Tag Archives: risk

SMEs and Agile to play key role as Government launches ICT plan to deliver £1.4bn of savings

By David Bicknell

Cabinet Office minister Francis Maude has launched a plan to implement the Government’s ICT strategy which it says will deliver around £1.4bn of savings within the next 4 years and help deliver better public services digitally. 

In its foreword to the Strategic Implementation Plan, the Government says it is committed to reducing waste and delivering modern public services at lower cost:

We have already saved hundreds of millions of pounds in 2010/11 by stopping or reducing spend on ‘low value’ ICT projects. These quick wins demonstrate what can be achieved by taking a whole of government approach and challenging the way we operate and provide services.

The Government ICT Strategy, published in March 2011, described our longer term programmes of reform to improve Government ICT and deliver greater savings. This Strategic Implementation Plan provides a reference for central government and is designed to be read alongside the Government ICT Strategy.

“Our plans are focused on standardising government ICT. In the past, government departments worked to their own requirements and often procured expensive bespoke ICT systems and solutions to meet them. As a result, departments have been tied in to inflexible and costly ICT solutions which together have created a fragmented ICT estate that impedes the efficiencies created by sharing and re-use. It also prevents government from offering joined-up, modern, digitally-based public services that are suited to local requirements.

“Affordability in the current ‘age of austerity’ requires a different approach. The approach set out in this plan ensures that departments will now work in a collegiate way, underpinned by rigorous controls and mandates.

“This is not just a plan to reduce the cost and inefficiency of departmental ICT.  Effective implementation of the Strategy has already begun in programmes that will radically reform front line public services. For example, the Universal Credit programme is one of the first ‘Digital by Default’ services, using an Agile approach to reduce delivery risk and improve business outcomes. 

“Success or failure of government ICT depends on greater business preparedness, competency in change management and effective process re-engineering. That is why, although we focus on the common infrastructure as a way of significantly reducing costs, the ICT Strategy (and this plan) recognises the need for a change in our approach to ICT implementation. In particular, implementation will be driven through the centre, as a series of smaller, local ICT elements, rather than ‘big bang’ programmes that often fail to deliver the value required.”

Significantly, the government says it will continue to reduce waste by engaging SMEs:

“Building on the £300 million already saved (from May 2010 – March 2011) by applying greater scrutiny to ICT expenditure, government will continue to reduce waste by making it easier for departments to share and re-use solutions through the creation of an ICT Asset and Services Knowledgebase, applications store, using more open source, and improving the ICT capability of the workforce. At the same time, it will reduce the risk of project failure and stimulate economic growth by adopting agile programme and project management methods and reforming procurement approaches to make it easier for SMEs to bid for contracts. 

“For all relevant software procurements across government, open source solutions will be considered fairly against proprietary solutions based on value for money (VFM) and total cost of ownership. Success will be measured initially by a survey of each department’s compliance with the existing open source policy. Longer term, open source usage will be measured annually by the use of a departmental maturity model. The ICT Asset and Services Knowledgebase will be used to record the reuse of existing open source solutions, and the deployment of new open source solutions.”

Specfically on procurement, the Government says it has the potential to leverage its huge buying power in the ICT marketplace. But it admits that government procurement of ICT “has in some cases failed to deliver economies of scale and failed to deliver value for money to the taxpayer.”

The government says its objective is to “reform government procurement through the centralisation of common goods and services spend by funding improvements in technology, processes and government wide procurement resources to better manage total procurement spend and government wide standards, such as those for green ICT.”

“Government is therefore committed to become a single and effective ICT customer, leveraging buying power whilst remaining flexible on how it procures. As part of this process government will create a more open, transparent and competitive ICT marketplace embracing open standards and open source that will remove barriers to SME participation in public sector procurement to create a fairer and more competitive marketplace.

Government Procurement has a number of strategic goals, including to:

  • create an integrated Government Procurement (GP) to deliver and manage the Operating Model for Centralised Procurement for all common goods and services including ICT, delivering cost reductions in excess of 25% from the 2009/10 baseline of £13bn;
  • transform Government Procurement Service (GPS) to be leaner, more efficient and to become the engine room of government procurement, delivering savings through sourcing, category, data and customer management across all categories of common spend including ICT;
  • formalise agreements between GPS and all departments to deliver centralised procurement and to improve capability, including within the ICT spend category;
  • deliver policy and capability improvements covering EU procurement regulations; transparency in procurement and contracting; removing barriers to SMEs; and
  • mandate open standards and a level playing field for open source; streamline the procurement process using ‘lean’ plus supporting programme to develop the capability of civil servants who lead government procurements.

The government says its key procurement metrics will be

  • Total spend under management on ICT common goods and services
  • Savings on ICT common goods and services
  • Number of ICT contracts with a lifetime value greater than £100m
  • Time to deliver ICT procurements
  • Number of active ICT procurements

On Agile, the government says many large government ICT projects have been slow to implement and technology requirements have not always been considered early on in the policy making process, resulting in an increased risk of project failure. Agile project methods, it argues, can improve the capability to deliver successful projects, allowing projects to respond to changing business requirements and releasing benefits earlier.

Its Agile objective is to improve the way in which the central government delivers business change by introducing Agile project management and delivery techniques.

By 2014, it says, Agile will reduce the average departmental ICT enabled change delivery timescales by 20%.

In delivering this, the government says it will be measured by:

  • Number of departments who have used the online Agile facility
  • Number of projects using “agile” techniques, by department
  • Total number of instances where the virtual centre of excellence has been utilised

ICT Strategy Strategic Implementation Plan

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What sustainability – and business – leaders should learn from Steve Jobs

By David Bicknell

It’s a couple of weeks since Steve Jobs left us. Many tributes have been paid. With sustainability in mind, I liked this blog post from Andrew Winston entitled ‘What Sustainability should learn from Steve Jobs.’

It’s not so much about Apple and sustainability. But it’s about Steve Jobs’  eye for innovation and one important lesson that sustainability-minded leaders can learn from Jobs’ legacy: you should lead your customers and show them a better way.

Winston, who writes regularly for the Harvard Business Review, suggests that most large companies today are “fast followers” –  with ‘fiscal and strategic conservatism breeding a culture where execs prefer to wait and talk to customers before doing anything drastic. Of course customer (and other stakeholder) perspectives are critical. But as with tablet computers, when it comes to sustainability, often the customers don’t really know what they need.

“Companies often gather data on what their business customers think a sustainable product should be, and the survey might show that including recycled material is important, even if that’s a tiny part of the real footprint story. Nobody knows the value chain of your product and service as well as you do (or if someone else does, get them in the room pronto). So figure out where the impacts really lie and what you can do to reduce your customer’s footprint in ways they hadn’t considered. This might require asking heretical questions about whether the product should even exist in its current form or should be converted into more of a service.” 

Winston believes the next generation’s Steve Jobs is likely to focus on sustainability since that’s where the largest challenges and business opportunities lie.

I like Winston’s thinking on “fast followers.” It’s far easier to be a follower  than to take a lead, get out there, take a risk and make a market. That’s fine, as long as second place is somewhere, and not nowhere.

As well as sustainability and business leaders, maybe there’s also a lesson here for those who aspire to create public sector mutuals: to take a lead and show that there’s a better way.

Mutuals: balancing the benefits of employee ownership and innovation with the risks and rewards

By David Bicknell

The excellent King’s Fund report released yesterday on social enterprise in healthcare made some interesting points on employee ownership and risk in social enterprises and mutuals.

It said: “Evidence from other sectors (the commercial industry, and other public services to a lesser extent) largely focuses on the employee ownership model. In the UK, there is considerable evidence based on the John Lewis Partnership, a major retailer and the UK’s largest employee-owned organisation. However, much of the literature in this field is from the United States, where a significant proportion of the workforce (more than one-fifth) is financially involved in their organisation.

“Literature from the private sector is predominantly supportive of employee ownership, and suggests that there is a positive link between employee ownership and productivity, innovation and job satisfaction. This literature is based on the argument that, by giving employees a stake in their organisation, they will be more engaged and potentially more productive.

“However, Ellins and Ham report evidence that suggests that employee ownership may slow down decision-making and generate a risk-averse culture. A review of the literature by Matrix Evidence also suggests that any productivity gains are not immediate, but become stronger over time.

“The relationship between employee ownership and staff engagement is quite complex. It has been suggested that employee ownership does not automatically lead to greater staff participation, but that staff participation is necessary for the development of a successfuland productive employee- organisation. The literature suggests that the main benefit of employee ownership is greater staff involvement in decision-making, which is associated with a stronger tendency for organisational innovation. However, the direct link between ownership and staff satisfaction is much less clear.

“In commercial industries, employee-owned firms tend to have a lower risk of failure. They are able to create jobs quickly, and are at least as profitable when compared to conventionally structured businesses. Further, a survey by the Social Enterprise Coalition found that social enterprises were twice as confident of future growth compared with small- and medium-sized enterprises (SMEs) (48 per cent as opposed to 24 per cent of SMEs). Additionally, since the recession began, 56 per cent of social enterprises have increased their turnover from the previous year (compared with 28 per cent of SMEs).”

The other week when David Cameron launched the Open Public Services White Paper, he suggested that the Civil Service (and perhaps other
enterprises too) would need to adopt a risk-taking culture.

“The biggest challenge for the Civil Service is to try and adapt to this new culture and also a very difficult thing to do, and an easy thing to say, is that actually civil servants will have to take some risks. We all know that in business it is very easy to award the contract to Price Waterhouse. They’ve done it before, they’re an enormous organisation, they won’t fail. I think there’s a similar tendency within the Civil Service. It’s safe to keep it in house and deal with one of the big providers.

“If we really want to see diversity, choice and competition, we have to take some risks and recognise that sometimes there will be a new dynamic social enterprise that has a great way of tackling poverty or drug abuse or helping prisoners go straight, and we do need to take some risks with those organisations and understand that rather like in business, when you have a failure, that that doesn’t mean that the Civil Service has done a disastrous job.

“In business, we try new things in order to do better, and when they don’t work, we sit back and think, ‘How do we do that better next time?’ We do need a sense of creativity and enterprise in our Civil Service which is clearly there….a change of culture, perhaps a different attitude towards innovation and risk and a sense that that will be a good way of driving performance.”

Interesting then that a blog post in the Harvard Business Review site discusses risk and argues that taking a risk is not immoral – as some might argue – and that “the world is full of people who sit on their high horses disparaging risk and risk takers. They counsel caution in order to gain moral stature, all the while making use of a thousand innovations made possible by the very people and practices they shun.”

It’s not the people who shun risks who are the saints, the author, Dan Pallotta, says. It’s the ones who dare to take them. Good piece – worth a read.

Mutuals: white paper offers public services choice as Cameron tells Civil Service to take more risks

It was unfortunate that yesterday’s press conference to launch the Open Public Services White Paper by David Cameron was hijacked by journalists quizzing him on the ongoing News International story.

The event, organised by Reform in Canary Wharf, also featured speakers from big business i.e. the CBI, the consumer organisation Which, and the voluntary sector – “a Coalition in support of the White Paper,” suggested Cameron.

Detailing the public services landscape, Cameron scarcely mentioned mutuals by name, though they do feature significantly in the White Paper itself.

Modernisation of public services, he said, will give people choice and control over the services they use, and end the ‘get what you’re given’ culture.

People will be given more choice to shape the public services they use, putting control in the hands of individuals and neighbourhoods so everyone can benefit from the best public services available.

“I know what our public services can do and how they are the backbone of this country. But I know too that the way they have been run for decades – old-fashioned, top-down, take-what-you’re-given – is just not working for a lot of people.“Ours is a vision of open public services – there will be more freedom, more choice and more local control. Wherever possible we are increasing choice by giving people direct control over the services they use,” said Cameron, who detailed five core principles for modernising public services: choice, decentralisation, diversity, fairness and accountability.

He also made some key points about change and also about risk-taking for those now in the public sector:

“This is the case for change. If we want to compete in the world; if we want to get value for money; and above all if we want the decent, reliable public services that make life better for people, there will be no progress if we stick with the status quo.  What does change look like? It’s about ending the top-down, big government way of running public services,  and bringing in a Big Society approach, releasing the grip of state control and putting power into people’s hands. The old dogma that says ‘Whitehall knows best’ – that is going.”

“We really need to ensure that civil servants and arms length bodies see that there is a clear set of principles to apply: about choice, about diversity, about payment by results, about the role of private and voluntary sectors.

“The biggest challenge for the Civil Service is to try and adapt to this new culture and also a very difficult thing to do, and an easy thing to say, is that actually civil servants will have to take some risks. We all know that in business it is very easy to award the contract to Price Waterhouse. They’ve done it before, they’re an enormous organisation, they won’t fail. I think there’s a similar tendency within the Civil Service. It’s safe to keep it in house and deal with one of the big providers.

“If we really want to see diversity, choice and competition, we have to take some risks and recognise that sometimes there will be a new dynamic social enterprise that has a great way of tackling poverty or drug abuse or helping prisoners go straight, and we do need to take some risks with those organisations and understand that rather like in business, when you have a failure, that that doesn’t mean that the Civil Service has done a disastrous job.

“In business, we try new things in order to do better, and when they don’t work, we sit back and think, ‘How do we do that better next time?’ We do need a sense of creativity and enterprise in our Civil Service which is clearly there….a change of culture, perhaps a different attitude towards innovation and risk and a sense that that will be a good way of driving performance.”

************

This what the White Paper says about public service mutuals:

6.14 We are doing much more than just sweeping away regulations. We are giving public sector staff new rights to form new mutuals and bid to take over the services they deliver, empowering millions of public sector staff to become their own bosses. This will free up the often untapped entrepreneurial and innovative drive of public sector professionals.

6.15 Ownership and control, through mutualisation, empower employees to innovate and redesign services around service users and communities, driving up quality. We will not dictate the precise form of these mutuals; rather, this should be driven by what is best for the users of services and by employees as co-owners of the business. Options include wholly employee-led, multi-stakeholder and mutual joint venture models.

6.16 The Government will take steps to identify and overcome the barriers placed in the way of public sector workers who want to exercise these rights.

6.17 Public sector employee ownership: the key policies we are already implementing include:

  • Right to Provide – we are giving public sector workers who want to form mutuals or co-operatives to deliver public services a Right to Provide. This will enable public sector workers to form independent, or joint venture based, mutual and co-operative social enterprises. Progress is already being made with a new Right to Provide for NHS staff and opportunities for local authorities to invoke the Right to Challenge;
  • mutual pathfinders – the first wave of employee-led mutual pathfinders was launched in August 2010 with a second wave announced in February 2011. These pathfinders are being mentored by expert organisations as well as leading figures in social enterprise and public service to support their growth and share best practice; the pathfinders will provide critical learning as more employees look to exercise these rights;
  • Mutuals Task Force – Professor Julian Le Grand, one of theUK’s leading thinkers on public service reform, has been appointed to lead a Task Force to push employee ownership across the public sector;
  • Mutuals Support Programme – we will invest at least £10 million in the Mutuals Support Programme, to support some of the most promising and innovative mutuals so that they reach the point of investment readiness. This support will be available from autumn 2011;
  • Enterprise Incubator Unit – this has been set up within the Cabinet Office to provide advice, challenge and resources for public service providers from central government departments and their agencies who want to move from the public sector to the independent sector. The unit will help management teams to restructure themselves and their teams into independent businesses, which may include partners providing finance or expertise, for example through a joint venture;
  • Post Office mutualisation – In May, Co-operativesUK published a report commissioned by the Government on options to transfer Post Office Ltd from government ownership to a mutual run for the public benefit. The Government will carefully consider this report before launching a public consultation later this year; and
  • My Civil Service Pension (MyCSP) – plans have been announced for MyCSP to become the first mutual enterprise to spin out of a central government service. MyCSP administers Civil Service pension schemes for 1.5 million public sector workers. MyCSP’s plans to mutualise, which have the full backing of the Government, will give employees a stake in the new business, alongside government and a private sector partner. The innovative ownership model will be matched by a participative management approach: there has already been a strong turnout in elections for the Employee Partnership Council, through which employees will have a meaningful say in the running of the business.
Enabling new provision

7.7  Creating open public services will require new types of investment in public services: investment of money, inspiration and entrepreneurial effort. The Government will promote the opportunities being created by open public services, tailored to individual sectors. This promotion will aim to support:

  • accessing new forms of external finance – there is an exciting set of opportunities to bring new forms of finance into public services. This includes social investment (e.g. social impact bonds); payment for results on capital improvements (e.g. energy efficiency) and the financing of modernisation programmes (e.g. joint ventures to introduce new technology). Work is under way to develop effective measures of the social impact of investment and to launch the Big Society Bank, which will catalyse the growth of a sustainable social investment market;
  • empowering public sector staff to take control of their own services in new enterprises like mutuals – the creation of mutuals is a critical step in achieving more diversity in public services. However, we recognise that this is a big step to take for both staff and the public body that employs them. We will set out a full range of support available to those who are considering setting up a mutual, in the same way that we seek to stimulate both voluntary and private sector development. This will include a £10 million Mutuals Support Programme to provide support to fledgling mutuals that are being set up to deliver public services by employees leaving the public sector; and
  • actively encouraging new providers, of all sizes and from all sectors, to deliver public services– when we say we want diversity in public services, that is exactly what we mean. We will take active steps to avoid simply switching from one type of monopoly to another. We will launch a positive action programme to improve the awareness of public service opportunities to new providers, especially small and medium-sized enterprises. Many of our policy changes have already opened up attractive new opportunities, for example in the Work Programme and through personal budgets in social care. In addition, we will take positive action on procurement and through regulators to ensure that other opportunities (e.g. in central government procurement) are opened up to new types of provider, be they from the public, private or voluntary sector.

If you want more details, you can access the White Paper here – and the Government has unveiled an Open Public Services website