July 18, 2006
BBC's Goof-up in the Outsourcing Deal
According to the National Audit Office (NAO) has revealed that the BBC miscalculated the savings it would make through its outsourcing deal with Siemens Business Services (SBS). The BBC had originally projected that the deal would generate savings of £35.2 million. It has now admitted its mistake in the projection. It was found that the BBC overestimated the cost of running its IT in-house by £7.7 million, which resulted in the error.
The BBC Management acknowledged that the saving figure should have been updated. It also regrets that the mistake could not be identified earlier. Otherwise, it would have been reported to the executive and the governors. The management has assured that appropriate processes are in place to ensure that it does not occur again.
The Broadcasting Entertainment Cinematograph and Theatre Union (Bectu), which represented approximately 370 of the IT staff the BBC sold to Siemens, fiercely criticised the BBC for its miscalculation of cost savings.
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