A recent report into the UK government's ICT spend by the National Audit Office (NAO) described a dysfunctional ICT landscape, including poor procurement, massive duplication of assets, poor management information, little re-use of ICT assets across departments, and inadequate and fragmented IT governance.
It followed an official review by Sir Philip Green, who lambasted the government's fragmented ICT procurement as wasteful and ineffective. You don't have to be a libertarian or a taxpayer activist to agree with these assessments.
What's the government doing? In the short term, a series of emergency project reviews and new spending controls will shave hundreds of millions of pounds from the £16 billion ICT spend.
Great, but if this only creates a temporary dip in government ICT spend, a big opportunity will be wasted and we'll remain stuck with a second-rate public-sector ICT infrastructure.
The good news is that we see an embryonic public-sector ICT turnaround strategy in the UK - with potential powerful lessons for other governments.
From now on:
- Individual UK departments will now need "central approval" or ICT projects over £5 million, which should mean that larger and mid-sized IT projects have a tougher job getting approved. This should impose better quality control and financial discipline over spending decisions
- A new "Major Projects Authority" will oversee all ICT outsourcing projects in central government, and senior civil servants will get powers to coordinate and manage relations with individual ICT outsourcers across all government departments. This could have radical and positive effects, assuming these "super-customers" have real powers to control how departments procure and manage ICT contracts.
- Nine categories of "common goods and services" used across central government will be procured centrally, including "office solutions", "ICT commodities" and "print and print management". This could include big chunks of ICT outsourcing.
The UK government is doing the right thing. European central governments simply cannot continue to take a chaotic and incoherent approach to ICT, given its importance and cost. We believe that:
- Central governments must treat ICT wherever possible as a cross-departmental resource whose "vanilla" common elements should be procured and managed centrally.
- All supposedly department-specific ICT spend must be based wherever possible on common technologies and standards.
- Ministers should drive adoption of cloud -based delivery where possible in order to lay the foundations of a flexible, cost-effective and future-proofed ICT infrastructure.
- While ministers must be more prescriptive about procurement and management of ICT outsourcing spend, it's not as simple as "public sector delivery = bad " and private sector delivery = good". There remains a defensible and indeed important role for the in-house service supplier working alongside external suppliers - sometimes competing with external suppliers, but sometimes commissioning services from them.
- Government should learn from the global services organisations run by large corporations, which run some shared services internally, where they have the scale and expertise to do so, but otherwise draw on ecosystems of partners including BPO provider and ICT outsourcers. The decision where and how to source ideas and delivery should be pragmatic rather than dogmatic or political - as it is in leading-edge private organisations.
Posted by Douglas Hayward