Category Archives: SME

SMEs – when to choose them and when not

By Ian Makgill

The key to giving business to SMEs is to understand when SME suppliers can meet the needs of government and when it is best not to try and resist the gravitational pull of a large supplier.  

Some of this is obvious.  You wouldn’t expect the government to award banking services or insurance contracts to an SME. On the other hand, there is no real reason why legal services or consulting contracts can’t be provided almost entirely by SMEs, with only a couple of larger providers required for national programmes with multiple sites. In fact, it is a great shame that Government Procurement Service’s (GPS) new tender for consulting services does not utilise the regional model that they’ve previously used for temporary medical staff.

GPS has scored a couple of hits with SMEs, firstly with the appointment of Redfern Travel as the preferred travel management provider and secondly, with the choice to let the G-Cloud IT framework. It may be that Redfern ceases to meet the exact criteria of being an SME once the contract is fully embedded in Central Government, but that’s the whole point, to drive growth through smaller businesses. The G-Cloud framework provides a meaningful opportunity for SME suppliers to sell complex services to government, and may also help government to break their addiction to monolithic, large scale IT projects (as typified by the CSA’s latest IT tender with 90,000 specified requirements.)

Cloud services offer a remarkable opportunity for small teams to serve millions of people. A good example is 37signals, a Chicago web design company that created a project management tool called Basecamp. Its team of 32 staff currently service three million customers.

It is equally important to know when not to try and counter market forces.

Take agency staff.

We’ve been doing some very detailed work in this area, and there is an inexorable move towards using large, national suppliers. These suppliers can provide much more competitive margins and better services and data to public bodies. The market is healthy in terms of competition and there is room for smaller suppliers to become second tier suppliers to some of the national companies. Clearly the option to become a second tier supplier, or to lose their existing business is not good news for smaller suppliers, but with such strong benefits available to public bodies it would make no sense to try and resist developments that are affecting the whole market.

There needs to be a much deeper understanding of the characteristics of contracts that can be fulfilled by SME suppliers and a comprehensive strategy to follow up on that work, and to prevent government issuing restrictive tenders that see SMEs unnecessarily barred from doing business with Government, or spin-out mutuals facing procurement hurdles that are inappropriate to them. Until that strategic work is done, then there is a risk that the appointment of SMEs to government contracts will be haphazard, with a few notable successes and far too many failures.

Ian Makgill is the Managing Director of Govmark, researchers who specialise in government contracting.

Download Govmark’s report into agency staff in local government

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Never knowingly undersold: the John Lewis ‘mutual model’

By David Bicknell

They say there’s no such thing as bad publicity. Just publicity. Well, unwittingly, John Lewis is getting plenty of it. It’s gone from being a retail store, to being the mutuals model, to being associated with care homes, and now, as this article suggests,  its name is being linked with schools.

Is there something in this? Have we truly stumbled on a new way of doing things in the public sector? Or, is it that we are all, as is our wont, looking for a label that we can apply for mutuals, and John Lewis seems to fit the bill?

When we have all finally moved on and gained greater ‘mutual maturity’, so to speak, other models will be more frequently cited. Until then,  you can probably expect that in a conversation where mutuals are cited, John Lewis is likely to be mentioned too.

Are SMEs getting more Government IT work?

Good piece by Peter Smith on why the government’s major IT suppliers may continue their rule over the Whitehall IT budgets (for the time being).

Ten reasons government procurement spend on SMEs isn’t increasing.

How the Dutch are taking a closer look at the energy efficiency of software

By David Bicknell

I am in Amsterdam to speak with a Dutch SME about its work examining the energy efficiency of software.

The Software Improvement Group (SIG) and the Hogeschool van Amsterdam (HvA) have come together to create the Software Energy Footprint Lab (SEFL).

The lab will enable researchers to examine such questions as:

  • How do different database management systems compare with each other in terms of energy consumption?
  • How do different programing languages/compilers compare in terms of energy consumption?
  • How do asynchronous requests compare to synchronous requests in terms of energy consumption?
  • How do unsigned integer arithmetic operations compare with signed arithmetic operations in terms of energy consumption?
  • How accurate are software energy profiling tools?

The laboratory will have computers rigged with sensors to measure the flow of electric current into each of the computer’s components. Specially crafted programs or generic benchmarks are then run with the sensors reporting on where the current is flowing to and how much of it is flowing to each component.

The relationship, which I’ll learn more about today, builds on the knowledge of electronics from the HvA together with SIG’s work into the technical quality of software which provides insight into the quality of organisations’ software projects, and therefore, the quality of their software suppliers.

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.

Why those driving the creation of public sector mutuals are Investors, not Conservers

By David Bicknell

All those considering setting up public sector mutuals like Hammersmith & Fulham  – and those in the middle of running successful mutual pathfinders such as Central Surrey Health – know the importance of investing in their vision and backing it.

That’s why I liked this piece by Craig Dearden-Philips, who while discussing third sector organisations, makes a distinction between Investors and Conservers.

“My guess though is that the people who make the biggest difference in the world , certainly socially, are almost all on Investors. These people are not ‘born’. They make a choice about how to live. They know that the Investment Principle works – and they live by it.

“Of course, Investment isn’t just a one way street. Investments frequently don’t pay off. In people, in relationships, in business. You get burned as much as you get it right. And investments that are not made judiciously, in people or ventures that are wrong to begin with, are not defensible either. Being investment-minded isn’t about being a soft-heart. But it is about understanding the powerful link between investment and reward and making this, somehow, a feature in the way you operate.”

Wise words.

Chief procurement officer: “40% of government contracts in September were with SMEs”

By David Bicknell

The Government has put forward the Olympic Delivery Authority as an example of procurement best practice in the public sector.

Chief procurement officer John Collington told the Cabinet Office  procurement conference earlier this week: “They have delivered the Olympics in time and on schedule in terms of the work so far and they have done so with openness and transparency.

“We in government must take the same approach, so every procurement must start with the principle, what will that supply chain look like and how will SMEs be allowed into that supply chain.”

Collington said that in September 2011, 1600 contracts, or 40% of government contracts, were agreed with small and medium sized enterprises (SMEs), compared with only 5% in January.

Coillington has promised more business with SMEs in the future, along with new commercial contractual models, more instances of re-use of equipment and systems across government and more savings and value for money.

Banned – consultants on some procurements
Government is giving more business to smaller firms

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.

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.