Please see the below article from Computer Weekly concerning Westminster City Council's aim to outsource all of its IT Infrastructure by 2015. Hopefully this can be successful and deliver value for money. I am doubtful as it seems to me London Boroughs go through cycles. We have seen outsourcing tried before and we have seen it fail before. In fact we don't have to go too far back on Tony Collins's blog on Computer Weekly to find a story confirming that there have been many failures with outsourcing within the Public Sector. Fingers crossed for Westminster City Council and their new approach to outsourcing.
Westminster City Council will be infrastructure-free by 2015, after completing the outsourcing of all its IT services.
CIO David Wilde said the council plans to transfer all its IT services to suppliers, who will also be responsible for day-to-day IT management. The council IT department will be left with a need for more project management skills and a "strong strategic arm".
Wilde said that cost cutting is not the main reason for the strategy. "It's not just about reducing costs, it's about getting more value for the same money," he said. "It's very easy to run an aggressive procurement exercise and go for the lowest cost - it doesn't mean that you then get the best service."
He said infrastructure-free environments are the future for many of the public sector organisations.
"A lot of local authorities have gone part-way down this road, but I'm not aware of any that have gone completely infrastructure-free. Even those with big 10-year deals are still hybrid, and manage some IT internally."
The move means different, "broader" skills will be required in the council IT department, according to Wilde. He said it is too early to know if there will be job losses. Staff will need to retain some technical expertise, and have commissioning and project management skills as well.
"It means quite a big skills change for IT staff. They'll need to know how contracts work and how supplier management works. We need to retain some technical expertise so we can be an intelligent customer. Staff will need to be extremely well-informed."
The aim of the Westminister project is to increase efficiency, transfer risk, get better quality of service and increase flexibility.
Wilde said, "Major legislative changes are having a massive impact on the technology we use to deliver services. Moving to an infrastructure free environment should mean the supply side should be much more agile and can deal with these changes more quickly."
One example, he said, is the Integrated Children's Service, which required local authorities to overhaul the way social services manage individual cases.
Showing posts with label IT Services. Show all posts
Showing posts with label IT Services. Show all posts
Tuesday, July 22, 2008
Friday, July 11, 2008
Selling Public Services
A government document has been leaked to me which may come to be seen as the last gasp of Blairite New Labour.
It has the unappetising title of "Understanding the Public Services Industry: How big, how good, where next?" and it was commissioned by John Hutton, the Secretary of State for Business - who once-upon-a-time was a Blairite ultra and is now, apparently, an enthusiastic Brownite.
The paper, written by Deanne Julius - the head of Chatham House and a former member of the Monetary Policy Committee - claims that this administration's controversial outsourcing and contracting-out of public services has created a world-leading industry for the UK with great export opportunities.
Julius is brainy. So her argument shouldn't be dismissed lightly. But trade unions on the left and Tories on the right are both likely to argue that her paper is consultant-backed spin, or a clever public-relations campaign deficient in real economic meat.
So what exactly is "public services industry"? Well, it's those private and "third sector" enterprises that provide services to the government or to the public on behalf of government. So it includes hospital cleaners, and suppliers of IT to Her Majesty's Revenue and Customs, and trainers of military pilots and managers of private-sector prisons, inter alia.
It's true they all have one big thing in common, which is that they are in receipt of public money. Which means that if they have a shared, valuable, highly developed skill it is in persuading ministers, or local councillors or civil servants to hand them our precious tax wonga.
But arguably what differentiates the hospital cleaner from the software engineer working in HMRC is more significant than the fact that they are both in receipt of public money. Call me unimaginative, but a provider of IT services seems to me to be an IT company, not a "public service" company, even if those IT services are bought by the NHS.
So the attempt by both Julius and Hutton to claim that the public services industry represents a huge homogenous industry seems a trifle ambitious. Others might say it's pretentious and absurd.
But for the record, Julius claims that the contribution to our economy made by the public services industry is £45bn, way greater than food, beverages and tobacco (£23bn), communication (£28bn), electricity, gas and water supply (£32bn) and "hotels and restaurants" (£36bn).
However all that really means is that the government has been handing vast and growing amounts of our tax revenues to private-sector providers of many and varied services.
In fact, the most interesting statistic in the report, perhaps, is that growth in revenues for these recipients of our tax dosh was an impressive 6.8% per year in real terms from 1995/6 to 2003/4. Interestingly, as we elided from the Blair era to the Brown months, the rate of growth slowed very significantly - to 2.9% per annum since 2004.
Which perhaps indicates that the current prime minister isn't quite as enthusiastic about outsourcing, contestability and all that as his predecessor.
To give Julius and Hutton their due, there is a plausible patriotic case for cheerleading on behalf of this slightly nebulous industry - which is that other countries seem to be following the UK's lead in handing over increasing amounts of public service provision to commercial firms, such that there may be a substantial export opportunity for British service providers.
Hutton, in fact, seems to be reinventing himself as the Thatcher of our time: she exported privatisation to the rest of the world; he wants to convert the citizens of other countries to the notion that their public services should be provided by our private sector firms.
It's a worthy ambition. And there is a good case to be put that promoting competition for public service contracts and also between public-service providers reduces the cost of those services while sometimes improving the quality of those services (though there are also plenty of examples of the public purse being handsomely ripped off by private sector bunglers and incompetents, especially when it comes to IT).
But to be clear, it's the competition or bidding contest that tends to yield those benefits, rather than the identity of the provider as from the private, voluntary or public sector.
* - Article from www.bbc.co.uk
It has the unappetising title of "Understanding the Public Services Industry: How big, how good, where next?" and it was commissioned by John Hutton, the Secretary of State for Business - who once-upon-a-time was a Blairite ultra and is now, apparently, an enthusiastic Brownite.
The paper, written by Deanne Julius - the head of Chatham House and a former member of the Monetary Policy Committee - claims that this administration's controversial outsourcing and contracting-out of public services has created a world-leading industry for the UK with great export opportunities.
Julius is brainy. So her argument shouldn't be dismissed lightly. But trade unions on the left and Tories on the right are both likely to argue that her paper is consultant-backed spin, or a clever public-relations campaign deficient in real economic meat.
So what exactly is "public services industry"? Well, it's those private and "third sector" enterprises that provide services to the government or to the public on behalf of government. So it includes hospital cleaners, and suppliers of IT to Her Majesty's Revenue and Customs, and trainers of military pilots and managers of private-sector prisons, inter alia.
It's true they all have one big thing in common, which is that they are in receipt of public money. Which means that if they have a shared, valuable, highly developed skill it is in persuading ministers, or local councillors or civil servants to hand them our precious tax wonga.
But arguably what differentiates the hospital cleaner from the software engineer working in HMRC is more significant than the fact that they are both in receipt of public money. Call me unimaginative, but a provider of IT services seems to me to be an IT company, not a "public service" company, even if those IT services are bought by the NHS.
So the attempt by both Julius and Hutton to claim that the public services industry represents a huge homogenous industry seems a trifle ambitious. Others might say it's pretentious and absurd.
But for the record, Julius claims that the contribution to our economy made by the public services industry is £45bn, way greater than food, beverages and tobacco (£23bn), communication (£28bn), electricity, gas and water supply (£32bn) and "hotels and restaurants" (£36bn).
However all that really means is that the government has been handing vast and growing amounts of our tax revenues to private-sector providers of many and varied services.
In fact, the most interesting statistic in the report, perhaps, is that growth in revenues for these recipients of our tax dosh was an impressive 6.8% per year in real terms from 1995/6 to 2003/4. Interestingly, as we elided from the Blair era to the Brown months, the rate of growth slowed very significantly - to 2.9% per annum since 2004.
Which perhaps indicates that the current prime minister isn't quite as enthusiastic about outsourcing, contestability and all that as his predecessor.
To give Julius and Hutton their due, there is a plausible patriotic case for cheerleading on behalf of this slightly nebulous industry - which is that other countries seem to be following the UK's lead in handing over increasing amounts of public service provision to commercial firms, such that there may be a substantial export opportunity for British service providers.
Hutton, in fact, seems to be reinventing himself as the Thatcher of our time: she exported privatisation to the rest of the world; he wants to convert the citizens of other countries to the notion that their public services should be provided by our private sector firms.
It's a worthy ambition. And there is a good case to be put that promoting competition for public service contracts and also between public-service providers reduces the cost of those services while sometimes improving the quality of those services (though there are also plenty of examples of the public purse being handsomely ripped off by private sector bunglers and incompetents, especially when it comes to IT).
But to be clear, it's the competition or bidding contest that tends to yield those benefits, rather than the identity of the provider as from the private, voluntary or public sector.
* - Article from www.bbc.co.uk
Tuesday, May 13, 2008
Optimistic growth predicted by software and IT services sector, despite credit crunch
SMEs in the software and IT services sector are challenging gloomy economic projections according to a survey from Intellect, the UK technology trade body.
With 53% of respondents forecasting double-digit growth for 2008 compared to 49% that predicted double-digit growth last year, the mood amongst SMEs remains bullish, despite the global financial squeeze. The Intellect survey, now in its second year asks software and IT services companies operating in the UK about their current and future performance. The SME software sector, in particular is an important contributor to the UK economy, and the survey aims to understand better the key challenges and opportunities of companies developing and selling software in the UK. The overwhelming majority of respondents (83%) were SMEs and it was these who were most bullish about the year ahead. Businesses expecting 15% or greater organic growth were largely in the smaller end of a £0-£20m turnover range, and there were no companies larger than this expecting such high growth rates. Some of the sectors most likely to generate this growth, according to the respondents are Services, Telecoms, Public Sector and Banking. These predictions are, however, tempered by the amount of activity companies are reporting in the Public Sector and the Financial Services sector. Growth estimations have not matched up with the reality of market activity. From 2006-2007 the percentage of respondents servicing the two sectors dropped from 28% to 27%, and 35% to 27% respectively. It is possible that SME software companies are adding value through becoming more specialised in certain sectors, or that their size enables them to be more agile in operations, providing quality of service and flexibility that larger companies may have trouble matching. Commenting, Nigel Hartnell, Chairman of Intellect’s Software Group and Executive Director of software as a service company FFastFill Plc said: “The results from this survey show that in today’s current economic climate, some SME software companies are finding their size an advantage, not a hindrance. Agile SMEs have the ability to respond to market changes and customer needs more quickly than large companies. Through innovation and intensive customer focus, many respondents believe they will generate impressive levels of organic growth.”The survey, which contains case studies, as well as a variety of questions on performance, activity, pricing and development strategies, also shows that SMEs are embracing globalisation. In last year’s survey, 59% of respondents identified globalisation as having a neutral or negative impact on their business. In 2007 respondents showed a marked turnaround in attitude, with 57% of respondents seeing globalisation as having a positive or very positive impact on their business. SMEs are today working on a global stage, identifying opportunities in the global market rather than focusing on home markets. Outsourcing and offshoring is also on the rise, but it appears that Asia is becoming less popular as a destination. The percentage of respondents outsourcing to Asia dropped to 44% from 55% in 2007. In contrast, both Western and Eastern Europe have seen an increase in R&D outsourcing. As Chris Barling, Chief Executive Officer of Actinic, a company profiled in the report said, “We are currently saving about 40% in costs by developing overseas – mostly in Eastern Europe. We decided on Hungary because of the cost and quality benefit.”The Intellect Software and Services survey will be conducted annually to establish whether these findings are trends or blips, helping establish the most comprehensive overview of the SME software sector currently available.
* - Article from www.publictechnology.net
With 53% of respondents forecasting double-digit growth for 2008 compared to 49% that predicted double-digit growth last year, the mood amongst SMEs remains bullish, despite the global financial squeeze. The Intellect survey, now in its second year asks software and IT services companies operating in the UK about their current and future performance. The SME software sector, in particular is an important contributor to the UK economy, and the survey aims to understand better the key challenges and opportunities of companies developing and selling software in the UK. The overwhelming majority of respondents (83%) were SMEs and it was these who were most bullish about the year ahead. Businesses expecting 15% or greater organic growth were largely in the smaller end of a £0-£20m turnover range, and there were no companies larger than this expecting such high growth rates. Some of the sectors most likely to generate this growth, according to the respondents are Services, Telecoms, Public Sector and Banking. These predictions are, however, tempered by the amount of activity companies are reporting in the Public Sector and the Financial Services sector. Growth estimations have not matched up with the reality of market activity. From 2006-2007 the percentage of respondents servicing the two sectors dropped from 28% to 27%, and 35% to 27% respectively. It is possible that SME software companies are adding value through becoming more specialised in certain sectors, or that their size enables them to be more agile in operations, providing quality of service and flexibility that larger companies may have trouble matching. Commenting, Nigel Hartnell, Chairman of Intellect’s Software Group and Executive Director of software as a service company FFastFill Plc said: “The results from this survey show that in today’s current economic climate, some SME software companies are finding their size an advantage, not a hindrance. Agile SMEs have the ability to respond to market changes and customer needs more quickly than large companies. Through innovation and intensive customer focus, many respondents believe they will generate impressive levels of organic growth.”The survey, which contains case studies, as well as a variety of questions on performance, activity, pricing and development strategies, also shows that SMEs are embracing globalisation. In last year’s survey, 59% of respondents identified globalisation as having a neutral or negative impact on their business. In 2007 respondents showed a marked turnaround in attitude, with 57% of respondents seeing globalisation as having a positive or very positive impact on their business. SMEs are today working on a global stage, identifying opportunities in the global market rather than focusing on home markets. Outsourcing and offshoring is also on the rise, but it appears that Asia is becoming less popular as a destination. The percentage of respondents outsourcing to Asia dropped to 44% from 55% in 2007. In contrast, both Western and Eastern Europe have seen an increase in R&D outsourcing. As Chris Barling, Chief Executive Officer of Actinic, a company profiled in the report said, “We are currently saving about 40% in costs by developing overseas – mostly in Eastern Europe. We decided on Hungary because of the cost and quality benefit.”The Intellect Software and Services survey will be conducted annually to establish whether these findings are trends or blips, helping establish the most comprehensive overview of the SME software sector currently available.
* - Article from www.publictechnology.net
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