Some customers are more trouble than they're worth. Sadly, this is how many resellers regard the public sector.
There are too many hoops to jump through when dealing with publicly funded organisations and, even if you do win a contract, budgetary constraints mean they won't pay the sort of prices you could charge an enterprise.
Then there is the red tape to look forward to, and the inevitable finger-pointing that comes with failed IT projects. Which is why it is argued that the public sector is denied the services of the best IT suppliers: they have bigger fish to fry in the private sector.
Until now, that is. The public sector has never looked such an attractive IT market and the tenders have become required reading. There are several possible causes.
If you accept that we are in a recession, it may be that reduced circumstances have driven UK IT suppliers to rethink their feelings for local authority buyers. On the other hand, it could be the millions of pounds of taxpayers' money being pumped into getting Britain's government online.
As part of the plan, the government is sponsoring Pathfinder, an initiative that will identify councils that can innovate new business systems, and encourage them by rewarding them with cash and the mentoring of a private sector systems integrator.
Work for the channel
Under the Pathfinder scheme, £300m has been made available from central government funds, which will be used to nurture some of the more innovative and dynamic government bodies. All in all, there is plenty of work to be done by the channel.
Whether those targets are realistic or meaningful, however, is a moot point. "A lot of people think 2005 is too early for targets to be set," said Paul McCann, head of the e-government division at Sopra Group, which has helped Tameside Metropolitan Borough Council to develop its systems. "If people rush to meet deadlines, there is a danger that the real benefits won't be delivered."
On top of this, there is not a great track record of successful IT projects in the public sector, according to Mike Davis, a government computing analyst at Butler Group. "The general perception is that all UK public sector IT projects fail. They are either late or over budget, or both," he explained.
However, there are still plenty of positives in this market. It is all a question of adopting best practices when working with local authorities. One of the biggest problems resellers will need to overcome is the speed of decision making.
Given that ebusiness is such a moveable feast, with new products and fresh mergers adding daily to the volatility of the market, it does not bode well for any supplier that wants to complete an installation before the technology becomes obsolete.
"In the time it takes most local authorities to agree on a spec, some of the ebusiness vendors will have evolved their next generation of technology," said Ian Cheewah, head of IT at service provider Sapient and head of the government's UK Online project.
The challenges do not end there. There are the usual complications over public sector financing, multiple and conflicting interests, too much emphasis on bespoke solutions and a lack of clear responsibility.
Same old mistakes
"The fact that the same types of failure are repeated time and again indicates a clear lack of project management methodology. This should be routinely used to minimise the risk to projects," argued Davis.
The early signs are not encouraging. In February, the Institute of Public Finance warned that many projects were "doomed to failure" because they failed to take public sector practices into consideration.
The National Computing Centre has also warned of the need to develop a best practice code for business-to-business and business-to-enterprise projects.
It is a bit late for that now, some might say, given that many local authorities are well into their projects. They have to be, because a quarter of all local authority transactions must be available online by the end of 2002. The pressure of this deadline is diverting local authorities from the long-term deadline of having total online availability by 2005.
So should resellers help their local authority clients to apply for the pot of money under the Pathfinder scheme? This is not necessarily a good idea, according to one consultant.
One of the criticisms of Pathfinder is that it has introduced another layer of bureaucracy to the process, maintained John Binns, head of government services at Andersen. Applying to become one of the 24 authorities with Pathfinder status can be more trouble than it is worth.
The bureaucracy goes beyond having to demonstrate why your authority's solution is innovative, why it is of benefit and why it will benefit other authorities as well.
"There is an argument that the bodies that have become involved in Pathfinder have not gone as far as they might if they had gone it alone. They constantly have to report to the people who monitor their progress in central government. The need for consensus is holding people back," said Binns.
He added that, on a big contract, it is not uncommon for a systems integrator or reseller to spend hundreds of thousands of pounds just preparing to get into the last eight candidates. For seven out of those eight finalists, there will be massive losses.
The biggest mistake IT buyers make, and one a value added reseller must divert them from if its project is to be successful, is false economies.
Budgetary constraints force cost cutting, which is bearable, but the problem is that they inevitably cut down on what is seen as the 'soft' elements of a third party's IT offering: the programme management and emphasis on people and processes.
These elements will be important to an ebusiness project, and are the areas in which resellers' services will be needed. But these are cut in favour of buying hardware and software. "The public sector historically has seen the people side of IT as unnecessary," said Binns.
This sort of thinking will be disastrous in the culture needed for online government, in which people are the major considerations, explained Cheewah. The biggest problem is procurement.
Today's procurement procedures are geared around the systems development process that IT departments went through when researching Cobol projects. "They are doing the right thing, but for a different era," Cheewah pointed out.
You can no longer take several months designing and developing a project; today it is possible to do it in one. The problem is that most authorities will take 11 months to make their minds up, in which time Vignette, for example, will have made two or three variations to the original product under consideration.
So what are the solutions? Surely the public sector isn't all that bad? It must have some strengths that can be harnessed.
Absolutely, enthused Ken D'Rosario, a civil servant for 20 years and now head of UK public sector business development at Alcatel Business Solutions. It is a question of perception. You should worry less about targets.
"One of the things this government has done is compromise the public sector with hard targets," he argued. "They are achievable, but are they necessary? Take the Inland Revenue website. It looks great, and it was on time, but only one per cent of tax forms were completed online. The target was 50 per cent."
Concentrate on easy wins and simple projects that can be achieved. Tangible proof of productivity gains as a result of business-to-business implementations are thin on the ground, but there have been some exemplary efforts.
Safe as houses
Housemark Online Services was set up by housing charity the Chartered Institute of Housing and Andersen Consulting. It is a subscription-based portal service that offers best practice advice on all the issues you would expect public housing departments to deal with, such as repairs, sourcing contractors, managing troublesome tenants and rationalising debt.
It has galvanised 250 housing authorities so far into knowledge sharing and pooling resources, as well as being profitable.
The Scottish Executive is outsourcing the development of an e-procurement system. Cap Gemini is providing the systems integration and training, while Elcom Systems is hosting it.
Hosting arrangements are the way forward, according to Elcom's managing director, Michael Templeman, as they do not force the local authority to purchase any kit.
"All they need is a browser, then they can get into any of the catalogues of the organisations that offer government supplies," he said. "It's a lot simpler this way. Tony Blair wants everyone in England online by 2005. In Scotland they will achieve it a lot quicker. This is Braveheart in real life."
Be wary of business-to-customer projects, warned one consultant. They are particularly vulnerable to criticism, as it is hard to demonstrate the success of an information publishing strategy.
Portals to success
This is what intranets and extranets were supposed to achieve, but they are already outdated. These static systems, and the work that went into them, will have to be abandoned in favour of portals. Portals are the key to making information accessible to all in the public sector, explained John Thornton, management consultant at CMG's government division.
Ultimately, the benefits of portals will not be easily measured, since improved service delivery is open to interpretation. And local authorities and government bodies tend not to use IT as a means of reducing headcount, so cost reduction is not a measurable factor.
The success of implementation cannot be measured, and the guidelines for best practice can only be sketched out. What should be kept in mind is the adage that has come to be applied to public sector IT projects: an old organisation plus new technology equals an expensive old organisation.
In the meantime, e-government will expose local authorities to many risks, since online cultures are available 24 hours a day, unlike civil servants. The millions being pumped into the e-government project could see many systems integrators through the dark days of the downturn, after which they could leave the public sector altogether.
But by 2005, the public sector could be the most efficient user of web technology in the UK, and the case for high-value services might be widely understood.
If you believe that, you'll believe anything. Still, at least the public sector has the advantage of financial stability. No matter how many IT projects they screw up, they always get more money for the next one.
Case study: EDS
In 2001 IT services giant EDS, after spending £100m of tax payers' money, implemented a web-based submission system for tax returns for the Inland Revenue. But as it did not implement integration with the mainframes, an operator had to key in details.
Software developer Perwill told EDS it could achieve full integration with its own package for less than £200,000, with a portal that would permit log-on and control data.
It would also deliver print to the submitter, deliver electronically to the Inland Revenue and advise acceptance or rejection by email or on a secure website.
Instead, EDS told businesses they could submit data by sending tapes and diskettes, rather than limiting them to electronic means. This was possibly because EDS charges the Inland Revenue for each tape or diskette that is processed.
Now there is an initiative to use XML messaging, but this supplier has been put off working with the government. "We could do this as well but, after the frustrations of the last few years, we're not going to bother," stated Bill Pugsley, EDS' managing director.
Sopra Group's top 10 tips for public sector success:
- Plan for success. Have a clear road map with achievable target dates.
- Get support from the top. Senior management buy-in is important.
- Focus on cultural and organisational needs.
- Separate IT and non-IT issues. Have parallel road maps.
- Remember that ebusiness starts with processes and people, not technology.
- Don't overcomplicate the technology. Keep it simple.
- Look for quick wins first. Plan to move on to complex issues.
- Don't reinvent the wheel. Learn from Pathfinder and other projects.
- Get best value for money by using freeware and shareware. There is plenty available.
- Think big, start small and keep going.
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