive indeed when the system is configured to support multiple business processes
of different customers, without rationalising those processes themselves. In contrast, our
Business Systems Convergence strategy is modest, based on process convergence, and likely
to involve procurement of standard business systems available on HE framework pricing.
ADMINISTRATIVE AND RELATED COSTS
There are unavoidable costs of operating the company as a separate entity. We intend to operate in
as lean and cost-efficient manner as possible and at the moment envisage the likelihood of only one
additional staff appointment, that of a Finance Officer; we think that not doing so would be a false
economy given the £6m or so initial turnover of the Company.
The Company will require legal and professional services, including audit; and insurances, including
employer’s liability insurance. There are other relatively minor costs such as Data Protection
notification.
We have estimated the total annual costs of the above at about £100,000 – put another way, 1.7%
of initial turnover. If we become liable for business rates at Fairways (and we hope not to) that figure
rises by about £30,000.
51
PENSIONS
At the moment we do not have an estimate of the effect of transferring liability for pension
provision from existing employers to the Company. Initial advice suggests that we might reasonably
hope that the effect would be broadly neutral. However we cannot rule out the potential for the
Company’s assessed contributions to be higher than the aggregate of current employers’
contributions (which are at varying levels) nor of a bond being required to be posted by the
Company.
The FRS17 accounting standard requires the Company to show the deficit (or surplus, but in reality
we will be talking about a deficit) attributable to the LGPS as a liability on its balance sheet, as is the
case with some but not all of the existing employing institutions. The effect of this may be that the
Company is apparently insolvent. This is not an uncommon situation and it does not mean that the
Company is not a going concern and that it cannot trade. However there are significant accounting
implications and we will take appropriate professional advice.
Transition Costs
By ‘transition costs’ we mean here those costs associated with transition to new ways of working, as
well as those involved in bringing elements of the technology base to a common standard.
We expect to obtain SFC support for these costs as well as for the administrative overhead indicated
above.
NEW WAYS OF WORKING
Especially as we have a principle of working on the basis of the existing staffing complement, and as
we anticipate a greater degree of specialisation in the new service (see Chapter 17), it would be
appropriate to budget for very significant staff retraining and reskilling costs in the first year – we
think £100,000 would be a suitable commitment. In addition, staff working together in new ways will
need to travel more, at least at first, and we expect that to cost an additional £50,000 in year 1
above current commitments.
Technology Changes
Technology changes are not inextricably linked to the development of shared services. Some, like
the updating of LAN infrastructures to a common standard, make particular sense in that context
because they make the environment as a whole easier to manage, but in general, they are needed
anyway.
In our discussions with SFC, we have identified the following technology transition costs:
Thin client development
Providing a standard technological
means of delivering applications to
the desktop (or indeed laptop or
mobile device) providing common
services to everyone, everywhere.
Includes a provision for upgrading
£1,116,000
52
software licensing to a common
standard
Business systems
Additional support for business
process rationalisation and transition
to the converged environment,
above the £320,000 already
budgeted
£375,000
Local Area Network (LAN)
environments
The ICT estate survey has identified
out-dated and diverse equipment at
many sites. Manageability would be
improved by investment in new,
standardised technology, as would
local network performance and
security
£250,000
Expected Efficiency Gains
In most cases these can only be broad estimates, when we can make estimates at all. They do not
necessarily relate to cash savings – in particular, we expect to make very significant improvements in
the way in which staff are collectively deployed, with reductions in redundant and duplicated work
and efficiencies achieved through automation of routine tasks. The anticipated consequence of this
is a redeployment of staff to work that has more value to the end-user, rather than a reduction in
overall staffing costs.
Delegates at Fort Augustus 3 were interested in the likely future costs of the ICT service beyond the
first year. The first point to make is that this is a matter for the membership to determine - there
may be a requirement for investment to achieve strategic aims or efficiency gains elsewhere in the
business, or conversely there may be an overriding imperative to reduce costs.
Our expectations on costs assuming, broadly, a steady state in terms of ICT provision, are as follows:
In the first year, as indicated, we expect to hold expenditure at a level equivalent to current spend,
adjusted for inflation.
In the second year, we expect to take efficiency gains sufficient to cover the loss of the temporary
(first year) funding support from SFC. In the third year, we would hope to make efficiency gains of
between 3% and 5%. These figures do not account for inflation.
THIN CLIENT
Our consultant’s estimate, in 2011, of the saving that could be achieved by widespread rollout of
thin client technology was £376,100. As this largely relates to client-side savings we are reluctant to
revise this up substantially, though we might expect additional energy-related savings at Inverness
College. This does not include the savings that might arise from software rationalisation, though it
very much provides a platform for that to happen.
53
Much of the cost saving in this overall figure arises from lower costs of procurement and
replacement of end-user devices such as PCs and terminals, and lower energy costs where that
equipment is deployed. In our scenario much of the financial benefit would accrue to members
directly rather than reducing the cost of core service.
SOFTWARE RATIONALISATION
Estimated total software spend across the Partnership in 2013/14 (excluding those institutions
taking only the core service) is £1.735M annually. Studies elsewhere have suggested that the type of
savings achievable through rationalised software provision might be in the order of 20%. We are not
convinced that this level of saving is achievable for us in the short term, partly because the balance
of spend is skewed towards the University rather than Academic Partners. We do think that 10% is a
realistic figure, arising from a combination of negotiation of contracts on a partnership-wide basis
and rationalisation of the range of applications in use. Our indicative figure for savings in this area is
therefore £173,500 per annum.
HARDWARE PURCHASE AND MAINTENANCE
We would caution against expecting significant saving in this area. Larger Academic Partners, in
particular, have invested in server infrastructure over the years, though little of that has been
recent; we should certainly be able to make better use of this kind of equipment if we manage it
collectively and it should cost less. However we have not been able to make a realistic estimate of
the cash saving.
In terms of end-user equipment such as PCs, laptops, classroom equipment, smartphones etc.,
where budgets will remain the responsibility of members, we would hope to gain efficiencies from
standardisation, but there are relatively few areas where we would make major volume-related
savings, as these items are typically available through nationally-negotiated framework agreements.
We think that savings in procurement of such devices (especially classroom and office PCs) might be
most likely to arise (accruing to members) through the provision of better management information
about the utilisation and age profile of the existing fleet, allowing better-informed procurement
decisions.
ENERGY COSTS
Some potential saving due to the adoption of lower-powered end-user devices is anticipated in the
‘thin client’ section above. We also know, to a considerable extent because of the Jisc-funded
ER4SER project carried out by the University, that there is considerable inefficiency in the way that
server rooms across the Partnership are cooled and heated, and we would expect a programme of
improvements in those areas to considerably reduce energy costs, again accruing to members rather
than the Company. We are not able to quantify these at present and in most cases installed
metering does not provide for direct measurement of server room energy costs.
54
9 ICT STRATEGY
ICT is now fundamental to the delivery of any organisation's operational and strategic goals. The
University and its Academic Partners is a modern, widely dispersed organisation, operating in a
highly competitive and fast moving sector. It's customers are increasingly "tech savvy" with high
expectations when interacting with the services they are consuming. To fulfil its potential the
partnership needs a modern, coherent and effective ICT service.
In the current economic and funding climate any new investment in ICT needs to be based on sound
academic and business reasons. Operational efficiencies need to be maximised and services
improved. The proposed shared service puts the partnership in a position where, for the first time, it
can realistically achieve a unified ICT strategy. This will allow it to make informed technology choices
that can be implemented in a coherent and efficient manner across the partnership, ensuring an
equivalence of experience and quality of service.
The Environment
ICT is a key enabler to delivering UHI's strategic plan and it is important that the ICT strategy is
responsive to the current and future challenges of UHI's internal and external environment:

Student experience is a key measure of success and an influencing factor in recruitment and
retention. Given UHI's geography and its reliance on technology to deliver its mission, the
ICT experience from the range, quality, newness, usability and convenience of the services
offered, is an important factor in determining satisfaction

UHI is going through a period of uncertainty in terms of structure and governance and
any ICT service needs to be flexible and agile

There will be continued development of UHI’s curriculum delivery model for FE and HE
including greater use of shared teaching resources and the continuation of networked
delivery through existing, including VC, and new collaboration tools

Strategic growth, particularly in HE FTE in the south and west of the Highlands and Islands

UHI is pursuing RDAP and a corresponding growth in Research, requiring research data
management and specialist services

UHI is developing new distribution channels

Funding pressures mean extending the life of equipment and a drive to make all services as
efficient as possible

Following the McClelland review the Scottish Government has embarked on a shared
services agenda for the public sector

ITaaS (IT as a Service) and Cloud computing are developing models of service delivery that,
where appropriate, offer greater flexibility, agility and transparency. Taking advantage of
this needs new skills and ways of working;
55

HIE are funding a program of fibre broad band roll out across the Highland and Islands that
should bring better opportunities for connectivity and resilience

Statutory carbon reduction targets will be pushed down to smaller enterprises and UHI will
only be able to address these in a coherent manner if the entire ICT estate is considered as a
whole.
Strategic Themes
The ICT service will have a set of core strategic themes which will be the foundation of any service
development and offering:
OUR CUSTOMERS
We will place the customer experience at the heart of the service offering and value excellent
customer service at every level of the organisation
OUR PEOPLE
We will invest in our people and collaboration tools to enable distributed teams and specialist skills
to be located anywhere and effective everywhere
DISTRIBUTED CAPACITY AND LOCAL RESILIENCE
We will enable the customer to access the services they require, where and when they require them
and be cognisant of emerging delivery channels
We will develop the data network capacity to meet increasing demands and provide local resilience
where possible in the event of network failure
ENVIRONMENTAL AND OPERATING EFFICIENCY
We will operate the service as efficiently as possible by reducing duplication and divergence and
maximising common solutions and standards
We will minimise the divergence in our hardware and software catalogue and combine our spend to
maximise our purchasing power
We will manage the service’s carbon footprint by consolidation and better environmental
management of computing facilities and smarter working practices.
What does this mean?
Here are some examples of how the Strategic Themes are and will be embedded into the service
offering:
56
CUSTOMER EXPERIENCE AND ENABLEMENT

Deliver a high quality user and customer service experience

Being transparent about the services we provide, what is required and how they are
accessed and what to expect when something goes wrong and how it will be resolved

Self-service resolution for common problems including password reset

Appropriate and equal prioritisation of issues and resolution through use of a single
helpdesk service and software tool

Expand scope of NorMAN after hours helpdesk service

Visible ICT service desks where students are located

Promote a Gaelic interface for accessing ICT services where practical and possible

Embedding customer service in the heart of the new ICT service

Scheduled visits to sites that have no permanent staff located there

Engagement with staff and students to develop their ICT skills and resolve common issues
through regular ICT clinics

Timely recommended “reading” and training for staff based on the current needs at that
point in the academic calendar

Work and print anywhere – be able to access files and print anywhere in the Partnership for
students and staff

Further development of online tools for student records management by students and staff

"Single sign on" meaning users only have to login once for the majority of applications

UHI wifi and EDUROAM allowing staff, students and visitors access to wireless connectivity
throughout UHI and when visiting other academic institutions

BYOD and multiple channels making it more convenient to consume ICT services

Further data integration provisioning secondary systems from core systems to improve
timeliness of processes, reduce administration overheads and improve user experience.
PEOPLE AND SKILLS

A commitment to develop and operate distributed teams and specialist skills

Work towards attaining an industry standard department accreditation

No centralisation on Inverness (or anywhere else)
57

A Personal Development Plan for every staff member and an investment in training to upskill staff

Value customer service as a skill

Introduce Social Business techniques and tools to coordinate the service delivery and
respond to customer demands quicker.
DISTRIBUTED CAPACITY AND LOCAL RESILIENCE

Ensure remote sites can still operate some services if there is a failure in data connectivity

Ensure appropriate business continuity and disaster recovery

Develop provision for local file store, print and application delivery (where applicable)
services

Strategic plan for delivery of appropriate network capacity to sites based on growth of HE
and FE student numbers by location and network teaching delivery growth plans

Storage capacity planning and investment to meet projected needs of staff and students

Virtualisation, if possible, of remaining real servers

Replicated and load balanced data centres over multiple sites for LIVE, Development and DR
capability

Cloud and managed services where appropriate

Focus on fewer database technologies correctly deployed for performance and resilience.
ENVIRONMENTAL AND OPERATING EFFICIENCY

Get the ICT provision to a common standard and address major technological choices
around WAN refresh, Telephony refresh and future VC and collaboration provision

Minimise power consumption

Maximise efficiency in service provision

Maximise combined purchasing power

Reduction and consolidation of data centres and more efficient environmental control

By 2020 to have minimal data centre capacity on site due to developments in server
technology and cloud services

Software rationalisation

Common desktop build and remote management
58

Common print anywhere solution with pull printing, cost allocation (staff and students) and
online payment

Business systems convergence

Single back-up solution

Decreased time to value through increased agility

Appropriate use of shared services developed for the HE/FE and wider public sectors

Being capable of meeting statutory requirements on carbon reduction targets.
Work Streams
STUDENT EXPERIENCE, TEACHING AND LEARNING, RESEARCH
It is important that during the period of implementation and bedding in of the new service that the
core services to students, teaching and research continue to be delivered to a high level.
The key elements of this are:

VC capacity meets the needs of the University and FE Region

VLE (Blackboard) enables delivery of FE and HE curriculum

Effective management information regarding e-Resources use so they can be managed
effectively

RIS (PURE) operationalized and a strategic road map for its development agreed with the
Research Office

LMS (Millennium) provision continues to support the needs of FE, HE and Research and the
ROWAN partnership

More support for Research activity including ICT equipment advice and specialist computing
services.
SERVICE DISENTANGLEMENT
The first phase will be to create the separate service elements based on standard configurations and
a consistent user experience. This will require disentangling the current ICT service offering and
developing solutions that can be delivered across the Partnership in a consistent manner. Starting
with the base elements of networks, directory services, desktop, file store and back up, secondary
services can be added including print anywhere. At the end of this stage a user anywhere in the
partnership should have a consistent and better experience logging onto their PC or device,
accessing their files and printing and be able to do that at any site.
59
In addition to make sure everyone has their needs prioritised correctly a single helpdesk call process
will be rolled out. As the core services are created and managed by smaller dedicated teams ICT will
be able to deliver ICT service desks in each of the APs where the service has a permanent presence
and offer a defined maintenance visit schedule to those that don’t, including remote sites.

Institution of a single helpdesk call process using UHI Helpdesk (150), utilising the
Webhelpdesk software to ensure consistent prioritisation and resolution of all support
requests, and provide the information for SLA monitoring

LAN equipment upgrades where applicable and the application of a common
configuration and network monitoring

Single back up service to ensure consistency in backup and recovery of data

Single active directory and group policy administration to ensure improved login times

Standard desktop builds and remote management using SCCM to minimise hands-on
maintenance

Global print and scan anywhere solution with pull printing, cost allocation and online
payment facility

ICT service desks at visible locations in each of the APs where the service has a permanent
presence

Consolidation of existing database and migration, where possible, to a fewer number of
supported platforms.
SERVER ROOM CONSOLIDATION
The Partnership has a significant number of server rooms, most non-specialist and poorly insulated,
and an over capacity in virtual machine hardware because of the needs of replication handled at a
local level. Most of this hardware was purchased 5 years ago and is now coming to the end of its
useful life. The majority of the physical server estate is also effectively end of life.
The University and a number of APs have recently invested in new hardware and the partnership’s
server environment will be consolidated on this in a smaller number of specialist server rooms. This
will provide efficiencies in server maintenance and licensing, power and A/C consumption and
release some estate for re-use. The physical server estate will, where possible, be virtualised and the
hardware retired.

Transferring local virtual machine provision to core service VMWARE

Virtualise where possible remaining physical hardware servers
60

Decommission redundant server rooms

Manage appropriately server room temperatures to within safe operating parameters to
reduce A/C costs.
MAJOR INFRASTRUCTURE
A single service will allow an overarching dialogue, which is not currently possible, with individual
APs, the FE Region and the University to determine where strategic development, and where
applicable, growth is going to be delivered in the partnership and how this is going to be realised in
a strategic way through investment in additional WAN capacity.
The current WAN contract is due to come to an end in 2016, although an extension to existing
arrangements may be possible. By this point the roll-out of BT fibre across the region and the SWAN1
framework will be in place, giving the potential for better connectivity and resilience in areas
currently reliant on microwave and satellite links.

LAN refresh to bring equipment up to a minimum standard of performance and reliability
making ongoing maintenance more efficient

Alignment of AP, FE Region and UHI strategic growth with WAN connectivity to individual
sites

Telephony refresh and making use of new unified comms technologies

Monitoring and making best use of proposed BT fibre roll out

WAN re-procurement in 2016, utilising SWAN framework services and taking advantage of
any 'contractual' hub arrangements with regional providers e.g. Pathfinder North

Thin client to bring energy and heat efficiencies, access to UHI's suite of standard software
and enable remote working

UHI wifi and EDUROAM services for students, staff and visitors.
PEOPLE AND SKILLS
It needs to be recognised that customer service is a skill that needs to be developed. There are also
specialist roles which will require new skills to fill them. In addition many people will not be used to
or initially comfortable with working in a highly dispersed environment with virtual teams and matrix
management. There will be a need to identify existing skills and develop new skills in order to
support the staff of the new service integrate and fulfil their potential.
1
The Scottish Wide Area Network (SWAN) aims to “deliver a single public services network available for the
use of any, and potentially all, public service organisations within Scotland; with aggregated demand delivering
both cost and performance advantages.” It is aimed to be live by April 2014.
61

The need to form project teams to disentangle the ICT provision

A skills identification and gap analysis and subsequent development using a recognised
framework e.g. BCS SFIA(PLUS) skills framework

Development of specialist teams to manage the disentangled services.
SERVICE MANAGEMENT
The new service will require the procedures and tools to manage the staff, ICT estate and services
effectively. There will be a requirement to provide effective reporting against SLAs and budget as
well as monitoring of system performance to identify issues and feed into capacity planning and
resource reallocation. Effective asset management and procurement processes will require all assets
to be identified, profiled and recorded to enable age profiling and determine renewal schedules.

Clear reporting lines and admin procedures

SLA monitoring and reporting

Comprehensive network, device and service monitoring giving:
o
Rapid response to LIVE issues
o
Monitoring of capacity utilisation
o
Feedback to Partner management of ICT resource utilisation
o
Longitudinal analysis

Asset register, age profiling and disposal

Business continuity and DR plans for every site and service

Procurement procedures and authorisation process

Budget monitoring and reporting.
CORPORATE SYSTEMS AND INFORMATION MANAGEMENT
The FE Region and UHI are demanding more management information, not just from student
records, to facilitate strategic planning and performance management. The service will also
inherit numerous different business systems from different vendors running on different platforms.
Some, where there is lots of commonality (e.g. timetabling), will lend themselves to better, more
consolidated implementations. Others are going through re-procurement and will need to be
managed as affectively as possible until common systems emerge.
62

Deliver the reporting requirements for the University and the Highlands and Islands FE
Region

Facilitate the Business Systems Convergence projects for Finance, HR, Timetabling and CRM.
63
10 SERVICE SCOPE - FULL AND CORE SERVICES
A full list of the activities in scope for the initial shared services offering is at Appendix A2. The
primary purpose of that document is to define the boundaries of the service - i.e. to enable clarity
about which functions (or staff, or contracts) are included within the service and which remain with
member organisations. It does not in itself form a full service catalogue (that issue is dealt with in
section Chapter 11).
The full set of services is that which will be provided to those member organisations which
participate fully in the shared service and transfer their ICT staff to UHI Shared Services Limited. A
smaller 'core' set - those not shown as 'full service' - will be provided to all members. Broadly
speaking this set of services is similar to that currently provided by Executive Office LIS through the
top-slice, and consists of services which are essentially independent of location ('above campus').
These services - virtual learning environment, student records, email, videoconferencing etc. - are
those which we believe are essential for members to consume if they are to function effectively as
UHI Academic Partners.
Members who take the core services only will continue to provide 'local' services themselves, and
will not transfer staff or contracts to UHI Shared Services Limited.
This plan is based on the assumption that of the current UHI Academic Partners, SAMS, Sabhal Mòr
Ostaig and Orkney College will take core services only. Others may choose to do so though clearly at
some point the initiative becomes unviable if critical mass is not achieved. It should be noted that
Academic Partners taking only the core service are as eligible to become members of UHI Shared
Services Limited as those taking the full service and indeed will need to do so if opportunities to
provide VAT-exempt services are to be exploited.
The core services are a whole package and have to be taken together whether or not a Core-only
member chooses to have alternative local provision.
The development and implementation of new core and non-core services will be in line with the ICT
strategy, which will be developed in consultation with all members as per the stakeholder analysis in
chapter 12. While trying to be inclusive as possible in the development of non-core services, the
final decision regarding these will be taken by those members taking the full service. However, coreonly members will be encouraged to implement similar solutions to maintain strategic alignment
and facilitate a continuity of experience for all staff and students across the UHI Partnership.
The following is a summary of those services in the 'core' and 'full' lists. It should be read in
conjunction with the more detailed definitions in the service scoping document. It has been
somewhat simplified from that document and in particular some elements of service which are
primarily carried out at Academic Partners but which have an element of support from the shared
service have been omitted from this list.
64
Core Services – Available to All
Admissions and enquiries platform
Multimedia content hosting
Backup and data recovery
Business continuity support (system-wide)
CLA Copyright Web Based Register
Course database
Desktop VC (Jabber)
Document management and collaboration
platform
MyUHI thin client platform and any successors
Network security testing (automated)
Online enrolment environment
Online fee payments support
Online module selection system
Online student feedback system
Domain and URL management
Podcasting service
Email, calendar, instant messaging
Reading list management
e-portfolio system
Research information management platform
(PURE)
e-Resources provision and management
FES return support
File store
Helpdesk platform
HESA KIS return and NSS support
HESA Returns
Information security policy maintenance
Resource discovery tools
Security (WAN environment)
Service desk (Helpdesk)
Service desk (Helpdesk) – out of hours
Service level reporting
Statutory returns support
Interactive voting system
Student and staff badges – software
environment
Inventory and asset management platform
Student attendance platform
IT compliance management (system-wide)
Student records accessibility platform
Janet
Student records core reports
Learning analytics
Student records fees environment
Learning content – hosting and technical
advice
Student records portal
Library management system
Module catalogue platform
Student withdrawal tools
Telephony – UHI internal, desktop
65
Timetabling/VC booking systems platform(s)
Training materials provision (generic)
Videoconferencing – bridging, connection,
booking, scheduling, user support
UHI Toolkit platform
Virtual learning environment (Blackboard,
Blackboard Mobile, Collaborate)
User account provision
Web content filtering
VC recording
Web – One Web development and
infrastructure
Video streaming service for learning content
(Helix)
Wide Area Network
Wi-Fi
Full Service – Available to Fully Opted -In Members Only
Apple device support
AV equipment – procurement support,
installation, configuration
IT classroom and laboratory support
IT compliance management (local)
Business continuity support (local)
LAN management
Business systems convergence project
Licensing audit services
Comms room management
Mobile device support
CRM software platform (as developed
strategy)
Mobile telephony
Desktop applications delivery, other than via
thin client
PC support
Equipment disposal (compliant)
Server platform for non-core services
Finance software platform (as developed
strategy)
Terminal (thin client) support
HR software platform (as developed through
business systems convergence strategy)
Web analytics, design, development
Out of hours class support
Printing and photocopying management
VC studio endpoint management and support
As a general rule, service development work required by a member only taking the core service, for
example, customisation work on a core system, or interfacing a self-provided system with the UHI
technical environment, will be chargeable.
Some of the services included in the subscription for full members only may be made available, on
an exceptional basis, to core service members if they have been fully funded or if the member
66
concerned is prepared to have a charge levied for the service. This might be the case, for example, if
those members wished to opt into shared business systems, which would be to the benefit of the
whole partnership.
67
11 SERVICE LEVEL AGREEMENTS
During consultation, many stakeholders emphasised the importance of 'robust' service level
agreements. At the same time we also heard, sometimes from the same people, about the
importance of maintaining flexibility, particularly at the local level. We agree with both positions. It
is important to set clear expectations in the minds of both service providers and consumers as to the
services being provided, but it is also important that we don't lose what people value about their
local services in the transition to the single service.
EO LIS currently operates a standard Service Level Agreement in respect of a range of its core
services, which was approved by Executive Board in 2007. The main element of this is a service
availability target of 99%, measured on a 24x7x365 basis, for services such as the VLE, email, student
records, etc. Service availability is monitored automatically and a monthly service review report
issued. The report provides monthly and cumulative statistics on service availability, broken down by
site where appropriate (e.g. WAN connections) together with narrative comment on the reasons for
failures. Statistics on volumes of service usage are also included.
A monthly service review report will continue to be published, though its content will be revised to
reflect the new SLA requirements and the changed range of services.
Service Availability
Service availability is monitored automatically. Where a key service target is expressed in numerical
terms we believe it is important that it is capable of being automatically monitored to avoid
excessive overhead in managing the SLA. The service environment that is delivered has a number of
internal dependencies, and therefore we will monitor and apply the statistics to all systems as
failures in one section may have a number of service effects. We group system monitoring to
provide stats for a Service known and used by a customer, as all services have a number of system
components which may or may not be redundant and used by other services.
An issue that is sometimes raised around the current service availability targets is that they do not
take account of the likely impact of outage on the consumer. For example, a failure of the student
records system for some hours early on a Sunday morning would be unlikely to be disruptive, but a
similar failure during the daytime on a peak enrolment day would be far more damaging.
We therefore propose that the IT shared service adopts a service availability standard that is tiered
according to likely impact taking into account the academic and institutional calendars, as follows:

Service availability target - 24x7x365 - 99%

Service availability target - core hours - 99.5%

Service availability target - critical periods (separately defined) - 99.9%
‘Core hours’ will be defined according to the period of peak usage, normally equivalent to the
‘college day.’
It may take some time to develop automated monitoring processes for all systems.
68
Service Performance
There are no current targets for service performance, e.g. for response times such as screen refresh
on data entry, or login times. In those cases where the shared service is managing the service endto-end, i.e. where members have subscribed to the 'full' service, we believe that it should become
realistically possible to set a number of such performance targets. We do not propose to do this
where the local ICT environment remains under local control and where performance may be
affected by issues to do with the local area network or home environment. A variant approach may
need to be adopted where the service has been outsourced to a third party.
In order for service performance targets to apply, a minimum specification of end-user device must
be deployed by the member organisation. That does not mean that the shared service will not
deliver service to devices which do not meet the specification, but that performance (or indeed any
functionality at all) cannot be guaranteed.
That minimum specification will be reviewed and will change from time to time, probably annually.
Performance targets and other quality expectations for service will be set in consultation with
service owners and user groups.
Notice Periods
Customers need, and should be entitled to, appropriate notice of significant changes in the ICT
services they receive. This includes new services being introduced, changes to existing services, and
services being decommissioned. Suitable notice also needs to be given for planned outages, e.g. for
maintenance and upgrades. It is recognised that there is always likely to be the occasional
requirement for emergency downtime, in cases of unexpected system issues.
Notice period for:

Planned outages - 5 working days

Service decommissioning - 3 months (allowing for customers to raise objections)

New services - normally 1 month in advance of introduction

Emergency outages - no minimum notice period, but announcement always to be made in
advance when possible; may not be possible out-of-hours
Up to 4 maintenance weekends per year may be announced for planned work in the main data
centres.
In addition, a service development roadmap will be published and regularly updated, showing
planned developments up to 2 years in advance, where possible.
Service Review Meetings
After the introduction of the standard SLA in 2007, a monthly service review meeting cycle was
established, with representatives from Academic Partners invited to discuss performance against the
SLA, remedial action plans where required and any proposed developments or changes to the SLA.
69
These meetings were discontinued after a series of meetings where no Academic Partner
representatives attended.
However we think that in the new environment of service delivery it is more likely that members will
want to have representatives attend meetings where the performance of the service can be
discussed and assessed against published criteria. The service will therefore commit to hold such
meeting monthly while there is a demand, but will also seek to add value to such events by, for
example, theming them around topics of interest to members.
As outlined in the service structure each member will also be assigned a management contact who
will be responsible for escalating and dealing with any service issues. There will be a minimum of
two formal service review meetings held individually at a site specified by the member for each
member. Members and their management contacts may agree a further schedule of reviews where
required. Where a site has experienced significant operating issues a Service Action Plan will be
agreed put in place and this will outline any additional meetings required.
Complaints
There will be a formal mechanism available for making complaints, all of which will be recorded and
responded to within 5 working days. Numbers of complaints will be published in the monthly service
review reports.
Presence
An important feature of the service is on-site support, which will be proactive as well as reactive.
There is definitely no proposal to withdraw front-line staff to a remote service centre or centres.
Where physically possible and practical the service will provide on-site support through manned ICT
helpdesks, preferably in highly visible locations e.g. the library or learning resource centre. Where
there is no physical presence of on-site ICT staff, scheduled visits will provide local staff and students
access to a face to face service.
All issues will be recorded and tracked in the Helpdesk system and, in the event that the matter
cannot be resolved immediately, progress towards resolution can be monitored. This will also
provide valuable information on trends in types of help calls and performance against agreed SLAs.
Analysis of this information will help proactive changes to the service to address common issues and
improve turnaround times. Requests which involve this kind prioritisation of resource allocation will
need to be made by a nominated member of staff of the member organisation, or their nominated
reserve.
The Company will endeavour to be flexible where the request falls outside the formal remit of the
service, but is within the capability of local staff. This may arise where the staff concerned previously
carried out that function for their Academic Partner.
For each location served there will be a published indicative schedule of the staff presence on site.
The larger sites will have a full-time staff presence throughout core hours. Smaller sites will have a
fractional presence. The smallest sites will be visited regularly by support staff. Every site on the
schedule will be visited at least twice per year. It is recognised that for operational reasons the
70
detailed schedule of deployment of staff will be subject to change. The Company will follow relavant
legislative requirements to ensure that all staff working with students are subject to the correct
vetting and are eligible to carry out any duties required.
Requests for Service
A formal channel will be made available by which requests for service can be made and will be
responded to. Where the request is for a service that has already been implemented elsewhere, or
follows an established pattern ("more of the same") then a response indicating the timescale for
delivery will be issued within 5 working days. Members may wish to decide if there are specific
groups or individuals who have the authorisation to request certain activities, especially where those
activities will impact other local departments (e.g., room moves only from facilities contact). Where
there is no resource issue then work will be scheduled and delivered as outlined above and in the
priorities. Where there is a resource issue, but a request doesn’t involve development and only
impacts on the requesting member the priority of the work against other requests will be discussed
and agreed between the identified member representative and the Company management contact.
Where the request involves development work or will effect a number of members, an initial
response will be made within the same period indicating whether the Company is able to undertake
the work, and whether it is chargeable; further discussion with the requester is likely to be required
in such cases along with a review to ensure that the request will be suitable for all members who
may require the solution. The Company will publish and maintain a list of the developments being
worked on.
Helpdesk Support
Helpdesk support will be available 24x7. Outside core hours, it may be contracted out to a remote
call handling service, as it is at the moment.
The telephone system is not currently capable of monitoring call pickup times (delay between first
ring and call answered, or call failures). At such a time when it is, we will seek to reinstate targets for
call answering.
All support requests to the helpdesk are logged, whether made by telephone, in person, by email, or
through the web form. We will seek to extend the range of channels by which customers can contact
the helpdesk, e.g. via Twitter, or indeed to follow progress on resolution or restoration following a
major incident or outage.
Calls will be prioritised, and target resolution times set, according to Figure 14.
71
Figure 14. Helpdesk priority levels and responses
Customer Satisfaction
The UHI Shared Services Board believes that customer satisfaction is likely to be the best indicator of
the quality of services that it delivers. We will therefore carry out a comprehensive annual survey of
customer satisfaction, covering all main services and all locations and commit to publishing the
results with a target of continuous improvement. The annual survey may take place at different
times for different groups of customer, to ensure that we target groups at the right time to maximise
survey return whilst being mindful of the academic calendar. The Company will also look to develop
personal helpdesk follow up for a random sample of calls monthly. This has been piloted by UHI
Helpdesk and has received very positive feedback. These will be in addition to the current practice of
publishing (in the Monthly Service Report) the results of the call survey which is sent out with every
closed helpdesk call.
Audit
The Company expects to engage with the University's Audit Committee and other interested
stakeholders to agree an approach to audit which protects the interests of the Company and its
members. Particularly in the initial period of operation of the shared service, issues of interest would
be expected to include information and data security and data processing agreements.
Service Catalogue
A summary list of the ICT services to be provided by UHI Shared Services Limited is in the previous
Chapter. Further clarification on scope is to be found in Appendix A2. We expect that scoping
statement to become a historical document - it will not be updated. Instead it will be supplanted by
a service catalogue, made up of individual entries which describe each service offered. An example
follows:
72
Figure 15. Service catalogue entry example - myUHI
Name of service
myUHI
Description
Virtual desktop access for UHI
The myUHI Citrix service provides a virtual UHI desktop on any internet connected
computer. Using the myUHI link, you can log into the service and access your files
from any computer and you can also access a range of software applications that
run across the internet. This means that you don't have to have these applications
on your computer but you can still use them from any computer connected to the
internet.
Provided with
Citrix version x
Normal hours of service
24x7x365
Scheduled downtime
None
Available to
All staff
All students
Software is installed as part of a standard UHI image. Students and staff may also
download the component software from the UHI website
Charges
None. Core service
Where
http://my.uhi.ac.uk
The myUHI service requires you to log into the service using your UHI user name
and password.
Documentation
We recommend the use of Internet Explorer with myUHI.
FAQ:
Help material/videos:
PC Requirements
More help
mailto:uhihelpdesk@uhi.ac.uk
helpdesk.uhi.ac.uk
www.uhi.ac.uk/lis
Service level agreement
24x7x365 - 99%
Core hours - 99.5%
Critical periods - 99.9%
See also
Technical information
(authorised users only)
73
12 STAKEHOLDER GROUPS
The unusual structure of the UHI partnership, along with the distributed nature of the service,
means that there is a complex mapping of communications lines between customers and service
providers. The following matrix is an attempt to make some sense of that mapping and indicate how
relationships might work in practice.
Board
Court
(APs)
Faculties
Director, ICT
Service Head
Head,
Service
delivery
Helpdesk
Local
service
lead
Service
quality
Routine
requests
Day-today
frontline
issues
Escalation
Service requests
Overall shared services
strategy, via Commissioning
Board
Regional
bodies (HE,
FE)
Members
Chief
Executive
ICT investment strategy
Appoint
directors,
approve
subscriptions
Accountability
for service
ICT Planning
Service
development
issues
Accountability
for service
ICT Planning
Service
development
issues
(normally
Head of LTR
Support)
Subject
networks
Service
development
issues
(normally
Head of LTR
Support)
Staff
(individual)
Head of LTR
Consultation
Service
quality
Student body
Consultation
Service
quality
Students
(individual)
Escalation
Service requests
74
Practitioner
groups
Consultation
PPF, FEPPF
Service
development
issues
(normally
Head of
Corporate
Systems)
User Groups
Consultation, feedback, focus groups, project sponsorship
Trade unions
Consultation
External
organisations
New
members
Potential
members
External
service
provision
approval
75
13 OPERATIONAL ASPECTS
Physical Presence
As indicated in the introduction to the current IT Estate (Chapter 3) UHI delivers service to 87 sites
connected to its network across the partnership. These sites would be the basis for the Shared
Service contracts and are specifically:
Table 3. Site list
Ref
UHI157
AP
AR
Site Name
Oban
UHI065
AR
Ref
UHI010
AP
MO
Site Name
Forres
Lochgilphead
UHI008
MO
Nairn
UHI149
AR
Hazelburn
UHI159
MO
Biblical Gardens
UHI069
AR
Kilmory CSC
UHI160
MO
Greshop Vocational Ctr
UHI057
AR
Campbeltown
UHI009
MO
Keith
UHI058
AR
Dunoon
UHI011
MO
Buckie
UHI064
AR
Arran
UHI048
NAFC
UHI059
AR
Islay
UHI019
NH
Thurso
UHI060
AR
Rothesay
UHI022
NH
Dornoch Ross
UHI062
AR
Tobermory
UHI023
NH
Alness
UHI090
AR
Helensburgh Library
UHI020
NH
ERI Castle St
UHI061
AR
Tiree
UHI121
NH
Dornoch Burghfield
UHI063
AR
Here We Are
UHI024
NH
Dale Farm LBTC
UHI144
AR
Fionnphort
UHI035
OR
Kirkwall Campus
UHI148
AR
Craignish
UHI137
OR
Centre for Nordic Studies
UHI039
AR
Rothesay CSC
UHI042
OR
Stromness
UHI038
AR
Dunoon CSC
UHI013
UHI068
PE
Perth Campus
AR
Rothesay office
UHI014
UHI056
AR
Eclark
PE
Pathways
UHI016
UHI001
PE
Crieff
EO
Ness Walk
UHI017
PE
Kinross
UHI124
EO
Fairways
UHI018
PE
Blairgowrie
UHI075
EO
CHS
UHI125
PE
Scone Airport
UHI049
HTC
Dingwall
UHI055
SAMS
Dunstaffnage
UHI002
IN
Inverness Longman
UHI043
UHI003
IN
Inverness Midmills
SH
Lerwick Gremista
UHI044
UHI004
IN
School of Forestry
SH
Unst
UHI045
UHI115
IN
Dumfries Dental Centre
SH
Brae
UHI046
UHI073A
IN
Aviemore
SH
Aith
UHI047
UHI025
SH
Whalsay
LE
Stornoway
UHI143
SH
Gutters Hut
UHI032
LE
Benbecula
SH
Mareel
UHI026
LE
Barra
SH
Gressy Loan
UHI118
LE
UHI088-5
SH
Sandwick School
UHI146
LE
Taigh Chearsabhagh
UHI088-1
SH
Islesburgh
UHI007
MO
Elgin Main Campus
UHI086
SH
Mossbank
UHI120
MO
Elgin Technology Centre
UHI087
SH
Ness
NAFC Marine Centre
76
Ref
Ref
UHI142
AP
SH
Site Name
Blydehaven Nursery
UHI081
AP
WHC
Site Name
Portree HS
UHI145
SH
Hospitality
UHI052
WHC
Mallaig
UHI092
SH
Whalsay HC
UHI079
WHC
Broadford
Sabhal Mòr Ostaig
UHI051
WHC
Kinlochleven
ICC Islay
UHI054
WHC
Kilchoan
WHC
Ullapool
UHI033
UHI034
SMO
SMO
UHI082
WHC
Portree
UHI083
UHI050
WHC
Fort William
UHI078
WHC
Gairloch
UHI077
WHC
Taigh Darach
UHI053
WHC
Strontian
On 1 April 2014 there will be a seamless transition to the shared service in the experience of the end
users. UHI Shared Services Limited will deliver the ICT service to these sites, to all Partners,
supported by IT staff operating from the bases at which they are currently employed, according to
the principle of no compulsory relocation. The contract that the Company will have with each of its
members will include a definition of where that service will be provided, and its scope – members
who have opted out of the full service will receive on-site support only in respect of core services,
such as telephony and the WAN.
Over time, we expect that the rationalisation of the ICT environment and the continued
development of remote technical support capability will free up locally-based staff time for more
face-to-face user support, enabling the service to cope better with the support demands of BYOD
and a more mobile user base.
The IT Estate
The following section is taken directly from the initial high-level report provided by Jem Taylor as a
result of undertaking a comprehensive survey of the IT Estate throughout the partnership during the
summer of 2013.
The IT Estate Survey, carried out during the summer of 2013 undertook a physical IT survey to obtain an
overview of the IT estate at a wide range of academic partner sites. The outputs of this exercise included:
- PC fleet size and age profile for each site
- Quantification of potential for a LAN renewal / energy footprint reduction project
- Quantification of the IT server fleet age and quality
- Quantification of the physical environment in IT server / comms rooms
- Comparison of asset inventory data with actual equipment on the ground
2
- Evaluation of practicality of migrating asset data onto the WHD asset management system
The survey was based on site visits and on a survey questionnaire sent out to IT managers and other IT related
staff.
The rate of return for the questionnaire was disappointingly low, and questionnaire data obtained was
insufficient for any overall detailed analysis. However, there was sufficient data to draw some high level
conclusions.
2
The WHD Helpdesk system provides a common fault report and management platform used by all IT staff
across the UHI partnership. This system has a powerful asset management facility which could potentially be
used to improve asset reporting and management, as well as linking fault history to specific assets. Inverness
College staff are, at the time of writing, trialling its use to replace their existing asset database.
77
The site visit methodology was tested and refined in Stornoway at the end of the 12/13 academic year and
then used at a range of sites during the summer, ending in Perth at the start of the 13/14 session.
We visited the main campus of each Academic Partner (excluding SAMS and SMO), and many subsidiary
campuses too, from Portree and Broadford to Buckie and Keith, and from Campbeltown and Dunoon to
Stromness and Lerwick.
At most sites, the method included
- photographing every room
- counting every item of IT equipment
- recording the size of monitor screens
- recording the age of desktop PCs and laptops
- counting the LAN data ports in use, and
- interviewing a range of staff including IT practitioners, librarians, assistive technologists, etc.
Where available, the asset register was obtained for comparison with the survey data.
Only at the two largest sites – Inverness and Perth colleges – was the asset register found to be of such a
quality that it could be used directly as the basis of further analysis, and then only for analysis of the desktop
PC fleet.
The survey data was been augmented and validated in September 2013 using network scans of the UHI Active
Directory environment to detect ‘live’ Active Directory managed workstations on the network.
This scan data, combined with the physical survey and asset register, gives increased confidence in the figures.
Summary statistics
In total, the Academic Partnership owns somewhere between 6,300 and 6,800 desktop and laptop PC and
Macintosh computers including Thin Client workstations. This figure is significantly above our previous
indicative planning estimate of 4,500 to 5,000 which was based on an analysis of building plans and desk
capacities carried out more than ten years ago.
Age profile
Of these at least 2,554 and perhaps as many as 4,000 can be classed as ‘old’ – requiring replacement in the
near future. Of those devices surveyed and classified, 50% were ‘old’. Fewer than 900 devices were positively
identified as ‘Good’, and a further 1,589 as ‘OK’.
78
Vignettes
Apart from the wealth of data and photographs obtained – which are stored in a shared drive with access
available on request – the survey visits and staff interviews conducted lead to some interesting vignettes:
Physical Environment
We found many computer rooms to have been fitted with air conditioning (which is good) but set to very cold
(which is not so good).
Why is this an issue? Apart from meaning we had to keep our jackets on, this has real costs to the organization
who pays the energy bills.
As we explored in the recent Jisc funded “ER4SeR” project – using both practical investigation and theoretical
modelling - if the target temperature of the computer room is lower than the target temperature of the
building heating system, then heat will naturally flow from the rest of the building, through the uninsulated
walls of the room, only be pushed outside by the cooling system.
The building heating system will try to maintain the building temperature, while the computer room cooling
works against it, leading to higher power bills both for cooling and for heating even when there is no IT
equipment actually in the room!
Ideally, the target temperature of the coolers should be low enough to protect the IT equipment (below 30C
say) but high enough that mostly, the waste heat naturally flows into the building and out through the exterior
walls. Only when the natural heat flow is inadequate should the cooling plant kick in, at perhaps 28C, to
remove genuinely surplus heat while maintaining the thermal gradient that allows heat to spontaneously flow
the way we want it to.
This points up that at the organizational scale of a college, neither the IT team not the Estates team will likely
include an IT environmental controls specialist. In a larger organization, the cost of installing and
understanding better temperature and energy monitoring and controls can be recovered through better
management of the physical environment and hence significantly lower energy bills and reduced carbon
footprint.
79
Lack of proactive monitoring
In a number of sites we found LAN equipment with warning lights showing, or with very noisy fans (a sign of
incipient failure), or running hot. These items of equipment can be expected to fail in service, causing
disruption to users, and are probably contributing to increased energy bills and increased thermal wear and
tear on other equipment in the same room.
All of these point to an absence of proactive monitoring and planned maintenance. Instead the typical support
response will be reactive – only when one of these items fails will it be replaced, possibly after a delay caused
by needing to order up a replacement.
The physical environment for IT has a wider estates footprint
Generally in small learning centres, IT infrastructure has to share space with people. The classic example is the
small data cabinet on the wall behind the reception desk, where the noise from the fans in the equipment
causes maximum annoyance to the lone centre manager!
In one particularly extreme example we visited, in a rather larger local learning centre with several classrooms
and staff, we observed that a data cabinet had been installed in the corner of an office some years ago; there
was presumably no suitable plant cupboard available, or perhaps the building design had not included the
requirement for an IT rack.
Over the years the rack had as you would expect gradually filled up with noisy and hot IT equipment – LAN
switching, routers, servers, monitors, disk packs etc. At some point a second rack had been added, though this
is now empty.
All this equipment emits enough heat and noise that the office – large enough for three staff – is so unpleasant
a working environment that it is only usable as a store.
This would not be a concern, but for the shortage of space in the building which means that two staff have
their desks in the corridor outside this room; unfortunately for them, in the height of summer the door of the
room has to be kept open to stop the IT equipment from overheating, so that their corridor area becomes
unbearable as well.
If the equipment could be replaced with modern low-energy / low-noise types or where appropriate relocated
to a remote datacenter, the entire room could be returned to use as staff accommodation.
The value of physical estate occupied by IT was out of scope of our survey, but ought to be taken into account
when investing in energy footprint reduction in the future.
Another opportunity for the shared service will be to review and consolidate the printing and
copying service across the partnership bringing all MFDs into a managed print environment. This will
not only provide a much better user experience, it could provide cost savings in leasing to the
Partners. This would need to be implemented over a number of years.
Strategic decisions will be required in the early years of the shared service, not only to address the
current state of IT Provision throughout the partnership, but also as major capital investment is
going to be necessary in the areas of telephony and VC and as the WAN contract comes to an end in
2016.
Facilities
As outlined above, many of the facilities hosting parts of the network are located at Partner sites.
These are rooms housing specialist equipment which tend to be visited when there are problems by
specialist network engineers. Although these areas are within the control and responsibility of
80
Partners, it is essential that specialist shared service staff have access to them at all times in case of
emergency. There are also opportunities to consider the working environment in and around some
of these rooms which might provide better use of space for host Partners and greater efficiencies for
the shared service.
As storage is increasingly being virtualised or moving to the cloud there will be fewer comms rooms
required in the medium to long term yielding not only savings, but also returning valuable space to
Partner estates.
All large campuses have computer and learning resource centres and videoconference suites for
classroom based learning with groups of students. Increasing use of intelligent systems will help
maximise resource usage and could lead to reduced investment requirements for end-user
equipment, an additional benefit of which would be releasing IT staff to spend more time on
supporting the users rather than dealing with the equipment.
Structure of Service Delivery
In the run up to the go-live date there will be extensive communications with all staff who will
transfer to the shared service so that, quite apart from the legal requirements, there is clarity about
the transfer arrangements and management and operational structures to which everyone will be
working from day 1. Staff will understand the focus of their activities as the service goes live, and it
is likely that during the transitional period these will be very similar to the roles which they are
currently undertaking, but perhaps more importantly they will know who they are working with,
who they report to, how the communications channels will work and what communication tools will
be set up to support them in their roles. Much of this preparatory work will take place prior to the
service going live so that there should be no surprises on the day. We are planning for a seamless
move into the shared service which will not be discernible to the end users.
The ICT service will be structured into a number of sections each with a head of service, and in
addition there will be a key contact or Relationship Manager at each Partner who will be responsible
for the end user experience across all services at all sites for which they have responsibility. Regular
Service Review meetings will take place which will afford the opportunity for feedback and
continuous improvement as well as noting matters in relation to the SLAs with respect to each
service.
As in the current situation, the shared service will have staff distributed across the Partnership
providing local and partnership services either in a dedicated or mixed capacity. As well as current
Academic Partner ICT staff, as indicated earlier a third of current University staff are also located in
Academic Partners.
Figure 16 provides a model of how these staff would be distributed and the matrix of services they
would provide. Depending on operational requirements, specific location and the particular service
element, this could mean dedicated onsite staff providing services locally, onsite visits or remote
configuration.
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Figure 16. Location of Shared Service ICT Staff and the Services They Provide
Academic
Partner A
Academic
Partner B
Academic
Partner C
Academic
Partner D
Ness Walk
Fairways
Local Support
Local Support
Local Support
Local Support
Local Support
Local Support
Helpdesk
Helpdesk
Helpdesk
Helpdesk
Helpdesk
Helpdesk
Relationship
Management
Relationship
Management
Relationship
Management
Relationship
Management
Relationship
Management
Relationship
Management
Learning, Teaching
& Research
Learning, Teaching
& Research
Learning, Teaching
& Research
Learning, Teaching
& Research
Learning, Teaching
& Research
Learning, Teaching
& Research
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Corporate Systems
Corporate Systems
Corporate Systems
Corporate Systems
Corporate Systems
Corporate Systems
Service
Management
Service
Management
Service
Management
Service
Management
Service
Management
Service
Management
Primarily local service
Partnership service
provided from this
location
Provided by Partnership
service external to this
location
Primarily Local Service
These functions are provided to the AP primarily by the staff located at that site. Those staff may
also assist in other Partnership services, and staff located at other APs or Fairways may be called
upon to provide absence cover or specific project resource.
Partnership Service
These functions are provided to the Partnership by staff located at numerous APs and Fairways.
Provided by Partnership Service
These functions are provided to that AP by staff located at other APs and Fairways. This will include
onsite activity to meet that AP’s operational needs.
As the shared service is embedded, in all cases staff, regardless of location, will work in virtual teams
based on the functions they provide to ensure efficient use of resources and deployment of common
solutions and standards. For example, while Infrastructure is delivered out of four separate locations
in
Figure 1 shows they are all working for the same team which may be coordinated from another
location entirely.
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As well as providing a Partnership service they might also be involved in providing local onsite
service. In these cases they will also be coordinated by the relevant Relationship Manager. This is
especially true of Local Support, although again the solutions they are delivering will be coordinated
across the Partnership. This does not rule out site specific solutions but the emphasis will be on
commonality if any of the efficiency gains of being a shared service are to be attained.
Restructuring of the service in this way will enable best use of people within the Company to provide
a much stronger and resilient service, with team working providing the strength and depth which is
much harder to achieve within the current status, resulting in fewer single points of failure (SPFs)
and providing greater flexibility to cover for peaks and troughs. This will result in better service
provision to Partners, a better quality of end user experience and enable the service to retain local
knowledge and build on relationships already in place whilst enhancing the opportunities for Partner
based staff to develop into specialist areas if they so wish.
Licence and Contract Management
As highlighted earlier, there is much duplication across the partnership in relation to software and
licence agreements and hardware maintenance contracts and this inevitably means that there is also
duplication of effort in managing these at each site. A follow on from this is that there exists a range
of versions of applications running across the partnership which causes additional problems for
upgrades, maintenance and support. An early opportunity for savings, more efficient working and a
better quality of end user experience is in the consolidation of software applications and the
negotiation of new contracts, managed by a small team of staff with relevant expertise and negotiating
skills, focussing on customer needs and not purely on the potential for cost savings.
Procurement
Procurement for major capital expenditure will continue to be made using APUC where possible and
Public Contracts Scotland or existing Frameworks where available, buying through the University
where this presents the best or only option e.g. when the contract must be with an educational
institution. The Company expects to be able to become an Associate Member of APUC enabling
access to APUC frameworks and contracts.
Responsibility for the decisions around the purchase of PCs, laptops, desk phones, smartphones,
tablets and other items of end-user equipment out of the scope of the shared service will continue
to rest with Partners, however, in the interests of achieving efficiencies, minimising the range of
end-user equipment connected to the network and requiring support and attaining minimum
specifications (defined by USSL), the shared service will offer support and advice when Partners are
planning procurement, including management information on PC usage and recommendations on
specification.
SLAs and performance monitoring will only apply where a member has maintained at least the
specified minimum standard of equipment.
Assets
We do not propose that physical assets should transfer to the company. Our reasoning is that since
these will have a book value to the member concerned (unless written-off), they would be expected
83
to be paid for them; as the company will not have the funds to pay for them, those funds would
need to be sourced from members; there seems to us to be little point, and significant complexity, in
the company borrowing from its members in order to pay them for their equipment, when it will
have to recover the cost of repayments through increased subscriptions. All the funds would remain
inside the 'system' (the partnership) but would be recycled to little point.
Note that if the company were able to access external borrowing to pay for the assets then the
interest costs involved would simply add to the whole cost of the enterprise.
However, in order to carry out its functions, the company will need to deploy and control equipment
owned by its members, and we propose that a part of the formal agreement entered into by each
member should detail the assets owned by the member (if any) that the company has the right and
obligation to manage.
New assets acquired by the company will be company assets unless procured for, and recharged to,
members.
Insurance
The company will ensure that its assets are appropriately insured.
We propose that members continue to insure assets that remain theirs as they do at present. In
most cases these are already included in wider institutional policies.
Premises
56 potentially in-scope staff are based at Academic Partners or at Ness Walk. The University pays a
standard fee for its staff based at Academic Partners (currently £2,000 p.a. for a shared office).
The Company proposes not to operate such an arrangement for its staff based at Academic Partners
or Ness Walk. In order to support the principle of remaining distributed in terms of staff location, we
propose that it be part of the contractual relationship between UHI Shared Services Limited and its
members that staff located at Academic Partner or University premises be accommodated free of
charge.
This is consistent with a general principle of minimising transactions where the Company procures
services from its members on a paid-for basis. These services are likely to be subject to VAT and the
net result is simply a transfer of funds out of the partnership to HM Treasury.
The Company's registered office is at Synergie House, Fairways Business Park, Inverness IV2 6AA.
These premises are currently leased by the University and occupied primarily but not exclusively by
LIS staff. There are 26 in-scope staff based at Fairways.
The initial intention was for the Company to take over the lease from the University. However, doing
so would expose the Company to liability for business rates at nearly £30,000 p.a. and therefore,
subject to taking appropriate advice on the matter, we now propose that the same arrangement
applies in this case as to the accommodation of other staff. We understand that the University has
some concerns as to whether this is appropriate, and it may be that further dialogue is required.
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Servicing the Service
In its current form the IT service draws management, finance, personnel and administration services
from within each of the Partners, a significant amount of which is provided by Executive Office
departments outwith LIS. As the service goes live the Company will employ around 80 people and
be responsible for its own financial and legal affairs as well as other functions as outlined in the
Corporate Services Department shown in the Organisation Chart in Chapter 16. Additional resource
will be required to provide these functions, in particular financial expertise. In the short term a bid
has been put to SFC which includes £100k to allow for acquiring these services in the transitional
period, which we understand will be forthcoming subject to final confirmation. Once the service is
established and the nature and extent of the ongoing requirements are clearer the resulting
overhead will need to be built into the shared service budget for future years.
There are several options for acquiring this support depending on the nature of the service required,
from recruitment to some of the specialist areas, through to buying the service in from Partners,
subject to the constraints noted in Chapter 20. Examples of such services include HR, financial
transaction processing and Health and Safety.
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14 CORPORATE GOVERNANCE
UHI Shared Services Limited is established as a Company Limited by Guarantee, Company No.
SC457396, with its registered office at Synergie House, Fairways Business Park, Inverness IV2 6AA. It
is owned by its members. All UHI Academic Partners, including the University, are eligible to become
members.
As the Articles currently stand, members have voting rights which vary according to their financial
contribution to the company. Each member has the greater of:


one vote; or
one vote for every complete £200,000 of annual subscription payable by that member in
respect of the then current financial year.
'Annual subscription' means that part of the total running costs of the Company contributed by the
member in that financial year.
In the first version of this Business Plan, the Shared Services Board proposed no change to these
arrangements, though there had been some discussion at the Fort Augustus 2 summit of a onemember, one-vote alternative. The issue was raised again at Fort Augustus 3 and there seemed to us
to be a greater consensus this time for such an approach. We are therefore proposing the variant
that follows.

Each member who subscribes for the full range of services offered: 10 votes

Each member who subscribes to a 'core' bundle only, or a set of services greater than the
‘core' but less than the full range: 5 votes

Members who take specific services only, less than the 'core' provision: 1 vote
The third category would typically apply to members outwith the UHI partnership.
Members would only fall into one of the above voting categories at any one time, i.e. they have 10, 5
or 1 vote(s) in all circumstances.
Obviously the model is intended to encourage maximum participation. The scenario in the second
category - where a member takes a range of services somewhere between 'core' and 'full' - is not
intended to suggest that a pick-andmix approach is available to the services described as 'option' in
respect of the ICT service, but accommodates a future, when we have brought on additional
services, in which perhaps some members are taking the 'core' option for some areas of shared
service and 'full' for others. We would need to take some care in drafting to future-proof the
wording.
This approach deals comfortably with the concern that it is difficult to bring in new external
members, and thereby grow the business, with 1M1V. There should also be no issue with Teckal
compliance and the requirements for Cost Sharing Groups. What it does not provide for, in itself, is
stability in governance for the Company if there are very major changes in the structure of the
86
membership, e.g. through substantial mergers. At this stage we simply note this as a risk, which the
membership would need to deal with if it became a practical problem.
Note also that this proposal would result in the incorporated colleges not having a collective
majority of votes, nor would any individual member have anything approaching a 20% level of
control of the Company.
The Articles make provision for there to be members which are external to the UHI partnership:
A member must be UHI or an Academic Partner or another United Kingdom Contracting Authority
which is approved by resolution of the directors and which in each case carries on a “relevant
activity” for the purpose of sub paragraph 1 (a) of Part 2 (Group 16) of Schedule 9 to VATA 1994 as
inserted by Section 197 (2) of the Finance Act 2012 and receives or intends to receive from the
Company the supply of services which are directly necessary for the relevant activity.
However, it is proposed that no such members should be admitted until the Board of Directors is
satisfied that the benefits of doing so are not compromised by detraction from core business or by
dilution of UHI members' interests. The Shared Services Board considered a category of membership
with no or insignificant voting rights, but this would be incompatible with a requirement to
demonstrate Teckal compliance in the context of EU public procurement law.
Members delegate the day-to-day management of the Company to the Board of Directors, who
delegate the operational management of the Company to the executive. Directors of the Company
are required by the Articles of Association to be employees, directors or trustees of member
organisations, or employees of the Company. Details of Board membership are addressed Chapter
15.
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15 DIRECTORS
The Articles of Association of UHI Shared Services Limited provide that there must be a minimum of
five directors. There is no maximum. The Shared Services Board has taken the view that it would not
be desirable to be over-prescriptive as to the make-up of the Board, as the scope of activity of the
Company may change significantly over time, as may the structure of the UHI partnership. Directors
may be appointed according to the conditions contained in the model articles for private companies
limited by guarantee, i.e. by ordinary resolution (of the members) or by a decision of the directors.
In response to issues raised during consultation, eligibility to be a director of the Company has been
limited to employees, directors or trustees of member organisations, and employees of the
Company. In the event that a director ceases to satisfy one of these conditions, he or she ceases to
be eligible to be a director. In any other circumstance provision for the removal of directors is
contained within the Companies Act 2006.
The term of office of directors is three years, renewable for two further consecutive terms of three
years. Directors who are not employees of the Company are unpaid.
The Board of UHI Shared Services Limited is currently:






The current members of the Board are drawn from those members of the Shared Services Board
eligible to be directors at the current date. The Board is of the view that its membership is likely to
need to change in the relatively near term, reflecting the transition of the shared services initiative
from project to service, and the need to separate the functions of identifying and prioritising
candidate activities for shared service from the governance and management of operational
services.
The Board recognises that the Articles in themselves do not provide for a balanced or representative
Board membership. While not wishing to hard-code such provisions into the Articles, the Board
would propose to adopt a set of principles of corporate governance which would, inter alia, provide
that appointment of directors should be informed by the following criteria:

appointed from a suitably wide range of member organisations

bringing an appropriate range of skills and experience to the Board
88

where appropriate, ability to provide through cross-representation links with the
governance structures of the University
where the Directors of the Company, as the Board, are primarily responsible for:

determining the company’s strategic objectives and policies;

monitoring progress towards achieving the objectives and policies;

appointing the Chief Executive;

accounting for the company’s activities to relevant parties.
In addition, Directors’ statutory duties and code of conduct are set out in the Companies Act 2006.
89
16 STRUCTURE OF THE COMPANY
Organisation
Figure 17 shows the proposed organisational structure of UHI Shared Services Limited at the time
that it begins trading.
The structure provides for the appointment of further Directors of service areas in future, but only
the Director, ICT is proposed to be appointed at this stage. The process for recruiting the Chief
Executive, the Director, ICT, and Heads of section is described later in this Chapter. These are the
only posts defined at this stage. The descriptive text in the boxes is an outline of the functions to be
carried out within that area, rather than a list of posts.
Figure 17. Structure of the Company and the ICT service
UHI SHARED SERVICES LIMITED
Board of Directors
Chief Executive
Corporate Services
Finance, Administration, SLA monitoring, documentation, change
management, compliance, procurement, environmental, project
management, business continuity, information security
Director, ICT
Director, Service 2
Director, Service 3
Director, Service 4
Head of Service
Delivery
Head of Infrastructure
Head of Corporate
Systems
Head of Learning,
Teaching & Research
Support
Service desk, local ICT
support, desktop &
mobile devices,
incident support,
installation & service
rollout, VC
Studio/Endpoint
support
Network
(WAN/LAN/wifi),
servers, system
architecture, ICT
Strategy, directory
services, thin client,
filestore, DBMS,
telephony, server
rooms, R&D, video
infrastructure, backup
SRS, BI & Reporting,
UHI Records, IDM,
systems development
& integration, business
systems, SharePoint,
web development,
TOMAS
VLE, LMS, e-Resources,
VC service, email,
collaboration tools,
timetabling, PURE,
generic applications,
usability, academic and
research liaison,
assistive technologies
The structure of the ICT service proposed is relatively conventional and parallels that found in many
other UK universities. Adopting a standard and well-understood structure should help mitigate risk
in moving to a different operating environment.
SERVICE DELIVERY
This area brings together and co-ordinates ‘central’ support functions such as helpdesk (even if this
is physically distributed) with ‘face-to-face’ and locally-based customer service and support. Initially
at least the largest number of staff will be located within this area. This reflects the proposed
emphasis on service quality and customer service.
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INFRASTRUCTURE
‘Infrastructure’ includes the communications environment whether wired or wireless – Wide and
Local Area Networks, telephony, wifi and the connection to Janet. It covers servers, backup, video
bridges (MCUs) and technologies such as thin client which deliver applications to the desktop.
Essentially, the hardware that underpins everything else and the connectivity that joins it all
together. It is also concerned with the design and development of the overall ICT environment, and
is concerned with the interaction of infrastructure, software systems, and identity management;
systems interoperability; the rationalisation of current systems and introduction of new systems into
the environment. It takes an overview of the ‘disentanglement’ of systems referred to in the IT
strategy at Chapter 9. The ‘strategy’ referred to in this area is entirely technical. In an environment
of UHI’s complexity, diversity and range this high-level focus on systems architecture is critical.
CORPORATE SYSTEMS
These are the technologies that underpin the Partnership’s operations as a business or businesses –
student records, finance, HR, customer relationship management (CRM), document management
and web development. Many of these systems have been developed and managed in isolation in the
past, and so the Business Systems Convergence strategy is a major challenge and focus for this area.
LEARNING, TEACHING AND RESEARCH SUPPORT
The focus on Corporate Systems above is paralleled by a focus here on the systems and services that
support learning, teaching and research. This is a rapidly developing area both in terms of pace of
change of technology and uptake, particularly in FE. This area also includes those areas of library
services – the library management system (LMS, includes online library catalogue) and electronic
resources such as e-books and e-journals.
CORPORATE SERVICES
This section, reporting to the Chief Executive, provides administration and compliance services to
the Company.
Senior Management
UHI Shared Services Limited will be led by a Chief Executive, to be appointed by the Board at such
time that there is sufficient commitment from members that the Board can be certain that the
company will trade. The Board will aim for an appointment in early 2014 so that:


the Chief Executive is in post for the period running up to initial operations
the Chief Executive is in place before other senior appointments are made
Figure 17 earlier in the Chapter shows an outline of the organisational structure of UHI Shared
Services Limited at the time of its initial operation. The structure will need to remain flexible as and
when new services are added or there are relevant changes in the operating environment.
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The Chief Executive is responsible for overall strategy and management of the company, its financial
integrity, compliance and the overall management of its relationship with its members and external
stakeholders. Critical activities at start-up will include working with the Director, ICT to embed the
shared service within the new Company. Draft Job Descriptions for each of these roles are at
Appendix A8 which illustrate the distinct nature of each role.
An important element of the role in the early years of the company will be the extension of its
business into other areas of shared service.
Major functional areas will be managed by Directors, of which only one is required in the first
instance, i.e. the Director, ICT. This post and the Head posts reporting to it will be appointed by the
Chief Executive working with a subcommittee of the Board, which would include the Director, ICT for
the recruitment of the service Heads. These positions will be allocated before 1 April 2014, so that
there can be clarity of reporting lines for all affected staff from the outset.
There is a general presumption that posts will be filled from within those staff in scope for transfer
unless in the opinion of the Board this is not appropriate. The Board recognises that if external
appointments need to be made then a contingency is likely to need to be invoked for the additional
cost of doing so, and this will be addressed in fine-tuning the budget plan.
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17 EMPLOYMENT MATTERS
General
The Shared Services Board and UHI Shared Services Limited believe on the basis of advice that TUPE
regulations apply to the transfer of staff from the University and its Academic Partners to UHI Shared
Services Limited.
The TUPE regulations provide for the protection of salary and terms and conditions of employment
for transferring staff. We will of course ensure full compliance with the regulations.
The Regulations further provide for the recognition of Trade Unions to be carried over to the new
employer.
UHI Shared Services Limited intends to seek Admitted Body status in the Local Government Pension
Scheme (LGPS) in order to be able to offer these pensions to transferring staff, the vast majority of
whom are already members of the LGPS. Pensions are considered in Chapter 17.
The Company is committed to remaining distributed. There will therefore be a principle applied that
there will be no compulsory relocation of staff as the shared service goes live. However, this is not
to say that staff will not be able to relocate as opportunities arise through training and development
or the identification of specialist skills or expertise requirements as the service is disentangled.
There is also likely to be a natural movement of staff in response to the operational needs of the
business which may result in the shared service requiring a presence where none currently exists. As
the service is disentangled and the new structures emerge during the first year of operating as a
shared service then the needs of the business in relation to its customers will take precedence and
the physical distribution of the service and its staff will be reviewed.
No compulsory redundancies are envisaged associated with the move to the shared service. The ICT
service currently being delivered is largely the same as the service which will continue to be
delivered, maintained, developed and improved by the new Company and as such will require
essentially the same body of staff to deliver it as the shared service goes live. However, as the
service faces disentanglement and restructuring following the move to the shared service some staff
may prefer to apply for voluntary severance. The Company will consider providing this option where
it makes business sense to do so.
Though not the subject of the current SFC Transitional Funding Bid it is possible that an application
to cover the additional costs of providing such a scheme could be made, such as has been the case
elsewhere in the sector.
TUPE
Staff will transfer to UHI Shared Services Limited on their current salaries, terms and conditions. It is
likely that some time after the Company begins trading that a restructuring of staffing will be
required, not necessarily as a one-off.
93
UHI Shared Services Limited has no issues around accepting all its liabilities and obligations under
the TUPE regulations.
Training and Staff Development
We propose that the staffing of the new, shared ICT service be made up as far as possible from the
staff transferring to it, from the University and its Academic Partners. It is inevitable that there will
be a skills gap. This is unlikely to be a major problem on 'day one' as the process of change will be
gradual, but the overall skillset needed by the service when it is more mature and stable will be
rather different to the aggregate skillset now.
There may also be immediate requirements to do with the skills required to run the company,
particularly in finance. This is not addressed here.
The intention is that as far as possible the necessary skills transformation will be achieved by
retraining and reskilling existing staff rather than a process of deselection and new recruitment.
Discussions with staff at a number of Academic Partners have suggested to us that there is
considerable interest in the development and training opportunities that an expanded, shared
service might be able to offer.
Provision of staff development and training for technical staff has been variable across the
partnership. Data supplied to us for 2012/13 suggest that the total spend on staff development and
training for technical staff was £41,859, with £30,905 of that being spent by the University on
approximately half the total staffing number. Six Academic Partners who employ ICT staff reported
no spend on staff development at all.
We think that at this aggregate level of spend there is little realistic prospect of achieving the degree
of change necessary. We have therefore included in our funding request to SFC an amount of
£100,000 for additional staff development in the first year.
Broadly, we expect to see a higher level of specialisation across the ICT staffing base, as repetitive
and duplicative work is engineered out. Some of the required specialisation will be technical, e.g. in:




thin client technology
LAN management
database management
systems integration and middleware.
However, much of the specialisation required will be in less technical areas, reflecting a trend
towards outsourcing specific services, often to cloud providers. Such specialisations would be likely
to include:




business analysis
contract and supplier management
contract negotiation
software portfolio management.
94
An early priority will be to assess and map the skills of transferring staff - as well as understanding
their interests in moving into new areas. A training and staff development programme will be
developed and managed holistically. We would hope to gain some input from staff development
practitioners in the partnership.
Future Employment and Terms and Conditions
No position has yet been taken as to the exact nature of employment policy, terms and conditions in
the new company. That will need to be determined in advance of trading and at least in advance of
making any new appointments.
We note the Fort Augustus 2 Agreement provision that the company will have an ethos of 'acting
and managed according to business disciplines' and will be 'flexible, adaptable and able to respond
quickly to changes in the partnership or the external environment'.
To us this suggests that the Company should certainly not be constrained to the standard
employment practices of universities and colleges, which is not to say that inferior conditions are
envisaged.
HR Activities
Consultation during the Fort Augustus 3 summit identified a number of issues relating to HR and
employment matters. It was agreed that a short life working group would be set up under the
leadership of Lindsay Ferries to address these issues. In discussion with the HR Practitioner Group
on Thursday 14th November a PID was developed for the HR workstream with the key objectives
identified in three areas as:
SELECTION OF MANAGEMENT POSTS
1. Following the template proposed for the Chief Executive job, complete job
descriptions for Director of ICT and Heads of Service
2. Formalise recruitment process
3. Support and act as HR advisor, supporting recruitment panel
TUPE TRANSFER
1. Review all current RPA’s and TU membership pertaining to those staff transferring
into UHI Shared Services
2. Establish terms and conditions of those staff transferring to UHI shared services
3. Consider RPA for UHI Shares Services
4. Prepare TUPE scripts and schedule of formal consultation for management leads at
individual employers
95
5. Liaise with Trade Union full time officials regarding representation and schedule of
individual meetings
6. Act as single point of contact for management leads regarding issues raised
associated with individual consultation
7. Prepare all standard documentation in advance of formal transfer
OUTLINE POLICES/PROCEDURES
1. Desk review of specified policies/procedures identifying point of
commonality/divergence and indicate where there is a contractual obligation
2. Aligned to principles agreed for UHI shared services and in line with ACAS code of
practice draft a Code of Conduct, Grievance, Discipline, Attendance and Maternity
Policy and Procedure
Pensions
At 3 October 2013 there were 82 staff actually in post who would be candidates for transfer to the
Company and 77 of those are current members of the Local Government Pension Scheme, with five
different administering authorities, though the largest number (53 in total) are with Highland
Council.
Of the remaining five, two are in different schemes and three are in none.
The intention of the Company is to seek admitted body status in the LGPS and to offer LGPS
pensions to transferred staff. This would ensure that the Company met its TUPE obligations – though
legally it is not bound to offer exactly the same scheme – and would also meet the reasonable
expectations of transferred staff.
The advice received to date (from Barnett Waddingham LLP) is broadly as follows:
There are two options for transferring LGPS pensions. One would be to replicate the current
arrangements for each fund, i.e. for the Company to be set up as an admitted body in each relevant
fund. Under this option, they advise that they 'expect the ongoing benefit cost to be similar' but
there are qualifications to this, including a risk that costs would increase, and this option would be
administratively complex for the Company for the foreseeable future.
The other option is to set up the Company as an admitted body in one fund and transfer all staff to
it. It might be natural for that to be the Highland Pension Fund but there might also be an option to
choose (on a variety of grounds) one of the other funds. This would involve more work in the short
term but would be simpler to administer in future.
In either case it would be important not to trigger a 'cessation debt' - that is, an expensive one-off
contribution to pay for all benefits that the staff concerned have accrued.
96
In conclusion their advice is that 'it is reasonable to assume that once the new company is set up it
would be unlikely that your long-term pension costs would change significantly. However, that does
depend on the approach taken by each fund and ... there is a risk that your costs are increased.'
There is obviously a significant effort involved in planning for and managing this transition and the
Shared Services Board believes that engaging professional support throughout this activity, and for
its full range, is the best way of mitigating risk both in terms of cost exposure and time over-run.
In further discussion with Barnett Waddingham following the receipt of initial advice, they have
indicated that they believe that the target date for transfer of staff of 1 April 2014 is achievable,
although there may be formal elements of the pensions transfer process remaining to be completed
after that date; this obviously depends on the specific circumstances that are encountered during
the work and the Shared Services Board is aware of the risk that there may have to be a delay to the
'live' date.
97
18 CURRENT FINANCIAL POSITION
We have collected data from the University and all Academic Partners who have declared that they
may be candidates to join the full shared service. The aggregate data that we present here therefore
does not include local spend by SAMS, Sabhal Mòr Ostaig or Orkney College.
The primary purpose of the data collection has been to establish a basis for the overall budget for
the new shared service.
Gathering non-staffing spend by category also enables some estimates to be made of the potential
efficiency gains to be made by taking a rationalised approach. Such estimates have, of course, to be
speculative but can reference experience elsewhere.
Overall, we think that the data collected is of reasonable quality. At some, probably most,
institutions the way that accounts are coded has meant that some of the information on historical
spend has had to be retrieved by manual trawl and is therefore subject to error. We think that this
error is fairly small overall but almost all of the error is likely to be under- rather than overdeclaration.
Summary Results
We gathered data for 2011/12, 2012/13 (actual) and 2013/14 (budget/projected) spend. In the
analysis that follows we have preferred the 2013/14 data as being somewhat more reflective of the
current position and we think it is probably at least no worse in terms of accuracy. Of course the
final out-turn will not exactly match this figure. The 2013/14 figures show a small cash increase over
2012/13. One of the reasons for collecting data covering more than one year was to detect any
major turbulence in spend patterns. No such turbulence is evident from the figures, except that
there is a relatively large item in the University budget for 2013/14 related to business systems
convergence.
In gathering the data, we referenced the definition of scope that is reproduced in Appendix A2. The
major items of spend that are therefore excluded from the overall envelope are to do with PCs,
laptops, smartphones, classroom equipment and other end-user devices. Spend on these items will
remain the responsibility of member organisations, though they will be supported by the shared
service. We have as part of the exercise gathered data on out-of-scope spend and we show that for
interest and information.
We have counted spend on printing and photocopying as a separate category. This is because
although we would hope to roll this category into the shared service, as there are significant
efficiency savings to be had (over time), the financial model in respect of this area will need to be
different, as charges will need to relate directly to volume.
98
Table 4. Total ICT planned spend (2013/14)
Non-staff, in scope
£3,564,433
Staff, in scope
£2,894,417
Total
£6,458,850
Income not including recharges to APs
£520,351
Total net of income
£5,938,499
Printing and copying
£325,742
Non-staff, out of scope
£807,560
We collected the non-staff spend by category. The following table shows non-staff spend broken
down by the categories we used, and shows separately the University’s spend and the aggregate of
spend at Academic Partners.
Table 5. ICT non-staff projected spend by category
Category
University
Academic Partners
Total
Wide Area Network
Network related
hardware
Software
Hardware
maintenance
Telephony
Travel & subsistence
Staff development &
training
Other annual fixed
Consultancy
Contract & nonpayroll staff
Other in-scope
Total
£701,422
£43,851
£55,700
£701,422
£99,551
£1,281,298
£220,093
£454,467
£17,500
£1,735,765
£237,593
£87,074
£85,848
£53,863
£199,531
£6,600
£6,750
£286,605
£92,448
£60,613
£51,575
£201,630
£4,000
£25,231
£20,000
£9,000
£76,806
£221,630
£13,000
£39,000
£2,769,654
£794,779
£39,000
£3,564,433
A little more detail on these returns is in Appendix A1.
99
NOTES ON UNIVERSITY INCOME
Table 6. Summary of University Income
WAN
£421,542
Mostly Janet, some income
from other connected bodies
Recharges to APs
£107,302
Shared library system
£30,209
Translation Memory Service
(TòMaS)
£55,000
Licences – Copyright Licensing
Agency, Microsoft Campus
Share of costs paid by UWS and
SRUC
Grants from HIE and Bòrd na
Gàidhlig
Miscellaneous (estimate)
£10,000
Total
£624,053
Costs associated with these activities, apart from the WAN, are included in staffing, software,
consultancy and travel & subsistence spend lines.
Staff spend includes employer’s on-costs but not other overheads. There are 82 individuals making
up the 80.13 FTE.
Table 7: ICT staff projected spend and numbers
University
Academic Partners
Total
ICT staff FTE
38.8
41.33
80.13
ICT staff costs
£1,597,151
£1,297,266
£2,894,417
There has been a perception that, for ICT staff if for no others, University pay rates are higher than
those at Academic Partners. The average pay rates that can be derived from the above would seem
to support that. However, having examined the detailed data, our view is that the difference is
primarily attributable to the types of staff roles that the University has. When roles of a similar
nature or similar value are compared, there tends to be a broad comparability across the
Partnership, though there is certainly a level of local variation, and some apparent outliers.
Overall our judgement would be that concerns over the potential for an expensive ‘levelling-up’
exercise are largely unfounded.
100
Variation across Partners
The data shows a considerable variation in spend across partners. For us, this data is useful because
it:

suggests (no more than that) where there may be an investment deficit, either overall or in
specific areas

indicates where the application of formula-based funding might have significant impact on
local budgets.
In the following figures, we have used the turnover figures that formed the basis of the distribution
of the procurement shared service costs. They are therefore not quite up-to-date.
Figure 18. Range of ICT projected spend as a proportion of turnover
7.00%
6.00%
5.00%
4.00%
Out of scope spend
3.00%
In-scope spend
2.00%
1.00%
0.00%
One AP did not give us any data on their not-in-scope spend for 2012/13 or 2013/14 and for these
illustrative purposes only we have therefore used their data on not-in-scope spend from 2011/12.
The range of in-scope spend is from 1.5% to 4.9% of turnover. The outliers are typically smaller
institutions who have some non-standard spend distributions and where relatively small amounts
make a significant percentage difference.
101
Figure 19. Range of printing and copying projected spend as a proportion of turnover
1.20%
1.00%
0.80%
0.60%
spend
0.40%
0.20%
0.00%
Two APs did not give us this data. The relative spend may reflect differences in contract costs but is
clearly also affected by numbers of small sites.
CATEGORIES OF ZERO SPEND
Another interesting element of the data returns is where a number of APs reported no spend at all in
certain categories.
Table 8. Categories of zero spend
Spend category
Network related hardware
Hardware maintenance
Travel and subsistence
Staff development and training
Number of APs reporting zero spend/budget
(2012/13 in brackets)
6 (6)
6 (6)
4 (4)
7 (5)
One AP did not provide sufficient breakdown to be accurately included in the above figures.
Staffing
As indicated above, total staffing spend is £2,894,417 for 2013/2014, inclusive of employer’s oncosts – superannuation, NI – but not including travel and subsistence, staff development, or any
other overheads.
102
Figure 20. Staff age profile
This information was not available for 3 staff.
Figure 21. Staff salary range
Salaries have been converted where necessary to full-time basis for the purposes of comparison.
Figure 22. Location of all staff
103
19 FINANCIAL MODEL
This section has been changed considerably from the first version of the business plan. Following
discussion at Fort Augustus 3, a working group was established to revisit the financial model in an
attempt to produce a model more acceptable to APs, in particular those who stood to become net
losers in the original model. The proposals from that working group are set out in the latter parts of
this section, beginning with “Division of recurrent costs amongst members – methodology.” The text
up to that point has not changed significantly.
In the previous section we arrived at a total financial envelope for the in-scope services as currently
delivered of £5,938,499 taking into account external income of £520,351. The Shared Services Board
proposes to set a budget for the shared service which is based on this figure plus a small inflationary
increase.
This, we think, is in line with the Fort Augustus 2 Agreement clause "Initially operate within the current
overall staffing and revenue cost envelope of the partnership, excluding any agreed transitional costs."
We assume that the income figure will remain broadly comparable and that, if it does not,
expenditure will be adjusted to match. Most of the income is relatively dependable – around
£400,000 is from Janet, an arrangement which we expect to continue3, and most of the rest is quite
stable (network connections to other organisations, the library management system service to UWS
and SRUC).
We noted in the previous section that the University budget for 2013/14 included a significant
amount - £320k – for business systems convergence. This is the only major item of expenditure in
this year. This level of investment is such that we would – as indicated in Chapter 22 – normally
consider it to be the subject of an investment plan to be submitted to the FE Regional Board and
HEPPRC. However if we do not include it at all in the base costs we will have an unrealistically low
figure, as there are historically funds for specific initiatives which may not be at this level individually
but might approach it collectively. We propose to adjust the envelope down by £75k to take account
of this and to broadly reflect the funds that have typically been allocated to smaller-scale initiatives.
There are some additional costs which arise as a result of establishing a new, separate legal entity.
We have estimated the additional overheads at £100,000 p.a. in our draft bid to SFC. We have also
asked for additional sums to cover extra staff training and development, more staff travel in the first
year and technology developments. The total bid is outlined in section Chapter 21. Here we are
assuming that the extra costs are covered by that external support and they are not therefore
modelled into the first-year costs. In the second and subsequent years we aim to have taken enough
efficiency gains to offset these extra costs.
3
“Janet contracts with UHI to provide connectivity to the nine tertiary education sites in UHI for which Janet is funded to
provide service, and it is envisaged that this arrangement will continue for the foreseeable future.” – Stephen Percival,
Janet, in a paper presented to the SWAN Programme Board, 18 July 2013
104
Our working inflationary assumptions are 1% for staff costs and 2% for non-staff. Applying this and
the £75k reduction to the base figures gives a total budget of £5,962,232 in the first year, which
would run from 1 April 2014 to 31 March 2015.
We agreed at Fort Augustus 3 that these figures would be revisited in the light of the 2012/13
financial year out-turn. This information is currently being gathered but is not complete at the time
of issuing of this document.
The proposal is that predictable annual running costs be recovered from members on a formulaic
basis (discussed further below) and that major strategic investment, according to an agreed ICT
investment strategy, should be sought from the University Court via the FE Regional Board and
HEPPRC.
General Approach to Charging
Broadly speaking, we could identify two possible approaches to charging – transaction-based and
subscription-based. We believe that the former is not generally desirable, other than in specific
circumstances, for the following reasons:



it can have the effect of driving behaviour that is not desirable for the organisation as a
whole, e.g. by reducing the level of use of a fixed asset
there is a significant overhead associated with administering a charging regime of this kind,
and for some services, it is difficult to identify a suitable transaction metric
it is difficult to reconcile this model with the requirement on a Cost Sharing Group to
operate on an ‘exact reimbursement’ basis – this could be achieved by allocating the total
costs to members on the basis of volume of use, but this could only be done in arrears and
would not allow members to predict their bills accurately.
We have assumed that members would prefer predictability in the charging regime and therefore
we do not propose considering transaction-based charging further, except in specific circumstances
where actual costs are directly related to consumption, e.g. printing charges. (Printing and copying
costs are not included in the total of £5,962,232.)
A subscription-based model is not without its disadvantages. Operating within a fixed cost envelope
has benefits in terms of budgetary stability for the partnership, but imposes constraints on USSL’s
ability to respond to changes in demand. One response to this is to emphasise robust capacity
planning (e.g. in predicting the impact on costs of increasing take-up of networked technologies for
FE) and another is the recognition that in some circumstances rationing might have to apply.
Another potential perceived disadvantage is that this kind of funding model explicitly decouples
charging from usage, and involves the near-certainty of there being ‘winners’ and ‘losers’. There is
no straightforward fix for this, other than to tie the subscription rate to some reasonably credible
proxy for the ability to consume service, that is seen to be fair by member organisations. The issue of
mitigation of changes to members’ cost bases is further discussed below.
105
Subscription Metrics
We have considered the question of on what metric(s) should subscriptions be based. The obvious
contenders are:
(a) student numbers. Many services and software products are licensed in this way. Taken at a
partnership-wide level, this metric is probably more important than any other in determining the
overall cost of service. However, it would not work well for the University or for SAMS, both of which
have small student populations relative to the size of their operation. It would be possible to attach
varying weights to different kinds of students, though the evidential basis for doing so on any
particular ratio would be weak.
(b) staff numbers. The Microsoft campus agreement is operated on this basis. It might be a better
overall proxy for ‘scale of operation’ than student numbers, as it would also reflect research and
commercial activity as well as central University functions. One very specific objection to this model
is that it is sensitive to outsourcing activities in a way that arguably it should not be, i.e. a member
organisation gains an extra financial benefit from reducing its staff numbers by outsourcing.
(c) turnover. The Janet network charges are based on this (in fact on total incomes as reported to
HESA). The costs of the procurement shared service are apportioned on this basis. It is a good proxy
for ‘scale of operation’ provided that it is defined correctly (e.g. the University’s figure should not
include sums disbursed to APs). As, however, it is typically people who consume services, it is further
removed from ‘reality’ than either staff or student numbers.
Operating the ‘Exact Reimbursement’ Criterion
It is worth thinking about how we approach satisfying the ‘exact reimbursement’ criterion (from the
Finance Act 2012) which is required in order to operate as a Cost Sharing Group which does not have
to apply VAT on services to its members.
The guidelines require that no profit element is added to charges to members, but the same
guidelines also state that the model of distribution of charges to members is a matter for agreement
by members, not imposition by HMRC. It will be important to maintain an awareness of any case law
or new guidance in this area, as not only will it not be possible to demonstrate ‘exact
reimbursement’ at the level of an individual AP member, it will definitely not apply at this level.
The most obvious example of this is the cost of the wide area network (WAN). First, this varies
substantially according to geography, with some circuits of similar capacity far more expensive than
others. Some APs have many more sites than others, and additionally, some connections (to the
University and the designated FE colleges, one per institution) are funded via Janet and some are
not. The varying costs of provision to different APs are currently invisible within the top-slice, and
within a subscription model, will amount to cross-subsidy which, while not immediately visible, is
completely quantifiable.
106
It could be argued that such a charging methodology distorts the calculation of viability for
operations at a particular location – e.g. it is possible to imagine some learning centres closing in
fairly short order if their connectivity costs were attributed directly to their P&L accounts. However,
the Shared Services Board takes the view that such ‘internal’ cross-subsidy currently exists to
support the UHI mission and it is not the role of the Shared Services Board to engineer it out. (Of
course, this argument only applies within the UHI partnership. Should we bring on an ‘external’
member, we should of course not be subsidising them in any way.)
Division of Recurrent Costs Amongst Members - Methodology
In the first version of this Business Plan we outlined a proposal whereby ‘core’ costs were divided
amongst members according to weighted student and staff numbers, and ‘option’ costs according to
turnover. We further assumed that the current top-slice for EO LIS services would be discontinued
and the funds distributed to APs, and we took the effect of this distribution to be a general uplift in
the unit of resource.
The consequences of this in terms of the impact on individual AP finances are broadly as follows:


distribution of top-slice with the RAM risks not putting individual APs in enough funds to pay
their ‘core’ subscription. In particular, APs with small proportions of HE do not do well from
this model, and generally, smaller APs are disadvantaged relative to larger ones.
allocating ‘option’ costs by formula has the effect of bringing all members’ contributions
towards an average unit cost. This benefits those with a relatively high level of current spend
and ‘penalises’ those with lower current costs.
Overall, the model tended to disadvantage smaller APs. Smaller APs include those with the lowest
proportion of HE, and probably because of economies of scale issues, smaller APs tend to benefit
from top-slicing relative to larger ones.
Also, lower unit costs at some smaller APs are not necessarily reflective of poor provision or
inadequate investment – they often reflect a no-frills approach to ICT provision and an absence of
some of the infrastructure and management costs that come with operations on a larger scale.
At Fort Augustus 3, we agreed to set up a working group to examine the financial model and to
produce recommendations on an alternative which would be more generally acceptable. That group,
chaired by Alan Ashworth, has met twice and at its second meeting commended a model with the


for ‘core’ costs, preserving the effect of the current top-slice (whether or not the funds were
actually distributed to APs) – i.e. there would be no financial impact on APs from introducing
the shared service for ‘core’
for ‘option’ costs, modelling the cost allocation in the way that ‘core’ had been in the initial
proposal, i.e. using weighted FE WSUMS, HE FTEs, and staff numbers
107
An illustration of the application of this revised model follows. In this table, we have only modelled
the ‘option’ costs as we are proposing that there be no financial impact on APs in respect of ‘core’
costs. The ‘variance’ column shows the financial impact on each AP, at this stage without any
transitional scheme.
It would be fair to consider this work in progress, as although the working group expressed a clear
view as to the principles to be followed in the new model, it has not had an opportunity to review
the detailed outcomes.
Table 9. ICT Shared Service Budget 14-15
Total service running costs
Core Service
Option Service
£5,962,232
£3,812,442
£2,149,790
wSUMs Data Year
HE Data Year
Staff Data Year
2011/12
2012/13
2012/13
wSUMs Weighting
UG Weighting
PGT Weighting
Staff Weighting
Budget inscope spend Variance
Option cost distribution model
Argylll College
University
HTC
Inverness College
Lews Castle College
Moray College
NAFC
Orkney College
Perth College
SAMS
Shetland College
SMO
Totals
wSUMs
9,788
0
0
44,183
8,430
26,318
0
17,584
5,128
33,021
0
6,663
896
5,669
157,681
UG FTE
54
0
62
1,154
289
808
26
377
172
1,476
72
151
104
90
4,834
PGT FTE
0
23
2
8
24
0
0
3
24
11
0
1
2
0
98
Staff
71
181
18
260
112
225
50
198
87
323
148
67
90
74
1,904
1
50
50
100
Weighting Option Cost
19,606
£78,413
19,227
£76,898
4,988
£19,950
128,320
£513,225
35,272
£141,071
89,201
£356,764
6,315
£25,257
56,352
£225,383
0
£0
139,684
£558,675
0
£0
20,957
£83,820
0
£0
17,586
£70,334
537,507 £2,149,790
£126,454
£49,534
£27,479
£443,186
£154,605
£298,434
£88,002
£214,963
£0
£627,149
£0
£80,602
£0
£39,381
£2,149,790
-£48,041
£27,364
-£7,529
£70,039
-£13,534
£58,330
-£62,745
£10,420
£0
-£68,474
£0
£3,218
£0
£30,953
£0
The range of the individual financial impacts on APs is considerably lower in this model, though it
also has the effect of turning ‘winners’ into ‘losers’ and vice versa. It probably serves to illustrate
that there is no one ‘right’ answer. We hope that this model or a close variant of it is reasonably
acceptable to APs and the University though of course it could be refined or developed further as
necessary.
The figures are still based on 2013/14 budget as per the previous version of this Business Plan; they
may look different when we have 2012/13 out-turn figures available. Individual variances will still be
quite sensitive to the quality of the declaration of in-scope costs – in particular, any significant
under-declaration would have the effect of increasing any apparent ‘deficit’.
Note also that any decisions by individual Academic Partners to take the ‘option’ package or not will
affect the overall envelope and therefore the level of cost for each other member. In the case of
smaller APs the effect would in all probability not be large.
We think that a transitional scheme is still likely to be required even though the impact of this new
model is considerably less. At this stage we propose a scheme similar to that contained in the
108
previous version of the Business Plan, i.e. a smoothed transition from ‘historical’ in the first year to
the full application of the model in year 4.
The following table makes the unrealistic assumption that the overall cost will be absolutely flat in
cash terms and that the scope of the service does not change over the four years. It is illustrative of
the effects of a transitional scheme rather than a prediction of the precise bill to individual APs over
a number of years.
Table 10. Transitional funding support
Transitional Funding Support (without inflation)
100%
67%
33%
0%
Member
Argyll
EO
HTC
Inverness
LCC
Moray
NAFC
NHC
Orkney
Perth
SAMS
Shetland
SMO
WHC
Total
Option Cost Option Cost Option Cost Option Cost
Year 1
Year 2
Year 3
Year 4
£126,454
£49,534
£27,479
£443,186
£154,605
£298,434
£88,002
£214,963
£0
£627,149
£0
£80,602
£0
£39,381
£2,149,790
£110,442
£58,655
£24,970
£466,530
£150,094
£317,876
£67,089
£218,436
£0
£604,327
£0
£81,675
£0
£49,698
£2,149,790
£94,425
£67,777
£22,459
£489,881
£145,582
£337,322
£46,170
£221,910
£0
£581,498
£0
£82,747
£0
£60,018
£2,149,790
£78,413
£76,898
£19,950
£513,225
£141,071
£356,764
£25,257
£225,383
£0
£558,675
£0
£83,820
£0
£70,334
£2,149,790
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20 OPERATING AS A COST SHARING GROUP - THE VAT EXEMPTION
Here we set out the rationale and practicalities around operating as a Cost Sharing Group. It is
somewhat simplified for a general audience but for those interested, references to the HMRC
guidance on the exemption and HEFCE's further explanatory notes, published recently, are at the
foot of this section.
Transactions between organisations such as the University and its Academic Partners normally
attract VAT if they are for the supply of services which are not themselves exempt. The provision of
education is exempt, so the supply of teaching services is not VATable, but for example, if a member
of staff of one UHI Academic Partner provides a non-teaching (for example, ICT) service to another,
and a charge is made, that charge will be liable for VAT.
Therefore organisations such as universities and FE colleges who wish to share services by having
one party deliver them and charge the other(s) have been historically discouraged from doing so by
the prospect of having to add VAT, thereby increasing the cost of the service, as universities and
colleges are typically able to reclaim only a few percentage points of the VAT they pay.
The provisions in the Finance Act 2012 which relate to Cost Sharing Groups provide a means of
avoiding this problem. However, the requirements which must be satisfied are not trivial.
The Conditions and HMRC's Guidance 4
1. There must be an 'independent group of persons' supplying services to persons who are its
members. This means essentially that a group of member organisations ('persons') come together to
create an organisation (the CSG) which will provide services to them. That organisation must be
legally separate from its members. It does not have to be a limited company though that is a likely
form for it to take. The requirement is that it be of a form which is capable of being registered for
VAT, though it need not actually be so registered. We have set up UHI Shared Services Limited as a
Company Limited by Guarantee owned by its members to satisfy this criterion.
2. All of the members must carry on VAT exempt and/or non-business activity. There is no
requirement that all or even most of the member's activity falls into this category - it need only be
5%. It would be a very odd educational (or research) institution which did not meet this criterion.
Note however that this criterion is not the same as the one which determines whether the supply of
services by the CSG is VAT-exempt.
3. The services supplied by the CSG must be 'directly necessary' for a member's exempt and/or
non-business activity. This criterion is critical in determining whether a supply can be made free of
VAT. In most circumstances and for most educational institutions, a simplified test devised by HMRC
applies. That is, if the member's proportion of VAT exempt and/or non-business activity is over 85%,
4
The HMRC guidance is at http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE…
HEFCE's guidance on the guidance is at http://www.hefce.ac.uk/news/newsarchive/2013/name,83013,en.html
110
then all services supplied by the CSG are automatically deemed 'directly necessary'. If the '85%' test
is not satisfied, then the 'directly necessary' test must be considered on a case-by-case basis.
The 85% test can also be applied to only part of a business, if a 'sectorised' partial exemption and/or
business/non-business method applies. This would only be likely to work if the member was
consuming the services only in that part of the business undertaking the exempt activity, which may
be unlikely.
There is no useful working definition of 'directly necessary'. It is clear that it does not cover the kind
of generic services that could support any business operation. The example given by HMRC and the
Treasury during their consultation events was cleaning services - ordinary office cleaning would not
pass the test, but the specialist cleaning services required in hospital wards might do so. In our case,
generic IT services like finance systems, telephony or network connectivity would not pass, but
services specifically supporting the provision of education might, e.g. VLE or student records
systems. If it comes to it, we might need to take specialist advice on that.
Note that the exemption only applies to the supply of services, not goods.
4. The CSG must only recover the member's individual share of the expenses incurred by the CSG
in making the exempt supplies to its members. This is the so-called 'exact reimbursement' criterion.
The CSG is not prohibited from making a surplus (though there may then be tax implications) if that
is intended to be returned into the service. HMRC do not set out any requirements as to how the
costs must be apportioned, leaving that matter to the CSG members, but will expect a suitable audit
trail to enable them to be satisfied that this criterion is met.
Part of Chapter 19 'Funding model' references this criterion and notes that 'exact reimbursement'
will need to be considered across the membership rather than on a member-by-member level, as a
formulaic distribution of costs is by definition not necessarily linked to the real costs of supply. We
should keep under regular review any case law which develops in the interpretation of this
condition. Meanwhile, we hope that it might give some comfort to those members who do not take
the 'full' service, as by definition, we should not be deliberately taking a profit from them.
5. The application of the exemption to the supplies made by the CSG to its members must not be
likely to cause a distortion of competition. This is generally taken as a prohibition on the marketing,
advertisement or promotion of services (unless the VAT exemption is not applied in those cases).
HMRC's view is that the CSG may gain members by recommendation, invitation and word of mouth.
It should not act like a commercial operator.
Further Implications
The cost sharing exemption only really works if the CSG is the employer of the staff. This is because
the exemption does not apply to supplies to the CSG. The CSG pays VAT on services that it buys in.
For example, if the CSG pays a supplier for a hosted service and passes on that charge to its
members, it pays VAT on that charge, but does not add VAT again when it passes the charge on.
If the CSG were an ordinary VAT registered trading organisation, in the same example, it would buy
in services from the supplier, but if it added no mark-up to those costs, would reclaim the same
amount of input VAT as it charged output VAT, and the effect would be the same.
111
The difference arises in the treatment of staffing costs. If the CSG buys in its staffing effort, even if
this is from its own members, it is liable to pay VAT. However if it is itself the employer, no VAT ever
gets paid and the supply of services based on those staff remains exempt. For this reason it is
necessary for the CSG to be the employer of the staff providing the service.
The fact that supplies to the CSG are not exempt provides the rationale for minimising transactions
where the CSG pays its members for services. These will normally attract VAT and therefore simply
result in a net loss to the partnership. It is not for the CSG's benefit that we propose this - as the CSG
just needs to be put in funds to cover its costs - but the partnership's as a whole. This is why we are
suggesting that members agree to host staff at no cost, and why if we must be charged for other
services, that this be done at as low a level as possible.
We expect that the Company will need to be VAT-registered as it is likely to provide some VATable
services to some of its members as well as to non-members and this will probably take it over the
VAT threshold.
Member Eligibility
The Articles of UHI Shared Services Limited provide that:
A member must be UHI or an Academic Partner or another United Kingdom Contracting
Authority which is approved by resolution of the directors and which in each case carries on
a “relevant activity” for the purpose of sub paragraph 1 (a) of Part 2 (Group 16) of Schedule
9 to VATA 1994 as inserted by Section 197 (2) of the Finance Act 2012 and receives or
intends to receive from the Company the supply of services which are directly necessary for
the relevant activity.
The University and its Academic Partners are therefore able to become members of the Company
subject to their satisfying the provisions of carrying on a "relevant activity" (which they all do) and
"receives or intends to receive from the Company the supply of services which are directly necessary
for the relevant activity." The latter is not a given, and is probably the only circumstance in which the
eligibility of an Academic Partner may come into question.
These provisions are derived from the Finance Act 2012 and are necessary in order for UHI Shared
Services Limited to act as a Cost Sharing Group. In addition, to be a member of a Cost Sharing Group
at all, members must undertake at least 5% of exempt/non-business activity, and we assume that all
UHI Academic Partners do.
Members, if not already in receipt of VAT exempt services (i.e. those satisfying the ‘directly
necessary’ criteria referred to earlier) must be able to evidence a "realistic and genuine intention" to
do so. This must be within the next 12 months.
If only some of the services to a particular member count as 'directly necessary' then only these
services would qualify as VAT exempt and other services would be subject to VAT.
In some scenarios it may be necessary to add VAT to some or all charges made to members. This
would be unlikely to apply to members fitting a 'normal' FE or HE profile.
112
It is unlikely that subsidiaries of Academic Partners would qualify to become members of a Cost
Sharing Group, or if they did, to receive services free of VAT.
113
21 INVESTMENT STRATEGY
UHI Shared Services Limited would propose to fund major investments in infrastructure via a
separate route from day-to-day services, which are funded by member subscription. Chapter 9, IT
Strategy, indicates major candidate areas for investment in the coming years.
These major investments are defined as those with a one-off cost over a threshold to be defined £200,000 is a possible figure - which may or may not meet a formal definition of 'capital'. That cost
will be based on spends with external suppliers, will not include allocation of internal resource such
as the time of existing staff, and will be based on the cost over three years including annual
maintenance.
It is permissible under the regulations for Cost Sharing Groups for a surplus to be built up if that
surplus is intended for future investment in the service. For various reasons, this is not our preferred
option. Increased member subscriptions would be required, and there are potential tax implications.
We suspect that introducing another entity into the UHI family able and seeking to hold surpluses
would not necessarily be in line with the wishes of all members.
Perhaps more importantly, we see the investment strategy as tightly aligned with the UHI/regional
strategy. For this reason we think that the investment strategy should be approved at
HEPPRC/FRB/UC level and that funding should be allocated at this level. This enables UHI
governance to be comfortable that UHI Shared Services strategy, at least in terms of major service
development, is aligned with partnership strategy.
The potential for a single, shared ICT strategy is one of the key benefits of developing the single
service.
We suggest that a strategic investment plan for ICT should be developed by UHI Shared Services
working with member institutions and with UHI academic structures. This would be a 3-year rolling
plan, revised and updated annually. The plan would be approved in principle annually by
HEPPRC/FRB/UC and funds formally allocated on a year-by-year basis.
In this context we could usefully look at the historical expenditure on major infrastructure items
over the past five years.
The majority of expenditure has been part-financed through European funding in the SDB
programme. This continues a pattern where major infrastructure investment has been highly
dependent on external funds. (However SDB matched funding for technology projects was from SFC
capital grant, not, for example, from Highlands & Islands Enterprise, so we have contributed some of
our own money).
Funding of a total of £7,038,169 was committed (and spent) through the SDB programme on ICT
projects. Over the same period, we estimate that approximately another £600,000 was spent by the
University on projects of a significant size not funded through SDB. This gives an annual average level
of major infrastructure investment of a little over £1.5m.
114
Projecting detailed costs into the future would need to await agreement on a development
programme, but we believe that the historical level of spend is a reasonable guide to what we would
need to provide for in the future, i.e. it would be prudent to think in terms of around £1.5m a year.
General expectations are that the availability of external and capital funds will continue to decline. It
therefore becomes even more important that we plan for effective and targeted use of such funds
as we can make available ourselves, and have strong business cases for such investment.
We would like to make it clear that the necessity for a planned investment programme for ICT is
independent of the development of a shared service. We would need it anyway. The shared service
puts us in a better position to have a collective strategy, and, we hope, to have a mature debate
around it, but it does not in itself make it easier to fund.
115
22 FINANCIAL STATEMENTS
Cash Flow
The Company will need working capital from the moment it begins trading. Also, a significant
proportion of expenditure, relating to annually-renewed contracts and licences, is front-loaded in
the financial year. We are preparing a detailed profile on the basis of the data that we already have.
There is potential for SFC to assist us in dealing with this by front-loading some of their funding, and
we propose to encourage them to do so.
A risk has been identified that a member in financial difficulty might fail to make its payments to the
Company in time, potentially causing the Company to be unable to meet its own commitments. A
possible approach to mitigation of this risk is to make provision for the University to make the
necessary payments, withholding the corresponding amount from its payment to the member.
There is also the possibility of unforeseen liabilities that are not covered by indemnities from
members and cannot be covered by corresponding savings. In this case and potentially in the case of
default above, there needs to be provision in an emergency for additional funds to be raised from
the membership as a whole.
Currently, SFC funding flows into the University on a 10 month schedule and is then passed to
Academic Partners through the RAM on the same schedule:
·
·
·
·
·
·
·
·
·
·
·
·
August
September
October
November
December
January
February
March
April
May
June
July
11%
11%
11%
11%
10%
8%
0%
0%
10%
10%
10%
8%
As we move into the shared service however, the major regular spend will be the monthly salary bill
and therefore a decision will need to be made as to whether it is practicable to follow this schedule
for the payment of member subscriptions.
There are also implications for the Company start-up dating from 1 April 2014. High among these is
the fact that financial processes within the University have led the LIS Management Team to
configure their budget to align with UHI’s financial year, i.e. 1 August – 31 July. In particular, over
the last few years negotiations have taken place with the majority of software licence, e-Resources
and maintenance contract suppliers to bring annual contracts into line with these dates too.
A major effect of this is that a high proportion of annual scheduled contract spend will have been
paid out on 1 August 2013 for which the Shared Services Company will take responsibility on 1 April
116
2014. As a result the University will present a bill to the Company for the 4 remaining months these
contracts have to run before renewal.
In addition, rather than this major item of spend (almost 50% of the annual non-staff budget) being
spread throughout the year, the majority of invoices associated with it will fall due in August
2014. Apart from member subscriptions the main element of income to the shared service is from
Janet, which to date is invoiced on a twice yearly basis and which, in itself, would not cover the
annual contracts bill.
It will not be possible to develop an accurate cash flow forecast until the next stage of due diligence
is performed when the details of all Partner annual contracts and their periods and due dates are
collected. However, it is already apparent that there will be shortfalls, especially in the first six
months of the shared service going live and an agreement has been sought from UHI that they will
support the Company with cash flow issues, if necessary, in the short term.
Balance Sheet
The Balance Sheet for the Company is one of the suite of financial statements to be produced. It is a
snapshot of the financial situation of the Company over a set period. It details the financial structure
of the business in terms of fixed assets, debtors, stock, creditors and profit/loss.
UHI Shared Service Limited will start trading on 1 April 2014. There is to be no asset transfer and
there will be no debtors or creditors at that point. As it is a service company there will be no stock
or work in progress to record. There will be no opening balance and essentially only a forecast profit
or loss depending on the cash flow forecast for the same period.
As has been stated, until the next phase of due diligence takes place it is impossible to forecast cash
flow accurately and therefore these financial statements will be produced at a later stage.
117
23 POTENTIAL FUNDING SOURCES
As discussed elsewhere in this business plan, the main sources of funding for the activities of UHI
Shared Services are expected to be:

subscription funding from members supporting annual running costs

'top-sliced' capital funding from the regional board structures for FE and HE supporting an
infrastructure investment programme.
SFC
We are in dialogue with SFC with the aim of securing funding to support the transition to shared
services. Currently (at the date of publication of this business plan) the 'ask' under discussion is
shown in Table 11. We understand that the funding will be forthcoming, subject to formal
confirmation, but in order to achieve this we will need to address the future prospects of efficiencies
beyond ICT services.
Table 11. SFC Funding Bid
Setting up the shared services company
£169,000
Transitional costs of establishing a common ICT
environment, of which:
£1,741,000
business systems
£375,000
thin client
£1,116,000
LAN infrastructure renewal
£250,000
Transitional costs of operating the new
company, of which:
£250,000
administrative costs
£100,000
staff training and development
£100,000
extra year 1 travel and subsistence
£50,000
Janet
UHI currently operates a 'regional network' on behalf of Janet which provides connectivity to the 10
fundable bodies eligible for a Janet connection (including the University). The funding Janet provides
is broadly equivalent to the direct cost of providing a single connection to each of those institutions
and the partnership funds the remaining costs, currently from top-slice. The amount is around
£400,000 per year and would not be expected to change significantly prior to the expiry of the
current WAN contract in 2016. Janet have indicated that although they are bringing othe regional
networks 'in house' they have no plans to do so with the UHI network in the foreseeable future.
118
If Janet funding is brought directly into UHI Shared Services Limited we will need to ensure that the
relationship does not compromise the VAT position of the Cost Sharing Group. We do not however
currently see a problem with this.
European Funding
If European funding is available for further infrastructure development we would expect it to be
sourced via the University. There would be other potential sources of funding only available via the
University or potentially an Academic Partner.
External Commercial Services
Our approach to commercial trading and the accession of new members of the Company is set out in
Chapter 7. Generally, the Company is open to generating external income and bringing in new
members if the circumstances are right, but not at the expense of loss of focus on core services to
UHI partnership members.
There are some existing services provided to other institutions and organisations: network
connectivity (Stirling, Heriot-Watt, Aberdeen and EMEC) and shared library management system
(UWS, SRUC) and these are proposed to continue. They are of relatively low value compared with
overall turnover and generate little if any real surplus.
Network connectivity provided to non-Janet-eligible organisations e.g. HEBNET, is subject to minima
in pricing to avoid state aid issues, and these arrangements are typically therefore unavoidably
moderately profitable.
ICT-Related Income Currently Generated by Academic Partners
The data collection exercise has suggested that the total amount of such income is almost negligible,
and may in any case not be in scope for the shared service.
119
24 REGIONAL DEVELOPMENTS
The planning context for shared services in the UHI partnership has never been stable, and it may
not be so now. The original business driver for shared services was seen as the need to reduce costs
in a scenario where a funding 'cliff edge' was envisaged in the relatively near future. That did not
materialise, and we are now more focussed on delivering efficiency and effectiveness, supporting
the changes that will be needed to educational delivery in a regional context.
The risk in broad terms has always been that our planning for shared service delivery is overtaken by
changes in the external environment, and this section of the business plan attempts to address that
risk. In particular we address the issues and potential issues arising out of regionalisation, and also
the issues for the incorporated colleges arising out the ONS reclassification of FECs into the Central
Government sector.
In general, the impact of the Post-16 Education (Scotland) Act on our shared services agenda is
either neutral or positive. In the Highlands and Islands, it has not had the effect of changing the
number of separate legal entities, and the ability for a separate company to act as a Cost Sharing
Group is unchanged. The question does arise as to whether a Cost Sharing Group is strictly necessary
for the purposes of avoiding liability for VAT, if the funding for shared services could be top-sliced
from both HE and FE funding streams, which will in future both flow through the Court of the
University. (Though we should note that these funding streams do not support the entirety of
activities of Academic Partners).
Our view as the Shared Services Board has been that if we are setting up a shared services function
to provide services to multiple organisations, the safest route to doing so in a VAT compliant fashion
is to use the very specific type of vehicle provided for in recent legislation (the Finance Act 2012) to
achieve that purpose. Indeed when the exemption became available, we preferred that to the
previous option of asking SFC to divert funding for shared services 'at source'.
However, the Shared Services Board does not see the establishment of a Cost Sharing Group as
simply a necessary evil, or extra overhead, necessary to legitimise the delivery of shared services
without an additional VAT burden. Our view is that the creation of a separate entity, focussed on the
delivery of services, is the best way to ensure that services are able to operate in the way outlined in
the Fort Augustus 2 Agreement, i.e.,


activity


environment

120

Not an outsourcing model, though, as now, specific elements of the service may be




Full transparency to its members as to its financial, contractual and other arrangements
We also believe that the establishment of the new company is the best way to ensure that we make
progress now, meeting the Outcome Agreement targets, and that it also provides for stability of the
ICT service through any potential changes in the structure and governance of the partnership. We do
not see any scenario, short of a full merger of all organisations in the UHI partnership, in which a
Cost Sharing Group would not be an appropriate and suitable delivery vehicle. In a scenario (and we
make no representations as to the likelihood of this) where a critical mass of the partnership came
together either as a single organisation or as a VAT group, it might be appropriate to look at
changing the status of the Cost Sharing Group to that of a subsidiary, but that change should be
entirely manageable.
Risk mitigation actions:



Take professional advice, review if necessary the Articles of UHI Shared Services Limited in
the context of the potential for a controlling mass of its members becoming subject to the
ONS reclassification, to avoid undesirable implications for then operation of the Company
Ensure that the governance arrangements and financial model for UHI Shared Services
Limited are not compromised by structural change in the partnership
Keep the legal form and governance of the company under review in the case of any such
structural changes.
121
APPENDIX A1: DETAILED FINANCIAL DATA RETURNS
The following table shows a more detailed breakdown of the financial returns by respondent. As providing the
raw totals in each area for the smallest colleges risks making it possible to derive individual salary data, we
have shown composite figures for the smallest Academic Partners (Argyll, HTC, NAFC, Shetland, WHC) across
each element.
These figures relate to 2013/14 budget data. This was the most complete data set at the time of the Business
Plan going to print on 19 November 2013.
University
Inverness
College
Moray
College
-
Lews
Castle
College
-
Perth
College
-
North
Highland
College
-
Total
-
Smaller
colleges
combined
-
Wide Area
Network
Network
related
hardware
Software
Hardware
maintenance
Telephony
Travel &
subsistence
Staff
development
& training
Other annual
fixed
Consultancy
Contract &
non-payroll
staff
Other inscope
Staff
701,422
43,851
18,700
-
-
-
30,000
7,000
99,551
1,281,298
220,093
144,000
8,000
18,000
-
55,000
3,000
34,136
-
165,000
6,500
38,331
-
1,735,765
237,593
87,074
85,848
50,400
400
19,000
1,800
21,000
-
30,251
3,600
35,000
500
43,880
300
286,605
92,448
53,863
-
-
5,000
-
1,750
-
60,613
51,575
918
-
-
-
-
24,313
76,806
201,630
4,000
-
-
9,000
-
20,000
-
-
221,630
13,000
39,000
-
-
-
-
-
-
39,000
1,597,151
219,201
114,715
203,535
145,619
365,423
248,773
2,894,417
Total
4,366,805
441,619
153,515
296,535
213,606
624,173
362,597
6,458,850
701,422
122
APPENDIX A2: UHI ICT SHARED SERVICE SPECIFICATION
Phase 1 – IT Services
Note that inclusion in scope does not mean that a service will be fully provided or even provided at all from
day 1, just that it is in scope to be provided.
The ‘core’ service elements are provided to all UHI member APs including the University. The ‘full’ service
elements are provided only to those members who are full participants in the shared service, i.e. have
transferred their in-house IT operations.
Contents
INFRASTRUCTURE, NETWORK AND TELEPHONY
LEARNING TECHNOLOGIES
LIBRARY TECHNOLOGIES
STUDENT RECORDS
SERVICE APPLICATIONS PROVISION
HOSTED APPLICATIONS SUPPORT
VIDEOCONFERENCING
EMAIL AND COMMUNICATIONS
SERVICE DESK
REGIONAL SERVICE DELIVERY
PRINTING AND COPYING
TRAINING
STRATEGY, INFORMATION SECURITY AND COMPLIANCE
SERVICES PRIMARILY FOR EXTERNAL CUSTOMERS
INFRASTRUCTURE, NETWORK AND TELEPHONY
The data processing, storage and communications infrastructure. Networks – wide area, local and wireless.
Internet and web services. User accounts and security.
123
Service area
Included
Not included
Backup and data
recovery
Backup of core services and
centrally-held data
Personal devices
Implementation of retention
policies
Setting backup retention
policy and timescales
Backup of locally stored
and managed data
Comms room physical
environment
Management of physical
comms room environments
incl. air conditioning, physical
access control
Energy costs
Content filtering (web)
Delivery of content filtering
services to designated users
Policy decisions as to who
gets content filtering
applied to them
Disposal
Provision of compliant
disposal service
Not for personally-owned
devices
Domains/URLs
Implementation and
maintenance of technical
aspects
Approval for use (within
*.uhi.ac.uk)
File store
Provision of file/data storage
capacity in our own or
externally-sourced provision
Does not extend to files
stored on desktops or
places where they
shouldn’t be
Maintenance of appropriate
security environment, access
controls, backup
Notes
Full service only
Full service only
Full service only
Personal storage
124
Inventory and asset
management
Provision, maintenance and
support of asset
management solution
Janet
Delivery of Janet services
within the partnership
LAN cabling
Specify, provide and
maintain appropriate cabling
infrastructure
Full service only
Under contract to
Janet(UK)
Costs related to new
build and
refurbishments should
be built into the
capital cost of the
works
Full service only
LAN patching
Full service only
Maintain patch panels and
patch cables
LAN switching
Provision and maintenance
of hardware
Management and
configuration of inter-VLAN
routing, VTP, STP, QoS,
DHCP, trunk/access ports
build and
be built into the
capital cost of the
works
Full service only
Monitoring network
performance
125
Multimedia content
hosting
Provision of specialist
hosting/storage
Maintenance of interfaces
with third-party services
MyUHI
development of thin-client
applications delivery service
Management of third
party services such as
YouTube
Content monitoring
Support for personallyowned devices accessing
MyUHI
Configuration and packaging
of applications to run on the
MyUHI service
Providing user
accounts
Account provisioning for staff
and students – ensuring
appropriate access to all
authenticated systems
User rights management
For students,
dependent on
enrolment in student
records system, and
for staff, may become
dependent on entry in
HR system (in the
future).
126
Security
Maintenance and
management of edge
firewalls
Decide who has to use
filtered context
Construction and
maintenance of SVI (VLAN)
ACLs
Configuration and
management of NPS
(RADIUS) domain
authentication for network
device access
Configuration and
management of WLAN
authentication (e.g. 802.1x)
Implementation of AD
Certificate Services
Server environment
supporting core
services
Support, management and
patching of all servers
Server platform for
non-core services
Support, management and
patching of server
environment
Installation support for
customer-owned
applications
Server platform may
be made available to
run customer-owned
applications subject to
technical compatibility
and capacity and
licencing. May be a
chargeable service.
SEE Hosted
Applications Support
Full service only.
127
Storage Area Network
(SAN)
Cabling and port
configuration for network
switches
Cabling and zone
administration for fibre
switches
Adding new LUNs
Telephony – mobile
including smartphones
Management of corporate
devices
Support for user-owned
devices
Contract management
Procurement advice and
support
Email integration
Call and contract
charges are the
responsibility of
member organisations
Device provision
decisions and
associated costs are
the responsibility of
Full service only
Telephony – UHI
internal, desktop
Provision of external lines
of inter-site connectivity
Contract management
Deployment of handsets to
user requirements
Provision of voicemail service
Call charges are the
responsibility of
Handset provision
decisions and
UHI IP telephony can
be delivered in nonUHI environments (e.g.
in the home, to
support home
working) but this
would normally be a
chargeable service
128
Web add-ons/
Advise on plugin selection
plugins
Install, customise, support
and maintain plugins
Web analytics
Installation, configuration,
customisation and
maintenance of tools
Analysis
Accessibility compliance and
testing
Content
Web design
Full service only
Full service only
Reporting
Full service only
Aesthetic Design
Provision of advice and
expertise
Web development
Database development and
maintenance
Server side configuration and
coding
Full service only*
*One Web
infrastructure is a
CORE service
129
Wide Area Network
Documentation
Operation
Management
Planning
Bandwidth management
build and
be built into the
capital cost of the
works. Costs to include
equipment,
installation and first
year’s bandwidth
charges
In-year non-budgeted
increased bandwidth
cost to be borne by
the member.
Bandwidth charges for
year 2 onwards will be
borne by UHI SS
subject to budget
approval
130
Wi-Fi
Issuing Guest Wi-Fi passes
Maintenance and
management of UHI
ubiquitous Wi-Fi
environment
build and
be built into the
capital cost of the
works
UHI Wi-Fi can be
delivered in non-UHI
environments (e.g. in
the home, to support
home working) but
this would normally be
a chargeable service
For CORE-only
members, where UHI
SS does not manage
the LAN infrastructure:

Access point
spares will be
provided but
fitting will be
a local
responsibility

the SLA will
be applicable
to the service
entry point to
the LAN
Learning Technologies
The provision and support of technology systems that support learning and teaching. Not including
academic policy or pedagogic advice.
Service area
Included
Not included
Notes
131
e-portfolio system
Currently Mahara
System configuration and
maintenance
User support and problem
resolution
Interfacing with other UHI
systems
Interfacing with third-party
systems
User and account
management
Interactive voting
system
Currently Turning
Point using remote
poll server
Account management
Ongoing development
Learning analytics
Provision of reports and
datasets
Learning content
Provision of technical advice
and support to staff involved
in content creation using
UHI-supported tools
Development of new
content
Quality assurance
Pedagogical advice and
support
Provision of hosting
platform(s) as appropriate
132
Podcasting service
Maintenance and ongoing
development
Research and
development
Content uploading and
management
Maintaining awareness and
knowledge base re VLE and
other learning technologies
in a worldwide context
Testing and evaluation of
new tools and technologies
(working with customer
groups)
Video streaming
service for learning
content
Virtual learning
environment
Configuration and
maintenance
Content uploading and
management
Currently HELIX
Currently Blackboard
maintenance
resolution
systems
systems
User and account
management
Module space and group
management
133
Library Technologies
The provision of electronic information resources – e-journals, e-books, datasets and others – and the
maintenance of systems that provide access to them. The provision and support of computer systems that
underpin library operations.
Service area
Library management
system (LMS)
Included
Not included
maintenance
resolution
Notes
Currently Millennium –
note development to
share this system with
University of the West
of Scotland and SRUC,
potentially others
systems
systems
User and account
management
Client deployment
134
Resource discovery
tools
maintenance
resolution
systems
systems
User and account
management
Security services
Local provision
decisions and
Ensuring that locallydeployed solutions are
consistent with technology
deployed centrally and with
each other
Technical procurement
support
Self-service provision
Local provision
decisions and
Central licence management
and system integration and
configuration
Technical procurement
support
Reading list
management
of software and system tools
Data input
Automated generation of
reading lists for the VLE
135
Cataloguing
Provision of external MARC
record source
Copy and original
cataloguing for print and
digital items
E-resource journal and
dataset cataloguing
Maintenance of cataloguing
standards policy
e-Resources
Digitisation
Management and
development of e-resource
collections
Negotiation and
management of licence
agreements
of resource discovery tools
and gateways and access and
authentication mechanisms
Provision of usage
statistics/KPIs
STUDENT RECORDS
The provision, development and maintenance of the IT system(s) for student records management. Support
for the production of reports and the maintenance of data integrity. Data exchange with other systems
(timetabling, finance etc.) and the use of the student record in identity management (e.g. providing user
accounts in other systems).
No responsibility for data input, and for the ‘truth’- as opposed to internal consistency - of data.
Service area
Included
Not included
Notes
136
Accessibility
Configuration of AAM in SITS
to user requirements
Relates to SITS
Accessibility module
Maintenance of software to
record PLSP (Personal
Learning Support Plan)
reports
Admissions and
enquiries
Configuration of UHI records
and SITS client to handle
online applications (HE & FE)
and enquiries
Data agreements on what
is collected and entered
and by whom
Production of reports for
admissions and enquiries
Maintenance of UCAS
interface
Attendance
Configuration and
maintenance of systems for
recording attendance
Production of reports on
attendance
Core Reports
UKBA student attendance
recording and monitoring
EMS student attendance
recording and monitoring
Configuration based on
specifications
Development and initial
testing of new reports
Reporting Instance
maintenance and support
137
Course database
Configuration of UHI Records
tool to allow creation,
maintenance and publishing
of course database
Examinations office
support
Production of reports to
support exam office
tool to record exam location
preference
FES
Configuration to support
regional outcome agreement
outputs / requirements
Integrity of FE data
Configuration of the FES
return
Updating of relevant tables
Maintenance of AP specific
aspects of data systems
HESA KIS return and
NSS
Configuration of SITs KIS
module to SFC specification
Collection and input of
necessary data
HESA Returns
Data quality reporting
Authorization to commit
to HESA
Large batch data fixes
Configuration of online data
capture/data tools to meet
requirements of latest HESA
student record
Analysis of, and strategy
for, fixing data to improve
HESA statistics
Data integrity checks and
corrections
Updating relevant tables
138
Module Catalogue
Creation and maintenance of
online module catalogue tool
(CUR03 and additional
marketing info)
Content entry and
updating
Creation of XML export file
for web publishing
Production of core and adhoc analysis reports
Linking module catalogue to
online module selection tool
Online Enrolment
tool to allow students to
enrol online
Support for CSP/ATR
Annual implementation/
timeline for activity
Returners survey,
collating and sharing
results, modifying records
to allow enrolments
Collection/entry/
verification of PAT
information
Online Fee Payments
Configuration of UHI records
to use selected online
payment gateway and
merchant services provider
Online payment reporting
Creation of invoices as
per SITS Fees
Reconciliation of online
payment bank account to
receipts
139
Online module
selection
tool to select modules online
Creation of single module
instance (MAV)
Creation and
maintenance of module
diets in SITS using SITS
user interface
Setting student and PAT/PL
user permissions
Online student
feedback
Creation of online survey
Analysis of dataset
Creation of specified KPI
reports
Setting student permissions
PPF
&
Development and
maintenance of data
collection and analysis tools
FE ‘PPF’ support
Development and
maintenance of the
Academic Development Plan
tool
SFC Returns
Report for FTE extract to
agreed counting method
(FTE counts)
FE - PCSR
Submission of returns
with explanations for any
anomalies (as defined by
SFC)
Monitoring FTEs over the
session
PCSR - FE destinations
information return to SFC
140
SITS
Fee profile and AP specific
account code configuration
Running SITS fee menu
processes
Batch process configuration
Invoicing
Fee reporting
Receipting
Fee invoice and receipt
template maintenance
Credit notes
Fees
SAAS/SLC/ LEAs
SAAS/SLC Attendance student to enrolment
matching /interface file
transfer
SDS data sharing agreement
– support for file creation
Debt management
Reconciliation of
invoices/credit
notes/receipts to bank
and control accounts
ILA200 certification and
claiming
ILA 500/PT fee waiver
grant
Loading interface into
Finance system
Reporting to SDS
SITS-VLE links
Provisioning of VLE with
student module/unit
enrolment data
Enrolling students to
module/ unit level to
allow data transfer
Reports written to highlight
discrepancies between
SITS/VLE module enrolment
positions
Student and staff
badges
Maintenance of software to
support ID system
Maintenance of UHI students
and staff badge template(s)
Provision of physical
badges and badge
printing systems
141
Student Progressing
and Certification
Production and updating of
exam/progression board
reports
Documentation/ training/
support for academics
and registry mark entry
Updating of SQA tables
Data extracted, cleaned,
and sent to SQA
Provision of RPL tool for
entry of results
Updating SITS with
awards
Production of certificates
Submission of data for
awards to outside
certification bodies (e.g.
City & Guilds)
Student Records Portal
specification
testing of new online
processes
Student Withdrawal
Creation and maintenance of
online withdrawal tools
Production of reports on
withdrawal and retention
Teaching and Learning
KPIs
specifications
Development, testing and
production of reports
Interpretation of
SLC/SAAS/SFC withdrawal
policies
Updating of student
records as necessary
Ensuring reports reflect
KPI definitions and
definitions are
appropriate
Ad-hoc analysis of live
data in SITS
Monitoring achievement
outside the KPIs
142
Teaching staff mapping
Configuration of SITS to hold
teaching splits against
modules
Population of SITS with
current teaching split
data
Flow of information to
Finance for distribution of
funds
Timetabling/VC
booking systems
Hosting and configuration of
UHI timetabling system (if
purchased)
Maintenance of SITS/Celcat
links
Integration of timetabling
system with TMS (VC
management system) for VC
suite booking
Collecting and validating
annual timetable data
Inputting and managing
timetables
Booking rooms and
managing teaching
resources
SERVICE APPLICATIONS PROVISION
Making available software applications that support particular aspects of UHI partnership business. A nonexhaustive list of some of the current applications in scope is given below. This section overlaps with some of
the others.
The systems may or may not be actually hosted on UHI hardware platforms.
Scope
Service
Current application(s)
Document management
SharePoint *
Email
Office 365
e-portfolio
Mahara
143
Interactive voting
Turning Point
Library management and catalogue
Millennium
myUHI
Citrix
Resource discovery
MultiSearch Plus
Service desk
Webhelpdesk
Student records
SITS: Vision, e:Vision
Video streaming for learning content
HELIX
Virtual learning environment
Blackboard
Web content management
Plone
[etc.]
Service area
Included
Archiving
Not included
Notes
Data retention policy
Ensuring data is archived to
specification and
requirement
Availability
Maintenance and monitoring
of service availability to SLA
144
Backup and restore
Ensuring backups are kept
and restores tested
Data held outside UHI
control (e.g. on individual
devices)
Configuration
specification
User requirements
specification
Interfacing
systems
systems
Provisioning
Ensuring account availability
based on having an identity
in the UHI system
Removal of account on
cessation of entitlement
Reporting
specifications
Identification of need
Specification of reports
available and to whom
Specification of look and
feel
End user training
145
Software portfolio
Maintenance of a portfolio of
licenced software to meet
the needs of users
Locally licenced and
hosted software
Provision of defined levels of
technical and user support
for the applications
Ensuring compliance to
licence agreements
User Management
Creation and amendment of
user accounts
User rights assignment
User support
Problem resolution
Approval of new users
and specification of user
rights assignment
Pedagogical advice on
learning technology
systems
Advice on appropriate use
Workflow
Development and
maintenance of tools,
templates and processes to
user specifications
User requirements
specification
146
HOSTED APPLICATIONS SUPPORT
The support offered for systems underpinning the business the University and its Academic Partners that are
primarily ‘owned’ and operated by their users or user communities, but which the shared services hosts
and/or supports. These systems may include but are not necessarily limited to:
Finance (Accounting, Payroll, Procurement, BACS)
Human Resources
Timetabling
ID Card and Access Control
CRM
Research Management
Estates Management
The systems may or may not be actually hosted on UHI hardware platforms.
Note that some of these systems may migrate to ‘service applications’ (as per Section 5 above) over time.
Service area
Included
Not included
Notes
Archiving
Ensuring data is archived to
specification and
requirement
Data retention policy
Full service only
Backup and restore
Ensuring backups are kept
and restores tested
Data held outside UHI
control (e.g. on individual
devices)
Full service only
147
Convergence
Support the technical and
business process changes
needed to converge business
systems
Specification of business
requirements for
convergence
Full service only
Loading and acceptance
of ad-hoc transaction
interface files (mainly
finance systems)
Full service only
Specification of technical
requirements
Specification of business
requirements
Full service only
Costing of impact of
implementation and
integration if non-standard
system procured
Final decision on chosen
application
Ensure coding
structures/naming
conventions are consistent
across different business
systems
Interfacing
Integration, where feasible
with other UHI business
applications and systems
Resolving issues around
loading and accepting
interfaces
Procurement
148
Provision of business
applications
Installation and hosting
(internal or external) for
business application
Configuration and
maintenance following
supplier’s guidelines,
including point and major
releases.
System performance
monitoring
Business user operations
using the system
interface, allowed by user
access rights and the
functionality of the
business application.
Full service only
Business continuity
planning for the whole
business process
End user training
Data secured and available
for business continuity and
recovery to agreed standards
and retention period of
archives
Recovery of systems in line
with business continuity
plans
Reporting
specifications
Identification of need
Full service only
Specification of reports
available and to whom
Specification of look and
feel
End user training
Support
Primary contact for UHI user
for issues with system and
provide Tier 1 (possibly Tier 2
or 3 depending on system)
level support
Supplier development of
the application
Full service only
Liaise between end user and
supplier to resolve system
errors
149
User Management
Creation and amendment of
user accounts
Approval of new users
and specification of user
rights assignment
Full service only
User rights assignment
VIDEOCONFERENCING
The provision, development, maintenance and support of UHI’s videoconferencing environment, including
studio equipment, bridging, desktop VC software and VC recording. Scheduling, problem resolution,
connection to external systems.
Not including the provision of hardware for end-users, or responsibility for the physical environment of
studios.
Service area
Included
Not included
Notes
Desktop VC
support of desktop VC
client(s)
VC recording
development of VC recording
service
Management of recorded
VC content
access control and security
environment for recorded
VCs
150
VC studio endpoints
Local provision
decisions and
Installation and maintenance
of VC endpoint equipment
Provision of advice and
support re local studio
environment
Full service only
Procurement support for
endpoint equipment
Videoconferencing
On-site support for
specific events will be
subject to availability
and may be
chargeable
Provision of connectivity
services – bridging,
connection to external
services and gateways
Provision of VC event
booking and scheduling
services
resolution
EMAIL AND COMMUNICATIONS
Provision of email services to all users. Including calendaring, resource booking, and instant messaging.
Service area
Included
Core email service
Not included
Notes
Updating mailing lists
Message transmission
Junk mail filtering
Mailing list capability
151
Scheduling
Calendar tool
Resource booking
Instant messaging
Messaging tool
Service Desk
Helpdesk services 24/7 (with external partner). Provision of helpdesk software platform. Service monitoring,
reporting against SLA, major incident management.
Service area
Included
Not included
Fault
resolution/request
fulfilment
Guidance/ advice
Fix of unsupported
software
Standard first line fixes
Notes
Standard first line requests
Escalation to second level/
other groups
Helpdesk application
Customisation
Testing
Reporting faults with
software
Upgrades and patches
Future
review/reprocurements
System feeds/integration
152
Logging calls
Incidents (faults)
Requests
Guidance
Escalations
Resource bookings
System alerts.
rd
3 party
Complaints/Feedback
Major incidents
Reporting
Global communication
Resolution of root cause
due to onsite facilities
issues (power, flooding)
First line analysis
Monitoring
Escalation
Out of hours
Handovers and data
exchange
Monitoring and contract
management
Call follow up
Service level
Reporting
Monitoring
Remediation of issues
rd
Monitoring of 3 party SLA
Answering complaints
153
System monitoring
Proactive system checking
Reporting of checks
Regional Service Delivery
Those services that have to be delivered on-site. Local user support, installation and deployment of
hardware, troubleshooting.
Member organisations are responsible for deciding what equipment they want locally and paying for it.
Service area
Audio-visual
equipment
Included
Not included
Provision of procurement
support
Installation
Configuration
Notes
Local provision
decisions and
Full service only
Covers:
Consumables

smartboards

projectors

digital cameras and
video cameras

digital signage

webcams

microphones,
headsets
Installation
Full service only
Supply of media
154
Licensing
Running audits on devices for
licensing etc.
Full service only
Reporting compliance issues
Out of hours
Providing onsite cover for
out of hours classes
Full service only
PC support
Hardware
Funding/costing
Mac support
O/S
Pat testing
Mobile devices
Agreed software
Specialist devices
Thin client terminals
Builds/rebuilds
Full service only
Testing
Images
Guidance/advice
specifications
The provision of a common framework for printing and copying across the partnership, including a common
contractual framework and common print management and charging systems. This will be a framework for
members to migrate to as they are ready.
Member organisations are responsible for deciding what equipment they want locally, and paying for it, and
for copy charges.
Specialist printing services are not included.
Service area
Included
Not included
Notes
155
Fax machine capability
in multi-function
devices
Fax to email
Printer copying
tracking and auditing
software & processes
Standard cost per copy/print
job
Full service only
Email to fax
Printing allowance &
billing to local college
Full service only
Type of printer
Tracking software
Printing from mobile
devices
Online payments
Procurement
Central procurement for
printers, printing and
contract
Universal printing
Universal printing
Ability to print
everywhere
Printing at any academic
partner
Full service only
Provision of paper
consumables
Full service only
Full service only
TRAINING
Training is primarily provided through ensuring that appropriate training materials are available, which
includes suitable user documentation. On-site training may be provided where a new system is being rolled
out or there is another clear business reason, which includes adequate numbers attending.
Service area
Included
Not included
Notes
156
Commodity software,
e.g. office applications
Provision of
printed/printable and online
training materials where
practicable
Direct end-user training
for all users
Physical training presence
at all sites
Staff training events
Ad-hoc helpdesk support as
practicable
Compliance and good
practice
For example, provision
of training materials
and good practice
advice in areas such as
data protection,
information security
Provision of
training materials
Ad-hoc professional advice
New service and major
upgrade support
Provision of
training materials
for all users
at all sites
Staff training events where
numbers viable
Telephone support, VC ‘dropin’ sessions
Ad-hoc user support and
problem resolution
Ongoing and stable
services
Provision of
training materials
for all users
at all sites
Ad-hoc user support and
problem resolution
Staff training events
may be held where
there is a strong
identified need/user
skills deficit and where
numbers are viable
157
STRATEGY, INFORMATION SECURITY AND COMPLIANCE
Ensuring that services are the subject of proper strategic planning and are appropriately funded, and that
they are operated in a secure and legally- and contractually-compliant manner.
Service area
Included
Not included
IT Strategy and
investment plan
Development of IT strategy,
business case, multi-year
investment plan, in
association with member
organisations
Funding approval
Accountability
Transparent reporting to
members
Notes
Consultation and
communication
governance
Inclusive planning processes
Information security
policy
Production and maintenance
of standard policy set
Local implementation and
enforcement
Advice and guidance on local
implementation
FoI (other than for UHI
Shared Services Limited)
General IPR issues
Business continuity
Maintenance of disaster
recovery policies and
procedures
Non- IT business
continuity plans
158
Compliance
Copyright policies
Data protection- service to
comply
Policies & guidance
FOI(other than shared
services FOI)
IPR
Enforcement of copyright
breaches.
Reporting function
Training Provision
Legal responsibility
Responsibility to ensure
all staff are trained.
In general, enforcement
of breaches to or noncompliance with defined
processes and policies will
lie outside shared
services.
Operations
Management of change
control processes
Software management
Auditing to ensure
compliance
Full service only
Licence manager applications
UHI-wide licence
agreements
Enforcement of local
compliance
Management of contracts
Central reporting
Those which enable
UHI staff to carry out
certain functions, e.g.
CLA, ERA
159
Network security
testing
Automated tests and
procedures ensuring that
devices connected to the UHI
network are compliant,
patched etc.
SERVICES PRIMARILY FOR EXTERNAL CUSTOMERS
Services that generate revenue and add value to the core service.
Translation memory
service
Translation
Full service only
of translation memory
software service
Training and documentation
Curation of digital translation
resources
160
APPENDIX A3: THE FORT AUGUSTUS 2 AGREEMENT
1
Preamble
This Agreement reaffirms the commitment of its signatories (the ‘Partners’) to work together to
develop a range of shared services supporting the whole UHI partnership. The aim is enhanced
student experience, greater ability to deliver equivalence, greater efficiency and effectiveness and
improved quality
The partnership may choose to take cost savings where available or re-invest efficiency gains in
improved service.
In this Agreement, the University and its Academic Partners agree to collaborate to develop a range
of shared services to be delivered for the collective good. They will operate on the principle of
collective self-provision rather than outsourcing.
The first services to be delivered will be ICT services and will be provided by a new shared services
company, UHI Shared Services Limited, subject to the satisfactory conclusion of a due diligence
process and the development of a business case acceptable to the partnership.
Other models may be used for other shared services as appropriate in the future.
The signatories to this document are the University Court and its Academic Partners.
2
The Shared Services Organisation
The Partners agree to establish a shared services organisation, UHI Shared Services Limited, with the
2.1
ETHOS
2.1.1
2.1.2 Supporting the whole business of all members including HE, FE, research and other core
activity
2.1.3
2.1.4 Flexible, adaptable and able to respond quickly to changes in the partnership or the external
environment
2.1.5
2.1.6 Not an outsourcing model, though, as now, specific elements of the service may be
2.1.7
2.1.8
2.1.9
161
2.1.10 Full transparency to its members as to its financial, contractual and other arrangements
2.2
FORM
2.2.1
A Company Limited by Guarantee, owned by its members
2.2.2
All Academic Partners entitled become members subject to their legal eligibility
2.2.3 Established as a Cost Sharing Group under the terms of the Finance Act 2012, and subject to
their eligibility, members may receive services from the company free of VAT.
2.2.4 Members of the Shared Services Board will be the initial Board of Directors, the membership
to be reviewed during the first trading year
2.3
FINANCES
2.3.1 Recurrent costs apportioned amongst members according to a fair and transparent agreed
methodology
2.3.2
A capital funding programme to be proposed to the FE Regional Board and HEPPRC
2.3.3 Partners retain the autonomy to develop local services at their own cost and risk. This may
include a cost of integration into UHI systems or an inability to do so
3
Planning Parameters and Operating Principles
The Partners agree that UHI Shared Services Limited will operate within the following planning
parameters and operating principles:
3.1
PLANNING PARAMETERS
3.1.1
Provide a range of services defined in agreed statement(s) of scope
3.1.2 Initially operate within the current overall staffing and revenue cost envelope of the
partnership, excluding any agreed transitional costs
3.1.3 Not seek to take over ownership of existing assets, which would by default remain in the
ownership of current owners, though new assets purchased by UHI Shared Services Limited will
become the property of the company
3.1.4 Confirm as out-of-scope decisions on investment in end-user equipment (PCs, laptops,
peripherals, etc.) which remain under the auspices of individual partners, within the parameters of
an agreed SLA
3.2
OPERATING PRINCIPLES
3.2.1
Operate on the basis of financial targets to be agreed on a rolling 3-year basis
3.2.2
Develop a strategic technology roadmap and investment plan
162
3.2.3
Establish appropriate consultative forums
3.2.4 Remain open-minded as to the appropriate structures and vehicles for delivering further
shared services, which may not be within UHI Shared Services Limited
4
Commitment of Signatories
4.1
FURTHERING THE BROAD SHARED SERVICES AGENDA, BY:
4.1.1
Release of members’ staff to participate in short-life planning groups, as necessary
4.1.2 Agreement to participate at a senior strategic level in the forward planning of further shared
services
4.1.3
Continued support for the aims expressed in the Outcome Agreements
4.1.4
Agreement to consider all new service developments as candidates for sharing, by default
4.2
ENDORSING THE OBJECTIVES OF THE SHARED SERVICES BOARD, WHICH ARE TO:
4.2.1 Determine how shared services will operate in the organisational environment in terms of
governance
4.2.2
Ensure strong governance, programme and change management from the outset
4.2.3
Identify appropriate solutions and determine the optimum method for sharing each service.
4.2.4
Involve partners in building and realising the business case for each service
4.2.5 Align shared services with partnership business strategy, organisation models, IT and
processes
4.2.6
Determine and allocate adequate resources
4.2.7
Simplify processes and maximise systems convergence
4.2.8 Set service standards and quality through development and agreement of the service
definition/SLA
4.3
SUPPORTING THE ESTABLISHMENT OF UHI SHARED SERVICES LIMITED, BY:
4.3.1 Participation in due diligence programme as appropriate, including provision of information
on financial spend, contractual commitments, licences, HR matters, to the reasonable timescales
required by the Shared Services Board
4.3.2
Full disclosure of relevant information
4.3.3 Early disclosure of any issues which might prejudice their ability to sign final agreements,
and attempting to resolve any such problems
4.3.4
Seeking common positions on service scope, financial parameters, SLA definitions etc.
163
4.3.5
Membership of UHI Shared Services Limited (subject to eligibility)
4.3.6
Being represented at General Meetings of UHI Shared Services Limited
4.3.7 Release of staff members to contribute as appropriate as members of the User Group, as
Directors of UHI Shared Services Limited, etc.
4.3.8 Provision of accommodation and local services to staff who are transferred or appointed to
UHI Shared Services Limited
4.3.9 Communicating with their staff and supporting UHI Shared Services communications with
their staff
4.3.10 Respecting their legal obligations in terms of consultation with staff who may be affected by
TUPE transfers
164
APPENDIX A4: ISSUES LOG FROM THE FORT AUGUSTUS 2 SUMMIT ON SHARED
SERVICES
This ‘issues log’ was produced at the Fort Augustus 2 summit to record issues raised by delegates. It
was slightly revised following the event in response to additional comments. Here the issues log is
augmented by a column indicating where the issue is dealt with in the Business Plan.
ISSUE
INITIAL RESPONSE FROM THE
SHARED SERVICES BOARD
BUSINESS PLAN SECTION
REFERS
How would funds flow to the
shared services company in the
new model?
The Shared Services Board
envisages that there would be no
top-slice, other than that which
enables Executive Office to pay
its share of the overall costs for
the services that it receives itself.
Funds would flow out to APs who
would pay their share of the
operating costs of the company
(UHI Shared Services Limited).
Chapter 19
Financial Model
What model would determine
the share of costs paid by each
member of the company?
This is yet to be agreed.
However, it is envisaged that the
shares of costs will be
determined according to a
transparent formula – turnover is
one possibility amongst several,
and has already been used for
funding the procurement shared
service.
Chapter 19
Financial Model
There is a need for clarity and
comfort on the initial level of
costs and that they will not
escalate.
Acknowledged. This will be
addressed in the business plan.
We assume that a transitional
model will be needed between
costs as incurred by APs currently
and costs determined by
formula.
Chapter 19
Financial Model
165
What level of cost saving is
anticipated?
Projected efficiency gains will be
included in the business plan. It
is unlikely that these will be
substantial in year 1, but from
year 2 onwards we expect
significant efficiency gains and it
will be for members to
determine the balance between
cost reduction and service
improvement.
Chapter 8
Financial implications of
moving ICT services into a
shared services Company
Will the company be able to
benefit from funding sources that
are available only to the
partnership or the University as it
currently exists?
We anticipate that there are
mechanisms available to deal
with this issue. Similarly there
are collective framework
agreements etc. only available to
HEIs and FECs and we will need a
way to take advantage of these.
Chapter 13
Operational Aspects
How will elements of financial
risk, e.g. major unanticipated
costs, be dealt with?
In general we are just shifting the
locus of existing risk to the new
company, and we acknowledge
that the business plan/ contract
with members will need to be
explicit as to how this is dealt
with.
Appendix A5
Risk Register
How will the costs be determined
for members who do not buy in
to the whole service, i.e. those
who do not transfer their staff,
contracts etc.?
The costs for the services that
form part of the core (i.e. that
everyone takes, much as they do
now for central IT services) will
be calculated separately from
other costs, and in line with the
requirement on Cost Sharing
Groups for ‘exact
reimbursement’. At the moment
we would expect the costs for
these parts of the service to be
distributed according to the
same formula as for the whole
service.
Chapter 19
Financial Model
Would there be only one shared
services company, or multiple
ones?
Only one, unless others were
needed for specific purposes (e.g.
to handle external trading or
joint ventures).
Chapter 7
Business Objectives
166
How would the potentially
competing requirements of FE,
HE, research, specialist activity
be resolved?
How would University Court/FE
Regional Board/HEPPRC strategy
be aligned with that of the
Company?
We acknowledge that there is no
easy answer for this. However
we note that many of the
requirements of the partnership
are increasingly convergent
across FE and HE.
We also expect strategic
investments to be agreed and
funded at FE regional
Board/HEPPRC level.
Chapter 12
Stakeholder Groups
What decision making capability
will require to be retained within
APs?
Will the service scope include
advice on local IT requirements
and planning scope?
Noted that this question
particularly relates to the
retention of decision making as
to the provision of PCs, mobile
and tablet devices, other
peripherals etc. at member level.
UHI Shared Services Limited will
include planning, advice and
decision support services,
including reports on device
utilisation, to its members.
Chapter 10
Service Scope
What are the intentions around
pensions, in the case of
transferring staff, and have the
potential liability issues been
taken into account?
We have made initial enquiries
as to the potential for gaining
admitted body status in the LGPS
for the shared services company,
and will progress this further
when UHI Shared Services
Limited has been formed.
We are aware of the potential
significant issues around pension
liabilities and will deal with these
fully in the due diligence and
business planning process.
Chapter 17
Employment Matters
Chapter 22
Investment Strategy
167
Do we need to establish the
Company early in the process?
Could we not wait until after a
business plan has been agreed?
It would be possible to defer
creation of the company, but it
would hamper us severely in
discussions over pensions,
advance negotiations with
suppliers, taking of legal and
professional advice, and a
number of other areas. Members
joining the company at this stage
are making no commitments to
taking service in future compared
to non-members.
As soon as the company is
formed with whatever members
are able to sign up initially, a
process for adding new members
from within the partnership will
be made available.
Appendix A3
Fort Augustus 2
Agreement
There is a need for a project plan
with specific milestones and
dependencies clearly articulated.
Agreed and this will be an early
priority.
There is a need for a
comprehensive business plan to
be developed before members
are asked to sign up for the
service.
Agreed.
The business plan will form the
basis of the contractual
agreements between the
company and its members and
there will need to be further
dialogue as to what is included,
but at a minimum, we anticipate
full clarity on financial
arrangements including
schedules of costs to members,
service scope, service level
agreements, governance
arrangements, provision for
contingencies, etc.
A Project Plan for the
follow up to Fort Augustus
2 was developed and
published in Mahara.
Current schedule to the
live service is at Chapter 4
Options Analysis
Document as circulated
for consultation on 8
October 2013
comprehensive ICT strategy to be
developed, aligning with
partnership and college
strategies.
Agreed, and the Shared Services
Board considers this both a
necessity and a priority. Its full
development would however
extend well past the initial
operation of the company.
Chapter 9
ICT Strategy
168
comprehensive Service Level
Agreement.
Agreed. The nature of this needs
more discussion, as the need for
a robust agreement regulating
service provision needs to be
reconciled with the requirement
for flexibility expressed by
partners.
Chapter 11
Service Level Agreements
What formal commitments are
being sought and in what
sequence?
We are seeking the agreement of
partners to the Fort Augustus 2
Agreement now. This is an
agreement in principle and a
mandate to the Shared Services
Board to proceed to the
establishment of an ICT Shared
Service operated by UHI Shared
Services Limited – subject to the
completion of satisfactory due
diligence. It is also a commitment
to engage with that due
diligence.
It is not a formal agreement to
take the service offered, to
transfer staff or any other
contracts or liabilities. That will
come as a formal contract
proposition at the end of the
process.
At some stage, but separately
from Fort Augustus 2 or the
formal service contract, partners
may be asked to consider
entering into a form of
agreement regulating the shared
services process in a context
broader than the operation of
UHI Shared Services Limited.
Chapter 4
Options Analysis
The company should operate
efficiently and have minimal
bureaucracy.
Agreed as a core operating
principle.
Chapter 13
Operational Aspects
Will the Company be buying in
any services (such as HR support)
from the partnership?
It is likely to do so and it will not
want to duplicate functions
unnecessarily. Noted however
that supplies into a Cost Sharing
Group from its members do
attract VAT, so there is a driver
to keep the level of these
transactions low.
Chapter 13
Operational Aspects
169
Would services be provided to
subsidiaries of APs?
It is unlikely that subsidiaries
would qualify to become
members of a Cost Sharing
Group, or if they did, to receive
services free of VAT.
Chapter 20
Operating as a Cost
Sharing Group
What happens if an AP cannot
meet the ‘85% criterion’ for the
supply of services free of VAT?
(85% of its activity being VAT
exempt).
Unless the ‘directly necessary’
criterion can be satisfied, which
is unlikely for most ICT services,
then provision will be subject to
VAT.
Chapter 20
Operating as a Cost
Sharing Group
Will the company be able to
generate income by offering
services outside the partnership?
Chapter 21
recognises the appeal of
Potential Funding Sources
spreading the overhead, reducing
costs, or improving quality by
offering the company’s services
more widely.
It would however only do so if
the service to partnership
members were not compromised
(ideally it would be improved)
and partnership members’
interests in terms of control and
direction of the company were
not threatened. The latter
proviso may be technically
difficult to satisfy if members
external to the partnership were
admitted and it is our intention
to seek professional advice on
this issue after the company is
formed. We do not think that
there is any issue with continuing
the current arrangements that
EO LIS has in place for the
delivery of service to a number of
other HEIs.
What is the position with library
services?
The Shared Services Board has
been considering the position of
library services within the shared
services agenda and has
undertaken a very positive
consultation with the library
practitioners. This engagement
will continue but the initial
priority is to establish the shared
service for ICT.
Chapter 7
Business Objectives
170
There is a need for an effective
communications strategy,
especially with Principals.
Agreed and this is an early
priority for the Shared Services
Board.
Chapter 12
Stakeholder groups
Gaelic - need to ensure
opportunities for promoting
Gaelic Interface in the shared
services delivery, which would
help meet the new Company's
obligations to have a Language
Plan under the Gaelic Language
Act
Agreed.
Chapter 9
ICT Strategy
171
APPENDIX A4A: ISSUES LOG FROM THE FORT AUGUSTUS 3 SUMMIT
Consultation questions – issues raised and responses from the shared services board
We intend to use these questions to help structure discussion at the Fort Augustus 3 event; if you
are able to feed back your preliminary thoughts on any of these – not necessarily all of them – in
advance, that would be very useful. In particular, if there are any issues that would make it difficult
for your institution to sign up, we’d be grateful to know as soon as possible and to hear your
suggestions for what would be more acceptable.
(Please note all page number references are to the pages in the original Business Plan released on 8
October 2013 for initial consultation.)
The Company
Q1
Are you content with the voting arrangements outlined on p79? If not, what alternative would you
propose? (Note that this issue may need to be revisited anyway as a consequence of ONS
reclassification, as majority control by incorporated colleges may have undesirable effects.)
2:1 seems fair from incorporated viewpoint but not the rest. More
material, Perth + Inverness have a clear majority and could have
their joint agenda always voted through.
There is a concern that the larger colleges will have the majority of
votes and therefore the smaller/specialist colleges will have little or
no voice. The risk is then that the ICT services could become heavily
weighted towards only teaching and therefore does not serve the
needs of all partners.
A revised voting model,
taking into consideration the
discussions at Fort Augustus
and the risks associated with
the different models, will be
developed and included in
the revised Business Plan.
If I’m reading it all correctly, this means of around 29 (plus 5
external) votes the ‘big four’ of Perth, Inverness, Moray and NHC
would have around 19 votes, leaving 10 AP’s with one vote each.
Meaning the bigger AP’s, if in agreement, will have the vote. Having
said that, how often will voting be used? Still something like 1 vote
for £200k plus 1 for each subsequent £400k would balance it more.
Do not agree that voting is proportional to spend. While
acknowledging that larger partners are contributing more cash, and
making greater use of the service, it is essentially the same service
that is provided to each partner with just the scale of provision
varies between smaller and bigger partners. An effective IT service is
equally important to each partner and the ability of each to
influence key decisions should reflect this. I would propose one
172
partner, one vote.
Voting (example of APUC). Some support for 1 member 1 vote
What would be matters appropriate for voting - level of annual
subscriptions, budget decisions
Q2
Are you content with the arrangements for appointing directors on p80? Currently the Articles do
not provide for members to individually have the right to appoint directors, and we cannot have
independent directors who are external to the membership. If you are not content, what
amendments would you propose?
Broadly content with the arrangements. Once operational, it would
be good to see representation from the specialist colleges on the
Board
These comments will be fed
into the process as Board
membership is being
reviewed.
Board not currently representative – 2 Inverness, none Perth but
should be fixed when Project moves to Service.
Why restrict Directors to member organisations, non-execs could
bring much needed skills/experience + no baggage.
Rules re removal of a Director appear too weak – strengthen
wording
Generally OK but concerned to ensure that directors are not unduly
influenced by their other roles in terms decision making that may
impact on academic partners differently. i.e. important to ensure
that appropriate declarations of interest are made and directors
withdraw from matters where their own institution might benefit
greater than another AP not directly represented on the Board.
Q3
Do you have any comments on the organisational structure on p81?
Potential for costly superstructure of up to Director + 5 HODS if
internal candidates are weak – potentially up to c £500k, all at
colleges risk i.e. straight onto annual subscriptions.
The Shared Service Board has
set up a workstream, under
173
Agreed on the grounds that where appointments could be
combined that this should be considered.
Need a grading structure and a clear set of job descriptions before
TUPE process commences
Appears to have a large number of senior managers. Question
whether all of the strategic responsibilities should sit within the
shared services company or should more direction be provided by
UHI structures. Reflects my concern that that the cost of the service
in future will be higher per annum than at present. i.e. no sign of
attempts to rationalise management and hence make savings
the leadership of Lindsay
Ferries, to review the
organisational structure of
the ICT Shared Service and
consider the pay policy and
recruitment to the senior
posts. The proposals will be
included in the revised
Business Plan.
The organisational structure indicates that the role of Chief
Executive would have long-term oversight of a range of shared
services, not limited to the initial operation of ICT/LIS. In futureproofing we need therefore to take cognisance of the future skills
requirements. This role is one of Chief Executive that has the
capability to direct a range of services beyond this initial stage. The
key skills required will be financial management of a complex range
of services and UHI partnership experience and understanding. The
indicative cost distribution circulated flags up potential issues that
the Chief Executive will need to manage, not least being the needs
and circumstances of smaller partners.
The table outlining the responsibilities of the roles in the cost
sharing group suggests that the Chief Executive position is not a fulltime role. Inverness College would propose therefore that this role
is taken up by a Principal and Chief Executive of one of the smaller
partners on a part-time basis and that the Academic Partner taking
on this role is compensated for their time to enable back-fill.
General thinking that the structure is top-heavy - needs more clarity
of the roles
Full vs part time positions at senior level
Employment matters
Q4
We propose that there be no compulsory redundancies associated with the move to a single shared
service. Is this a commitment you wish to see made?
174
Not as a blanket guarantee. There may be circumstances where this
is necessary in the pursuit of the overall objectives
Should at least offer voluntary severance to reduce 80 FTE’s?
Initially this will help provide stability and ease concerns of staff
transferring across so seems sensible. However, it might be
something that needs to be reconsidered in the longer term to
ensure the service remains efficient and effective.
The Shared Service Board will
consider the issues raised
around redundancy and will
review the appropriate
sections within the revised
Business Plan
Yes. Is there a time frame, say 1 year in when this will not apply or
is it a case of wait and see? Could voluntary redundancy be an
option?
Business case indicates that there may be a voluntary severance
scheme which would pay for itself within a year – I note from the
information provided that a large number of staff in scope are over
50. They are likely to be in LGPS and therefore any severance would
incur a strain on the fund cost…this could be significant – needs to
be a risk and impact assessment of this.
Is this the commitment really given? The paper refers to a post
transfer restructuring, is the commitment that there would be no
compulsory redundancies during this restructuring as this would
surely be ‘associated with the move to the single shared service’.
This is desirable at a personal level for staff affected but suggests
that no effort is being made to achieve savings through
rationalisation / removal of duplication. i.e. a key argument for joint
services was initially to effect savings and achieve greater efficiency
through removal of unnecessary duplication. With a commitment to
no compulsory redundancy and no changes that would encourage
voluntary redundancy it is unclear how a more efficient service will
be achieved.
The expectation that SFC will commit the level of funding proposed
without a commitment to efficiency saving is naïve. It is highly likely
that once formally considered at SFC Committee that SFC will
require a business plan for 3-5 years that details cost saving and this
is unlikely to be realised without redundancy. Inverness College
would therefore propose that a 2 year commitment to no
compulsory redundancy is more realistic and in line with
175
commitments made in other regions.
General feeling that a commitment to No Compulsory Redundancies
is not the most effective way forward and Voluntary Redundancies
be considered at the least
Has any work been done on profiling the in-scope staff?
Need to understand any impacts of SFC conditions
This would seriously impact upon the ability of the Company to
make savings. (The Shared Service Company is about more than just
ICT in the next x years)
APs don't have a feel for the 'right size' of the Shared Service - 50,
80, 100?
Q5
Nearly all those staff who would be candidates for transferring to the Company are current
members of the Local Government Pension Scheme. We propose to seek Admitted Body status for
the Company and to offer LGPS. Are you content with this?
For this service, yes, as the impacted staff will be members of this
scheme currently (unless not members of a scheme at all). Pension
needs significant clarification as this matter would be hugely
significant.
Yes, provided that actuarial/legal advice is sought prior to such a
move.
Yes. Only concern is whether confirmation of this can reasonably be
expected to have been achieved ahead of the intended staff
transfer date. This is likely to be a concern for staff, especially those
nearest retirement.
The Shared Service Board is
taking specialist advice on
Pensions and will include any
details available in the
revised Business Plan up to
the date of publication.
Beyond that time all Partners
will be kept informed of
developments.
Pensions – a fundamental issue which needs to be clarified
This is a major concern - need more clarity on the immediate
process and timing and possible outcomes - risk assessment esp on
solvency
176
Q6
We propose that a principle of no compulsory relocation of staff should apply, even at the expense
of compromising operational efficiency. Is this a commitment you wish to see made?
No. Where expertise/experience is best deployed to another
location this should at least be considered
If the main argument is operational efficiency/ growth/
flexibility/etc. and not cost saving can’t see how the plan can state it
will allow compromise on the former.
This would seem sensible initially but might need to be reviewed in
the longer term.
consider the issues raised
around location of staff after
the service goes live and will
review the appropriate
sections within the revised
Business Plan
Yes. Is there a time frame, say 1 year in when this will not apply or
is it a case of wait and see? Could voluntary redundancy be an
option?
This would certainly assist in relation to the employee relations
element of this and presumably would support the service to
partners locally.
In terms of staff this is clearly important but I would like to know if
is anticipated that there would be any compromising of operational
efficiency. If the anticipated impact is small then would support this
proposition but could not do so at ‘any cost’ i.e. how big is this
problem likely to be?
Again, if we are cost sharing and seeking to provide an equitable
experience across academic partners there will no doubt be some
relocation involved. It is unlikely that any business can make this
long term commitment and still adhere to business objectives.
Commitment needs to be only for a reasonable period of time, then
operational needs of business must take precedence
Commitments must reflect the shared values of the Company and
take cognisance of the willingness and ability to deliver future
shared service initiatives
Q7
177
Senior roles in the new organisation are identified in Figure 17, p81. In principle we have taken the
view that these positions should be filled where possible from the pool of staff in scope for transfer.
Do you have any views on this or on the mechanism for appointment to these senior positions?
External candidates should also be considered where these posts
are being created from new.
Agree on the principle of appointing from within provided that the
skills required are there. It might need to be a competitive process
as it is entirely possible that there is more than one person suitably
qualified for these senior roles across the partnership.
Agree to the point that the posts should be filled with competent
staff and if no internal person meets the criteria, then recruitment
goes external.
set up a workstream, under
the leadership of Lindsay
Ferries, to review the
organisational structure of
the ICT Shared Service and
consider the pay policy and
recruitment to the senior
posts. The proposals will be
included in the revised
Business Plan.
These should be advertised internally in the first instance and
appointed by competitive interview against a clear job role and
person spec. If there are no suitable internal candidates then
external appointments should be sought. Presumably it cannot be
guaranteed at this stage that there are necessarily suitable internal
applicants as the roles will be larger than at present and in some
cases ‘new’.
Although the majority of staff providing technical support will come
under TUPE legislation in terms of transfer to the new organisation
the very senior roles will be significantly differently roles and
therefore should be open to application. This application process
could be open to all staff of the partnership (see response to Q3) or
alternatively closed – by partnership agreements. Both approaches
have been taken in the rest of Scotland during the regionalisation.
Any external appointments will add to the funding requirements
Q8
Do you have any other comments about the employment issues addressed on pp84-86?
I note that the business case that there is a proposal that other
service such as HR will be sourced from a partner. This service will
be supporting (potentially) 14 sets of terms and conditions – this
could be significant especially at a time when system changes may
Wherever possible the
Company will seek to source
necessary services from its
178
be taking place.
Members.
Where will detailed HR work be sourced from?
The new company will incur the professional costs associated with
employing people (OH presumably, advertising, emp benefits, PVG)
– These will impact on Admin costs. I do think that the corporate
costs of running the company require to be considered
Will there be any employment liabilities retained with the Academic
Partner following the TUPE transfer? (eg any unfair dismissal claims)
As presented these appear to be a reasonable arrangement for staff
who might be transferred in to the company but I would
recommend seeking qualified HR advice on this.
Terms and conditions of new company needs to be determined,
given the following we would need to know more about this.
SFEU have been through this recently and may have some lessons
learned
Additional costs of servicing
the business have been
estimated and these will be
refined in due course.
Specialist advice on TUPE
matters will be sought and
clarification given to Partners
as it becomes available
commits to strengthening the
section on restructuring to
respond to the issues raised.
Need clarity on restructuring
We have a duty to inform and consult with the staff and this
consultation needs to include and intended ‘measures’. The
Company will be required to provide the partners with information
on the ‘measures’. The Business case refers to restructuring post
transfer. Presumably the terms and conditions which apply
following the restructuring will be the company’s terms and
conditions. We therefore need to be provided with details of the
restructuring and also the company terms and conditions.
Will the reason for the intended restructuring constitute an
economic, technical or organisational reason? It is unlawful to make
changes to the terms and conditions of employment of the
transferred employees if the sole or principal reason for the
variation is transfer unless there is an ETO reason for the change.
Timescales – as I understand it, pension still needs to be clarified,
governance arrangements need to be agreed, corporate
commits to reviewing the
179
administration needs to be in place – partners need to review and
sign up to the plan then consult and inform , undertake due
diligence and agree liabilities across up to 14 partners. Is 1 April
2014 achievable?
timescales and revising as
necessary
How do the current staff roles transfer in, in terms of job
descriptions?
commits to strengthening
this section of the Business
Plan
Clarity of reporting arrangements needed as soon as possible
The revised Business Plan will
detail these arrangements
Need to upskill people rather than recruiting where possible
has detailed its commitment
to Training and Development
of staff in scope for
transferring to the service as
appropriate to the Business
Appears to be an underlying message that there will not be
sufficient people to deliver the service
The Shared Service Board
would like to state
categorically that they feel
this is unlikely given that the
service will be delivered
following the go-live date by
essentially the same set of
staff as have been delivering
it in the lead up to that date.
It is absolutely not intended
that the Business Plan should
read like this in any part.
Finances
Q9
As we discussed at Fort Augustus 2, we propose to base the first year’s budget on the total current
spend. This is addressed on p93. Are you content with this as a principle, and if not, what would
you propose instead? If you are content, does our methodology for arriving at the indicative budget
of £5,962,232 seem reasonable?
This is fine in principle; however, the inclusion of the amount for EO
180
for Business Convergence seems at odds with the rest of the
expenditure being running costs. Plus it does not follow the
proposal that major initiatives should be funded separately
Still contentious in my book, in spite of the commitment at FA2.
Agree should operate within the current overall staffing and
revenue cost envelope.
has set up a working group
drawn from Partners, under
the leadership of Alan
Ashworth, to review the
current financial model and
develop a revised proposal.
Concern that the additional overhead of setting up the company of
£100,000 is charged to the ‘Core’ in the funding model and not to
those partners who benefit from the whole venture through the
‘Optional’
Note: Income from Janet for the WAN of £421,542 is attributed as
university income in table 5, page 89. My understanding is that
some, or this entire amount, relates to the commitment by the
Government/SFC? to FE colleges to provide a ‘free’ WAN
connection. i.e. this is money paid centrally to the university to
provide services to the Colleges so the cost of providing the WAN to
at least one key location at each AP should not be seen as a cost
that the FE part of college businesses need to pay towards.
Incidentally should we ever move to becoming a single institution
then we would loose much of this as there would then only be an
obligation to have one government funded WAN link through Janet.
Budget based on current spend is sensible – with the additional SFC
transitional funding. However, the cost distribution remains
inequitable. To have extreme winners and losers is unfair and
unsustainable and runs the risk of de-railing the whole process. An
alternative cost distribution formulae needs to be devised that take
account of turn-over as well as RAM. EO, without the LIS service has
the same turn-over as Moray College. It is unclear therefore, given
the numbers of staff and ICT activity within that organisation, why
the EO contribution should be less than Moray’s. As the cost
distribution stands, North Highland College’s position is
unsustainable. This has to be addressed.
Starting off at £5.9m pa running cost is only sustainable if colleges
provide an open cheque book and take all the risk.
Costs need to be more in proportion with scale/size of business
181
APs can't pay more than they are paying now
Q10
We propose to recover annual running costs from members according to a formula (rather than, for
example, by transaction-based charging). Are you content with this general approach, and if not,
what alternative would you suggest?
Subscription is better than transactional. Generally happy in
principle.
General approach of formula rather than transactions is fine as
using transactions would get overly complicated. Student nos and
staff seem fair.
Clearly a formulaic approach is necessary but the model as currently
illustrated in the Business plan is extremely unattractive to Orkney
College and smaller partners in general.
Need to form a group to consider this.
Q11
If you are content with the formula-based approach in principle, do you have any comments or
alternative suggestions on the particular methodology suggested on pp95-96?
The logic flow of the various models is to be commended. However
the impact on “micro” APs i.e. those with very few incumbent IT
staff and/or relatively low HE activity levels could be significant
It is difficult to define one specific metric that will suit all so broadly
content with those suggested. Individual partners should see their
own calculations and metrics (student/staff no.s) in the spirit of
transparency
The current model doesn’t reflect the size of the elements that
make it up. For example the partners with the highest share of
wSUMs or HE students (and presumably staff) aren’t picking up
proportionately the larger share of costs compared to the metrics
used, so by the same argument the smaller partners are bearing
more cost.
182
Suggest a formula that is based on actuals for students nos not PPF
predictions (accepting the current figures are for illustrative
purposes).
I am quite prepared to suggest (or work with others) on an
alternative formula. Those working on the Business Plan have had a
year to come up with a proposed formulaic approach. I’ve had
seven days to consider an alternative, so forgive me if it takes a little
longer. If I understand correctly both the additional £100,000
overhead cost of the shared services company in the first year and
the full cost of ‘core’ and ‘optional’ for the central university costs
are charged against the ‘Core’ for all partners. I recall that this is to
‘incentivise’ partners to sign up full. Maybe that is an argument but
the overall impact is to hit some partners extremely hard.
Conscious that it is easy to criticise, I am aware how the outcome
depends strongly how you throw the dice, but also what kind of
dice you throw. I would be happy to be involved in any group
working on other options that might reduce turbulence.
Q12
If we are keeping overall costs level in the first instance, but changing the funding methodology, it is
inevitable that there are ‘winners’ and ‘losers’. On pp99-100 we propose a possible mitigation
scheme. Do you think such as scheme is necessary? Do you have any other comments on this?
The explanation of the figure in the table on page 98 ‘top-slice into
RAM’ is slightly unclear therefore it is difficult to assess the levels of
mitigation that might be needed. However, agree with the Board
that some mitigation will be needed by some partners in order to be
able to participate
Don’t think mitigation should be necessary – can dilute/delay effort
to have no losers.
Option Cost Model seems equitable
Core Cost Model transition arrangements whilst generous in year
one (i.e. status quo) the drop off to 2/3, 1/3 and zero requires
detailed scrutiny at a local level.
Clearly mitigation is better than no mitigation. However the
183
mitigation scheme suggested is predicated on the funding model
being correct. All the ‘mitigation’ scheme does is spread the pain of
transition over three years. This makes it more palatable in year one
but nevertheless three years down the line we would still be paying
out considerably more per annum for IT services than at present.
Mitigation scheme is suggestive of transitional relief. The formula
itself needs to be re-thought in the light of the UHI partnership
commitment to support the sustainability of smaller partners.
Putting in place mitigating factors is often not equitable
Q13
Is any more permanent mitigation necessary, e.g. for smaller partners facing an increase in their
costs?
In reality permanent mitigation may be needed to reaching tipping
point for marginally sustainable colleges. Not healthy
We believe so – as any model that increases cost is unlikely to be
acceptable to local management.
This will depend on the size of the gap for individual partners but
may well be necessary to support the whole partnership
Ideally the funding model could be improved to make mitigation
unnecessary or at least reduce the level of mitigation. It is difficult to
compare like with like for the Optional services but analysis of table
8 on page 98 shows that the impact on the ‘Core’ costs for partners
varies significantly.
184
The table above shows that the impact on partners (in relation to
the Core) varies from an increase in cost of 244% at one extreme to
being 11.5% better off at the other. It is critical that the percentage
impact on academic partners is considered rather than just the
absolute costs because of the massive differences in size of APs. The
above has been arranged in rank order of impact and the adversely
differential impact on smaller partners compared with larger
partners is quite stark and I would suggest unacceptable as it
currently stands. For some this mitigated in part by the cost of the
‘optional’ service reducing the overall impact but for others, such as
Orkney it is actually made worse.
Q14
Do you agree with the approach to major investment outlined on pp107-108, i.e. to seek funding for
major developments, according to an agreed ICT strategy, on a top-sliced basis?
Agree in principle that major investment should be agreed and
funded outside the running costs/partner subscriptions. Top-slicing
on top of subscriptions (which may already need some permanent
mitigation) may be beyond the finances of some partners, so needs
to be carefully considered.
Yes, but illustrates the danger of 12 votes out of 20 vested in Perth
and Inverness
commits to taking account of
these concerns and reviewing
the relevant sections within
the Business Plan
185
Agree in principle and believe that the proposals would further
enhance accountability and lead to more strategic procurement
based on well consulted business cases. Not convinced about the
top-sliced methodology – need further clarification.
I fully support the creation of a shared ICT strategy for UHI in which
all APs are stakeholders. On the basis that there is not yet a
formulaic model that seems tenable I would support the top slice
approach to major investments, hopefully combined with match
funding where possible from other sources.
As long as we have no recognition with the UHI funding model of
the additional impact of remoteness and sparsity on some partners
it is difficult to see how a simple activity related formulaic approach
will adequately apportion the cost of shared services.
The appointment of a smaller college principal as part-time Chief
Executive will guard against the development of unaffordable
investment plans. That said, the cost distribution should
incorporate an on-going investment into infrastructure. Plans to
negotiate investment in a ‘bid’ for top slice basis are not consistent
with the planning processes required by the partnership and its
increasing reliance on ICT.
Concerns about use of the term top-slice.
Q15
We have deliberately not projected ICT service costs beyond the first year, on the grounds that this
becomes a matter for the company’s members to determine. Would you however wish to see any
such projections made at this stage, and if so, what direction and quantum of travel might you
propose?
Early forecast would be desirable; an outline 3 year forecast would
be appreciated.
Should be at least 5 years not just 1.
It may be worthwhile projecting an indicative budget for say the
first 2 years, even if this shows nothing more than the inflationary
increases stated in the business plan. Even if these then alter going
forward, there is a baseline from which any changes can be
review the sections on costs,
savings and efficiencies and
incorporate a section on Year
2 finances where appropriate
186
explained.
For the document provided to live up to the title of ‘….Business
Plan’ I believe it is necessary to model at least three and preferably
five years ahead. When bidding for business start-up costs in Orkney
College, whether that be OIC, HIE, UHI ESF etc. I would never have
achieved success with only one year of financial projections and
would go so far as to say I would have been laughed out of the
room. It’s crucial, although I acknowledge there are a lot of
unknowns, as in any new business venture.
This is a naïve approach that we suspect will not be supported by
the partnership or SFC (in terms of transitional funding). In itself, it
creates an unnecessary barrier to Academic Partner support and
should be revised asap.
3 year plan would be reasonable. Likely that SFC will prescribe.
The Service
Q16
Do you have any comments on the proposals for Service Level Agreements on p61-66?
SLA – staffing considerations should be included – Eligibility and PVG
checks, references etc
P66 – what is the current SLA achievement performance
agrees to provide further
clarity and detail where
requested.
Service Availability - why do we aspire to monitor all systems?
Should we not aspire to achieving system coverage commensurate
with criticality?
Service Performance – sounds challenging.
Notice Periods – agreed
Service Review Meetings – this section is inadequate. Quality
Assurance cannot be managed in this way – please rethink this area.
Presence – agreed
187
Generally OK with the proposal for Service Level Agreements as set
out on these pages
Detail that can be agreed at a later date once the basics are agreed.
Request for Service – who will arbitrate?
HelpDesk Support – appears commensurate with the scale and
nature of operations proposed.
Customer Satisfaction – can we examine a “rolling” survey rather
than an annual snapshot?
Service Catalogue – looks good.
Nature of negotiations around the appropriate service levels
Some further clarity required on exactly what is in and out of core.
Q17
Is the division between ‘core’ and ‘full’ services on pp59-60 acceptable?
The split appears to be very pragmatic. The option to offer
members a “selective” opt-in to additional services is to be
commended but will require vigilance to avoid “cherry-picking”.
There was a question about why Wifi was in the full service and not
in core. What if all the ‘core’ services are not required, is there any
mechanism for reducing the costs?
Wifi is shown as Full Service. Happy with running on this basis at
present in terms of current Wifi technology but what would happen
when there is a step change in Wifi technology. Would this then be
dealt with as a Core item as it would be an infrastructure issue
rather than just an end-point matter?
Who would meet the cost of installing the WAN to new sites (e.g.
learning centres) Would this still sit with ‘Core’?
commits to clarify the
definition of ‘core’ and ‘full’
or ‘option’ service and also to
review the position of Wifi
within this, without giving
any room for
misunderstanding that there
is opportunity to pick-andmix from the service offering.
Further detail will be
provided on the provision of
services to new sites and to
188
Would ‘Core’ only members receive the same statistical monthly
outputs on performance as at present?
While acknowledging that maintenance of websites for ‘Core’ only
partners would be with the AP locally will the current central lead
on website architecture be maintained and be available to all APs?
Would ‘Core’ only members be fully consulted and entitled to
influence decisions over matters such as the introduction and
implementation of Thin Client technology. This is an issue of
particular concern in Orkney where we are reliant on microwave
links and fibre optic connections alongside the A9 that are disrupted
from time to time. I.e. need local facility to maintain functions when
the WAN goes down.
Members who are not fully
opted in.
Reinforce wording around it
being a clear requirement for
all partners, whether core
only or full, to discuss any IT
procurement/projects with
the Shared Service, if only to
ensure compliance and
minimum specs, etc.
Would expect universal printing / ability to print at any site to be a
‘core’ service rather than ‘optional’ although acknowledge managed
locally.
Q18
We have proposed that members remain responsible for decision-making and spend in respect of
PCs, other end-user devices, classroom equipment etc. Do you agree with this?
Not entirely. The company should reserve the right to mandate
equipment procurement choices where circumstances indicate an
overwhelming “corporate” benefit (volume discounts/commonstandards/ serviceability /adherence to the technology “roadmap”
etc).
Yes, although as at present welcome guidance and advice.
commits to revising the
wording associated with local
IT spend to reflect the
positive relationship between
the Shared Service and its
Members
Yes with caveats. If we are to achieve efficiencies then some degree
of uniformity will be required regarding:

Devices supported and expertise required;

Depreciation and replacement of hardware (which will have
an impact of required support);

Innovation (and its impact on future networked delivery);
ICT Strategy
189
Q19
On pp49-57 we outline a draft ICT strategy for the delivery of ICT services to the Company’s
members. Do you have any comments on this?
Again comprehensive. If this is the appropriate section, would like
to see more consideration of “partnering”/”piggy-backing” with
similar ongoing or emerging programmes in aligned sectors e.g.
secondary sector, LAs, other public sector initiatives
It is important to remember that this strategy needs to support the
whole business (including the specialist areas) and therefore it is
encouraging to see research mentioned on page 53 under work
streams.
relevant sections as
identified.
Details that should be agreed later.
On page 55 it is stated that “A single service will allow an
overarching dialogue, which is not currently possible, with individual
APs, the FE Region and the University to determine where strategic
development……. At present Orkney College is not able to sign up
for the ‘Full Service’ due to a) being part of Orkney Islands Council
with no mandate to transfer staff; b) the current financial model
makes the ‘Full Service’ and incidentally the ‘Core’ service financially
untenable. Nevertheless the College would be committed to
achieving the principles of the shared service in terms more joined
up working, convergence of systems etc. The College would wish to
be an active partner in the dialogue referred to on pg 55.
What is the difference between IT Strategy (Business) and IT
Strategy (Technical)? Is the latter a full time role?
How is the ICT Strategy developed, articulated and implemented
with and for the University?
Concluding
Q20
Are there any other areas of the Business Case/Business Plan that you’d like to comment on?
Whilst the detailed risk register has been included in the appendices
it was a little surprising that there was nothing in the main business
commits to reflecting key
190
plan.
risks within the body of the
Business Plan
This is a comprehensive and well-argued Business Case/Plan and the
team are to be commended for their thoroughness. However, strip
away all the logic and wiggly-amps and this proposal has at its core a
significant change management programme that faces some serious
hurdles (as evidenced by the heel-dragging and passive resistance
already encountered in parts). Would like more evidence as to how
this vital aspect will be managed as the Winning Hearts and Minds
will be crucial to success.
commits to emphasise the
sections on training and
development,
communications and change
management within the
appropriate sections of the
Business Plan
There are some comments within the Business Plan that do not
need to be said within the context of the ICT service regarding
external factors
Chapter on Regional
Developments
What about contingency for delays in relation to the timescales, e.g.
in particular Pensions?
timescales and revising as
appropriate
Where do Libraries sit?
commissioned some
exploratory work from an AP
Librarian which will be able to
inform consideration by a
Commissioning Board, should
that be established as per the
proposals.
What are the communications channels between the Board and the
University/APs
commits to clarify how it
intends the Company should
align with the academic
governance model of the
partnership.
Need milestones for the 2 year period following the live service
date. (Bus Plan projection period?)
commits to review and
update the Project Plan and
191
upload this into Mahara
Q21
Is there anything in the Business Plan – or omitted from it - that would make it difficult for your
institution to sign up for the shared service, and if so, how could we address that?
Should be more detail as to efficiency gains/growth/flexibility etc, in
particular general initiatives proposed to realise them.
Business Plan to incorporate
further details around these.
The logic is clear and supported. The concern from smaller (and
more distant) AP perception is that we could end up paying more
for a service that, whilst overall more efficient and effective, could
potentially be remote and fail to meet our local needs.
Revision of the Financial and
Voting Models and the makeup of the Board after the ICT
shared service goes live will
in part address this.
Continued engagement with
all stakeholders and
communities within UHI will
also ensure an efficient and
effective service across all
Members.
Still feel there should be some acknowledgement of the desirability
of cost savings/method of achieving and some basic forecast
numbers
Business Plan to incorporate
further details around
efficiencies as well as cost
savings.
The financial commitment is a concern at the moment so we would
need to see the subscription calculations and understand if we are a
‘winner or loser’. If a ‘loser’ by how much and what mitigation if
any would be available.
Revision of the Financial
Model will address this – see
Finance Section above
We would also like to see more representation from the
small/specialist colleges in the major decisions, either through
membership of the Board or the voting rights.
This will be addressed as set
out above under the sections
on Voting and Directors
192
As part of Orkney Islands Council the College does not have a
mandate to enter in to negotiations to transfer staff to the UHI
Shared Services company. I would never say never on this matter
but it is almost inconceivable that the College could go down this
path following the current timeline that is set.
Noted
Our proposals and those anticipated by SFC:
Noted

A 3-5 year projected income/expenditure plan;

A governance/staffing model that takes account of UHI
partnership commitment to support smaller partners
The financial model causes serious concerns as it is set out at
present. Although not published in the Business Case and Plan
(which is actually unfortunate) the cost of the ‘optional’ services
would be circa £30k per annum higher than the current in scope
spend. The financial position regarding the ‘Core’ is also extremely
concerning as given by the indicative figures in the Business Plan.
The ‘Core’ services as set out in table 1, pg 19 would cost the
College an additional £30k per annum. Combining the additional
‘Optional’ cost of £30k per annum and the additional ‘Core’ cost of
£30k per annum would mean a total increase in annual spend on IT
services of £60k per annum. As it stands this is an untenable
additional cost. The current IT service in the College operates more
efficiently and reliably than it has ever done in the past.
Revision of the Financial
Model will address this – see
Finance Section above
Unknown costs of Pensions
The Shared Service Board is
taking specialist advice on
Pensions and will include all
details available in the
revised Business Plan up to
the date of publication.
Beyond that time all Partners
will be kept informed of
developments.
193
Potential insolvency
will seek advice from the
Financial Directors of the
partnership with respect to
financial processes and
operation of the Company
The following from the perspective of a College which cannot opt in.
Infrastructure, Network and Telephony – LAN cabling/ patching/
switching – if we were to e.g. add another site by leasing a building
where would we stand with getting the LAN installed?
There will be greater clarity
regarding the situation of
non-opted-in Members in the
revised Business Plan
Infrastructure, Network and Telephony – Wifi – as above
Infrastructure, Network and Telephony – server platform for noncore services – can we add applications to e.g. myuhi ourselves?
(assuming they are compatible)
Infrastructure, Network and Telephony – web analytics/ design/
development or Hosted Applications Support – convergence – using
these as examples of areas we might need assistance with in future.
Is there an indication what the charge rate would be?
Training – would staff not transferred in be able to access the
training? Would there be a cost?
IT Meetings – as above
194
195
APPENDIX A5: UHI ICT SHARED SERVICES RISK REGISTER


Risks numbered 1.x are for the period prior to launch (i.e. before 1 April 2014)
Risks numbered 2.x are for the first year after launch (i.e. after 1 April 2014)
No.
Risk descriptor
Root cause
Implications
Rating
(Likelihood
x Impact)
Proposed
mitigation/controls
1.1
VAT
exemption
proves
unworkable in
practice
Further
guidance/case
law makes (e.g.)
‘exact
reimbursement’
impracticable to
implement
CSG unviable
in its intended
form
1x5
Note: updated
guidance from HEFCE
suggests this even less
likely.
Monitor via HEFCE,
BUFDG, UCISA, APUC
etc.
1.2
Impracticable
to transfer
LGPS pensions
Employer
contributions
unaffordable,
bond
requirements
unfundable, or
other
Major
industrial
relations
difficulty in
establishing
CSG
2x4
Take professional
advice as soon as
practicable (currently
in process Oct 13)
1.3
Insufficient AP
buy-in for
critical mass
Proposition is
not appealing or
convincing
enough;
financial model
disadvantages
key APs;
unacceptable
governance
model
Delay in
establishing
CSG
2x4
Extensive engagement
with APs on business
plan/partnership
agreement
Development of
acceptable financial
model, if necessary
including transitional
relief
1.4
University
does not buy
in
Perceived loss of
control, failure
to demonstrate
how HE interests
protected,
unacceptable
governance
model
Delay in
establishing
CSG
2x4
Ensure that there is a
suitable model for
strategic influence at
HEPRC and FE Regional
Board level – capital
investment determined
at this level on the
basis of agreed
strategic plan(s)
1.5
Failure to
agree financial
model
Irreconcilable
vested interests
Delay in
establishing
CSG
2x3
See 1.3
1.6
Transition
The emergence
Delay in
2x3
No relocation costs
196
costs
unaffordable
of unexpected
or unpredictable
costs/liabilities
establishing
CSG
No compulsory
redundancies in Year 1
Seek SFC funding
See also 1.2
1.7
1.8
Industrial
relations
problems
Poor
consultation
processes;
failure to offer
guarantees on
location, job
security,
pensions
Delay in
establishing
CSG
3x3
LIS shared
service caught
in broader
planning blight
APs not willing
to sign up to
broader process
Delay in
establishing
CSG
3x3
See also 1.6
Constructive
engagement with trade
unions at early
opportunity
See 1.3
Position CSG as stable
option through
organisational change
Articles etc. kept under
review
1.9
ONS issues
compromise
model
Company
becomes subject
to ONS
strictures
Delay in
establishing
CSG
1x4
Articles and
governance kept under
review with
contingency plan
1.10
Inadequate
capitalisation
APs/EO
unwilling to
commit upfront
CSG has no
operating
funds, cannot
take on
liabilities
3x4
See 1.3
1.11
Legal challenge
From APs who
are ‘forced’ to
take core
services at
prices they
cannot control
Delay in
establishing
CSG (at least),
further impact
on partnership
1x5
Ensure transparency of
cost model at suitably
granular level necessary in any case
to meet audit
requirements of VAT
exemption
1.12
Not all APs buy
in (less serious
version of 1.3)
Various reasons
More complex
operating
model,
reduced
efficiencies
5x1
Effect of compromising
the model in order to
get apparently
complete buy-in would
compromise core
objectives. No specific
action proposed.
1.13
Failure to
secure
necessary
operating
agreements
Inability to
offer/agree
acceptable
terms
Delay in
establishing
CSG, increased
costs
2x2
Short internal
‘procurement’
timescale to reveal
potential problems;
have effective plan B
197
with APs
(provision of
services to
CSG)
2.1
Cash flow
failure
for selfprovision/outsourcing.
Inadequate
capitalisation,
poor profiling,
unexpected
liabilities,
members late
paying their bills
At worst, CSG
failure. More
likely, severe
loss of
credibility
3x3
Ensure that contracts
with APs protect
against inheritance of
unsustainable
liabilities.
Put effective financial
management in place.
Explore underwriting
arrangements with
University/HEPPRC and
FERB.
2.2
Member
default
Failure of AP
Unlikely to
lead to
complete
failure but
could have
significant to
severe
financial
consequences
1x5
Develop contingency
plan
2.3
Legal challenge
From industry re
Teckal
compliance
CSG cannot
operate
1x5
Don’t provoke them.
Ensure that CSG
Articles and protocols
are as compliant as
possible.
2.4
Failure to
operate within
budget
Management
failures;
unbudgeted
liabilities
At worst, CSG
failure. More
likely, severe
loss of
credibility as
members have
to bail it out
2x4
Ensure that contracts
with APs protect
against inheritance of
unsustainable
liabilities.
Put effective financial
management in place.
Effective Board
oversight.
2.5
Loss of
confidence of
members in
service
Perceived and
unremedied
drop in service
standards
Lobbying by
opponents
Business
disruption,
unwillingness
to progress
shared
services
agenda
further
2x4
Effective monitoring of
user satisfaction and
intervention as
necessary
Effective Board
oversight.
Relationship and
expectations
management. Solid SLA
198
2.6
Sabotage by
disaffected
CSG staff
Failure to
address issues
with disaffected
staff
Significant
service
disruption,
loss of
confidence
2x4
Inclusive management
approach
Effective HR
procedures
Possible VR offer for
staff who would not
want to be part of new
service
2.7
Key staff
overload
Failure to
distribute
workload widely
enough – limited
number of staff
with key
expertise
Significant
service
disruption,
loss of
confidence,
loss of key
staff
3x4
Ensure that workload is
well-distributed and
does not (e.g.) just fall
to current University
staff
Engage all staff in
process of change
Well-planned and
funded retraining
programme
Do as much work as
possible prior to ‘hard’
launch
2.8
2.9
2.10
2.11
Legal
challenges to
post-TUPE
reorganisation
Non-compliant
approach, IR
failure
Compliance
failure
inherited by
CSG
Failure to
secure capital
investment
Loss of CSG
status
Significant
service
disruption,
inability to
manage
change
1x4
For example,
major ongoing
licence breach in
relation to
novated
contract
Significant
financial
liability,
reputational
damage
2x4
Failure to
convince
FERB/HEPPRC
on capital
investment plan
(or failure to
produce an
effective plan)
Inability to
maintain and
develop IT
infrastructure
in support of
the business
3x5
Failure to
comply with
terms of VAT
exemption
Although it
should be
possible to
recover from a
breach, a
Robust principles of
fairness embedded
Take good legal advice
Appropriate contracts
with APs in relation to
inherited liabilities
Appropriate due
diligence
Early engagement with
FERB/HEPPRC (do not
just present ultimatum
demand)
Make sure plan reflects
business needs
Seek SFC support
1x5
Effective audit and risk
management
Proper due diligence
before taking on major
new business
199
major VAT
liability could
be incurred in
the interim
2.12
VAT
exemption
proves
unworkable in
practice (but
we find that
out postlaunch) OR
becomes
unavailable
because of
changes in
legislation
Further
guidance/case
law makes e.g.
‘exact
reimbursement’
impracticable to
implement OR
EU takes
infraction
proceedings
against UK
(probably well
past Year 1)
Possible
complete CSG
failure
1x5
Have a plan B for the
event in which a CSG
becomes impossible to
maintain (e.g. revert to
top-sliced funding,
direct grant from SFC,
etc.)
2.13
AP member or
members
withdraw from
CSG
Multiple
possible root
causes
Loss of
efficiency or
even viability
2x4
Properly structured
agreements between
the CSG and its
members
Also see 2.5
2.14
Services to
individual APs
under pressure
Increased
visibility of
internal crosssubsidy
Loss of
coherence and
unity in
partnership
2x3
Ensure that there are
operating principles
put in place early on
and agreed to
2.15
Failure of CSG
internal
business
function
Internal supplier
failure (e.g. AP
contracted to
deliver financial
services to CSG
deprioritises
that work)
Service
disruption
2x3
Effective business
continuity function,
and contracts/SLAs
that allow for exit in
case of failure
200
APPENDIX A6: ARTICLES OF ASSOCIATION OF UHI SHARED SERVICES LIMITED
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
APPENDIX A7: BUSINESS SYSTEMS CONVERGENCE STRATEGY
University of the Highlands and Islands
Business Systems Convergence Strategy
Version
Draft
1.0
1.1
Author
John Maher
John Maher
John Maher
1.2
John Maher
Date
30/11/2012
10/12/2012
29/01/2012
Notes
Initial draft to Alun Hughes
Reviewed and comments from AH incorporated
Expansion of ERP v Best of Breed (Solutions Types) and AP
application refresh plans (Systems Audit)
11/04/2013 Minor corrections
217
Executive Summary
UHI’s HE and FE outcome agreements contain an objective to review and develop a strategy for the
convergence of its business systems. The benefits of business system convergence include:





Improved processes and functionality
Culture change towards greater partnership sharing of knowledge and expertise
Self-service online services delivering cost savings, greater productivity and better data
quality
Better management information
Informed decision making
There are a number of single instance business systems supporting partnership wide services e.g.
student records, VLE, library and research. However these are high-end expensive systems capable
of managing the individual business processes of each academic partner. If UHI is going to benefit
from further business system convergence and reduce costs common business processes need to be
adopted.
An audit has highlighted a diverse range of systems in use, often small and lightweight and therefore
lacking in certain functionality. Where there are predominant systems these have been
implemented and configured individually. By combining the partnership’s annual spend on business
systems it should be possible to access quality business systems with a wide range of functionality,
including online self-service processes and quality management information.
There has been much discussion in Scotland and across the UK regarding the development of shared
services. Currently APUC are developing a framework for the procurement of finance and HR
business systems for the education sector in Scotland which UHI will be able to access. However,
despite strong encouragement from government there is little indication of the development of
shared business systems services, especially in the education sector in near future. Therefore UHI
needs to look at either extending one of its current business systems or procure a new one for HR,
Finance and Timetabling.
To avoid implementing inappropriate business systems it is imperative that each functional area
develops a partnership wide strategy with supporting business processes. These are needed as a
reference for creating the functional requirements specification which will be used in any business
system assessment or procurement. Any assessment should also take into account the full cost of
providing the business systems in-house including hardware and staff, who often need to be highly
skilled. These should be compared against the potential benefits of procuring a business system that
is managed externally e.g. hosted in the cloud.
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To manage the process of business system convergence a series of 12 month projects will be
necessary, coordinated under a programme structure. It is proposed the Shared Services Board acts
as the programme board with strategic practitioner groups developing the strategies, business
processes and requirements specifications for the supporting business systems. Finally teams made
up of business users, IT and vendors will implement the chosen solution. It is essential that during
this process the Shared Services Board, the practitioner strategy groups and senior management
support the redesign of business processes and ensure they are consistently implemented.
219
Introduction
The UHI Shared Services Board commissioned a report that would satisfy the following objective
contained in both the HE and FE outcome agreements for the University of the Highlands and
Islands.
“Undertake a review of the existing IT systems for functional areas such as Finance and Human
Resources with a view to developing a plan for these to be converged.”
The terms of reference for the review were to:

Prepare an inventory of the finance, HR, and any other major administrative systems in use
across the UHI partnership

Present an initial options appraisal for the methodology by which these might be converged,
including options such as:
 extending one or more of the existing systems to cover the entire partnership
 procurement and installation of a new system or systems to cover the entire partnership
 procurement of a cloud-based solution with simultaneous migration of all partners to it
 procurement of a cloud-based solution with phased migration over time

Take account of the broader Scottish and UK IT strategic context including an assessment of
whether there are collaborative opportunities with other institutions.

Present an outline draft project plan for the implementation of the preferred solution

Present any evidence that might be available about the potential costs of the preferred
solution.
Existing Convergence
Despite the implication of the objectives within the two outcome agreements, it is important to note
that UHI has a number of partner wide services that already use a single instance of a business
system. These include:




Student Records System (SITS)
o Used by all academic partners for FE and HE student administration
VLE – Blackboard
o Used by all academic partners for HE and some FE delivery
Library Management System(LMS) – Millennium
Research Information System(RIS) – PURE
However there is no similar convergence in HR or Finance.
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Figure 1 Joined Up Management Reporting
Figure 1 shows the main components needed to create an effective management reporting model for
UHI. However, two of those components are currently missing, namely Finance and HR data. The
Student Accounting Model in SITS provides some student finance data, for those academic partners
currently using it for fees and funding: Perth, Moray, Inverness and North Highland. However, there
is no access to additional staff or cost data, including staff numbers, staff costs etc. This data can be
collected and added manually but this is a laborious process making the production of timely
management information almost impossible.
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Expected Benefits
Figure 2 outlines some of the expected benefits of converged business systems.
Figure 2 Expected Benefits
Self-service online
services replacing
paper
Better
management
information
Informed
decision making
Culture change
Improved
processes
and
functionality
Improved Processes and Functionality
Some partners have some good business systems that have the functionality they need, but
generally this is only in one or two of their systems. The audit has shown that most are lacking at
least some key aspect of functionality e.g. self-service, reporting etc. Pooling license expenditure
brings with it a wider choice of products, often richer in functionality, than can be sourced
individually especially for smaller Partners. Being part of a collective agreement makes this
functionality accessible to all, giving administrators more tools to do their jobs better and partners
better data to analyse.
Culture Change
A converged business system will allow greater sharing of best practice across the partnership and
allow practitioners from different partners to support one another in performing administrative
functions. It also gives a solid platform on which to develop new, more efficient ways of working,
possibly as a shared service with professionals developing specialisms in different areas.
Self-service Online Services
A key component of any new business system will be its ability to provide online self-service
functionality to staff. This will improve business processes in terms of time, cost and data quality.
Staff being able to manage aspects of their own data and perform key processes online (e.g. leave
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requests, absence notification, expenses, performance review etc.), without the need for paper
forms, will make these processes more efficient and the data more accurate and timeous.
Better Management Information
Having all the data for each functional area in one system, in the same format will allow better
management information reporting at a partner and partnership level. As there the will be only one
interface to maintain the costs of providing that information will also reduce.
Informed Decision Making
Better management information will support UHI in making informed planning decisions and allow
better on-going performance monitoring across a range of KPIs.
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Strategic Context
External Environment
There has been a lot of discussion in the UK and in particular Scotland, at both sector and
government level, in terms of shared services and making better use of IT resources.
Principles of McClelland
The Scottish Government commissioned John McClelland to review ICT usage in the public sector in
Scotland (McClelland 2011). Some of the key principles he identified are relevant to UHI:

Although “information management” is a core activity it is not essential to operate totally
self-sufficient local information processing, support and development.

Excess resources and cost are being created by the existing operating mode of “standalone
self-sufficiency” including the operation of many separate data centres and local systems
development.

The existing clusters of nearly common applications should be built upon by selecting the
best single application implementation and associated business processes and then from
there achieve a reconciling of and, agreement on common business processes so that the
number of separately hosted instances can be rationalised and reduced.

Order of merit should be to first re-use, then buy and build only as a last resort.
Griggs – Regionalisation
At the same time Russell Griggs’s review of further education (GRIGGS 2012) has moved the Scottish
Government to restructure the FE provision through a smaller number of regions. This has resulted
in the majority of colleges merging within these regions, with the main exception being UHI, which
will operate with activity and funding being coordinated through a regional board. This brings with it
the need for tighter cost control, greater cooperation and a need for much better management
information to support planning, performance measurement and the distribution of funding.
Collaborative opportunities with other institutions
Although there has been some discussion about shared services across the Scottish and wider UK
education sector, there has been little tangible evidence of effective shared services being
developed, especially in relation to core business systems. The HE Information Directors Scotland’s
(HEIDS), in conjunction with Scotland’s Colleges, report (HEIDS, July 2011) and the FE&HE Oversight
Board’s initial strategy both mention business system convergence, but it is either at the far end of
the road map, or in the case of the Oversight Board the priority is to support it in the context of the
numerous regional college mergers that are taking place. Therefore it must be concluded that there
will be no sectorial development of a business system shared service in the short term.
APUC is currently in the process of creating a framework for the purchase of finance and HR systems,
through its work with the new Edinburgh College. UHI will be able to benefit from this service once
Edinburgh’s procurement has been completed.
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Internal Environment
Options for Change and Regionalisation
The Capita review of UHI structures and governance, and the regionalisation changes prompted by
the Griggs report have created a need for better management information to support the University
and the new FE region. Currently the disparate business systems in use across the partnership create
data silos that are almost impenetrable, making the collation of data for any cross-functional
analysis, either within the individual institution or at a UHI level laborious if not impossible.
Shared Services
UHI is very close to creating the LIS shared service and it is assumed that by doing so, there will be
savings made in the consolidation of software licensing and application hosting. The new service will
have the responsibility of hosting the current range of disparate business systems. Their variety in
terms of numbers of applications, versions, operating systems and database platforms will present
an immediate challenge, both physically and financially.
Estates Management and Timetabling
The ability to coordinate the network delivery of HE and now due to regionalisation FE activity,
particularly the video conferencing estate makes the creation of a global timetable highly desirable.
Pressures on funding also create a need to provide better audit evidence, at a regional level, of
estate provision and usage.
Existing Business Systems Fit For Purpose?
During the audit exercise is was apparent that a number of academic partners and executive office
do not rate some of their business systems as fit for purpose. They are either at the end of their
version cycle and need upgrading, lack functionality or do not have some of the new features that
users and staff expect e.g. self-service of your HR record, online leave requests etc. Some academic
partners are actively planning to either upgrade their existing system or purchase a new one.
There are a few examples where partners have procured the same finance, HR system or estates
system (see
Audit of UHI Partnership Business Systems). In each example,
although it is the same system, and on the face of it performs the same functions, they have been
implemented in very different ways to fit each academic partner’s business process.
Business Process Convergence
The strategy for the convergence of business processes in the service areas covered by the systems
(HR, Finance, Estates) under review has yet to be defined. Consideration also needs to be given for
processes that sit between the interface between functional areas but which do not sit consistently
in one or other of these functions across the partnership e.g. payroll which in the partnership either
sits in HR or Finance.
An important distinction needs to be made between the common definition of a business process
and its implementation. An example, requesting and authorising a leave request online, can look on
paper or in a requirements specification like a common process but if each partner implements it
225
differently, for example in the workflow over who approves it (e.g. line manager, HR or department
manager) the benefits of convergence are lost.
It is unlikely there will be an immediate 100% acceptance of any proposed business system
convergence, and not just Orkney and Shetland who have their systems provided for by their
respective island councils. The consequences of a partial take up will be that the full benefits of
convergence will not be realised and certain processes will remain manual e.g.:
 Joint staff and estate returns
 Compiling a consolidated set of accounts
 Provisioning of IT accounts for staff
Work has already been started on assessing what business processes within in a functional area may
be considered for a future shared service. While strategic elements of a function may remain
separate the common elements need to be implemented in a converged business system in a
common manner. As an example, in the finance area would be the following could be included:
 Accounts Payable
 Accounts Receivable
 Debt Recovery
 Sales Invoicing
 General Ledger Accounting and Financial Reporting
 Fixed Assets/Asset Accounting
 Tax
 Treasury Management
 Internal Audit
 Payroll5
Partner Size
The small size of some partners means they have not implemented enterprise level business
systems, either because they cannot afford to, or it is not warranted. Implementing a single business
system of a particular business area/process across UHI may have two opposing outcomes. First, it
may give access to functionality and reporting at a cost that may not be available to the individual
partner. Second, conversely, it may make the process or system more expensive for a particular
academic partner, either in terms of license cost or additional staff effort.
Audit of UHI Partnership Business Systems
An initial review of the business systems across the UHI partnership was undertaken. Its scope was
HR, Payroll, Finance, Estates, Timetabling and CRM. Partners were asked to provide a breakdown of
software used, versions, licensing arrangements and total spend (see
Appendix 1 –
Business System Audit). There was no return from NAFC and Shetland and Orkney are
excluded from Finance, HR and Payroll as they have these provided by their respective island
5
With reference to its interface with HR
226
councils. Due to the short timescales an in-depth data collecting exercise or detailed analysis could
not be performed but it was sufficient to highlight some key points:

The business systems used across the UHI partnership are mainly hosted in-house. Very little
use is made of the cloud, with the exception of Argyll and WHC who have their HR system
hosted externally. Perth is currently investigating this option with their HR platform.

There is a wide range of systems in use reflecting size of each academic partner and
executive office although there are a few predominant systems. However, these “common”
systems are all individual installations, with different components purchased, with separate
licensing arrangements and seemingly no consistent pricing formula. Common systems
include:
o
o
o
HR - CIPHR - 3 instances
Finance – Sage 50 – 4 instances; SUN – 3 instances
Timetabling – Celcat - 5 instances, possibly 6 in the near future

Some academic partners and executive office do not have dedicated business systems due
to their size, often utilizing spread sheets instead.

A number of academic partners indicated that they need or would like to, replace or
significantly upgrade one or more of their business systems. This included four who would
like to replace their finance system in the near future. No academic partner was forthcoming
regarding the budget they had allocated to this.

There were no examples of academic partners sharing an application although there are
currently discussions between Perth College and executive office about entering into a joint
service for CIPHR, hosted externally by Computers in Personnel.

Licensing for specific numbers of administrators (power users) is higher than for an
organisation of the combined size of UHI, reflecting the multiple teams across the
partnership in each functional area doing the same type of work.

Total reported annual license6 spend on systems (including VAT) is approximately:
o
o
o
o
o
o
HR – £55,000
Finance – £120,000
Payroll7 - £16,000
Timetabling - £55,000
Estates - £4,000
CRM - £6,700
Given the levels of spend on HR, Finance and Timetabling, and their criticality to UHI’s development
they should be the focus of any future business system convergence.
6
7
This does not include consultancy or internal hosting costs.
Payroll costs maybe higher as they are often included in the license of either the HR or Finance system.
227
Options Appraisal
Solution Types
UHI has historically bought large, heavyweight, and consequently expensive software solutions to
meet the multiple business process needs of its partners. Experience has also shown that some
vendors find it hard to accommodate the complex licensing models UHI has demanded in the past
e.g. to price UHI as a single entity but provide 14 individual instances. The insistence on needing
solutions that can manage the myriad of business practices within UHI has two outcomes:
1. UHI pays more than a single institution of a similar size
2. Often a wide range of software solutions are excluded from the selection process
In-house or Cloud
Cloud solutions, while sometimes costing more in license terms than those managed in-house, have
the benefit of reducing an institution’s resource costs, both human (people and expertise) and
hardware. This simplifies the technological environment freeing the institution from maintaining a
high skill level in particular niche technologies e.g. Oracle database administration. However,
consolidation may deliver economies of scale that make an in-house hosted system justifiable. It is
important that any cost benefit analysis takes into account all costs (tangible and intangible).
The cloud solutions market has also matured considerably and SaaS (Software as a service) providers
can often offer much better scalability, performance and reliability. With all outsourced solutions
there is a loss of control but this can be an advantage, as any configuration change comes at a cost,
which allows the institution to make a disciplined decision on whether the change is really worth it.
The choice facing UHI is to either extend one or more of the existing systems or procure and install
new systems to cover the entire partnership. This can only be decided when a requirements
specification for each functional area has been drawn up. This can then be used along with other
factors including cost of ownership, depreciation and where the systems are on their lifecycle, to
assess the existing systems and measure these against the cost of procuring new ones.
ERP or Best of Breed
ERP (Enterprise Resource Planning) systems concentrate on data integration across a range of
business applications from the same supplier, the core normally being the general ledger, accounts
payable, accounts receivable and payroll. Common add-ons include HR, CRM and Business
Intelligence. A Best of Breed methodology is about selecting the most appropriate application for
each business function, not necessarily from the same supplier, and then integrating it into your
already existing set of applications.
The traditional argument for ERP versus Best of Breed is that you choose between having integrated
data across a range of applications, but with varying degrees of functionality against having specialist
applications that perform one function very well but were harder to integrate. Investment by ERP
vendors in developing application functionality, new easier to use SOA (Service-orientated
Architecture) integration technologies and SaaS for both ERP and Best of Breed solutions has blurred
these differences.
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When looking at the choice between integrated solutions and Best of Breed the following points
should be considered:

Does UHI really need the rich functionality provided by specialist business systems? There is
a balance to be struck in being confined by the possible limitations of an individual
component, or the inherent business process of an integrated solution and being able to
cater for specific business processes through specialist applications.

Making a commitment to use one provider, in principle, to provide all of UHI’s business
systems can make the procurement process less labour intensive. There is no need to have
multiple competitions to procure the separate business applications of a of a Best of Breed
approach.

Is the range of applications on offer from a single integrated supplier truly integrated or the
product of a strategic acquisition to bolster their product range?

Implementing an ERP solution can be complex due to the high levels of integration inherent
in these systems. This often requires reengineering the business processes across all
business areas, and in UHI’s case across all in scope Partners, at the same time.

Having a single supplier can make relationship management easier but it also puts them at a
significant advantage when dealing with the institution.

The integrated nature of an ERP solution can make the exit costs higher as dismantling it
impacts all areas of the business. Choosing Best of Breed solutions allows individual systems
to be changed with minimal impact to the running of other core business applications.
There are broadly four different models for a business system implementation in UHI:
1. Multiple Systems/Multiple Instances
This is the status quo. Each partner has their own instance of the system of their choice. Additional
hardware and staff costs are incurred hosting and maintaining a variety of systems on a variety of
platforms. This requires maintaining a diverse range of staff skills. The potential for combined
management information is very low due to the number and variety of interfaces that would need to
be maintained
2. Single System/Multiple Instances
Each partner has their own instance of a single system based on a best fit to a set of collectively
agreed requirements. Additional costs are incurred maintaining multiple instances in applying
software upgrades, configuration changes, disaster recovery and backups. This option makes the
convergence to a single instance at a later date easier as long as common business processes have
been agreed and maintained. There is some potential for combined management information but
multiple interfaces would need to be maintained, albeit of the same format.
3. Single System/Single Instance
Each partner uses the same system with discreet areas of data managed by different partner
administrators. This has the lowest cost in terms of hosting and maintenance. The potential for
229
combined management information is very high including individual partner and partnership
reporting.
4. Single System/Federated Instance
This is the classic ERP model for an organisation separated into discreet divisions. Individual partner
and partnership views of the data can be achieved. This model often has significant costs attached to
it as it is the preserve of some of the bigger solution providers. The potential for combined
management information is very high.
Appraisal Factors
Each requirements specification and software solution needs to be measured against the following
appraisal factors:
Cost and Funding Mechanism
“Order of merit should be to first re-use, then buy and build only as a last resort.”
“Excess resources and cost are being created by the existing operating mode of “standalone selfsufficiency” including the operation of many separate data centres and local systems development.”
(McClelland 2011)
Any costing model of convergence should include the value to UHI of the potential savings in IT and
business user time spent across the partnership supporting individual systems, producing and
maintaining separate procedure guides, training users and liaising with multiple suppliers.
In looking at requirements for new systems there is always the potential of scope creep as the “blue
sky” thinking exercise becomes a shopping list of everything ever wanted from a system. There can
also be the desire to specify a fully flexible system to accommodate multiple business processes
rather than make the hard decisions about changing working practices. These two factors drive up
complexity and cost.
Software purchases normally involve a large capital invest upfront followed by an annual
maintenance payment for the duration of the license. Given the current indications from the SFC it is
unlikely the partnership will be able to access large capital sums for the purchase of new software
although this should be investigated further.
A second option and one that is increasing in popularity given the rise of cloud services, is the
subscription model. There is no large capital investment upfront but higher monthly or annual fees
for the lifetime of the contract. If priced over a 5 year software renewal cycle it is very attractive
especially if access to capital is restricted.
Management Information
“Although “information management” is a core activity it is not essential to operate totally selfsufficient local information processing, support and development.” (McClelland 2011)
230
The effective consolidation and integration of disparate business systems makes it easier for
information to be entered once and then promulgated to other relevant systems. This ensures that
all systems are updated simultaneously, reducing administration, duplication of effort and the
potential for error.
Consideration needs to be given to data protection and confidentiality issues, especially as each
partner will remain an employer in their own right. Any solution will need to be able to separate
data into discreet areas only accessible by those that have the rights to see it.
Having the data in one system, as long as it is structured in a consistent manner, allows for much
more coherent and rapid management information. Having one instance of each core business
system reduces the number of interfaces needed to bring the information together, to be able to
produce cross-functional management information for planning, analysis and performance
measurement.
Reducing Complexity
“The existing clusters of nearly common applications should be built upon by selecting the best single
application implementation and associated business processes and then from there achieve a
reconciling of and, agreement on common business processes so that the number of separately
hosted instances can be rationalised and reduced.” (McClelland 2011)
The objective is to increase convergence and reduce complexity. This involves adopting common
business processes and single, simpler software implementations.
Self-service
Learners and staff should be able to access and update a reasonable level of information held about
them through self-service portals, thereby ensuring it is accurate and up to date, and reducing costs
of producing paper copies e.g. salary slips.
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Appraisal Factors Summary
In summary any consolidation of business systems should satisfy these key objectives:
High
•Convergence
•Management
Information
•Self-service
Medium
•Cost
Low
•Capital Intensity
•Complexity
•Number of
Instances
Table 1 Software Solutions Matrix
Complexity
Cost
Management
Information
No. of Instances
Convergence
Multiple System
Multiple
Instances
High
High
Low
Single System
Multiple
Instances
Medium
High/Medium
Medium
Single System
Single Instance
Low
Medium
High
Single System
Federated
Instance
High
High
High
14
Zero
14
Medium
1
High
1
High
Table 1 assesses the four models of business system implementation against the appraisal factors
outlined above. Self-service and low capital intensity have been omitted as these can be delivered
across all the models. The optimal solution for UHI is the Single System – Single Instance model.
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Guiding Vision and Key Principles
Throughout this business change process a guiding vision and set of key principles need to be
adopted by which to assess any of the programme outputs:
The Vision: Adopting a common and integrated set of business processes, supported by services
from a set of commercial best-of- breed systems.
The Principles:
1.
2.
3.
4.
5.
6.
Review existing business processes – looking ahead to 2017 – and adopt common ones
Compromises will need to be made to meet the needs of the whole
Replacement of paper-based processes and local systems
Once Only – no duplication of master data sources, of processes, or of systems
Adopt ‘Out-of-the-box’, best-practice implementation using common standards
Easy web-based user access from on and off campus with appropriate security levels
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Potential Costs
Without a detailed requirements specification and supporting business strategy it is hard to elicit
real costs from software suppliers. The following are estimates based on informal conversations with
various suppliers:
HRMS
A best of breed HRMS including: HR, Payroll, HESA, Recruitment, Web Recruitment, Learning,
Development, Health & Safety, ESS, MSS, Eslips, Performance Management, Reporting Layer and GL
interface.
Over 5 years, based on 2000 staff records - £234,943 (excl VAT).
Additional costs can include:



External hosting
Consultancy (100 days)
Project Management (20 days)
£55,870
£87,700
£17,540
Finance
No costs are available but it is assumed that a solution can be realised within the limits of current
license expenditure.
Timetabling
A best of breed timetabling solution - £32,000 (excl VAT) p.a.:


Core includes base timetabling option and room booker
Optional extras can be purchased either individually or as a Partnership:
o Attendance Monitor - £28,000 (excl VAT)
o SITS plug-in - £6,000 (excl VAT)
o Online timetables - £14,000 (excl VAT)
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Project Plan
Programme Governance
A programme of several projects is needed to coordinate the level of change required to deliver the
business system convergence outlined above. Where there is functional and business process crossover joint project teams will need to be formed.
Figure 3 Programme Structure
Programme
Board
Shared Services Board
Functional Strategy Groups
Chair: SSB Member
Functional Project Team:
Business, IT, Supplier
Finance &
HR
HRMS
Pay-roll
Estates &
Timetabling
Finance
Estates
Timetabling
Programme Board
The Shared Services Board is the natural locus for the programme board which will coordinate all the
project strands, ensuring they are delivering their objectives to the agreed timescales, cost and
quality.
A key task will be the review of the requirements specification and project briefs developed by the
functional strategy groups. It’s essential the programme board maintains its focus on the core
objectives, key vision and principles to help steer the functional strategy groups’ strategy
development, business process design and business system selection. It will be necessary to provide
dedicated project management resource from a skilled project manager to support the programme
and the individual project strands.
Deliverables:






Programme governance and programme/project management
Budgetary control
Programme level RISK management
Sign off of new business processes
Sign off of the business system requirements specification
Sign off of the procurement process
235
Functional Strategy Groups
The functional strategy groups will be made up of practitioners with the relevant responsibility and
experience to develop the functional area’s strategy. To minimise the risk of implementing an
inappropriate system, it is essential that the area’s strategy is developed as a matter of priority.
From this they can develop the new business processes needed to support the strategy and the
requirements specification for an appropriate business system.
Each group should be chaired by a member of the Shared Services Board to ensure coordination
across the whole programme. Appropriate IT resource will be needed to complete the technical
aspects of the requirements specification.
Where there are cross-functional interdependencies (e.g. payroll) two or more functional strategy
groups will need to form a joint group. This will ensure that the business needs of both areas are
represented and a coordinated business process can be developed.
These groups will be responsible for tendering and selecting the eventual business system solution
based on the requirements specification. Strong procurement expertise will be needed to ensure
UHI gets the best license terms, phased in over the implementation period as partners adopt the
systems in stages.
Deliverables:







Project brief
Project level RISK management
Functional area strategy
Business process redesign
Management information requirements specification
Business system requirements specification
Business system procurement
Project Teams
These are the implementation teams made up of business unit team members, internal IT and the
supplier of the chosen software solution(s). These teams will be responsible for the embedding of
the new business processes, the implementation of the new software solution to support these, and
the creation of training and procedure guides. Each team will utilise a project manager tasked with
managing the project to agreed timescales, quality and budget. It is important that the relevant
strategy group and Shared Services Board actively support these teams to ensure implementation of
the business process changes necessary to make the projects a success.
Deliverables:





Implementation of new business processes
Implementation of selected business system
Testing
Training
Procedure Guides
Phased Approach
236
JISC’s Regional Support Centre, that has been supporting some of the college mergers, has indicated
that business process rationalisation and system implementation has been achieved in up to 6
months. However, this is based on a model where a number of factors considerably reduce the
complexity of the project:



An existing system from one of the colleges was extended
Additional data needed from the other merged colleges’ systems was migrated to the
existing system
An existing business process was selected and adopted within the new single functional
team
Given UHI’s federated structure and geography a similar transition will not be so easy to achieve.
There will need to be greater consultation regarding business process redesign, their adoption and
the requirements capture exercise for a supporting business system. Phase 1 (see below) could take
up to 6 months alone but only if it remains focused, is well managed and is positively supported by
the Programme Board, the functional strategy groups and senior management. It is also unlikely that
UHI will be able to utilise all of its existing business systems meaning a procurement exercise will
need to be completed. This normally takes 3 months to complete with a further 3 months
implementing the new system. The timing of the implementation will also need to be sympathetic to
the business cycle of the functional area e.g. it will probably not be acceptable to introduce a new
finance system mid-way through a financial year and certainly not near a year end.
Figure 4 UHI Business System Convergence Phases
Functional
working
groups
Project
Governance
In-depth
audit
Budgetary
controls
RISK
assessment
Regional
Strategy
Vision
Objectives
Business
process
redesign
Requirements
Functional
requirements
Project briefs
Supplier
engagement
Options
assessment
Procurment and
Implementation
Procurement
Business
process
changes
Data
migration
MIS
developed
Project
management
Testing
Training
This activity is not necessarily linear as Figure 4 indicates. UHI’s capacity of change, given that many of
the same people will be needed on the cross-functional projects, may require that the different
projects do not run exactly simultaneously.
It may also be the case, either due to project capacity or partner specific reasons, that each partner
may not implement the new business system at the same time. This will mean the Procurement and
Implementation phase may have concurrent strands for the data migration, testing and training
stages. However, the longer this process takes, the longer it will be before the full benefits of the
business system convergence can be realised.
237
Phase 1 – 6 months
 Programme governance and practitioner groups set up
 In-depth audit and due diligence performed on existing business systems and business
processes
 Practitioner groups formulate regional strategy for convergence of business processes
 New business processes for each functional area developed
 Business system requirements specifications and project brief for each area developed
 Project briefs and requirements specifications reviewed
 Budgets set
 Suppliers engaged
 Requirements refined
 Systems procured
 Phased implementation of new business processes
 Phased implementation of new business systems to support business processes
o Data migration
o Procedures
o Training
o Testing
 Management information implementation
238
Appendix 1 – Business System Audit
Table 2 Business System Audit Summary
Shetland
NAFC
Orkney
NHC
LCC
HR
N/A
?
N/A
CHRIS 21
None
Payroll
N/A
?
N/A
CHRIS21
None
Finance
N/A
?
N/A
SUN
Access Accounts
HTC
Inverness
Moray
SMO
WHC
Perth
SAMS
None
CIPHR
HR World Service
Sage 50 HR
Cascade
CIPHR
CIPHR
Sage 50 Payroll
CINTRA
HR World Service
Sage 50 Payroll
Sage 50 Payroll
PAYRITE
PAYRITE
Sage 50 Accounts
SUN
Symmetry
Sage 50 Accounts
Sage 50 Accounts
Symmetry
SUN
Argyll
Cascade
Cascade
Sage 50 Accounts
Estates
None
?
None
?
Trend 963
Supervisor
None
None
CAFM
Spreadsheet
None
None
None – possibly
CAFM
None
EO
None – possibly
CIPHR
Resource Central
Aptos
None
Timetabling
None
?
MS Outlook
Celcat
Celcat
CRM
None
?
None
?
None
None
Celcat
Celcat
ASC Timetables
None
Celcat
MS Outlook
None
None
None
Spreadsheet
None
None
Sage ACT
None – possibly
Celcat
None
None
Raiser’s Edge
239
Table 3 HR Management Systems Audit
AP
Product
Name
NAFC
NHC
LCC
HTC
Inverness
Moray
SMO
WHC
Perth
SAMS
Argyll
EO
Shetland
Orkney
CHRIS21
NONE
NONE
CIPHR
HR World
Service
Sage 50
HR
CIPHR
CIPHR
Cascade
CIPHR
N/A
N/A
2009
V5.1.0 SU
12022
Compute
rs in
Personne
l
Windows
Server
2003
10505 r 1
V4.0
Cascade
HR
Module
V4.5.110
902.102
Software
for
people
Sage
Windows
Compute
rs in
Personne
l
Windows
2008 R2
Compute
rs in
Personne
l
Windows
2008 R2
Cascade
Windows
Server
2000
Cascade
Human
Resource
s Ltd
Windows
Decisions
& Org
Plus 750
records,
others
1500
records,
Ciphr
report
writer 2
users
8 users +
11
Employee
self
service
2 User/1
Company
Max
employee
s 150
750
concurre
nt + 8
system
admin
4
concurre
nt client
licences
(admin)
covers
250
employee
s
Site
Licence
(up to
600
users). 3
Admin (2
full, 1
limited)
8,441.80
5,838.00
300.00
2,160.00
18,840.00
3,408.00
9,576.00
N/A
MS SQL
N/A
?
In-house
Hosted
SQL
Server
Not
known
Hosted
Version
Supplier
Frontier
Software
Platform
License
Arrange
ment
License/S
upport
Cost p.a.
Database
Platform
DB
Version
Inhouse/
Hosted
2009
v6
2009
Windows
Compute
rs in
Personne
l
Windows
2008 R2
Licenced/
Hosted
?
4,862.70
-
-
MS SQL
SQL 2000
In-house
In-house
SQLserve
r 2000
SQLserve
r 2000
In-house
MS SQL
SQL
2008
In-house
Hosted
-
-
SQL
Server
Not
known
Hosted
240
Table 4 Finance Systems Audit
AP
NHC
LCC
HTC
Inverness
Moray
SMO
WHC
Perth
SAMS
Argyll
EO
Shetland
Orkney
Product
Name
Sun
Systems
Access
Accounts
Dimensio
ns
Sage Line
50
Accounts
Plus
Infor Sun
Systems
v4
Symmetr
y
Sage 50
Accounts
Sage 50
Accounts
Professio
nal 2009
Symmetr
y
Infor FMS
SunSyste
ms
Infor
Q&A
ALBANY
ePay
SAGE
Line 50
N/A
N/A
Version
v4.4
v2.50b
19.00.11.
0263
V4.3.3
9.12.0
Accounts
Professio
nal 2012
15.01.20.
0191
9.11.5
v4.3.2
v10
Supplier
Castle
Compute
r Services
Windows
Access
Accounti
ng
Windows
Sage
Symmetr
y
Sage
Sage
Symmetr
y
Windows
Server
2003
Windows
Windows
Windows
Server
2003
Castle
Compute
r Services
Windows
Server
2003
Aptos
and EAS
reporting
Aptos
web
Services
(Time &
Expenses
and other
reporting
tools)
Version 9
(current
patch
level 23)
B-Plan
Platform
NAFC
Windows
7
Castle
Compute
r Services
Windows
Server
2008 R2
Standard
12
Phoenix
Software
Windows
Windows
241
License
Arrange
ment
License/S
upport
Cost p.a.
Database
Platform
DB
Version
Inhouse/
Hosted
8 client
and 5
vision
(excel
reporting
)
10,852.00
Per
Annum
2 User/2
Company
4,985.00
-
MSSQL
16
concurre
nt
20 users
12,219.31
26,886.00
MS SQL
Oracle
Unlimited
/10
Compani
es
No set
licence
arrangem
ents
1,600.00
-
N/A
?
32 users
plus 6
system
users
15
Connecti
ons
15
Connecti
ons
1
concurre
nt
27,736.00
12,000.00
Oracle
MS SQL
3 user
license
(not
networke
d)
Renewal
is 1st
August.
Different
licences
for each
module
of the
database.
Header
system
concurre
nt 15,
each
module
then has
10,
develope
r licences
1. Aptos
web
Services
unlimited
.
600.00
20,642.40
SQL
My SQL
In-house
2008 SP3
x64
In-house
In-house
SQL2008
R2
In-house
10.1.2.3.
0
In-house
N/A
In-house
?
10.2.0.3.
0
In-house
2005 200
In-house
In-house
In-house
242
Table 5 Payroll Systems Audit
AP
LCC
HTC
Inverness
Moray
SMO
WHC
Perth
SAMS
Argyll
EO
Shetland
Orkney
NONE
Line 50
Payroll
2011
18.00.03
1
CINTRA
HR World
Service
Sage 50
Payroll
Sage 50
PAYRITE
PAYRITE
Cascacde
Resource
Central
N/A
N/A
20.2
10505 r 1
Payroll
Professio
nal 2012
18.00.03
1
2012v01r
1.0
v1R1.8
Supplier
Sage
CINTRA
Sage
Sage
Cascacde
Northgat
eArinso
Windows
Windows
XP SP3
x86
Windows
Windows
W7
Windows
Windows
, Firefox
License
Arrange
ment
1 User/1
Company
5
Concurre
nt
8 users +
11
Employee
self
service
1 User/3
Compani
es
No set
licence
arrangem
ents
Bond
Internati
onal
Windows
Server
2003/Wi
ndows
2008 R2
2 users
CIPHR
Platform
Software
for
people
Windows
Server
2000
1
concurre
nt.
Site
Licence
(up to
600
users). 3
Admin (2
full, 1
limited)
Same as
HR
3 year
license
due to
expire
Feb 13
Product
Name
NAFC
NHC
Version
License/S
upport
Cost p.a.
Database
Platform
DB
Version
Inhouse/
Hosted
See Note
-
350.00
3,948.01
Pervasive
SQL
In-house
In-house
1,500.00
SQLserve
r 2000
SQLserve
r 2000
In-house
1,200.00
4,002.00
N/A
?
none
N/A
?
N/A
In-house
In-house
In-house
Included
in Ciphr
pa
Propriety
In-house
4,608.00
-
-
SQL
Hosted
Hosted
243
Table 6 Timetabling Systems Audit
AP
Product
Name
NAFC
NHC
LCC
HTC
Inverness
Moray
SMO
WHC
Perth
SAMS
Argyll
EO
Shetland
Orkney
CELCAT
CELCAT
NONE
CELCAT
CELCAT
Asc
Timetabl
es
2009.10.
4
Applied
Software
Consulta
nts
NONE
CELCAT
OUTLOO
K
CELCAT?
NONE
NONE
WORD,
OUTLOO
K
-
-
-
-
-
Version
7
Supplier
Corbett
Engineeri
ng
CELCAT
CELCAT
Platform
Windows
Windows
Server
2008 R2
Windows
Server
2008 R2
Windows
Windows
Server
2003
License
Arrange
ment
Per
Annum
Site
licence
for 2,500
FTE
students
Site
Licence
multicomputer
Licenced/
Annual
maintena
nce and
support
18,452.40
10,400.00
-
MSSQL
MS SQL
N/A
SQL
Server
DB
Version
2008 SP3
x64
SQL2008
R2
N/A
Inhouse/
Hosted
In-house
In-house
SQLSERV
ER 2008
R2
SQLSERV
ER 2008
R3
In-house
SQL
Server
2008
In-house
License/S
upport
Cost p.a.
Database
Platform
6,580.80
4,396.80
7.2
-
7.2.700.1
In-house
6.4.98
CELCAT
-
14,602.00
244
Table 7 Estates Systems Audit
AP
Product
Name
NAFC
NHC
LCC
HTC
Trend 963 NONE
Supervisor
Inverness
Moray
NONE
CAFM
Spreadsheet NONE
Explorer
Quantum ()
Version
SMO
11.2.0.0
Excel 2010
Microsoft
Supplier
Redrew
FMX ltd
Platform
Windows
Windows Windows
Server 2003
License
Arrangeme
nt
Per Annum
2 Licences
License/Sup
port Cost
p.a.
3,141.00
-
-
Perth
SAMS
Argyll
EO
Shetland
Orkney
NONE
NONE but
looking at
CAFM
Explorer
NONE
NONE
NONE
NONE
Campus
838.24 Campus/£3
8.33 per FTE
Database
Platform
MSSQL
SQLSERVER N/A
2005
DB Version
2005
Express
SQLSERVER N/A
2006
In-house/
Hosted
In-house
In-house
WHC
-
-
-
-
-
-
-
In-house
245
Table 8 CRM Systems Audit
AP
Product
Name
NAFC
NHC
LCC
HTC
Inverness
Moray
SMO
WHC
Perth
SAMS
Argyll
EO
Shetland
Orkney
NONE
NONE
Dynamics
NONE
Spreadsh
eet
Mail
Chimp
Excel
2010
Microsoft
Rocket
Science
Group
NONE
NONE
SAGES
ACT
NONE
Raiser's
Edge
NONE
NONE
Version
Supplier
Alchemy
Platform
Windows
Server
2008
Standard
SP2 x86
10 user
license
License
Arrange
ment
License/S
upport
Cost p.a.
Database
Platform
DB
Version
Inhouse/
Hosted
-
-
-
7.92.550
8.5
Blackbau
d
Eureka
Ltd
Windows
Browser
W7
Windows
. Mobile
Devices
Campus
6
concurre
nt
Annual
renewal.
Feb- Feb.
-
-
MS SQL
N/A
SQL 2005
In-house
13.0.401
-
-
720.00
-
5,932.13
SQL
N/A
MS
Access
2010
In-house
In-house
In-house
-
-
246
Bibliography
Putting Learners at the Centre: Delivering our ambitions for Post--‐16 Education. (Scot Gov, Sept
2011) ISBN: 978--‐1--‐78045--‐379--‐8
Report of the Review of Further Education Governance in Scotland. (Prof Russell Griggs OBE, January
2012)
Above Campus IT Services for Scottish Universities and Colleges --‐ A Shared Road Map for Local
Benefit and Collective Opportunity. (HEIDS, July 2011)
Review of ICT Infrastructure in the Public Sector in Scotland by John F. McClelland C.B.E. (Scot Gov,
June 2011) ISBN: 978--‐1--‐78045--‐229--‐6
Scottish Government Response to the McClelland Review of ICT Infrastructure in the Public Sector in
Scotland. (Scot Gov, Sept 2011) ISBN: 978--‐1--‐78045--‐414--‐6
Joint Consultation Paper: College Regionalisation: Proposals for Implementing Putting Learners at
the Centre. (Scottish Government, Scottish Funding Council, Nov 2011)
247
APPENDIX A8: DRAFT JOB DESCRIPTIONS – CHIEF EXECUTIVE AND DIRECTOR, ICT
Post Title:
Chief Executive
Grade:
Insert grade (would suggest £80 to 90k)
Accountable to:
Board of Management UHI Shared Services Company
The shared services company is a company collectively owned and governed by its members, supporting the
whole business including HE, FE and research.
The job description is not intended to be exhaustive and is indicative of the nature and level of the
responsibilities associated with the post. Such duties may vary from time to time without changing the general
character of the post or the level of responsibility entailed. Such variations are a common occurrence and
cannot of themselves justify a reconsideration of the terms and conditions of employment associated with the
post.
Job Purpose
To provide active strategic leadership and direction to the UHI Shared Services Company, including embedding
the initial ICT Shared Service and the development and extension of its business to other areas of shared
service.
Key Accountabilities

Strategic Leadership

Sustainability

Managing relationships with Internal and External Stakeholders
248
Strategic Leadership

Through strategic leadership, ensure improvements to student experience, greater ability to deliver
equivalence, improved efficiency and effectiveness of services and therefore improved quality in the
development of shared services.

Accountable to the Board, develop and deliver the business strategy ensuring sustainability and
efficient operation of the Company.

Ensure Services and Operational Plans are aligned and the Company meets its obligations in line with
agreed service levels.

Ensure Company Policy is implemented in line with strategic aims.

Build and maintain an effective management team.
Sustainability

Ensure financial integrity of the business by putting in place appropriate plans and financial control
systems.

Closely monitor and report operating and financial results against agreed plans and budgets.

Reporting to the Board, anticipate and identify remedial action where necessary.

Ensure legal, financial and regulatory compliance
Managing Relationships with Internal and External Stakeholders

Review the business structures on a regular basis to ensure it meets the requirements of members,
customers and other stakeholders as the Company develops and grows

Manage the relationship with external stakeholders and the extenstion of the Company to other
members as the company develops.

Ensure all grant and project funding attributable to the Shared Services Company is fully auditable
and in line with conditions associated with the funding.

Ensure the continuous improvement and development of staff and support an ethos that motivates
and drives the Company to achieve.

Actively promote and ensure that best practice is followed in the development of all activities, and
that best value is achieved.

Report on internal and external quality and service audits to the Board, members and customers.

Represent the shared services company externally keeping abreast of sector developments.
Any other relevant duties (standard term in all job descriptions)

Uphold and ensure compliance with Health and Safety, safe guarding and Equality and Diversity
arrangements.
249

Abide by all approved procedures and perform any other duties not specifically detailed but which
may fall within the overall job purpose and within the expected competence and ability of the post
holder.
Core Management Competencies (this is optional and may be better embedded in the personal spec)
Making a Personal Impact:
Is committed to the priorities and values of the Company. Takes a wide corporate view, and works with
established protocols. Sustains effort in the face of difficulties and set backs
Giving Direction and Purpose:
Personally contributes to, shapes and champions the vision and goals. Has the capacity to provide originality
of thought as well as measured judgment. Creates a shared understanding of what has to be achieved.
Delivering Outcomes:
Engenders a culture of achievement. Displays drive, energy and determination and the capacity to mobilise
people and resources to greatest effect. Responds flexibly to changing demands. Is prepared to challenge
exiting ways of thinking/behaving in a continuous search for ways of improving performance and services.
Getting the Best from People:
Develops a positive working environment, and builds effective teams which achieve results. Supports an ethos
of continuous learning and improvement
Building co-operation:
Listens actively, demonstrates respect for and considers the differing views and experiences of stakeholders
internal and external to the college. Works with and helps others to achieve common standards and goals.
250
Post Title:
Director, ICT
Grade:
Insert grade
Accountable to:
Chief Executive
Draft outline job description for a Director, ICT
The Director of Information and Communication Technology (ICT) Services will be responsible for
managing the University’s IT infrastructure and services.
Main duties will include the development of policies for the management, operation, procurement
as well as the maintenance, development and improvement (where appropriate) of:

Corporate and enterprise systems (Finance, HR, Student Administration and related other
systems and databases) as well as web-based applications and selected bespoke software
developments

Corporate servers and associated software, and the maintenance of a virus-free
environment

ICT equipment (not end-user), including provision and support of the desktop environment
and office applications

Network and related functions, including the delivery and provision of broadband
connections as well as the wireless domain

Email and related web-based services and environment as well as remote access

Customer support, helpdesk and on-site services

Technical support of AV systems, including personal VC and teleconferencing

Support for the Virtual Learning Environment (VLE) and other related technologies and
systems
251

Support for research and enterprise related ICT requirements

Procurement of ICT software and equipment, including establishing and servicing of
procurement contracts, software licences and maintenance contracts, through APUC where
appropriate

Assessment and evaluation as well as the adoption of appropriate emerging technologies

Data security, business continuity and disaster recovery as well as audit trails

Risk management pertaining to the ICT environment and the ICT service

Physical environment and accommodation for the Shared Service throughout the
partnership, ensuring a pleasant work environment as well as functional and safe operation
of the equipment and personnel

To lead, manage and motivate Information and Communication Technology Service staff to
deliver the highest service standards that enhance the student and staff experience and
support the University’s strategic plan

To deliver operational and strategic development of these areas to optimise opportunities
available whilst recognising the contribution to the overall student experience and
reputation of the University

To establish customer focused relationships with key stakeholders and external businesses

To develop an appropriate commercial focus to these operations

To create and implement a strategic business plan for the development and marketing of
the full portfolio of Information and Communication Technology Services to internal and
external customers

To be responsible for the development and delivery of strategic, operational objectives and
day to day management of the Information and Communication Technology Services team

To provide leadership to the staff within the Information and Communication Technology
Services including the effective management of performance, conduct, capabilities, staff
training and development

To manage the Information and Communication Technology Services team within the
context of the Shared Service Company’s core values and strategic plan

To continuously review business processes and staffing levels to optimise financial and
operating performance and provide a seamless delivery across all areas

To maximise opportunities for cost reduction and efficiency whilst recognising student
experience and core strategies of the Shared Service.
252

To be the budget owner for the areas within Information and Communication Technology
Services and prepare an annual budget and business plan in line with the annual planning
process

To ensure good financial controls, processes and management reports are in place

To identify possible operating improvements through external partnerships and alternative
and appropriate service delivery budgets

To ensure legal compliance in all aspects of the operation of Information and
Communication Technology Services including food safety, health and safety and COSHH

To be responsible for identifying and specifying projects to improve existing IT infrastructure

To lead projects or undertake other duties as may reasonably be expected at this level as
requested by the Chief Executive

To work closely with the Chief Executive, Shared Services and the Board

To ensure customer focused services are provided through the use of effective customer
relationship management

To develop and implement customer care, service level and performance objectives for the
department and instil a culture of service excellence

To put in place formal processes for regular student and customer liaison

To attend workshops, exhibitions, conferences etc to represent the Shared Service on
external bodies in order to promote the image, reputation and facilities of the Service

To ensure that the identification and mitigation of risk is an embedded management process
253

uhi ict shared services business case and business plan

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