A new report  released by TechMarket View explores the ICT industry reaction to the coalition Government's new ICT strategy.

 

“What needs to change in UK Government?”, revealing that the IT industry largely supports the new Government ICT strategy, although questions still remain over some policy areas. 

“The new Government has placed huge emphasis on IT in its quest to
reduce spending and pay back the UK’s national debt,” stated Georgina
O’Toole, research director and author of the report. “However, with
recent news of the £1m cap on IT project spend, ICT suppliers are
increasingly trying to demonstrate that their services are not ‘just
another cost to be cut’ but that ICT should play a central role in
supporting Government-wide reform.”

Respondents in the PublicSectorViews report (eight of whom are top 20 UK software and IT services suppliers) agree that change in Government ICT strategy is long overdue and there is strong support for the new Government’s plans, if executed in the right way. 100 percent of respondents backed reform of government IT procurement, outsourcing back office functions and reduced consultancy spend. Across a range of pledges proposed by the new Government, on average 82 percent of respondents supported the plans, found TechMarketView.  If implemented appropriately, respondents strongly indicated that cost savings could be made in future whilst protecting front line public services.


“Whilst the results of this survey demonstrate that the ICT industry is largely in agreement with the new Government’s policies on IT reform and spending, some policy areas are seen as contradictory or unclear,” continued O’Toole. “The Government must go further to clarify their position before the key ICT suppliers will fully rubber stamp these proposals, especially on topics such as contract size limit, open source software and the creation of a government ‘skunkworks’.”

The report identifies eight pledges or ideas proposed by the new Government that TechMarketView believes could have a significant impact on the ICT industry. These areas are covered in-depth in the report:

1.         Outsourcing of all back office functions

2.         Reduction in the size of IT projects

3.         Creation of a Government ‘skunkworks’

4.         Opening up of Government procurement to encourage greater use of SMEs

5.         Reform of Government IT Procurement

6.         Provision of a level-playing field for open-source software

7.         Reduction in consultancy spend

8.         Common infrastructure, standards & capabilities

 

The report finds that implementation will be crucial to achieving success; the right ‘sort’ of consultancy spend should be targeted for cuts (value-added consultancy where there is proven return on investment), the right ‘types’ of functions should be outsourced (predominantly back office or non policy-related), and procurement reforms needs to be handled sensitively to prevent suppliers being further alienated.

 

Question marks remain over some areas of new Government’s ICT plans

Whilst respondents support most areas of the ICT-related strategy, a number of caveats were identified, especially where Government objectives are unclear. Questions were revealed around:

·         the Government’s rationale for market intervention to encourage the use of open source software

·         whether SMEs have the delivery capability, as well as the technical ability, to compete against the large SITS companies on complex projects

“If the Government’s aim to favour open source software is to reduce costs, then this decision will not necessarily deliver the desired results as the cost of support can increase ‘total cost of ownership’” commented O’Toole.  “The survey found that almost a third (32 percent) of respondents were against the UK Government creating an open playing field for open source software.”

“Now is the time for tough Government. For the new ICT strategy to succeed reform must be implemented both carefully and robustly – enforcement of policies being a case in point,” said O’Toole. “However, where the UK Government has contradictory aspirations with broader government policy, these areas must be defined clearly.  One particular issue to highlight is that outsourcing on a wide-scale will not achieve the desirable economies of scale if an arbitrary limit is put on the size of ICT contracts.”

The report revealed that several of the aspirations of UK Government appear contradictory, either with each other or to broader government policy. For example:

-outsourcing on a wide-scale will not achieve the desirable economies of scale if an arbitrary limit is put on the size of contracts

-the desire to consolidate the ICT infrastructure and impose common standards and processes appears to contradict the new government’s localisation agenda

- reducing the use of consultants will be difficult at a time when UK Government is set to make some radical changes requiring specific expertise

- making programmes smaller will require more administration and higher costs at a time when the mantra is “less for very much less”

- SMEs may struggle to adhere to common standards due to the potential increased cost of development

 

Broader Government changes required to support ICT reform

Throughout the survey respondents made clear that radical changes would be required to the way Government functions for many of the plans to be successful:

- Enforcement - a common theme in the survey was a ‘mandate’ whether that be to mandate the use of central framework agreements or common infrastructure, or to mandate the use of back office outsourcing

- Professionalism - across the board, respondents raised the issue of skills within the civil service with a need to up-skill in several areas of UK Government, for example, in procurement, in ICT skills (for the creation of a ‘skunkworks’)

- Machinery of Government changes – some respondents went further to outline that radical changes were required to the way Government functions for most, if not all, of the plans to be successful. One respondent suggested the most far-reaching change: ‘move towards a much smaller permanent civil service clustered around ministerial portfolios with the large majority of the actual work being carried out by agencies that have a clear managerial – not policy advice – brief.’