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Mind the government budgets gap

Will next-generation platforms supply a head of steam for shared services and savings in the public sector and how can VARs drive this? Fleur Doidge reports

Virgo: Public sector IT investment needs overhaul

There is a gap in government budgets, for now and the foreseeable future. The good news is that technology providers may still score government deals over the next few years – although old-style IT procurement may be gone forever.

According to speakers at a public-sector roundtable sponsored by Siemens Enterprise Communications, government bodies are moving towards ‘next generation’ platforms and shared services to boost efficiencies, performance and save money.

Martin Ferguson, policy head at public-sector IT management body Socitm, said: “There is a sense that there are ways we can continue to invest in this financial climate, on things with creativity which create capacity.”

But it needs to be far less about selling new technology, and much more about helping government bodies do lots more with what they have or even less, he warned.

Fewer suppliers
Those that stick with a ‘buy this’ strategy will soon fall through the gaps, especially as the need for increased efficiency sparks contract consolidation across the public sector, said Ferguson.

Ian Wilcox, principal IT consultant at Hampshire County Council on secondment to the Cabinet Office on the Public Sector Network (PSN) programme, agreed: “I can see the market actually driving it down to a handful of suppliers for each type of service.”

Market forces, too, would decide whether it was the incumbent suppliers that would go on benefiting, or whether new players would move into favour for whatever reason, Wilcox noted.

“Particularly with large systems, we may just want three or four major suppliers in that field,” he said.

Procurement could and should probably be made a lot simpler, although this could bring worries about market competitiveness to the fore, Wilcox said.

David Wilde, head of ICT for Westminster City Council, said the competition commission already takes an interest in IT procurement arrangements for government authorities.

“And that worries me. If you have got into a position where regulatory bodies are getting involved to prop up competition, you have a problem,” he said.

“We have got this problem because we are still operating in a world where we have UK-specific services for IT and we have some services that are basically driven by the IT systems we have put in.”

The tail too often wags the dog, Wilde said, with public sector service delivery being defined by IT procurement, rather than the IT being chosen and deployed to fit in with public service needs.

“Do we really need to buy IT all from a company as a complete system, when maybe parts can be drawn out of other systems?” said Wilde.

Simpler, slimmer and more shared IT services are required both to make public sector cost savings and to improve public services, and it is doubtful, he said, whether that can be achieved by simply buying more IT.

‘Right providers’ required
“For example, benefits assessment can go into CRM and into your finance system,” said Wilde. “Can we bring in more of the right providers in a way that we can’t at the moment?”

Philip Virgo, secretary general of the European Information Society Group (EURIM), said changes in the way government invests should aim to help the changes pay for themselves and, even better, build up budgets so yet more investment can follow.

“And it is perhaps about making much more use of things, and buying things where somebody else is building the infrastructure and investing in buying it off them,” he said.

Cloud computing is one particularly attractive next-generation platform for the public sector because of this, as are many managed or hosted services. However, joined-up thinking must prevail, and the maximum efficiencies could only really be achieved by reshaping and restructuring the IT resources that the public sector already has, he agreed.

“People will be avoiding, this year and next, anything that looks like a large capital investment,” Virgo warned. “We do not have budget to do things the old way.”

Patrick Smith, executive for local government business at IBM, said the G-cloud proposal could prove really positive for service delivery, meanwhile perhaps allowing the involvement of smaller or niche suppliers – but a lot has to happen before anyone gets near the benefits of G-cloud.

“G-cloud will be 15-24 months after [some of these other projects] and may never arrive,” Smith said. “And suppliers of the future will be in wireless, such as Siemens and BT. There will be application sharing on the PSN. The rest of us will all be going to people like David [Wilde] and buying him lunch, and saying, ‘please, please let us in; we have got this fantastic thing here you could buy’.”

He added that IT typically represents about three per cent of budget for government bodies. While you might be able to take it down to two per cent – which sounds fantastic – you are not offering longer-term value or helping in public sector transformation.

No power available
EURIM’s Virgo points out that there is already no power available within the M25 to build any more new datacentres. So there is a really serious question yet to be answered on how the public sector is going to achieve anything new around IT unless it massively boosts its efficiency.

“Forget carbon footprints, what about getting the robust power supply we need in the first place at a price we can afford?” he said.

Westminster’s Wilde said another problem with getting any advantage from next-generation platforms is the territoriality of different government bodies. While many are happy to cooperate with another department at a great distance from them, they are often suspicious of sharing information with a department close to them or with a different mandate.

“It is like everyone is a seller and no one is a buyer [of other people’s ideas or systems]. I am trying to change that around things like ERP; we do not want to go out and create yet another ERP contract,” he said.

“I think it is beginning to change but there are areas where they will not change, such as on council tax, where people are very, very reluctant to let go of things – and not for any technical reason.”

Westminster’s Wilde added that there are still not enough IT people with the right kind of business skills to programme-manage and communicate with finance directors and help get the right kind of projects happening.

EURIM’s Virgo agreed: “Often people need to go and talk to the finance director, and when you go and talk to them, you find there are much more profitable ways of delivering what is being sold [in terms of IT].”

Yet the bonus or sales commission culture could negate all those benefits, encouraging ICT advisers to favour more expensive solutions that will earn them more revenue, Virgo said.

This needs to change, partly via improved interdepartmental and inter-partner communication in government deals.

“People tend to think marketing and finance are enemies, but in a time of financial crisis, one’s enemy must become one’s ally,” he said.

His own authority has already achieved 24 per cent cost reduction across its total IT budget – reflecting “a lot of flab” in the system. But further savings should focus on aligning IT with organisational needs long term, Virgo said.

Looking into the G-cloud>> www.channelweb.co.uk/2259593