Since the fundamental dynamic of government is to continuously improve relationships between different societal groups and to implement policy which reflects these improvements, the ICT infrastructure which supports these advancements needs to constantly evolve.
Ever-more complex ICT systems are necessary if government is to achieve its stated aims.
A staggering £16 billion per year is currently spent on public sector ICT, with a further spend of £105 billion planned for the next five years, according to the Database State report, written by information systems experts Ross Anderson, Ian Brown, Terri Dowty, Philip Inglesant, William Heath and Angela Sasse from the Foundation for Information Policy Research.
There are many reasons why ICT places such high demand on public sector spending, but one example of just how big a job government faces in modernising its ICT infrastructure can be seen in the databases recently inherited by the Serious Organised Crime Agency (SOCA). The new body took ownership of more than 500 databases from its predecessor agencies, which it must now consolidate into just 60 within the next five years.
Despite the traditionally risk-averse nature of the public sector, the sheer magnitude of necessary ICT projects undertaken has led to many high profile failures, including the delays to the marking of SAT tests, and more recently the failed delivery of student grants.
Since no government agency wants the stigma associated with the failure of large-scale projects, it is clear that more needs to be done to increase the success rate of much-needed public sector ICT initiatives.
Speaking at the Government UK IT Summit in 2007, Joe Harley, CIO at the Department for Work and Pensions, said: "Today, only 30 percent of our projects and programmes are successful."
Government has struggled to reignite support for and faith in subsequent ICT projects. Consequently, confidence in the Government's ability to successfully deliver more complex projects in the future is at a low.
To attempt to address these concerns, public sector CIOs and suppliers have signed up to an ambitious series of targets, including an increase in the success rate of ICT projects to 90 percent by 2010/11.
Looking to the private sector
There are many examples of successful large-scale private sector ICT projects, from which public sector CIOs can learn. Large corporates wield similar levels of aggregated ICT purchasing power and influence as government departments, and private sector CIOs frequently handle major ICT overhauls brought on by organisational change, such as mergers, takeovers and asset disposals.
Failed public sector ICT projects are usually ascribed to original specifications being unclear, contradictory or conflicting in the minds of stakeholders, so it is essential to first set a clear strategy that will underpin the entire project such that RFPs are developed and contracts negotiated with clear goals in mind.
In order to achieve this successfully, the timescales for the project need to build in sufficient due diligence that will allow those involved to understand the contracts, assets, people and costs currently in place. Otherwise, contracts are negotiated on the basis of a poor understanding of the environment to be managed or outsourced.
If specialist third party vendors are asked to transform or manage complex ICT systems without being fully aware of the intricacies of that environment, it is impossible for them to accurately quantify the baseline cost to support the project. By carrying out full and in-depth due diligence prior to starting the contract negotiation process, organisations can minimise risk and improve the quality of contracts agreed with vendors.
Due diligence can sometimes be overlooked in the haste to commence, yet it is a cornerstone of any ICT programme or project. Moreover, when combined with smart selective sourcing, careful contract negotiation and continual reviews, projects can be delivered successfully and achieve the projected business benefits.
Getting a grip on Total Cost of Ownership
Total Cost of Ownership (TCO) represents the bottom line of a public sector ICT project, and is generally the factor by which a project’s success is ultimately judged. By defining objectives for a future TCO profile, a project team can focus on the desired end-result and work out how best to get there.
Another challenge that comes with any large ICT project is a temptation to treat the “C” (ie the communications part of the mix) as a commodity. This is a narrow view as, more often than not, the communications infrastructure is critical to the mission and represents up to 30 percent of the total ICT budget.
An over-reliance on de-constructed commodity-level sourcing fails to unlock the value that can be realised from an optimised supply chain. To improve a project’s chances of success, ICT procurement professionals should take a strategic, rather than tactical approach to the selection of telecommunications and network services vendors.
Continuity of intellectual capital
All too often in public sector project management, procurement on major IT projects is carried out by a different team than the people who subsequently have to implement it.
Similarly, the vendor’s sales team rarely has anything to do with the project once the ink is dry on the contract. In contrast, projects would benefit hugely from continuity of intellectual capital from the sourcing phase to the implementation phase, whereby key personnel are retained through all phases. This process helps to ensure that promises and commitments made at procurement stage are followed through in the implementation phase.
What happens if things go wrong?
Even with all the planning in the world, there are inevitably some pain points during the implementation phase of any large-scale ICT project.
A natural and somewhat understandable reaction to this is to blame the vendor for non-performance. But this should not be the default reaction. The successful execution of a large ICT project is a two-way street and customer organisations also need to look themselves in the mirror and be honest about their own shortcomings.
For example, poor contract governance leads to “value leakage” of between 17 percent and 40 percent of the original business case. No matter how well structured a contract may be, if it is not properly governed then the customer creates a self-inflicted risk to the realisation of the business benefits inherent in the contract.
Equally, if the parties initially negotiated a bad contract, then the project will struggle to deliver any real business benefits, regardless of how well the governance model is executed.
The solution is to design the right contractual framework from the outset – having put in place the appropriate due diligence and contract negotiation processes – and to underpin this with a robust governance model that is meticulously executed.
Once a project encounters problems, there are two ways to address the situation. The most radical solution is to begin again, often with a new vendor; however, this can lead to substantial business interruption, has significant timescale implications, and may result in legal complications with the incumbent vendor.
The other option is to commission an independent Mid-Contract Review which will objectively assesses the root causes of the problems in the customer-vendor relationship and negotiate a positive way forward.
Fail to prepare, prepare to fail
Preparation for a major ICT project, be it in the public or private sector, requires a balanced and mutual combination of foresight, patience and perseverance. Allowing time to carry out a detailed due diligence project delivers an understanding of the assets and resources in place, and encourages the development of a clear strategy for the entire project.
Adopting a best practice approach from inception ensures that the essential preparation is done and maximises the project’s chances of success. Whereas this undoubtedly requires an investment in time, money and effort, it will maximise the potential for ICT transformation projects to reap the expected benefits in both the short and long term.
Harry McDermott is CEO of specialist consultants group Hudson & Yorke. McDermott was formerly Director of Deloitte Management Consultancy Services (MCS) Ltd, where he was a member of the leadership team of the Technology Architecture & Network Services practice