At last an IT supplier that tells it like it is

Rarely is the chairman of a Parliamentary committee surprised at anything that’s said during a hearing. It happened when Martin Rice, CEO of software company Erudine, appeared before the Public Administration Select Committee during...


Rarely is the chairman of a Parliamentary committee surprised at anything that’s said during a hearing. 

It happened when Martin Rice, CEO of software company Erudine, appeared before the Public Administration Select Committee during one its hearings on government IT.

The committee’s chairman, Conservative MP Bernard Jenkin, thanked Rice for his candour. It came after another Conservative  Robert Halfon MP asked whether a cartel of big companies is crowding out smaller ones.

“It is dangerous for me to say yes,” replied Rice, “but I understand what you mean and it is close to that.” After an exchange with Rice on the question of a cartel, Jenkin said: “It is very refreshing to have such frankness …”

Platitude free, this is what Rice told the committee:

IT industry should apologise for rip-offs

When Jenkin asked whether the industry is aware of a perception that it is exploiting an unskilled customer Rice replied: “I agree with you; I think the IT industry should publically apologise to the citizen for the rip-offs of the last 10 or 20 years. 

 “The Martin Read report in 2009 said something like: 'the UK is being charged 23% more than our peer nations for no discernible benefit'. So we are ripping you off as an industry."

An oligarchy of government IT suppliers

“We are reinventing the wheel each time and it should not be allowed.  As a taxpayer, I am very angry about this and it should just not be allowed.  A lot of these problems have been solved; they are not being brought to the Government because of the oligarchy.  It is not in a profitable interest to bring you these paradigms.  That is why I feel the oligarchy has to stop…”

2 days to build the equivalent of Jobcentre Plus website

“The Guardian [corrected to Rewired State] runs ' Hack the Government' in which geeks get together and do clever things; four people in two days produced the equivalent of a multimillion pound DWP website for Jobcentre Plus.  In two days they had a globally-scalable website that you could use to find out what jobs were in your area.  It was a better experience for the user.  

“They couldn’t keep it going because the Post Office wants to charge too much for the look-up of the postcode.  The DWP know about this but they haven’t adopted it.  It cost two days, four people, and delivered a better experience but they would rather carry on going to the same supplier.  It is criminal.”  

Stop signing lock-in contracts 

Bernard Jenkin [chairman of committee] said, "But the industry has locked the Government into these very large supplier contracts.  You insist on these exclusive arrangements, don’t you?"

Rice replied: “Stop them.  As an intelligent customer, just stop placing them.”

Cosy relationships that block success stories 

“I feel nobody is fully to blame here; generally as an industry we have taken advantage of a non intelligent customer who made a quick saving outsourcing everything a decade or two ago.  

“The fact that the industry continues to take advantage is wrong.  There are paradigms out there that we, as an industry, should be bringing; the Government should be listening and the Departments will not let those paradigms in.  The cosy relationships exist and it will keep those out. I believe that they cannot let one success story get through because it will open the floodgates..."  

Rearguard actions against coalition changes.

“What I am seeing at the moment is the Government making a lot of noise—which is good— and I don’t mean noise in rhetoric; they want change. I am seeing rearguard actions being fought everywhere and contracts being extended to get 10% savings.”

“I believe the HMRC has an extension to 2017 because it reduces costs, which precludes innovation into HMRC.  We need to stop this. We need to educate Government and we need to bring in the paradigms.”

Suppliers should be able to say: your tender is flawed. 

“If a systems integrator puts in what is called a 'non-compliant bid' to Government, they are discarded. It is not listened to. So if the Government asks for something and you do not comply with that bid, as an SI [systems integrator], you will not be considered because if you start saying, “we think it is flawed”, you will not get the work…”

SMEs used by big suppliers to win contracts - then edged out

“I am passionate about SMEs but I don’t think they have a right to work.  It is dangerous to say that 25% goes to them; they should only get the work if they offer the best value..

“…Real innovation tends to come from small organisations.  This is not an SME issue; it is that people tend to leave big companies because they have an idea to solve something; they set up a small business and you get elite people working together solving a specific problem.  

“The route to Government is through the systems integrators. The reality of the situation is that you will be engineered in to the procurement to win the bid because, as part of the procurement, the Government is saying, ‘Show us the innovation’.  You are then almost guaranteed to be engineered out once the systems integrators win it. 

“So many SMEs now just don’t bother getting involved.  Where the innovation that could make a difference could be brought forward, it won’t ever make it to the project itself.  

“The simplistic answer is, buy in the small, and don’t assume you have to buy in the big; it is not that complex, and it is a con.  You have 70 million citizens and there are global companies dealing with hundreds of millions of customers in a very complex way and they do not have anything like the budgets that you spend.  Do just close the cheque book. Procure in a different way.  

The world is moving to pay-as-you-use contracts

“As soon as Government starts buying IT in the small instead of the big the best person with the best value will win because there are much smaller contracts for each small subset part…the world is going to pay-as-you-use.  

“If I get a BlackBerry, I do not pay £300 to £400 for the physical phone.  I get a phone on a contract and I pay an amount of money per phone call.  

“If I use it a lot, I pay for more time and if I don’t use it, I don’t get charged.  I don’t pay for the infrastructure of the phone network ... The rest of the world is moving to a pay-as-you-go service and the Government isn’t.  

“You shouldn’t be paying the capital expenditure. You should be specifying a requirement and the industry should be building it at their expense, and it should be multiplicity of supply for each service.” 

Shut your cheque book to mega-deals

“You should be able to bring the competitive market into no-locking contracts.  There is so little that Government is doing that couldn’t be delivered that way and if you stop buying large capital expenditure projects and say, ‘This is how we are going to do it’, you are forcing industry to have to interact that way.  

“While the DWP and HMRC are happy to spend £2bn at a pop, industry is still going to keep coming. They are big boys - and taking your money.  You will not move to where the rest of industry is going.  You have the ability to do it.  You own the cheque book: close it.

“…the Dutch laughed when they realised the scale of the projects we do here.  They consider ‚¬30m [£26m]  to be a huge project and I believe [they have] only three or  four projects over ‚¬30m …”
Let people deal with government through Asda or Tesco front-end IT

“The delivery of most front-end Government services can be done through the places that the citizen already has a relationship with.  Why can’t Tesco or ASDA run part of the Jobcentre?  

“We shop there. We get banking services there.  If Tesco want to invest and produce a front-end to interact and deal with Mrs Miggins and her interaction with Government, why shouldn’t they be able to?  

“Tesco don’t want to get involved in a £1bn procurement, but they want more up-sell to Mrs Miggins. So give them the opportunity; tell them what you require and industry will build it.

Open standards and open source

“...You bring in Open Standards.  You say, ‘To deliver that service, it has to meet x’.  You audit what they are doing and if it meets that standard, the citizen can go to them.  You can bring it in [IT connections with the public] through standards.”  

“… Facebook is an interesting example; they developed some software called Cassandra.  It is a globally scalable database, they decided they did not want to own it so they put it as part of the Apache Open Source stack.  

“It is available to the world and it has a very large group of developers working on the code.  It is a brilliant piece of software and it is free.  Now it is not free, because you will pay people to use it; you will pay maintenance support, but you are not locked into an adversarial relationship.

Jenkin: What about the security problems?  Facebook is notorious for its lack of security.  

Rice:  That is beyond the scope of today to go into that, and I believe it is a red herring.  If you were to take a copy of Facebook and say, ‘Let’s use it for Government,’ it would be unsuitable, but that does not mean the underlying technologies are not capable of delivering this. 

Open source doesn’t have big hospitality budgets and lobbyists

“I am yet to find Open Source to have a salesman who takes everybody out to lunch.  A lot of procurements are sorted in the wine bar, over lunch or on the golf course, so I see that as a problem for Open Source systems with very good software out there…

“A friend of mine was an MEP a few years and said as a tongue-in-cheek joke, ‘Microsoft had a bigger delegation there than most Member States.’  

“So the Open Source community did not have a large delegation there and Microsoft keeps the stranglehold. ..

On agile principles

"Just do fast, iterative spikes. It doesn’t matter that it is not scalable; and it doesn’t matter that it hasn’t got security.  Is [it] what the citizen wants?  You can do it in days and then you can start saying, ‘You have totally got the wrong end of the stick,’ and you can get everybody involved and get the stakeholders in… build, fast, iterative systems and throw them away. 

“At Erudine, we follow a process of quest; if we are not sure how to solve a problem, we get two or three teams of two people, and we give them half a day to go away and get creative. There is not a wrong way of solving it.  

“They then come back and we will discard one or two of the routes.  We might have two weeks of development and then we choose one.  We don’t pre-determine from a big report.  We just keep looking and saying, ‘That is getting closer to what we think we need’, and then you are on the right track.  

“So we don’t waste millions because we waste a few tens of thousands doing experiments, and then you know that you are on the right track.  So, in the pub with the minister, I would be saying, ‘Start funding more of things like the geek cells, and get more people who can do these very quick systems who can ask, ‘Is that what you meant?’ and get everybody involved in analysing your systems and, if they work, use them”.  

Big companies don’t like agile

“The purpose behind agile as we see it is there is no lock-in and no pre-determined outcome.  You just have a vision working with a partner and that it is a true partnership.  But you are starting on a journey of saying. ‘We will give you a working system every month which will be better than the last time and then we will all get together and decide what it will be’. But at any point you can stop the contract.  

“Big companies do not like that; they want five or 10 years’ lock-in...”

Jenkin: So what skills does Whitehall need?

Rice: Learn the principles of agile. Learn the principles of agile from agile development companies, not from the current oligarchy, because they are not experts although are starting to read the manuals and say, ‘We can do agile.’  

“I was really interested in the transcript from last week’s evidence session when one of the people said that he could do agile within waterfall.

"That is a fundamental misunderstanding of the point of agile and it is dangerous that that is on record in Government.  If you want to know about agile, talk to people who are delivering agile projects; do not talk to people who are not.  

Janet Grossman [Intellect’s Public Sector Council Chair, and a director of CSC]  "We have a long way to go in the big contracts because some of the big contracts are over specified to not be as agile as they could be, but it is happening more than you think and agile is out there… 

“ Just to be a little bit provocative, the problem with agile is, if you are not careful and you are not an informed customer, it can be the never ending change project so I will just say that you do have to put some brakes on it at times and I will leave it there." 

Rice:  "If you look at agile from a certain perspective, you are right it can be never ending, but the purpose of agile is to reduce the cost of change.  The whole purpose of agile is to make change easy.   Lord Erroll has a lovely phrase: he  says that it is the job of a systems integrator to extend the problem, not solve the problem.  That’s a waterfall; it is a throwaway comment.  

“… Facebook did not have a document saying, ‘Let’s build Facebook,  Job done. Go away’; what they do is say, ‘How can we improve the service?’ It is an iterative, constant change and it is cheap.  


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