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back to article NHS IT bods 'walk out' in pay row with crashed UK tech giant 2e2

A number of contractors from collapsed UK tech giant 2e2 refused to turn up for work in NHS IT today after their January pay was withheld, it is claimed. Debt-crippled 2e2 Group went into administration this week and put staff wages under "review", but its new handlers assured health service bosses that hospitals are a top …

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Stop Outsourcing things!

Tis all. Okay there may be some legit reasons to outsource but giving the boss a bigger pay seems to be the main one.

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Re: Stop Outsourcing things!

It's OK to outsource, as long as:

a) the function is not critical to your organisation - otherwise you've given away the keys to the kingdom and your supplier will have you over a barrel at the next renegotiation; and

b) you aren't large enough to gain the economies of scale on your own - otherwise how can someone else do it cheaper than you and make a profit margin?

So catering or night-watchmen - OK to outsource (but not if you're a restaurant or the military). NHS IT? Not so much.

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Anonymous Coward

Re: Stop Outsourcing things!

Outsourcing is often the best option for big projects where you need to assemble a lot of resources temporarily for a big project.

Or should all of the people involved in the olympics been hired full time and then laid off afterwards?

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Facepalm

Re: Stop Outsourcing things!

should all of the people involved in the olympics been hired full time and then laid off

Isn't that exactly what the outsource contractors planned to do?

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FAIL

@ AC 18:18

Read the article - this wasn't outsourcing for a one-off project like the Olympics, this was a long term deal covering all IT services.

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Re: Stop Outsourcing things!

I can't believe someone has the nerve to hold up the Olympics outsource as an example of how it works well.... Where were they when military staff were having to be used because the outsource company had not fulfilled its contract?

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Re: Stop Outsourcing things! @Chris Miller

NHS catering shouldn't be outsourced, either. Nor should NHS cleaning, nor probably the security. The biggest sources of complaints are from these areas, which the hospital has very little control over because of outsourcing - there are different priorities for the contractor than the health-care provider.

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Anonymous Coward

All Back In

As far as I'm aware, this was due to the BACS run issues that were in play last night, and once the salaries appeared in the staffs' bank accounts, they all went back to work.

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Re: All Back In

Which BACS issues were those?

It's the end of the month and millions of staffers are being paid in the UK, yet strangely only 2e2 staff had a problem! Hmmmmm, something smells suspicious, are you one of the Administrators Mr Anonymous Coward?

What perhaps happened was that some staff went back to work after salaries were paid by Faster Payments when FTI realised they were screwed if they didn't pay them. I know some 2e2 permies who have received nothing today.

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Anonymous Coward

Re: All Back In

My continuing lack of pay is suspiciously congruent with an invitation to an 11am conference call tomorrow morning where I'm expecting to be given a sharp push through the exit without my missing January wage. Needless to say, the legal fun will then start in earnest. I'm actually quite looking forward to the fight!

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Re: All Back In

>I'm actually quite looking forward to the fight!

Hope you enjoy the fight itself then because as a little guy employee you will be far back in line as a creditor and what $ is left will be long gone by the time its your turn.

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Anonymous Coward

Re: All Back In

Well, one has to at least try, if only as a matter of principle.

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Anonymous Coward

I'm actually quite looking forward to the fight!

What asdf said isn't entirely true.

You didn't say whether you were an employee or contractor. If an employee you probably won't get any expenses owed, for they will be classed as an "unsecured loan", but as an ex-employee you should be entitled to some payment, including owed holidays. This payment is capped at £x per week, so probably won't match the income you expected, but it's better than a kick in the teeth.

I only found out about this from my accountant. Neither the employer that went under nor their administrators told me about this.

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Re: I'm actually quite looking forward to the fight!

Oh yeah I forgot we are talking about the UK where employees actually do have a few rights. Being a right to work state (fancy term for can be fired at will without cause without recourse) Yank myself I have no idea what that is like. Good luck and sorry for the misfortune. Its always the little guys that get screwed and never the Porsche driving douche bag sociopath mgmt.

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Anonymous Coward

Re: All Back In

Not "only 2e2 staff had a problem" based on info from some of those still left, some staff were paid this morning as expected, and some weren't. FTI most likely trying to put some kind of "priority" on who they paid first with whatever they can find down the back of the sofa. Guess they screwed up with the NHS guys - no surprise.

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Anonymous Coward

Re: I'm actually quite looking forward to the fight!

Gosh, surely you're not saying that us commie Europeans have actually got something right ???? !!! :-)

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Re: I'm actually quite looking forward to the fight!

Under the UK insolvency act staff are considered preferential creditors, for about 4months worth of wages. Plus if they make you redundant any outstanding holidays will be owed, along with wages in lieu of notice, possibly a payoff for break your T&Cs by not giving you a notice period and of course the actual redundancy package. The odds are in your favour and some guaranteed by the government.

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Anonymous Coward

Re: I'm actually quite looking forward to the fight!

Although it won't help you much as:

a) average time to payout is >6 months, more like 1 year

b) the dole office will not let you claim any income based benefits as "you expect to be in receipt of monies/are owed monies" by other parties.

So you can forget housing benefit, mortgage payments, income based jsa, tax credits, etc. Lets hope you have got NIC class 1s sufficient, or you get a job quick

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Re: I'm actually quite looking forward to the fight!

Actually as shown by our last election a majority of Americans are not right wing buffoons. The ones out there are just extremely loud.

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Anonymous Coward

Re: All Back In

OP here. No no, not one of the admins, just one of the grunts.

Rumour was that the helpdesk early shift (two people!) didn't turn up as their pay hadn't arrived. Within an hour someone else was taking the calls. Once the pay turned up, everyone went back to work.

I know some people got fully shafted though, but those people were not the NHS IT Bods for which the world+dog are reporting.

Onto the other point, it seems that anyone who is being let go gets the fully-shafted treatment though, which leaves me wondering what will happen the day before pay day in Feb if the buyout hasn't been completed. Really worried that we simply won't get a penny :(

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UK Govt IT Policy and SMEs

It's interesting that part of the UK governments IT policy is to encourage the public sector to open up to smaller UK SMEs - thats all when and good, and certainly the right thing to do, but the question is, how does government cope when this sort of thing happens and the SME was providing services that have a knock on effect on front-line services - I'm not really saying that the big outsourcers are the way to go, but this isn't something that would happen with the "usual suspects".

Obviously one solution is not to outsource, but for the current lot in office that answer "does not compute".

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Re: UK Govt IT Policy and SMEs

"collapsed UK tech giant 2e2" is an SME?

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Re: UK Govt IT Policy and SMEs

"collapsed UK tech giant 2e2" is an SME?"

Yes, a quick Google says they only have around 2000 employees so they would have to grow by a factor of 10 to be considered "Enterprise"

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Re: UK Govt IT Policy and SMEs

In the UK, a 2000 employee business is Enterprise. Its definitely not SME. Sure, its not 'IBM' in size, but it isn't a little company like IDNS or CSE.

SME only goes up to about 250 employees in the minds of EU govts.

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Re: UK Govt IT Policy and SMEs

"In the UK, a 2000 employee business is Enterprise. Its definitely not SME. Sure, its not 'IBM' in size, but it isn't a little company like IDNS or CSE.

SME only goes up to about 250 employees in the minds of EU govts."

All of the vendors consider enterprise to be 20k and up including Microsoft, HP, Dell and many others. I'm inclined to agree even though my biggest customer is 20k because up to this mark you're still using relatively small systems and design philosophies. Over 20k and you definitely need to work in a different way to everyone else, and cost of hardware and software begins to be less of a problem than the implementation, manpower and design of the system, hence the differentiation between SME/SMB and Enterprise. As such, there are very few people actually working on enterprise level systems which has led to SMB being gradually redefined as SME by people who like the idea of "Enterprise" but don't fully understand it. This will probably get downvoted as the Reg commentards mostly work in smaller businesses but have delusions of grandeur. Vote away, I don't really care as long as I keep a better average than Eadon :)

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Re: UK Govt IT Policy and SMEs

Should have added, the new Microsoft ECI licensing starts at 50 server sockets.

How many 250 user organisations need 25 virtualisation hosts? Almost none :)

How many 1000 user organisations need 25 virtualisation hosts? Almost none :)

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Anonymous Coward

"He was unable to say how many 2e2 employees made it into work this morning at Swandean Hospital in Worthing where the trust is based. While on the phone to us, the PR man walked into a room of people that greeted him and he told us these were 2e2-supplied techies."

Haw! I got this really nice bridge here, going cheap, if you make me a cash offer for it right now you might just snatch it away from the other buyer I've got whose interested...

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FAIL

Not quite

SME = Small to Medium Enterprise, so <20k is still an enterprise!

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Anonymous Coward

What really happened

"He was unable to say how many 2e2 employees made it into work this morning at Swandean Hospital in Worthing where the trust is based. While on the phone to us, the PR man walked into a room of people that greeted him and he told us these were 2e2-supplied techies."

"He was unable to say how many 2e2 employees made it into work this morning at Swandean Hospital in Worthing where the trust is based. While on the phone to us, the PR man walked into a room (the A&E waiting room dressed in a white coat) of people that greeted him (who had been there since the previous day waiting fto be seen) and he told us (laughingly) these were 2e2-supplied techies."

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FAIL

What fun...

This, has all the hallmarks of a farce....

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WTF?

Subcontracting government work is ...

unreliable and expensive.

How much will this mess cost the taxpayer?

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Re: Subcontracting government work is ...

It'll cost us double (ish).

2e2 will still demand paid for work done by their "employees", yet the employees won't receive the money and the government insolvency service will cough up (some of) their missed pay.

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Anonymous Coward

The way I see it

If IBM couldn't make money from it's desktop services and sold the contract to Phoenix then maybe for 1st and 2nd line services there isn't any money to be made.

This worries me as a second line technician working for Phoenix

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Anonymous Coward

Re: The way I see it

Phoenix offered me a job once, at 70% of what i was already earning at the site and wondered why I turned it down

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FLOSS offers protection against outsourced failure

To some degree. Outsourced production and running of closed licenced software provides opportunities for barrel straddles.

Alas, the common expectation of NHS software is failure and managers may prefer to have that outsourced rather than in-house.

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I do hope everyone gets the wages they're owed but if it was me, even if I'd been paid, I'd be looking for guarantees going forward that I was still going to get paid. What happens in January can easily repeat in Feb and beyond if the underlying cause (the debt interest payment) is still there.

I've been in a similar situation years ago when the dotcom bubble burst. Luckily I was only owed a weeks pay plus a weeks redundancy which I did eventually get, about six months later.

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Alert

"I'd be looking for guarantees going forward"

The only guarantee I'd accept is payment up front.

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Re: "I'd be looking for guarantees going forward"

Yeah, I think I would too. Cash on delivery....

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2egone2

FTI =Failed to Investigate

Sweaty palms will be prevalent amongst the limp wristed misanthropes pacing the Barclays Capital Boardroom today as I am sure they have realised by now that 2e2 was about people and the marketing emphasis was on enhanced client ROI by packaging contracts with Employee Adoption Training (Employee Adoption was first to go) everything else is outsourced smoke and mirrors available anywhere.

Disgruntled employees and contractors can enjoy the spectacle as they endeavor to put lipstick on a pig (no reflection on existing staff)

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FAIL

Outsourcing - the BIG FAIL

Time after time, we hear of outsourcing problems.

When will STUPID MANAGEMENT LEARN?

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Anonymous Coward

Re: Outsourcing - the BIG FAIL

Firstly, where does outsourcing start and where does it end: strictly speaking, oursourcing starts already with one-man-band contractors. These contractors are usually the most committed. Things become complicated once several layers are within that contractor and the end client: for example, a service company promises to do the same job much cheaper and better when this IT project or all the IT operations are outsourced to them. This service company cannot work wonders either, and need to recruit (maybe the same) contractors for much less money or do inter company transfer abuse or offshore to a low cost country with low paid workers. Together with tax avoidance etc. a cheaper price can then be calculated. The product to deliver or the service level agreement is in many cases not met, which should trigger the payment of a penalty charge from the service company to the client, however, the service company tries every trick in the box not to pay a penalty, but to provide this upgrade or that additional service for free. Over a long period of time the client starts employing checkers who are only there to validate that the service company is actually doing it's job. This of course reduces the savings the client hoped to achieve, up to a point where the client pays more for the outsourced service than it would had the IT operations been kept in house.

Outsourcing can be compared with the Vietnam war: all battles are won, but in the end the war (or operation) is lost. Outsourcing is mainly a financial transaction, not a technological. It lives off inflexiblilty, i.e. goal post changes and changes to the IT service are not welcomed. All this at a time where we have seen tumultuous markets and ever agressive global players from emerging markets, not to mention new IT technology remains the growth industry for the next decades! Outsourcing shows a 30 year old thinking: IT is just a tool which supports the business operation. This is wrong: the IT operation IS the business operation. Companies that pursue strategic enterprise architecture like Samsung, the London Stock Exchange or Barclays will be the real winners, as they insource and leap from strength to strength. Companies who decide to take a cost cutting approach and outsource will lose in the long run, since they don't keep their entrepreneurial wisdom in house.

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