WRITTEN ON February 25th, 2010 BY William Heath AND STORED IN Ideal government IT strategy

OK: here’s a big fat post. I havent got this right yet, but there’s something here. Please help me, people.

The British government after the election will have serious and urgent challenges. Government’s IT suppliers are in a critical position. They could prolong the challenges and obstruct attempts to overcome them. Or they could help, and that would require an unprecedented flexibility.

The starting point is far from Ideal in several ways.

First is cost, and there are three orders of magnitude to this. Government IT costs too much, as any small user in a department with a PFI/PPP contract which tries to get a new terminal or a small change done will readily attest. Call this a £3-4bn problem (depending on definition of government and of IT). But there’s a ten times larger problem which is that the administration of public services is far too expensive, and modern technology isn’t doing enough to help. Call this a £30-40bn problem. And beyond that there’s a problem ten times as big again which is that public services themselves cost far too much to deliver, and we dont get sufficiently good results. This is a £300-400bn problem.

Government’s IT and business-service suppliers are charging UK government too much. EDS/HP, Cap Gem, IBM, Capita, Microsoft, BT: tell me it isn’t so. Compare for us the margins you make on UK government business compared to governments elsewhere and the private sector.

But – understandably – they want to be paid for solving the £30-40bn problem, or the £300-400bn problem, not less.

Now: here’s the crux. Britain’s new post-election government may be pretty hostile to its IT suppliers. Whichever colour it is it faces the same problems, but let us assume for sake of argument it is Conservative.

Relations have not improved since the unseemly spat between Intellect and David Davies over ID System contracts. Big IT suppliers and their big bills are definitely seen as “part of the problem” in Tory HQ, as is the trade association, and an ineffectual (overpromoted/overpaid) CIO culture and the excessively big, out-of control IT projects they have cooked up.

What is a smart government IT supplier to do in this situation?

Here’s – for free – my tip.

Smart government IT suppliers need to have a conversation roughly as follows.

Dear Francis (or it may be Jim, or Stephen, or someone else. But let us assume it’s Francis)

It may be that Goverment hasn’t always been that brilliant a customer but, frankly, we as an industry haven’t been brilliant either. We thought PFI’d big systems and more data sharing were the right things to do (to be honest, it was your policy and we were only responding). But if we carry on like this things will be far from Ideal in terms of public budgets, service quality and levels of trust.

The problem is best understood that what were doing together doesn’t look or feel particularly good on the receiving end, and it’s expensive. Also, we’re losing people’s trust. But it could be great, and far better value. And we could earn all that trust back and more, because people in Britain are a half-decent and forgiving lot.

What can we do constructively to help?

Look, we’re businesses and need revenues and profit to survive. But we’re all in this together, and we accept the need for change.

First up, we’ll work flat out to keep the lights on, make sure everyone gets paid their benefit and we minimise delays, cock-ups and further data losses.

We accept that there will be a new transparency about contracts and project performance. While this may be occasionally uncomfortable for some of us individually, we benefit when this same transparency affects our competitors. So overall we benefit more than we lose.

We accept, because we’re all in this together, that there will need to be some variations on long-term contracts, even some terminations. (We might even ask the trade association to operate an arbitration or compensation scheme, so if we need to cancel one of two contracts the loss doesnt fall entirely on one supplier).

What we’re trying to say is we understand you have inherited a very difficult position, that you want to things differently, urgently, and we are prepared to show an unprecedented level of flexibility.

What we want to see from you is that
– any new project is a properly conceived and designed business change project based around real user needs
– you reduce the tendering/procurement overhead as far as possible for all consistent with transparency, fairness and conformance to WTO rules
– you procure outcomes and results so we are able to be innovative where there is a business benefit, without unnecessary contractual restriction.