WRITTEN ON October 21st, 2004 BY Louise Ferguson AND STORED IN Across the Board

I completely agree with Jim Norton’s post on investment in people.

Over the years, I’ve done a lot of fieldwork in places like London local authorities, the NHS, central government…What never ceases to amaze me is

1. How public sector pay rates can be so appalling in the NHS (and local goverment, and education). Central government seems to have figured out a way of paying more in the middle reaches at least. How does anyone expect to get anything worth having out of a severly understaffed NHS Trust IT department paying barely subsistence wages? Or out of education IT staff in London being offered what I regard as joke salaries? Yes, you can get someone to work for £15K or £18K in London, but they will take twice as long to produce something several orders of magnitude worse. What kind of economy is this? I think it’s called a false economy.

If I want to hire a programmer, I can bet on a ‘good’ programmer being 10X better than an average one. Same with a developer. Or a systems analyst, or… Even a good note-taker will be many times better than an average one. If we pay appalling wages, we will get, at the very best, average people.

Then the decision is often then taken to outsource (amazing how budgets cannot get stretched for salaries, but seem to become infinite for outsourcing). Which costs a lot. And then they – the vendors – have you by the short and curlies. How come it’s OK to pay a health sector IT company £800 per month (2002 rates) *just to host your own server* for one particular system (and worse, providing an unreliable service), because you’ve got nobody in house able to look after this? This is plain bonkers, but I have seen it.

The problem here is that pay rates have fallen so far behind in some parts of the public sector that you’d need to double wage budgets to get sensible salaries in some fields. And then the public asks: where’s the money gone?

2. The generalist v amateur that Jim refers to: I’d refer back to Ed Straw’s paper for Demos [1], which I blogged here a while back. Straw argues fiercely against the roving generalist, master of nothing, that gets posted here and there before learning anything really useful that can be applied. It’s a very good read.

3. I believe that the non-box costs that should be expected from any project in fact exceed the box (IT) costs.

Nicholas Carr argued both in his Harvard Business Review article IT Doesn’t Matter, and in his book Does IT Matter? [2], that IT has become a commodity, just like the utilities. But what is not a commodity is the person-effort that goes into researching, designing, building, testing, piloting, adapting, training, learning how to work with, reviewing. You need quality people to do this, or the results will be indifferent or worse.

4. The most extreme example – perhaps – that I have seen of the staff/box cost equation was the call management system that ‘fell off a back of a truck’ (on its way to the dump), currently used to manage council tax in one London council. The system was cheap (free!) and is fairly serviceable (very basic, indifferent stats etc. – in the third world, it would have been called ‘appropriate technology’), and used by dozens of staff. They’d learned how to deal with it, and how to work around it. !00% staff cost, 0% IT box cost. An extreme example, but highlighting the fact that the basic IT cost is often the least of your problems.

1. http://www.demos.co.uk/catalogue/deadgen/

2. http://www.nicholasgcarr.com/articles/matter.html