Category Archives: reducing cost strategically

School report on Govt ICT Strategy – a good start

By Tony Collins

In a review of progress on the Government’s ICT Strategy after six months, the National Audit Office says that the Cabinet Office has made a “positive and productive start to implementing the Strategy”.

The NAO says that at least 70 people from the public sector have worked on the Strategy in the first six months though the public sector will need “at least another 84 people to deliver projects in the Plan”.

The UK Government’s ICT Strategy is more ambitious than the strategies in the US, Australia, Netherlands and Denmark, because it sets out three main aims:

– reducing waste and project failure

– building a common ICT infrastructure

– using ICT to enable and deliver change

The US Government’s ICT Strategy, in contrast, encompasses plans for a common infrastructure only – and these plans have not produced the expected savings, says the NAO.

In a paragraph that may be little noticed in the report, the NAO says that senior managers in central government have plans to award new ICT contracts (perhaps along the pre-coalition lines) in case the common solutions developed for the ICT Strategy are “not available in time”.

The NAO report also says that “suppliers were cautious about investing in new products and services because of government’s poor progress in implementing previous strategies”.

Of 17 actions in the Strategy that were due by September 2011, seven were delivered on time. Work on most of the other actions is underway and a “small number” are still behind schedule says the NAO.

The NAO calls on government to “broaden the focus to driving business change”.

Some successes of the UK’s ICT Strategy as identified by the NAO:

* The Cabinet Office has set up a small CIO Delivery Board led by the Government CIO Joe Harley to implement the ICT Strategy. The Board’s members include the Corporate IT Director at the DWP, CIOs at the Home Office, MoD, HMRC, Ministry of Justice and Department for Health, together with key officials at the Cabinet Office. The departmental CIOs on the Board are responsible directly to Francis Maude, Minister for the Cabinet Office, for implementing the ICT Strategy in their departments and are accountable to their own minister. No conflicts have arisen

* Senior managers in central government and the ICT industry are willing to align their strategies for ICT with new cross-government solutions and standards but need more detail.

*  Some suppliers have offered help to government to develop its thinking and help accelerate the pace of change in ICT in government.

* The Cabinet Office intended that delivering the Strategy would be resourced from existing budgets. Staff have been redirected from other tasks to work on implementing the Strategy. “We have found collaborative working across departmental boundaries. For example HMRC and the MoD have combined resources to develop a strategy for greener ICT. Teams producing the strategies for cloud computing and common desktops and mobile devices have worked together to reduce the risk of overlap and gaps.

* The BBC has shown the way in managing dozens of suppliers rather than relying on one big company. For BBC’s digital media initiative, the Corporation manages 47 separate suppliers, says the NAO.

* The Cabinet Office intends that departments will buy components of ICT infrastructure from a range of suppliers rather than signing a small number of long-term contracts; and to make sure different systems share data the Cabinet Office is agreeing a set of open technical standards.

* Some of the larger departments have already started to consolidate data centres, though the NAO said that the programme as a whole is moving slowly and no robust business case is yet in place.

* The Cabinet Office is starting to involve SMEs. It has established a baseline of current procurement spending with SMEs – 6.5% of total government spend – and hopes that the amount of work awarded to SMEs will increase to 25%. Government has started talking “directly to SMEs”, says the NAO.

Some problems identified in the NAO report:

* Cloud computing and agile skills are lacking. “Government also lacks key business skills. Although it has ouitsourced ICT systems development and services for many years, our reports have often stated that government is not good at managing commercial relationships and contracts or procurement.”

* Suppliers doubt real change will happen. The NAO says that suppliers doubted whether “government had the appropriate skills to move from using one major supplier to deliver ICT solutions and services, to managing many suppliers of different sizes providing different services”.

* The Government CIO Joe Harley, who promoted collaboration, is leaving in early 2012, as is his deputy Bill McCluggage. The NAO suggests their departures may “adversely affect” new ways of working.

* The NAO interviewed people from departments, agencies and ICT suppliers whose concern was that “short-term financial pressure conflicted with the need for the longer-term reform of public services”.

* The culture change required to implement the Strategy “may be a significant barrier”.

* The Cabinet Office acknowledges that the government does not have a definitive record of ICT spend in central government (which would make it difficult to have a baseline against which cuts could be shown).

* The Cabinet Office has not yet defined how reform and improved efficiency in public services will be measured across central government, as business outcomes against an agreed baseline.

**

Amyas Morse, head of the National Audit Office, said today: ” ICT is going to play an increasingly important role in changing how government works and how services are provided.

“The Government’s ICT Strategy is in its early days and initial signs are good. However, new ways of working are as dependent on developing the skills of people in the public sector as they are on changes to technology and processes; the big challenge is to ensure that the Strategy delivers value in each of these areas.”

NAO report:  Implementing the Government ICT Strategy: six-month review of progress.

CSC criticised again in The Times

By Tony Collins

The Times has followed up its three pages of coverage of the NPfIT yesterday with an article in which the chair of the Public Accounts Committee, Labour MP Margaret Hodge, criticises one of the programme’s main suppliers CSC.

Hodge tells The Times she was surprised to learn that CSC was hoping for a revised NHS deal – worth about £2bn – after it failed to deliver fully functional software to any of 166 NHS trusts in England.

CSC has said in a filing to the US Securities and Exchange Commission that, based on events to date, it does not does not anticipate that the NHS will terminate its contract.

CSC gave a series of reasons in its SEC filing why the UK Government may retain CSC and its NPfIT contracts, though it conceded that the outcome of its talks with the Department of Health, is uncertain.

CSC also said it has cured or is in the process of curing the alleged events of default. It asserted that failures and breaches of contract on the part of NHS have caused delays and issues; and it said that if the NHS wrongfully terminated the contract on the basis of alleged material breach, CSC could recover substantial damages.

Hodge told The Times:

“Any private sector company that cares so little about the public interest that they are prepared to extract this kind of money from the public purse should not be given the right to work for the Government again.

“If they are going to take such a private sector attitude to it that they don’t give a toss about the public interest they should be treated like a cowboy builder.”

CSC says it has made a significant investment in developing systems for the NHS and has demonstrated a strong and continuing commitment to improving the quality of healthcare in England. It says it has a demonstrable track record of successful and widescale delivery to NHS within the National Programme and beyond.

The Times also reported that Christine Connelly, the Department of Health’s former CIO,  was bought a £416 first-class train ticket for a visit to a hospital at Morecambe, and was flown to San Francisco and Seattle at a business-class rate costing £8,278.80.

American “cowboys” blamed for NHS fiasco – The Times

CSC confident on £2bn deal says The Times

CSC confident on £2bn NPfIT deal says The Times

The Times reports today that CSC is confident that the Department of Health will not terminate the supplier’s contracts despite the Government’s pledge to dismantle the national programme.

The paper says that “taxpayers will foot the bill for a further £2bn on a failed NHS IT project even though the Government has already pulled the plug on it”.

It adds that the “American technology company Computer Sciences Corporation (CSC) has boasted to Wall Street that it expects an extension of its contract to provide electronic patient records despite failing to deliver a fully functional version of its software”.

In a series of articles on the NPfIT, The Times suggests that the Government is locked into CSC, at least until 2017.

“The Government’s pledge to dismantle the failed NHS programme to computerise patient records is in tatters because it cannot afford to break its contractual commitments and start a search for alternative suppliers”.

The Times quotes a CSC filing to the US Securities and Exchange Commission in November which says: “Based upon events to date, the Company does not anticipate that the NHS will terminate the contract.”

CSC, the Department of Health and the Cabinet Office are still discussing a memorandum of understanding which may end with the supplier’s cutting £764m from its NPfIT contracts, leaving about £2.1bn in place.

CSC discloses in its SEC filing that the Memorandum of Understanding anticipates that the contract term will be extended one year to June 2017 and that CSC anticipates revenue of £1.5bn to £2bn over the remaining term.

With certain amendments “ the contract remains profitable and the Company would recover its investment,” says CSC in its filing.

But MP Richard Bacon, a member of the Public Accounts Committee, has received Parliamentary replies to his questions on the costs of NPfIT deployments at University Hospitals of Morecambe Bay NHS Foundation Trust and North Bristol NHS Trust which show that the costs of installing and maintaining a system under national programme contracts are more than twice that of systems bought by trusts outside of the NPfIT.

Health Minister Simon Burns said in a reply to Bacon that the costs of a Cerner Millennium deployment at the North Bristol NHS Trust are £15.2m for deployment and an annual service charge of £2m. This brings the total cost of the Cerner system over seven years to about £29m, which is more than three times the £8.2m price of a similar deployment outside of the NPfIT at University Hospitals Bristol Foundation Trust.

At Morecambe Bay, the trust’s costs of being involved with the NPfIT (including the deployment of CSC’s Lorenzo 1.9 system) are £6.2m, according to Burns in his reply to Bacon, whereas the typical internal trust costs of deploying of a non-NPfIT system, excluding the cost of the system itself but including training, project management and additional corporate reporting tools, are about £1m-£2m.

Is the Department of Health locked into CSC?

CSC in its filing to the SEC says that the NHS, when considering its options of maintaining or terminating the contract, will “consider costs and risks that NHS may incur over and above those related to termination fees”.

These include:

– damages and costs that may be payable to CSC

– the cost of initiating and managing a public tender, procedure or procedures to obtain one or more suitable replacement suppliers

– the operational risk of switching suppliers at this stage in the contract with CSC

– the cost of alternative suppliers

– the cost of obtaining exit management services from CSC to ensure an orderly transition to one or more replacement suppliers.

In addition, said CSC in its filing, if the NHS terminated the contract for convenience, possible claims that the Company has against NHS include “claims for compensation due to delays and excess costs caused by NHS or for contractual deployment delay remedies or for costs associated with change.

If the NHS had terminated the entire contract for convenience with immediate effect at September 30, 2011, the termination fee would have been capped at approximately £430m.

CSC would also be entitled by way of termination fee to a sum to compensate for the profit that CSC would have earned over the following 12 months had the contract not been terminated.

CSC recognised in the filing, however, that the signing of a new NPfIT deal was uncertain.

Lorenzo “not right yet”

The Times quotes Dr Simon Eccles, the medical director of Connecting for Health, as saying “Lorenzo has had an extremely painful gestation. Lorenzo may yet be a great success because it is a brilliant bit of software but they haven’t got it right yet.”

In an editorial on its NPfIT investigations, The Times said that government IT failures have in common the fact that “we don’t really know who was to blame”. It says:

“Nobody took responsibility and nobody apologised. It is perhaps too much to hope that there will not be more disasters. But if there are, someone must carry the can.”

NPfIT to be dismantled – brick by brick

Dedicated Cloud servers make a difference says Puma

By Tony Collins

Jay Basnight, the head of digital strategy at sports shoe and sportswear manufacturer Puma, has told CIO how his company moved from four cloud suppliers – Amazon, Computer Sciences Corporation, Rackspace and Slicehost (now part of Rackspace) –  to cloud supplier Eucalyptus.

Eucalyptus provides Puma with dedicated servers rather than spreading the company’s data and applications across servers used by other businesses, as is the case at Amazon, says Basnight. That helps make privacy audits easier because he can point to a specific server where data resides.

“This allows you peace of mind that you’re not sharing infrastructure with anyone else.”

Consolidating clouds saves “significant” money says Basnight – as much as 50 percent per hour due to better contract terms and economies of scale.

CIO article.

 

Government CIO to retire

By Tony Collins

CIO reports today that Joe Harley, the Government CIO and CIO for the Department for Work and Pensions (DWP), is retiring next year.

Harley has been CIO for the DWP for seven years and just last year was promoted to Government CIO.

The DWP says on its website:

“After more than seven years of major accomplishments as CIO for the DWP and one year as the Government CIO, Joe Harley, CBE, has decided to retire from the Civil Service in the Spring of 2012.

“Joe has transformed IT in the Department which has made a huge difference to the efficiency and effectiveness of IT and of the DWP as a whole.”

Work and Pensions Secretary Iain Duncan Smith said:

“I would like to thank Joe for his significant and exceptional contribution to DWP and the Government – he has been instrumental in building reform and modernising our approach to technology.

“Joe leaves us with our highest regards having secured this Government well-placed to deliver major reform in the future.”

Harley said:

“It’s been a great honour and a privilege to have served the Department and Government over the years. It’s been a hugely fulfilling experience. I am proud to have made some contribution to improving Public Services for the benefit of the citizen and the tax payer.”

DWP Permanent Secretary Robert Devereux said:

“I want to thank Joe for his enormous contribution to the Department’s performance. He has been pivotal in establishing commercial arrangements which give value for money, and in the delivery of major changes to IT underpinning services which are critical for millions of people every day. The IT for Universal Credit, in particular, is on track. I wish him well in his retirement.”

Cabinet Office Permanent Secretary Ian Watmore said:

“Joe has accomplished great things in his time as Government CIO, having created and published a transformational ICT Strategy, along with plans of how it will be implemented.

“I would like to thank him personally for his leadership and huge contribution to Public Service and the ICT Profession across Government.”

Minister for Cabinet Office Francis Maude said:

“Joe has played an integral role in the past year whilst as Government CIO – he has led the delivery of a new ICT strategy and strategic implementation plan.

“These will ensure that the old siloed way of developing government ICT projects comes to an end, and leaves us with all departments working together to produce a fit-for-purpose and cost effective ICT system potentially saving £1.4 billion over the next 4 years.”

The process for selecting his successor, as CIO for DWP, will begin immediately. The Cabinet Office will run a separate process for the next Government CIO along with the process that is already underway to replace Bill McCluggage, the Deputy Government CIO.

Comment

Joe Harley has achieved much within the DWP – including cutting costs and helping to set up the administration, based on agile principles, of Universal Credit .

But it was always going to be difficult combining a full-time job as DWP CIO with that of Government CIO.

Harley’s retirement gives the government a chance to appoint a full-time CIO who is passionate about structural change and can build a strong public profile on the need for it.

G-Cloud and agile briefings

By Tony Collins

On 22 November the Government Digital Service is giving a briefing for potential G-Cloud suppliers. It’ll be streamed live.

Officials say the briefing will be particularly useful to suppliers whose employees have never participated in a government tender.

At the ApplyCamp, officials will explain G-Cloud, steps in the OJEU procurement process, what information potential G-Cloud suppliers need to give, and what happens next.

The event is particularly aimed at Infrastructure as a Service, Platform as a Service, Software as a Service and other specialist cloud service suppliers. It will be held at Google, 76 Buckingham Palace Road, London SW1W 9TQ – 3pm – 5pm.

Agile TeaCamp – 24 November

Between 4pm and 6pm at the Cafe Zest, House of Fraser, Victoria St, London, there will be talks on agile. Derrick Cameron, MD of software consultancy Eximium and COO of agile software house Procession will speak on “Becoming the Intelligent Buyer”.  Chris Parsons, a “freelance thinker, coder and trainer” will talk about the e-petitions project and the aims of the Agile Delivery Network.

Teacamps in November and December – Government Digital Service

UK GovIT often a barrier not enabler says Cabinet Office official

By Tony Collins

In an interview for UKauthority.com Chris Chant, Executive Director at the Cabinet Office and head of the G-Cloud programme,  debunks the claims of some that GovIT doing a great job and should remain largely untouched.

Chant says: “IT is supposed to be an enabler. Quite often in my experience in government IT it is actually a barrier to getting things done. That’s no way to use IT. It is supposed to support what we do.”

His criticism puts into context claims by some in the civil service that GovIT is an unpublicised success because of the ease and success of online re-taxing of vehicles, the payment of benefits to millions of people and the collection of taxes.

Chant has made clear his concern that some departments are locked into major IT suppliers through costly, inflexible long-term contracts that, in some cases, are being signed anew.

“In the main we are not delivering good quality IT to government and public sector workers. We are not delivering good IT solutions to the citizen …”

He calls for internal change and describes SMEs as “front and centre to what we need”.

“It is with SMEs that agility and innovation lie, and it is that market we are really encouraging… Good IT is not developed by spending a long time trying to work out a definitive answer, and then taking ages over delivering it only to discover it is not what we needed in the first place. It is about iteration. I have said all along that we do not have all the answers. We will develop as we go and take SMEs with us.”

Asked whether the public sector is ready for the cloud Chant replies: “No we are not. We are quite a way from that… We are very well positioned to operate in a world where our IT is delivered by multinationals but now it is a different world.”

He says that the cloud has security limitations. “It is difficult to see the cloud in the short term handling some of the higher security aspects of what we do but for a lot of what government does it’s about commodity products and we need to get people in who know how to handle that.”

The focus he says must always be on the citizen – assumptions should not start from a departmental or systems standpoint. “We will need to change the way we do things; we will need some new people and I suspect a lot of retraining. I think we will need a lot fewer people working on the client side of government IT…

“We are in really tough times and the idea that we can operate with [current] cost levels is wrong…”

Government clouds take shape – UKauthority.com.

The unavoidable truths about GovIT – Chris Chant.

Vested interests will try to stop GovIT changing.

What exactly is HM Revenue and Customs paying Capgemini billions for?

DWP signs new large contracts with HP, Accenture, IBM and Capgemini.

What exactly is HMRC paying Capgemini billions for?

By Tony Collins

When the National Audit Office published a largely-positive report on HMRC and its online filing systems last month, the department received some justifiably good media coverage.

What was little noticed was that auditors were unable to get a breakdown of what HMRC is paying its “Aspire” systems suppliers Capgemini and Fujitsu for online filing.

Collect your car after a service and your bill has a breakdown of the parts used, their cost, and the cost of labour. But when HMRC pays around £8bn to Capgemini for its Aspire IT service, a clear breakdown of costs is not provided.

Says the NAO report:  HM Revenue & Customs – The expansion of online filing of tax returns:

“HMRC has a high-level view of the overall costs of ICT provision through the ASPIRE contract. It has been taking steps to improve that information and achieve cost savings. It does not yet have a detailed breakdown of the costs of online filing services, so it cannot benchmark those costs to assess their value for money.

“HMRC is currently negotiating with the ASPIRE contractors to obtain a clearer breakdown of the costs of ICT services provided.”

In case you think the NAO has made a mistake, and that HMRC must surely have a breakdown of the costs of Capgemini’s services, the NAO makes it completely clear that the Department has no such breakdown.

“The ASPIRE contract includes a rolling programme of benchmarking the prices HMRC pays for the various contracted services, including those relevant to online filing … Since 2010, HMRC has introduced new processes to improve information on the cost and use of ICT and benchmarking of key ICT service lines. These processes cannot yet provide information in sufficient detail to benchmark and challenge the cost of individual online filing services…”

Unfortunately for taxpayers it is not unusual for a department to pay its main IT supplier without having a full breakdown of the bills.

Several years ago the Conservative MP Richard Bacon asked criminal justice officials for a breakdown of costs on the “Libra” contract for magistrates’ courts IT. The Department didn’t know. So it referred Bacon to Fujitsu, Libra’s main supplier.

Fujitsu eventually provided a breakdown so vague – with high-level categories such as “network services” – that Bacon had little choice but to ask the same questions repeatedly to find out how public funds were being spent with Fujitsu.

In the end Bacon failed – and he had little support from departmental officials.

Now, about 10 years on, Capgemini is keeping HMRC in a similar level of ignorance.

Can any department be trusted with the public funds to pay its IT suppliers billions of pounds without a clear and unambiguous breakdown of what it is paying for?

A supplier’s reluctance to supply a breakdown of costs is understandable.  A clear breakdown could clear a path through the fog of supplier pricing, so it could make price comparisons easier.

It is up to HMRC to insist on a breakdown.  Its IT services have been outsourced since 1994. Shouldn’t it know exactly what it is paying billions for by now?

Chris Chant, an Executive Director in the Cabinet Office, has deplored the high costs of locked-in long-term contracts with out-of-season monolithic suppliers.  Does the Aspire contract alone make a good case for the reform of central government?

The unavoidable truths about GovIT – Chris Chant.

SaaS or Cloud SME? – get in touch says Cabinet Office official

By Tony Collins

Chris Chant, Executive Director in the Cabinet Office working as Programme Director for the G-Cloud initiative, says in a blog post that “if you are an SME and you have a SaaS or other cloud service that government might use – we want to know about it”.

Chant says the government is changing the way it buys and uses IT. “We have trained our suppliers and ourselves to think that we need big, complex solutions to complicated problems; which has meant that all too often it’s only the big, complex suppliers that get a look in.

“We are changing all this. We are giving SMEs and ourselves a chance to work together by levelling the playing field for all IT suppliers.”

Chant says it won’t happen overnight and mistakes may be made.  “This is new territory for many departments and very few are experienced at handling this new way of working.

“I think it’s fair to say that many just can’t see how this can happen yet though
many know it must.” Government users are not so different to others.

“First off government has realised that it’s not that different. From now
on, if government wants some IT,  it needs to do what everyone else does and look  at what’s already available, not just what we can pay to have built for us and not just what we are used to doing.

“It will be uncomfortable, uncharted territory for many but it must be done. It is unacceptable for things to remain the same. So if you are a SME and you have a SaaS or other cloud service that government might use – we want to know about it.”

Chant says that government will use open standards wherever it can, and buy IT on pay-as-you-go or short term contracts.

“Some contracts may be longer but there must be a break option, in my view, at no later than 12 months.

“Of course organisations will offer lower prices for longer lock-ins but, as I’ve said before, the cost of being unable to exit will almost always outweigh the savings.”

Chant says that if you are an SME, any supplier that’s never worked with government, or an existing supplier that “gets” cloud “you are the type of people we need to work with the deliver the savings all of us need”.

Talk to us, he adds.

Chris Chant’s blog post.

Vested interests will try to stop GovIT changing.

Praise for departing Deputy government CIO

By Tony Collins

Bill McCluggage, the departing Deputy government CIO, has been praised by friends and colleagues for his strength of purpose as a change advocate, and for steering through the government ICT Strategy.

He is also admired by friends for “telling it like it is” despite the Cabinet Office’s restrictive communications policy.

Said one friend: “To get the ICT strategy out and into delivery underlines Bill’s credentials as a deliverer not just a strategist; and he regularly held his ground with those who sought to maintain the status quo.”

McCluggage announced this week he is leaving government to join storage supplier EMC. He said on Twitter that it’s “sad to leave excellent team that have delivered real change but time to move on and address new challenge”.  He said he counted himself “lucky to have been part of the vanguard of new GovtIT”.

Mike Bracken, Executive Director of Digital, Efficiency and Reform Group, Cabinet Office, said that Whitehall will be poorer in McCluggage’s absence.

McCluggage joined the Cabinet Office as Deputy Government CIO in September 2009. He has been Director of ICT Strategy & Policy and Senior Information Risk Owner with overall responsibility for the formulation, development and communication of cross-Government ICT strategies and policies.

He was IT Director at Harland & Wolff Heavy Industries in Belfast and was an engineering officer in the RAF. He is a chartered engineer and member of the Institution of Engineering and Technology.

As Deputy government CIO McCluggage has been a firm advocate of agile techniques, cloud computing, open source, cutting out waste and duplication, and bringing many more SMEs into GovIT.

Deputy Government CIO to join EMC.

Deputy government quits.

Cabinet Office loses another top ICT man.