Patni Computer Systems has been working with global health and care leader Bupa for over three years - one of a small number of third party suppliers retained by Bupa as part of its multi-vendor outsourcing strategy. 40 specialists based in the UK and India deliver a comprehensive managed service for core business applications and beyond. As part of a worldwide initiative by Bupa to drive change within its IT function, Patni helps Bupa IT deliver on its mission to improve levels of service to the business, with quality software development and global re-use of applications and processes. David Guest, Chief Applications Officer at Bupa explains: "The Group's ambition is driving change in IT. We are a large company and our staff and customers expect professional levels of service. Growth in business volumes continues to put increasing pressure on services and drive additional requirements so our software is ever more critical to the business. By working with Patni, we have more predictable IT costs, reliable systems and can deploy our in-house staff into higher profile projects that keep them motivated. We also value Patni's advice on how to innovate with IT."

Patni recently completed its first year of a three-year managed service contract designed to bring cost-savings and service improvements to application support for Bupa, the UK's leading healthcare company. As a result of the first 12 months of activity, Bupa has achieved its performance improvement targets and laid the foundations for the delivery of new applications and services to the business.

IT systems and software are highly critical to Bupa as the impact of poor quality applications can be huge, both from a customer service and an employee engagement point of view. Global re-use is also important: the ability to create standard applications and services that can be rolled out across the world is vital.

David Guest, Chief Applications Officer at Bupa said: "Overall, cost and efficiency are key drivers for the IT function at Bupa. Quite simply, we have to do more with less. Offshore was an obvious piece in the jigsaw."

In May 2008, Bupa appointed Patni to provide a managed service for the support of core business technology, including PeopleSoft, Business Intelligence (BI), Web Technologies and core client applications. The managed service contract was planned to last for three years and projected to deliver significant savings over its duration.

The scope of the project covers four main areas. The first, BI, includes Oracle and Teradata databases, data integrators, TIVOLI Scheduler and Cognos 8 BI. The second area is Web Technologies, which includes 36 different applications such as Sharepoint, Oracle, Struts, Hibernate and Spring. The third is Core Applications, which includes 29 different client/server applications and products based on platforms such as Visual Basic, C#, .NET and Oracle. PeopleSoft includes both Finance and Human Resource Management.

Bupa and Patni reached the project's one year milestone in May 2009, and have taken the opportunity to review the benefits of the managed service to the business as well as the financial savings achieved.

David Guest takes up the story: "Our aim with this first phase of the project has been to bring cost reduction and stability to the IS application support function, whilst reducing the margin for error in all processes. The next step will be to add value to this stable platform - we're already seeing some green shoots of new activity, and expect these to grow significantly."

During the past 12 months, the managed service team was able to transition applications into support successfully and to meet all of the quarterly SLAs proposed for the project. Using problem management techniques, the team was also able to achieve a 10% annual reduction in requests/tickets received by the support team.

"We've got to the stage now where we are providing a service that is in many respects better than the one we had before this project but at a much lower cost. We've achieved our aim of getting more for less." However, says Guest, the project has now taken as many resources offshore and as many costs out of the process as possible. "We're about as lean as we want to be - we have 20% of this team onshore with 80% offshore, but there will always be a requirement for us to have touch points near the business in the UK".

The offshore element of the project meant it was vitally important to establish clear processes for development and change management, following ITIL guidelines. An initial stage was to define key application areas and development processes, along with the relevant people in the business associated with those applications. "It's easy when everything is managed in-house and onshore to communicate on a less formal basis and for people to work in the way that suits them best individually. When you move more resource offshore, you have to adopt a much more disciplined approach with tightly documented processes. The fact that some people working on our applications were now 5,000 miles away drove new rigour into the process."

Overall, the project to date has been well-managed and well-structured, so there have been very few surprises to deal with along the way, says Guest. "We had a couple of stumbling blocks in that somethings took longer than we hoped. There are also, inevitably, different levels of complexity in different applications, which has an impact on the skills that you need. But as a team we have done this many times now, and we recognise that fixing a lot of the problems that you see, comes down to getting the relationship right - we think that it takes between six and 12 months to get that bedded down."

In terms of measurable improvements, all four areas of applications under management at Bupa saw significant upturns, leading to higher productivity for IS and for the business. BI saw a reduction in action requests/tickets of 25%; Web Technologies a reduction of 14%; and Core Applications of 10%.

The transition of PeopleSoft to a managed application was more difficult than the other systems, simply because of its complexity and the skills required to manage it. However 98% of tickets handled within PeopleSoft over the 12 month period were managed within agreed SLAs, and the application is now firmly on track.

As well as bringing a new stability to the applications used by the business, the project has enabled Bupa to reduce the costs of managing its systems. Staff have been redeployed into other work and Bupa has cut back on the numbers of contractors it was using to support applications.

"We have achieved our aim to bring stability to our resource base. We believe that there is still a huge cost differential between offshore resources and contractors, particularly in scarce areas of technology. Rationalising our use of contractors and the number of outsourcing companies we work with has provided additional savings."

Actual productivity gains by the business are less easy to quantify at the moment, says Alan Patefield-Smith, Head of Application Support at Bupa, although there are plans to carry out more structured internal customer satisfaction surveys in the future: "The two main improvements for the business are the reduction in tickets and the improvement in code quality. We have over-achieved in all areas of the project, and intuitively this will impact the business"

Bupa anticipates that it will be able to contain application management costs for some time to come. "When you consider that our business continues to grow year on year, the cost savings will bring incremental value to us each year over the lifetime of the contract."

Looking forward, Bupa has a number of initiatives in its schedule that will build on the stable application platform built over the last 12 months. David Guest concludes: "Patni has spearheaded initiatives to improve the performance & quality of our applications and as our managed service partner is clearly in a strong position to continue adding value to us. There is plenty of potential for Patni to help us meet the goals of our business in the future."