Tag Archives: Landseer Partners

Are SIAMs the new SIs?

In this guest blog, John Jones and John Pendlebury-Green, co-founders of strategic sales architects Landseer Partners, take a look at the development of a new generation of outsourcing in ICT and the creation of a new breed of integration and manageement specialists dubbed ‘SIAMs’. This article is also carried on Landseer Partners’ website.

We now live in an age of austerity where we have to live within our means and this includes the Government  which has just announced the need for Departments to find a further £16bn in savings. 

All Departments and Agencies are having to make real year-on-year cuts to their budgets – effectively having to do  the same for less money for some considerable time to come.  This is leading to new models for the delivery of services (third generation outsourcing) as Government becomes more about “policy and strategy” and leaves the delivery of public services to the private sector.

Industry has already played a major part in first and second generation of outsourcing including what is now more commonly called “outcome-based contracting”. 

The recent contract awards of new prison builds and operations similar to the likes of G4S and Interserve provide exemplars of outcome-based contracting. The Work Programme Initiative at the Department of Work and Pensions is another relatively recent example of second generation outsourcing with payment linked directly to outcomes.  Lessons learned are only now emerging as to the efficacy of these contracts.

What is interesting is that now we are starting to witness a new third-generation of outsourcing in ICT – Service Integration and Management (SIAM).  The consequences for the ICT Industry and the delivery of ICT within and to Government are likely to be profound. 

At Landseer Partners, we believe that the shape and players of the ICT market will change significantly in the next two to five years.  The net effect on the role of existing System Integrators (SI) is likely to be significant.

So what is SIAM all about and, importantly, what will make SIAM a success and its implications for the big SIs?

SIAMs are the ICT Managing Agent for the Customer

So, what are SIAMs – well, for starters, there is no agreed de facto industry definition of what a SIAM is. Rather, there are emerging trends in the private sector and in the current government procurements at the Ministry of Justice (MoJ) and the Foreign and Commonwealth Office (FCO) that identify key characteristics of what Service Integrators and Management Services may look like. 

For instance, the MoJ and FCO both plan to award contracts to SIAM providers that can successfully demonstrate the ability to integrate services and manage a number of Tower service providers that (typically) provide one or more commoditised services of: data hosting, LAN/WAN provision, Applications Management and Support and some Security related services.  Importantly, the SIAMs will be characterised by:

  • Taking the risks for “end to end” delivery of the services and their continuing operations
  • Creating new commercial constructs to balance risk versus delivery
  • Not necessarily holding direct contracts with the Tower service providers
  • Providing full 24/7 service desks to support national and global needs of the customer
  • Working hand-in-glove and be contract-managed by the retained Intelligent Client Function (or Informed Partner as they are sometimes known) of the Contracting Authority

In effect, the UK public sector is now requesting what has long happened in the construction industry; they are looking to award contracts to Managing Agents to help deliver and manage critical  ICT services back to Departments/Agencies.

Expected Benefits

So, with the advent of SIAMs  what are the expected benefits?  Reading the prospectuses of the government procurements we would expect the benefits to be large and varied and include:

  • Reduced cost of ICT services to the commissioning Department/Agency – this might come about by greater efficiencies in programme delivery; but significant cash savings are also expected as staff are transferred move to more cost-effective private sector pensions schemes
  • Better risk management with continuous incentives to improve service quality to users
  • Greater innovation by the SIAMs, possibly by the use of niche SMEs which will assist with more agile delivery and innovation methods

The Future

Given the real lack of experience and reliable data on the likely impact of the creation of SIAMs it is difficult to say at this particular time whether SIAMs will effective in the longer term]– will SIAMs be effective in the longer term?  Will they help to drive down cost of ICT services?  Will they help in the delivery of better public services?

Landseer Partners’s view is that, although it is early days, SIAMs are likely to be here to stay, at least in the foreseeable future. The status quo, keeping large in-house Intelligent Customer Functions and Service Desk provision, is  neither desirable nor efficient and future procurements will build on the lessons learned from the current MoJ and FCO procurements.

The key thing now is for System Integrators to recognise that change is in the air, that different business models are appearing and that, to be in the market, a change in attitude, behaviours and delivery will be needed in order to become Service Integrators and Managing Agents to Government.

Lean Procurement – an early bird analysis

 In this guest blog, John Pendlebury-Green and John Jones from strategic sales architects Landseer Partners discuss the Government’s plans to introduce lean procurements, an approach which should shorten procurement times, reduce bidders’ costs and encourage greater SME participation

Lean procurement is being piloted by the Government with six pilots underway across various departments. We at Landseer Partners have been extensively involved with one of these pilots. Also, we have discussed the emerging characteristics with service providers participating in other lean procurements.

Although it is early days, there are some emerging trends that the Government and bidders would do well to take on board for lean procurements to become successful and ubiquitous across government.

So, what are these emerging trends? Our “early bird” experience of being on a lean procurement pilot suggests that:

·         Lean procurements, by their very nature in attempting to reduce the overall procurement timeline significantly, have the potential benefit of reducing bidders’ costs. They also have the potential to reduce the opportunity to discuss in sufficient detail important commercials such as contract schedules and contractual terms and conditions.

·         Both the client and potential suppliers need to plan and resource better a lean, competitive dialogue. That means supplier submissions need to be submitted much sooner than in previous procurements. It also means that client bid reviews and quality assurance need to be undertaken much quicker and more efficiently.

·         There is an even greater need for strong leadership and decision-making on both the client and supplier side i.e. the need for empowered individuals is greater in lean procurements than in a traditional competitive dialogue. Decisions need to be taken swiftly in order to maintain pace in the procurement.

·         Stress levels for all parties can be high. All parties will be “doing more” in “less time” – so outcomes need to be kept in perspective with a view to the quality of deliverables/schedules not being compromised and

·         Bid teams need to be better resourced at the outset, especially in terms of having the right subject matter experts being available at the appropriate time. This seems to be especially so in the case of lean dialogue.

Finally, our experience, short though it is, suggests that incumbent suppliers, by virtue of their incumbent status, have a slight advantage over other short-listed competitors. They have greater knowledge of the existing services supplied. They need less time in the “data room” and are often able to provide a greater level of detail in their dialogue responses, simply by virtue of knowing the service in greater detail.

In summary, it is still very early days in the lean procurement world.  The obvious benefits of shorter procurement times (and hence reduced costs on all sides) though welcome, might actually mask additional costs that could subsequently emerge.  

Landseer Partners     http://www.landseerpartners.com/

Mutuals bring relief after the public sector moratorium

The public sector landscape is likely to be dominated by mutuals in the future.  In this guest blog, John Pendlebury-Green and John Jones of Landseer Partners discuss the outlook for service providers in this mutualised world and argue that their approach must be both innovative and flexible.

Last year was a difficult one for service providers to the public sector given the moratorium and general economic slow-down.  Despite a relatively slow start 2011 is looking significantly brighter for existing and new entrant market players.  The Government’s plans to achieve cost savings, develop mutual organisations, and use SMEs and the third sector to develop new ways of delivering services, are moving rapidly from theory to reality.  So, with the white paper on Open Public Services due out in July, now is the right time for both large and SME service providers to look at themselves and work out how they should be playing in this new world.

We wrote about the concept of mutualisation in early 2010. It has taken the Government longer to get to this point than we expected but the number and variety of public sector organisations looking at mutualisation in one form or another is impressive. The opportunities are starting to appear: from Camden Council looking at how all of its services can be delivered to Cleveland Fire Service receiving approval to finalise a business plan and a structure to establish an employee-owned mutual.   In central government the announcement that My Civil Service Pension is going to be placed into a mutual joint venture is the first major “spin out” of a central government service giving employees the opportunity to take a stake in their business.

So with Francis Maude now talking about an expectation of up to a million public sector workers being in mutual organisations by 2015, the scale of the government’s ambition for mutualisation is clear.  With these types of numbers being talked about it makes it obvious that a one-size-fits-all approach by service providers is doomed to fail.

Our view is that service providers, including possible new entrants, will need to invest time and money now by discussing with existing and new clients the art of the possible: what can be achieved in setting up mutual organisations in order to deliver jointly and successfully services that will provide the right outcomes to the customers of the mutual.

This is most likely to be in the form of working with the public sector organisation to help define the vision and outline structure, and identify the stakeholders – from users to the Cabinet Office – who need to agree the idea.  Then the service provider is ideally positioned, given its private sector experience, to help develop the business plan.  The plan needs to cover the services to be provided, the market opportunity to provide additional services and the resourcing and finances needed to make the new business work.

How this works in practice will be closely examined and no doubt later mutuals will learn from any mistakes in setting up the initial ones.  So the success of the pathfinder mutuals and high-profile examples such as My Civil Service Pension will examined very carefully.   It is clear that how the successful private sector service provider and any third sector organisations become part of these new entities, and how the governance, structure and profit share will work, will set the tone for subsequent mutuals.

Now at mid-year in 2011 it is still early days for new ways of working with the public sector.  If events to date have not spurred service providers to action the July white paper should certainly do this. Either this, or the significant number of re-tenders now coming onto the market, should provide some welcome relief compared to the slow down in 2010.

For more details, read the white paper or visit Landseer Partners’ website

The Big Society and Mutualisation

By David Bicknell 

I was interested in David Cameron’s discussion yesterday about the Big Society and how the government plans to devolve power from Whitehall.

Cameron pointed to the imminent publication of an Open Public Service White Paper setting out the Coalition’s approach to public service reform, and that paper when it comes out will make interesting reading, and should point the way to how new approaches to public service delivery, for example through mutualisation, may develop.

There has been increasing comment over the last few weeks on the potential impact of mutualisation, and the Campaign4Change expects things to become clearer once the new Mutuals Taskforce led by Professor Julian Le Grand hits its straps in working with front line staff who can see how they can do things better but at the same time want to ensure  that their ‘rights to provide’ are upheld.                                                                  

Francis Maude, Minister for the Cabinet Office, has said, “When you take power away from bureaucrats and give it to people on the ground they often come up with better, more efficient ways of doing things, this is the essence of the Big Society agenda. Public sector professionals have been held back by the limitations of top-down control, and their commitment to serving people has been ignored in favour of targets and regimented structures.”

Maude has already announced the launch of the first wave of Pathfinder mutuals – public sector spin-offs – to be run by entrepreneurial public sector staff who want to take control of the services they run.

These pathfinders are designed to be trailblazers for the rest of the public sector, helping Government establish, by learning from the front line, what type of support and structures will best enable the development of employee-led mutuals on an ongoing basis.

The Campaign4Change has already been involved in discussions on mutualisation with Landseer Partners, the results of which will emerge in due course.

Landseer Partners White Paper on Mutualisation

By David Bicknell

We will shortly be posting a white paper on mutualisation and the private sector by Landseer Partners. The paper discusses how mutualisation can provide the opportunity for a step change in the delivery of public services.