Network Rail is to outsource significant parts of its IT infrastructure in a multimillion-pound deal.

The organisation will retain control only of services that affect its core business. It is to appoint a third party to manage enterprise operations, computer systems and network services at 1,200 sites.

Network Rail’s goal is improved service, but it also expects savings.

‘Keeping true to our origins as a railways maintenance and engineering company, we will retain core IT activities that are important to the company’s strategic objectives,’ said a Network Rail spokesman. ‘Non-core activities will remain externally provided or be outsourced.’

Core activities include Network Rail’s service centre, operations management, technical design and application support.

The organisation has shortlisted suppliers and will make its selection later this year.

Focusing on core activities while outsourcing network services and IT infrastructure is increasing among large organisations, says Forrester analyst Euan Davis.

‘This is a sensible deal as it will allow Network Rail to focus on what really counts, such as rail management, signalling and track maintenance,’ he said. ‘Centralising its core services will also simplify them, reducing management overheads and costs.’

Independent rail expert Christian Wolmar says the decision fits in with its strategy of focusing on core activities, such as the insourcing in 2004 of IT activities related to track maintenance.

See also:

Network Rail restructures IT round smaller central core

Computerworld UK: March 08, 2007

Enterprise operations to be outsourced

Network Rail has launched a major shake-up of its IT department to refocus it on core activities, with plans to outsource the enterprise operations and distributed computing workstreams.

Network Rail’s infrastructure support services department will manage and support applications and equipment across the organisation, while the IT helpdesk, incident management and operations bridge units will be amalgamated into a new service centre to support Network Rail’s 20,000 IT users. These core activities will be retained or brought back in-house.

The company has now shortlisted suppliers to provide enterprise operations and distributed computing services and is planning to select a single partner organisation for each workstream.

But Network Rail said an outsourcing arrangement would only be finalised “if the proposals are economically and technically viable” and the relationship with the proposed partner organisations was right. The selection process is set to be completed in the middle of this year.

The rail infrastructure firm said the restructuring was prompted by a detailed review originating from a 2006 benchmarking exercise, in which it analysed monthly performance statistics and trends in its IT infrastructure delivery.

The new strategic plan also takes previous experiences of insourcing and outsourcing into account, Network Rail said.

The rail firm has recently completed the national rollout of Windows XP, and last year began a process of consolidating nearly 900 applications in a move aimed at rationalising the infrastructure it inherited from predecessor company Railtrack.