Business is going digital but IT departments have yet to grasp the way they have to change

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"Digital" is undoubtedly the buzzword of the day in conversations between IT leaders and their executive counterparts in the organisation. But it's only recently that the full implications of "going digital" are becoming clear in the IT department.

We hear plenty about how digital is changing business - increasing customer engagement, opening up new channels, breaking down old silos and so on. We hear even more about digital in the public sector - government as a platform, reform of service delivery, agile policy design and so forth.

But we've heard a lot less about what digital means for IT departments, the skills they need and the way IT develops, delivers and supports technology. It's increasingly clear that the changes are more fundamental than many had thought. We've heard a lot of talk about what Gartner calls "bimodal IT" - effectively, having one IT team responsible for the traditional IT operational disciplines for keeping the lights on; and another to look after the agile, fast-moving, digital stuff.

But at best, this two-speed IT is only a transitional phase. It's certainly not something you hear talked about at the most advanced digital businesses. Hailo, the taxi app, is an example - developing its software using highly componentised microservices, using public cloud and DevOps techniques to deliver the sort of flexibility and speed of change that conventional IT departments would barely recognise.

In the US, companies like Walmart, Paypal and Yahoo are using OpenStack - an open source tool created mostly for private clouds but being used by such firms as a highly flexible environment for managing IT operations. The way they develop software, test, release and run it is very different to the traditional corporate datacentre.

In the same way that digital promises to break down barriers between businesses and customers, and between citizens and government, it also breaks down barriers between IT and the business. Digital doesn't just put IT teams at the heart of business, in many situations it means IT teams are the business. The ability to rapidly develop and release new software is what will determine successful businesses in the digital era. It will be the difference between success and failure.

IT leaders and their teams need to prepare for the digital IT department - it's already starting to happen in your competitors.

What does the end of the "Francis Maude era" mean for GDS?

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Earlier this week, I wrote here that a new Conservative government could mean more changes in government IT than such administrative consistency would suggest. It already seems those changes may be even closer than anticipated.

I speculated in that previous blog post that civil service CEO John Manzoni is likely to put his stamp on digital government now he has been in post for six months and the election is out of the way. In a speech to the FDA yesterday (14 May 2015), the civil service union, Manzoni confirmed as much.

The key quote, reported by Civil Service World, was this: "The good stuff happens when you put great people out in the departments. It doesn't happen when you put great people in the centre."

This surely increases the likelihood of the Government Digital Service (GDS) being slimmed down and much of its delivery responsibilities handed back to departments. I'd suggest this was always the eventual plan - GDS looks after strategy, departments look after delivery, and outsourcers are brought in once a service or system is into the support and maintenance phase.

More key quotes from Manzoni:

"Our first step was to intervene and this was the Francis Maude era. There was an intervention in stopping all the bad stuff happening. But what we hadn't figured out how to do was how to enable the good stuff to happen. And the good stuff happens when you put great people out in the departments. It doesn't happen when you put great people in the centre...

"The modus operandi of the last five years won't get us where we want to be... I know we can be more efficient; the question is how do we mobilise the organisation in getting there? And I think that there is a recognition, even at the political level, that collaboration needs to improve."

Manzoni suggested that Maude's replacement as Cabinet Office minister, Matt Hancock, was chosen specifically because of his relationship with chancellor George Osborne - Hancock was an aide to Osborne at the Treasury.

"In my conversations with Matt he's saying we need to draw the centre, the Treasury and Cabinet Office more collectively together, and it's something I've been saying since I arrived," said Manzoni. "So I'm actually quite encouraged that we're getting it and I think that is a great sign of the future for how we work in a more collaborative way."

The next transformative phase of the drive to digital government is "government as a platform" (GaaP), and we know that GDS is working closely with the Treasury - and consultants McKinsey - on the business case for GaaP due to its cross-departmental nature. Is this the model for the future? Could we even see some of the current Cabinet Office responsibilities transferred to the Treasury, with the latter becoming the driver of cross-departmental change?

You could imagine the Crown Commercial Service (CCS) - the Cabinet Office procurement agency - moving to the Treasury. Why wouldn't you have your purchasing team as part of your finance and accounting team? CCS has attracted criticism, especially around some aspects of technology procurement, and new management inside the Treasury could be an opportunity to tackle those issues.

At a political level, the Tories are making much of their "100-day plan" to introduce some of their more controversial legislation in the forthcoming Queen's Speech and to get them in place before Labour has a chance to sort itself out and elect a new leader.

Perhaps we'll find out soon if the 100 days of change extend to the shape of management and delivery in digital government too.

New government, same government IT? Perhaps not...

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On first impressions, the Conservative election victory appears to be business as usual for IT across government. The challenges before the election are the same challenges now; the civil service leadership faces are the same, even if the names on the ministerial doors might change - not least in the case of Francis Maude, formerly the political driver behind digital reform but now ennobled as trade minister, with Matt Hancock picking up Cabinet Office minister responsibility for digital government.

But I have a feeling there will be surprises - that things will change more over the next year or two than some might expect. Here's a personal look at what might change, what needs to change, and what will trundle on much the same.

Changes ahead

There will be changes at the Government Digital Service (GDS) over the next 12-18 months - not as a result of any particular problems or deficiencies (although there will inevitably be some who will portray it as such, given the negativity towards GDS in some quarters) - but as a result of an ongoing shift in GDS's role and focus.

GDS for the last five years has been seen as Whitehall's digital department, when its real purpose has been to create strategy and demonstrate and drive change more widely. I would expect that purpose to become clearer in the coming years. What will that mean in practice? Here are a few guesses:

Support and development of the website will be sold off or mutualised. This will follow a model similar to the Crown Hosting Service and the Shared Services Centre, where Ark Data Centres and Steria respectively run operations as a joint venture, part-owned by government. There's no longer a strategic need for to be run entirely in-house - the technology infrastructure and publishing platform are in place, and content management is devolved to departments. It's becoming a commodity service and is likely to be commercialised as such.

Developing digital transactions will be the responsibility of departments, driven from the centre by Civil Service CEO John Manzoni. It's often forgotten that Manzoni, appointed in October 2014, is the person ultimately responsible and accountable for digital transformation across Whitehall - not GDS chief Mike Bracken.

He's had six months to assimilate his new job, and to assess the needs for civil service reform and greater efficiency. It's significant that Matt Hancock has not taken on the entire job previously held by Francis Maude - we effectively have two Cabinet Office ministers in Hancock and Oliver Letwin. The latter is more senior, but Hancock has been given a focus on "efficiency and civil service reform" - the new political muscle behind Manzoni's plans.

GDS has already announced that its initial transformation programme is over - the 25 digital "exemplar" transactions that were the focus of the first wave of digital development and were mostly, to some degree, implemented before the election. Responsibility for those exemplars and further transactions has been gradually handed back to the departments as their own digital teams have expanded. You can expect to see GDS being much less involved in the day-to-day delivery of digital transactions from now on.

Instead, GDS's main Whitehall focus will be the government as a platform (GaaP) strategy, as well as overall digital government direction, setting open standards for interoperability and data, and enforcing red lines around technology purchasing.

Consultancy McKinsey has been brought in by the Treasury to evaluate the financial aspects of GaaP - Mike Bracken's first post-Purdah tweets emphasised that GDS is still in charge of "strategy, discovery and tech" for the programme. In effect, that means McKinsey is working out the potential savings - watch out for that figure to be announced by chancellor George Osborne in a Budget statement later this year or next. GaaP is the next stage of the intended digital overhaul of central government, and will increasingly be the focus for GDS.

In general, as digital services move from strategy to delivery to ongoing support, this three-tier model of GDS (strategy), departments (delivery) and private sector / joint ventures (support) will become clear.

Remember that the GDS recruitment pitch to bring digital experts out of the private sector and into the civil service has always been to say: "Come and work for us for two or three years and help us change government". Outside of a permanent core team, the idea was always to flex in size and skills according to the next transformation task ahead. Some of those core team members will go during the next five-year parliamentary cycle - CTO Liam Maxwell, for example, is contracted until 2018 and if he feels he has completed the overhaul of technology delivery and contracting he set out to achieve, he's likely to move on.

What needs to change but might not

Over the past couple of years, the area mentioned most often as a problem has been procurement. The agile GDS and the process-oriented Crown Commercial Service (CCS) have at times proved to be difficult bedfellows. For all the good words about making more use of SME suppliers, many insiders feel that CCS's instincts are towards the big players, the likes of Capita.

Everybody loves G-Cloud, but many of the team that created it (and have since left the civil service) feel that CCS doesn't like it and fear for its future. CCS is at least being pragmatic - its recent tender notice for the replacement for the unpopular Consultancy One framework mentioned the possibility of a "G-Cloud like" arrangement. Insiders say that CCS has tried to use purchasing models that work for commodities like stationery and office furniture, but fails to appreciate the flexibility needed by digital and technology.

There seems little doubt that some people close to GDS would prefer to see more tech-related purchasing driven by GDS principles. But CCS is a big beast and hard to change.

GDS has also been tasked with closer working with local government on its digital transformation - but it's not yet clear how that will work and or even what it means in practice, beyond a commitment announced by Osborne in his March Budget. The digital challenge for councils is arguably bigger than that in Whitehall, and the cost cuts they need to make are significant. But outside of a core of forward-thinking local authorities, there are still big question marks about whether enough council CEOs really "get" digital to deliver the scale of radical change that is needed in the sector.

Carry on, regardless

Universal Credit will continue its slow progress to the much-awaited digital system currently being trialled in Sutton in south London. The troubled programme remains a huge technology risk for the government - barely 1% of all benefit claims are on Universal Credit despite the original objective to have the vast majority of claimants on the system by now. Roll-out continues, but the same risks remain.

Francis Maude promised that all the big outsourcing deals inherited in 2010 from the previous Labour government would have gone by 2020. Most of them conclude in the next two or three years. GaaP is not going to be developed enough - or a panacea - to replace them all in that time. The process of contract disaggregation will continue; some incumbent suppliers will gain short-term extensions; some will win a few of the disaggregated contracts; you can almost guarantee that some of the transitions will go badly. But, largely, Maude's promise will be fulfilled.

Whether that leads to a greater involvement for SME suppliers is less clear. The Cabinet Office basically bodged the figures to claim it achieved its target of 25% of new spending going to SMEs. The target for technology was meant to be 50%, and in G-Cloud that's been achieved. But the amount spent with tech SMEs on G-Cloud - roughly half of a cumulative £559m over three years so far - is tiny compared to the billions still being spent with big suppliers on outsourcing deals.

The biggest outsourcing deal of them all, HM Revenue & Customs' £800m a year Aspire contract, expects to save £200m or 25% of that annual cost through disaggregation. That's still £600m a year of external supplier spend - and will half or even a quarter of that go to directly contracted SMEs? No way. Once the big contracts are replaced, it's going to be almost impossible to say that even 25% of new IT spend has gone to SMEs without some very creative accounting on behalf of the big suppliers claiming much greater use of small businesses in their supply chain.

The aspiration to make greater use of SMEs will continue - and many SMEs will benefit - but the target numbers will be difficult to prove. There is still plenty of money to be made for the big outsourcers from the new government.

The digital challenge for the new government

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It's been said that the general election this week is the most important for a generation. That's probably true on a number of levels - and certainly within the microcosm of the IT and digital community.

Technology is not going to decide who wins, but it is going to underpin the delivery of almost every major policy enacted over the next five years by whatever parties make up the new administration. This will be the most digital government ever - frankly, whether they like it or not.

Fortunately, the politicians appear to know this. Every major party's manifesto recognised the importance of broadband, startups, education, research and digital public services.

The IT community expects and demands that it receives the same sort of favourable political treatment as financial services, manufacturing or construction. We're not there yet. But a digital Britain ticks every box in terms of the issues that will determine the economic success of the new administration - rebalancing the economy, growing new businesses, reversing the export trade gap, and more.

In healthcare, there is simply no way the NHS will be able to meet demand without a radical growth in technology adoption and innovation. In education, children will not meet the future needs of employers unless they have computing skills. Name a policy priority, and tech is at its heart.

This criticality must be acknowledged by the next government in its support and policies for the technology community. We will need a dedicated digital minister, with a far-reaching brief to promote the digital economy and to push through IT-enabled change in Whitehall. We need to build a broadband infrastructure that will meet the needs of the next 20 years, not just the next five. We need digitally enlightened policies that recognise how technology can radically transform the business of government, not simply automate the way things have always worked.

There has been good progress over the past five years, but there is a lot more yet to do - and a lot more benefit to be achieved in terms of cost cuts, service improvements and government efficiency. There is a digital dividend awaiting a government that gets it right. We hope and expect that they accept the challenge.

If not GDS, then what?

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The closer we've come to the UK general election, the more it seems the Government Digital Service (GDS) is taking a public bashing. You might wonder why.

It's certainly true to say that GDS divides opinion across the public sector and among IT suppliers - it has become Marmite for many observers and practitioners of government IT; you either love it or hate it. That in itself is understandable - when any new organisation challenges the status quo, with its institutional inertia and entrenched vested interests, there will be a backlash.

Indeed, GDS quite deliberately set out to slay sacred cows - the model for government IT by the 2010 election was clearly broken, and Cabinet Office minister Francis Maude gave GDS a remit specifically to shake things up.

Some of the vested interests that GDS has upset deserved everything that came their way - the big system integrators raking in billions of pounds; the cosy relationships of old-school IT managers waiting out for their civil service pensions; the endless procurement cycles.

But the recent noises off feel different.

It's important to point out here that GDS is currently unable to defend itself against criticism - the pre-election purdah rules for civil servants mean it isn't allowed to offer a public perspective on its work. Of course that's great for anyone wanting to leak or publish critical information, knowing that nobody from GDS will be able to comment or counter.

But equally, that doesn't mean some of that criticism is undeserved.

Valid concerns

Even some of GDS's biggest supporters acknowledge its flaws. There are valid concerns that need to be discussed - insiders have questioned the "build everything" preference and an over-dependence on agile; a lack of external scrutiny; delays to critical programmes such as the Verify identity assurance service; accusations of hubris and arrogance towards departmental IT teams. You might add others, not least the failed rural payments system.

It's also fair to say that many of the changes GDS has put in place will only show their real benefits over the life of the next government - enforcing open standards; eliminating big outsourcing deals and ending inflexible legacy contracts; encouraging SMEs through G-Cloud; and others.

I'll declare my interest by saying I'm still glass-half-full about GDS - but it has got things wrong and it needs to deal with critical feedback better and more openly (once out of purdah). I realise the irony of writing that GDS needs to deal with feedback better, at a time when it can't respond to feedback. But I hope readers will forgive me on the timing of this article, for I wanted to make observations after some of the recent commentary elsewhere.

Let's look at some of the most recent criticism. This month, consultancy BDO published a report criticising GDS for its dual delivery and advisory role in government, highlighting the risks BDO sees and offering its "high-level vision for GDS's future". The report was, I'm told, not externally commissioned, but was proactively written by BDO, apparently without any input or discussion with GDS itself. Frankly, it's the most self-serving document you can imagine - you could summarise it thus: "GDS needs more input from private sector advisory firms, says big private sector advisory firm."

This week, The Register reported on a leaked report from July 2014 by a consultancy brought in to review GDS's people processes, which highlighted problems with high staff turnover, criticisms of leadership and recruitment, and accusations of favouritism.

I wouldn't criticise The Reg for publishing - but here too you might question the timing of the leak itself. Because of purdah, GDS can't explain how it responded to the report, whether it has addressed all those criticisms in the 10 months since, nor put forward any of the GDS staff who outside purdah use Twitter to regularly talk about how much they enjoy working there.

Let's not forget that GDS is barely three-and-a-half years old, and has gone from nothing to more than 300 employees plus contractors in such a short time. Any new organisation that grows at that rate is going to have staff problems and make mistakes in people management along the way.

Glass half full, admittedly.

Reviewing GDS

GDS has rubbed a lot of people up the wrong way - mostly, because it had to. But after the election, and despite the public support it has received from the Conservatives, Labour and the Liberal Democrats, there's bound to be some review of where GDS goes next.

We already know, for example, that McKinsey has been brought in to help work on the business case for GDS's government as a platform strategy - not the sort of consultancy you would expect GDS to use but chosen, apparently, because the Treasury likes them.

We know too, that some of the big IT suppliers that have seen their new business from Whitehall diminish under GDS have been lobbying Labour over the last couple of years. They want their toys back.

So perhaps it's inevitable that GDS's critics see the election period as an opportunity to stake their claim in the hope of changing things post-election. Just to say it again - some of those criticisms are fair. Some are not.

But so far there is one thing missing from the critics and the leaks - what is their alternative? Even if GDS has made mistakes, got things wrong and not delivered as much as it hoped (all things which I think GDS management would privately admit) - nobody is offering a better solution. It's easy to point a finger and have a moan, it's not so easy to take accountability and propose something better.

Once the election is out of the way, there will be an opportunity to take stock. GDS needs to initiate such a process - open itself up to feedback and criticism; be honest and open in public about where it needs to improve and how it intends to do so. The worst thing GDS could do is withdraw behind barriers and ignore its critics - that would be an insult to those friends and supporters who have valid observations to make. GDS is a public body, pushing forward with a programme that promises to transform public service delivery. That has to be done transparently, openly and honestly, without hubris from GDS or rancour from critics.

Some perspective

For a little perspective, the following is well worth a read. Take a look through and see what you think, before I say where it's from.

"Mid-way through our efforts to put government online, we have done much but not as much as we would like. It's easy to point, poke fun or make a living as a commentator on what we've done so far (as so many do), but much harder to see what next. My thinking is that realisation is dawning that online government is just as much about government as it is about online. That one is not different from the other. So where online services fail to get the boost that we expect, it is not necessarily a failing of implementation but just as much the fact that we have metaversed the status quo.

"The realisation that as long as online government reflects offline government, take-up will be low will, I think (hope/believe) drive a different set of changes... Issues like we have seen where technology and business issues conspired to cause enormous pain mean that we will have to rethink delivery controls. Spending will tighten as we enter another financial review round. The potential for central infrastructure will be fully realised and people will commit resource to exploiting it rather than exploiting ways to get out of it. There are other things in this storm too - some that I can see, some that I can feel and some that I can't talk about. All of them together create a one time, once in a generation chance, to make some changes come through the system - to undo hierarchies, convoluted processes, business rigidities and long-time resistance.

"As we break down and through all of those barriers, new things will happen. The great thing is that it will be possible to see this storm unfold in real time and see what actions are put in place that might lead to the new metaverse, one that is not a reflection of the status quo. One that is genuinely new. One that places what can be done online at the heart of delivery and looks to find ways to wholesale the online service to a variety of retail channels - government people, intermediaries and the citizen or business themself. And once we are past the stigma of 'e-government' and we have real services working effectively and widely used, the potential for further change will become apparent. Because, as the storm is unfolding, people will be conjuring up new things that rely on new business structures and processes - things that expect walls between silos not to be there rather than assuming that they will be there and hobbling the service because of it."

If that was published on a GDS blog following the election, nobody would be surprised. It's not unlike the sort of article that GDS chief Mike Bracken has written in the past about the challenges and opportunities of digital government.

But that was written in July 2003, by a former government IT chief, Alan Mather, who was involved with development of several critical Whitehall IT systems that are still in use today, such as the Government Gateway and online tax self-assessment. It shows how much government IT continues to reinvent the past, and how far it still has to go to deliver what everyone knows it can and must. GDS isn't perfect, but it's better than what it replaced; it has achieved a lot - even if less than hoped - and right now it's the best we have. So let's make it better.

As Mather wrote 12 years ago: "It's easy to point, poke fun or make a living as a commentator on what we've done so far (as so many do), but much harder to see what next".

Is local government capable of the radical change it needs?

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Local government IT leaders have spent the last five years of austerity implementing the most dramatic cost cuts the sector has ever seen. Yet they await a new government after the UK general election that is likely to expect even greater cuts, regardless of who is in power in Westminster.

This was the context in which council IT chiefs came together for last week's conference for Socitm, the local government user group. I was privileged to be invited to chair the event, and listen to the debate about the challenges facing councils in the coming years.

You could summarise the day as follows: Radical change is needed in the delivery of local public services, but is local government capable of being radical enough?

Digital collaboration

Among the more enlightened council IT leaders, there is recognition of the opportunity that going digital offers to deliver that radical change. They know that the key to achieving this is widespread collaboration to share ideas, resources, software, experiences and best practices. But they also privately admit that, while individual councils may understand, far too many authorities simply don't get it.

One IT chief told me he had sat in on meetings with council CEOs where it was abundantly clear they had no idea about digital and what it means - its potential to reshape public service delivery at much lower cost.

The reality is that councils have delivered austerity cuts predominantly by reducing costs of the way they have always done things - and not by changing how they do things. Costs have been salami-sliced, reducing bureaucracy (a good thing) but often cutting back on frontline services (a bad thing).

The most radical move by many councils has been merging functions with neighbouring authorities - still running services the same way, but using economies of scale to cut the resources needed to run them. Or they have done what they believe to be something radical and outsourced huge chunks of service delivery to the private sector.

As Mark Thompson, author of Digitizing Government and a keynote speaker at Socitm, said: "Renewal of multi-year outsourced IT contracts constitutes a failure of public services", and you could easily take out the letters "IT" from that sentence and find it to be true in many cases.

Lack of radical thinking

There is still little evidence that anyone is doing the necessary level of radical thinking to completely reshape the sector. The question to address, surely, is not how to make the existing local government system cheaper to run, but what is the most efficient way to deliver local public services nationwide? Instead of cutting costs by slicing back on resources in the existing administrative structure, why aren't we asking how much cheaper could local services be delivered using a radically different structure?

Local government is simply a system of administration - a historic form of bureaucracy designed in a pre-technology time as the best way to deliver analogue services. If you were setting up a system of local public services from scratch, you would never establish it the way it runs today.

There are 433 local authorities of some form across the UK. Do we really need that many?

The biggest unitary council is Birmingham, covering about a million people. On that basis, why don't we have 60 local authorities of similar size? Frankly, I'd wager that we could operate comfortably with half that amount - 30 back-office management and administration operations, supported by a few hundred frontline local service delivery hubs.

Citizens don't care where the council office is - they just want somewhere local to go if they need to talk to someone. And as more public services are delivered digitally, so the volume of local face-to-face transactions will shrink. Remember - most public services are delivered by local authorities, not by central government.

Instead, we're on the brink of having 433 councils, most of which will build their own digital services, duplicating effort, buying from a dwindling number of unresponsive software suppliers that dominate the market, trying to maintain their local administrative power base, delivering services in essentially the same way as ever, just at slightly lower cost. And often, reducing service levels to meet their austerity budget.

The problem is that asking for the sort of radical changes needed is, to use the obvious cliché, like asking turkeys to vote for Christmas. How do you convince 433 council CEOs to agree to put 400 of them out of a job? Not to mention the number of back-office managers that would go the same way - albeit to preserve frontline services.

Of those 433 councils, 326 collect council tax and business rates. Do we really need 326 different IT systems to collect council tax and rates? Surely a tenth that number would collect cash more efficiently. You can apply the same logic to every IT system used by councils.

If a group of councils band together to develop new digital services - and those services work - why wouldn't they make the system available either on a shared basis or as open source for other councils to use?

Local interest over local services

Another speaker at Socitm told a story that summarises the problem neatly. Eddie Copeland is head of the technology policy unit at think-tank Policy Exchange; he cited the developer of a mobile app called AppyParking, which uses open data published by councils to guide London drivers to available parking zones. Of course, not all that data is actually published as open data, and the developer wrote to every London council asking for the relevant information. Having received positive responses from most, he set about sourcing £250,000 of private investment to develop the app.

That was until two London boroughs decided not to release the data, because they might want to use it for a similar app themselves.

The lack of logic - and absence of understanding of radical digital change - embodied by those two councils is a warning bell for the future of all local government. They put their own local interest over that of local services. Instead of allowing public data to be used by a private entrepreneur for the benefit of all London citizens - at zero cost to the council - those boroughs would prefer to spend citizens' taxes on building an app that serves only those drivers in their own area. And bear in mind this is London - where most people live in one borough and work in another, so the use potential of a council-specific app is limited.

It's an example only of a radical lack of thought.

A sense of place

But it also demonstrates one reason most council chiefs will give to justify the 433 administrative bodies - the importance of place, and local democracy. Rightly, councils see themselves as bearing responsibility for the maintenance of local culture, history and that sense of place; they stay close to citizens to ensure everyone has a voice in how their district is run. How can you continue that role without local organisations working close to local people, they say?

The easy answer for a digital thinker is - "digitally". But perhaps here, realistically, we're touching on a much wider issue about the organisation of politics nationally. Surely the devolution debate needs to be informed by digital thinkers too - if those 30 new administrative bodies had greater powers devolved to them, then there's a radical compromise. New local government bodies may be bigger and not so physically close to citizens, but with extra powers they become more accountable to them. And by the way - digital can help here too, as a means of bringing disparate citizens' opinions to council leaders.

You could also add that representatives of those slimmed-down, digitally-enabled, devolved authorities might make for a more democratic upper chamber in Parliament than the current House of Lords, but perhaps that's thinking too far for a mere technology publication.

Local government is the most protected sector there is. Without a political mandate and a huge majority, Westminster is never going to tell councils to undergo such a radical reshaping of local services. The structure of local government has not featured once as a general election issue. So those authorities take the swingeing budget cuts imposed upon them, slice off a few more resources, squeeze down on service levels, and do everything they can to sustain the structure of local government essentially as it has existed for decades.

Radical change is needed

The only way radical change is going to take place is from the bottom up; from councils themselves realising the need and the opportunity to use digital to dramatically cut costs and improve service levels in a completely new-look administrative structure.

Another Socitm speaker, Peter Wells - who project managed the Labour Party review of digital government last year - gave a warmly received talk about the many good things about local government. "We need to celebrate the public sector as a great place to work - a place to do fantastic things and improve lives," he said. And he's right, and that needs to be protected. But without radical change, all those fantastic things are at risk.

I got the sense last week that there's a core of digital leaders in councils who absolutely get this. But will that be enough? Is local government capable of radical change? Eventually it must - or else it starts to lose its relevance and ability to deliver, with every attempt to reduce the cost of maintaining the status quo.

Amazon Web Services is showing traditional IT players how they need to change

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Amazon Web Services (AWS) is clearly doing something right. The e-commerce giant has split out AWS revenues for the first time in its latest financial results, revealing a $5bn business growing at nearly 50% year on year.

AWS has shown the big, traditional IT players the way to do public cloud - defining the market for infrastructure (IaaS) and platform as a service (PaaS) along the way, forcing the likes of IBM, HP, Oracle and Microsoft to respond. Amazon is by far and away the dominant public cloud player, and when you see it is also the company's most profitable division, the scope for further growth, innovation and lower prices shows it is still in the early stages of its development as a business.

Perhaps unsurprisingly, there's a certain resentment towards AWS in parts of the IT industry. It has not played the game by the same rules as its increasingly distant competitors. It has constantly cut prices - the more customers AWS has, the bigger the economies of scale, and the lower the unit cost for every customer. Every new AWS user is, eventually, helping to cut costs for every other user. You're not meant to do that as a traditional IT supplier - imagine if the cost of software licences fell when more customers bought that software; it just doesn't happen.

AWS has done very little marketing, relying on word of mouth among IT leaders. It's common at Computer Weekly events for our CIO guests to be heard advising their peers, "Why don't you just put it on Amazon?" AWS users seem not only to be happy, but to be happy to tell others about it too.

AWS applies a retail mindset to the provision of technology services - the "pile it high, sell it cheap" approach behind its e-commerce success. It exploits the commoditisation of IT to develop new products and services that build its ecosystem using the same commoditised pricing. And it encourages others to use that ecosystem to build their own open services that can be fed back into the ecosystem. It's a bit like Microsoft asking third-party Windows developers to include all their applications in Windows, for free.

Amazon has achieved $5bn of cloud revenue at a time when there are still widespread fears about cloud - related particularly to security and data protection - that prevent many large organisations, especially in heavily regulated sectors like financial services, from moving to public cloud. But those fears will be overcome; the sceptics will be convinced; the laggards will be forced to catch up. A tipping point is approaching.

AWS has proved, so far, to be an impressive technology business, and its potential to further shake up corporate IT is huge. But we do need more competition - a challenge the rest of the industry must better respond to. As long as Amazon Web Services continues to do things in ways the traditional IT players find anathema, it is going to keep eating into rivals' profits and embedding itself into IT leaders' strategic plans.

The missing election manifesto promise - educating MPs on the UK's digital opportunity

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Who is going to be the big digital winner after the 2015 general election? Congratulations to anyone involved with smart ticketing on public transport - you're in for a good time. The one area that all three of the Conservative Party, Labour and the Liberal Democrats have committed to in their election manifestos is to develop nationwide smart ticketing, particularly on the railways. Who'd have known?

As for the rest of the technology sector, while there is not quite the same universal commitment as those lucky smart ticketing types (and by the way, sign up whoever does their lobbying now), there is enough common purpose to get a view of the digital priorities of the next government, whoever they may be.

High-speed broadband roll-out is assured - if you're in the 95% of easiest to reach properties at least. If you fall outside that area, best vote for the Lib Dems and their promise of 99.9% household availability.

The future of the Government Digital Service (GDS) is secure - even if Labour has taken the opportunity to score a few political points in blaming the outgoing coalition for GDS failing to hit its target of having 25 "digital by default" exemplar services live by the election. The Lib Dems' manifesto was the only one to specifically mention extending the GDS remit to local government, but Labour has previously made a similar promise and Tory chancellor George Osborne made it a Budget commitment last month.

The parties all recognised the importance of backing and investment - in varying degrees - for the UK's science and technology research base, for digital skills and apprenticeships, and for helping to create and grow tech startups.

But the most contentious topic remains that of data privacy and state surveillance. The Lib Dems stand out as the party offering most change, with their digital bill of rights. With Labour and the Tories, we're likely to see continuance of internet snooping by the security services, albeit with slightly more oversight under Labour.

But has any party really given us a vision of a future digital Britain? Not really - it's mostly different flavours of the same trends seen across the past five years. There are still so many more things we could do for the benefit of us all, if only our political leaders had a grasp of the potential.

So here is one policy we would like to see delivered by the time we come to the next scheduled election in 2020 - for politicians to be educated in the true opportunity for technology to radically transform the UK for the better.

Would GDS like to airbrush rural payments out of its digital exemplar history?

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Last month, I wrote in this blog about the problems that caused the new rural payments digital service to be withdrawn from use by farmers and replaced by paper forms. The system was one of the 25 "exemplars" that the Government Digital Service (GDS) intended to showcase its digital transformation drive.

GDS needs to be challenged to live up to its mantra of "make things open, it makes them better" by being open about the problems, what caused them, and what was being done to resolve them.

Just today I came across the latest GDS quarterly progress report, published on 27 March, a week after the rural payment service was withdrawn. The report was published quietly and without fanfare in the run-up to the dissolution of Parliament, and GDS along with the rest of the Civil Service is in "purdah" during the election campaign and unable to respond to journalist queries. I haven't seen any other publications cover the quarterly report, so it seems there was little attempt made to publicise its release.

If you read it, here, you would think that the rural payments problems had simply never existed. You might even fail to realise that rural payments was one of the critical exemplar services in the first place.

In a section of the report titled "Service transformation", it highlights "seven more exemplar services went live this quarter" - the list fails to include rural payments, which went live in January.

The report continues: "By the end of March, a total of 20 exemplar services were available for public use. Four services are in beta development and one is in alpha. Home Office, Department for Work and Pensions, HMRC and Department for Business Innovation & Skills /Land Registry will continue work to deliver these remaining five exemplars, building digital by default services that meet the needs of their users."

No mention whatsoever of the work that Defra is having to do to remediate the rural payment problems for future use.

Under a section titled "Exemplar projects: what we're learning" the report says: "We want departments to learn from this transformation work and to use exemplars as templates when redesigning their own digital services. We're also looking at how organisational structures and culture need to adapt and staff skills need to improve."

And that's it - no mention of the lessons that may need to be learned from rural payments, one of the exemplar services, and why it failed to meet user needs.

Eventually rural payment does get a mention in the report, as one of the first services using the new Verify system for identity assurance - but again, no mention of the problems farmers had using the Verify service.

Admittedly, the report was no doubt close to being finished when the rural payments service was withdrawn, and GDS was under time pressure to publish the report before purdah began a week later.

But the total absence of any mention of the rural payments problems in an official GDS quarterly progress report is extraordinary. Not even one sentence, added at the last minute, to acknowledge what happened. It leaves GDS open to accusations that it's not just failing to be open when things go wrong, but seems instead to be airbrushing rural payments out of its exemplar history altogether.

To make Britain digital we need leaders who are part of the network, not apart from it

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It's great to see so much debate taking place on social media - and hopefully in the real world - following Martha Lane Fox's Dimbleby Lecture broadcast on BBC1 last night. Regardless of what anyone thinks about what she said, if her talk starts a widespread debate about the role of the internet and the digital economy in the UK, then it was a success.

I completely agree with the principles and aims that Lane Fox outlined - better digital inclusion; get more women into IT; tackle ethics and privacy; better broadband; public service reform; and get more politicians to understand the opportunities and issues around digital technologies.

I'd like to think these are all issues that Computer Weekly has consistently highlighted. Let's all get talking about them. If anyone can catalyse the debate, it's Lane Fox, with her public profile, drive to succeed, and contacts with business and government leaders.

But I'm far less convinced about Lane Fox's proposal for a national institution to tackle some of these issues - what she has called "Dot everyone". It seems a very old world solution to a very 21st century challenge. It risks accusations of elitism - gathering the digerati into one great public body to tell everyone else how great digital is.

Let's not forget that the internet became what it is due to ground-up support - nobody in positions of power or influence decided that we would all use the web, that it would become so central to everyday life for so many people. If some great public body had said that 20 years ago, it would probably have doomed the internet to failure.

Equally the criticisms of today's internet giants - Google, Facebook, Apple, etc - and the idea that they need an institutional counterpoint ignores the fact that those companies became giants because we all use them. That doesn't absolve any of them from criticism as they exhibit increasing tendencies towards corporate megalomania, but the great thing about the internet is not only that anyone can use it, but that anyone can stop using it. Facebook grew from nowhere because it engaged people; if we all get fed up with it and use something else, we can still make it go away.

To me, the idea of a national institution places it apart from the people it wants to influence. If there is one thing the internet has taught us, it's that in a digital world, leaders need to be a part of the network, not apart from it.

The real challenge is that politicians need and expect a hierarchical society - indeed, they will do everything they can to protect and maintain it. If the social impact of the internet is truly ground-up, then at some point the irresistibly rising digital tide will meet the immovable hierarchical rock of institutionalised establishment, and then things get really interesting.  

Perhaps proponents of a national digital institution will say its function is just that - to be the bridge between those two forces, engaging with the establishment in terms it can understand, while empowering the network to enable change. But the danger is an establishment-backed institution instead becomes a barrier to keep the hierarchies of power at the top. We already have plenty of public institutions, and you only have to look at some, like the BBC or the NHS, to see what happens when the establishment decides it doesn't really like them the way they are.

In the UK we have yet to see the emergence of the sort of ground-up political movement that can only exist in a digital world. The closest we've seen elsewhere is the Pirate Party, which came to influence in libertarian Sweden and has gathered a following more widely, winning seats in the European Parliament and 5% of the popular vote in Iceland's 2013 election.

Perhaps that suggests the UK has not reached the digital maturity needed for that sort of change and that degree of challenge to the establishment. Plenty of people (me included) throw around the phrase "digital revolution" very easily and carelessly, when perhaps the natural process of social change is more measured. But that change will come - inevitably, inexorably, unstoppably.

As the UK gears up for what promises to be the most dramatic and unpredictable general election in a generation, we can already see signs that the public is turning against the old way of things with its rejection of two-party politics. Nonetheless, we know the country will still be led by one of only two men - both steeped in their own form of establishment background. The stirrings of ground-up change - or at least, the desire for change - are there.

A country governed by the principles of the network not the hierarchy would solve many of today's economic challenges. A new, federated model of central and local government to address devolution, enabled by "government as a platform" technologies, is just one example. A national broadband infrastructure to connect everyone and not just the commercial needs of one or two semi-monopolistic telecoms suppliers, is another. Investment in digital skills to help tackle unemployment and prepare in advance (for once) for the automation of blue-collar jobs, is yet another. I could go on.

Whoever forms the new administration, the next five-year Parliamentary cycle will see the most digital government ever. It will also see the generation that grew up on the internet reach their late 20s and start to emerge as young business leaders and budding politicians. Many of them will be bashing their networked heads against the hierarchical walls of establishment. It's going to happen.

So let's keep going with the debate that Martha Lane Fox has started; let's make noise, make headlines, broaden the network, engage with everyone. In her lecture, Martha challenged journalists and editors to do their bit. That, for sure, is a challenge I hope we can rise to.

After rural payments embarrassment - the test for GDS is to 'make things open, make it better'

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The failure of the rural payment digital service last week - and its subsequent replacement by paper forms - is not the IT disaster some would claim, but it is an embarrassment for the Government Digital Service (GDS).

The project, budgeted to cost around £154m, has not seen all that money wasted. Only £73m has been spent so far, and very little of that has been wasted either. The system will still be developed, and will be used for next year's round of farming subsidy claims - or that's the plan at least.

The cost of failure this year amounts to the unbudgeted processing of paper forms, and the cost and effort involved in trying to correct the performance problems that have so far proved insurmountable. That's probably several million pounds that nobody wants to have spent, but it's tiny compared to past IT disasters.

GDS chief Mike Bracken's words in a speech to the Institute of Government in October last year are worth quoting now:

"No policy or service we civil servants think up will ever work in practice the way we thought it would in theory. We must start out humble, and rapidly iterate in response to the messy reality of real users using real services," said Bracken.

"We should say to critics in the media or elsewhere that failure is an essential part of government, just as it is in private enterprise. And the cost of failure should be tiny, dwarfed by its rewards," he said.

"The cost of failure is only enormous if you plan to launch with a big bang on a fixed date in a couple of years' time, with the world's media and public watching - but before you've really started the work to understand how to best meet the needs of the people who will use the service. Big bang was fine in 1986. It is a disaster waiting to happen in 2014."

Those apposite words frame the three issues that need to be addressed in the light of the rural payments problems.

1 - How does agile work with immovable deadlines?

For many years, one of the most frequent causes of government IT failures was the immovability of political deadlines. When the tax credits system fell over under the Labour administration, it turned out that testing was bypassed to meet the political deadline set by then-chancellor Gordon Brown. That's a great example of what Bracken meant when he talked about avoiding fixed dates and big bangs. But the "messy reality" of government is that some deadlines will always be fixed.

If it weren't for an EU deadline of 15 May (since shifted to 15 June) for farmers to claim for the new Basic Payment Scheme policy, the rural payment system might have had time to be fixed. In the end, that fix didn't happen in time. GDS is left red-faced because farmers have been complaining about performance problems with the digital mapping tool since they started using it earlier this year.

Few would argue that avoiding big bang launches is a bad thing. Similarly, few would argue that the iterative approach preferred by GDS's agile strategy is a bad thing. But in government, there will always be fixed deadlines, like it or not - and GDS needs to show that the iterative approach can still work in such circumstances when there are problems along the way.

2 - Was this a prototype or not?

The digital service launched to farmers was, in GDS parlance, still only a beta version. According to the GDS Service Design Manual - the current bible for government IT developments, mandated by force of Cabinet Office minister Francis Maude - a beta is: "A fully working prototype which you test with users. You'll continuously improve on the prototype until it's ready to go live, replacing or integrating with any existing services." Only after a service has passed its public beta phase is it classified as a "live" system by GDS. But farmers were told that this was the mandatory route for making their claims.

The rural payments service was launched to all 110,000 farmers and 1,200 land agents to be used for the very live act of applying for their annual subsidy payments. As one source put it: "Beta is bullshit in this context".

Farmers wouldn't understand the digital concept of alphas and betas - all they wanted was a system that worked. Why wasn't the service launched as a beta to a smaller group of users - preferably the more digitally literate - knowing that they were a test service, while planning from the start to use a paper-based alternative for the remainder of users? That way the developers learn, and they can better prepare for scaling up the service and for what Bracken has called the "edge cases" of farmers who need more digital assistance or live in rural areas with poor broadband?

Iteration, and learning as you go along, is commendable - but was it appropriate for the circumstances here, with a system launched to the entire user base, as the only option for making a claim, with a fixed deadline ahead?

3 - Make things open

Mike Bracken also wrote last year about, "Making things open, making things better". One of GDS's most prized - and widely applauded - principles is "make things open". It refers to open source, open standards, coding in the open, and an open culture, with GDS staffers regularly blogging about the projects they work on, in a reversal of historic civil service practices and secrecy.

But now, when something has gone wrong, the shutters seem to have closed. The Cabinet Office press office suggested Computer Weekly talk to Defra, the department responsible for the policy. The Defra press office said we should talk to the Cabinet Office.

Now is the time for GDS to be completely open about what has happened. There is a growing perception among farmers and the media that the rural payments service is a failure, that the money has been wasted, and all the work done so far has been abandoned. In a vacuum of information from GDS and Defra, rumour and speculation turns into damaging fixed perceptions.

Rural payments is arguably the biggest hiccup for the GDS digital strategy so far. Other services that have gone live have generally worked well - register to vote, carer's allowance, power of attorney, prison visits, online drivers' licence details have all been successful digital launches. But rural payments is perhaps the biggest and most complex of the GDS digital exemplars to so far reach this stage.

The model for this service is classic GDS - multiple, smaller suppliers instead of one or two big system integrators; agile development; multiple off-the-shelf products instead of heavily bespoked versions. This is what we are told will be the model for much bigger services to come, such as online tax accounts, and the Universal Credit digital service - systems that would cause national political repercussions if they failed. It's the model by which the future "government as a platform" will be built.

Furthermore, critics of GDS have warned of an over-focus on the web front-end and user experience, and a lack of attention to the thorny, IT-led area of scaling back-end systems and integrating with legacy IT. We know that the core of the problem with rural payments was difficulties between the front-end mapping tool and the back-end rules engine. Servers were hitting 100% utilisation and falling over, which suggests a scaling issue in the back-end software or the integration layer.

But what were the problems exactly? Were the suppliers to blame? What are the next steps to a resolution? What was broken? We just don't know.

That is not "making things open". Openness is to be welcomed, but it cannot only apply to the good news. The true test of openness for GDS is now, when something has seemingly gone badly wrong.

So over to you GDS - make things open, so we can see how you are making things better.

George Osborne set the UK on a digital roll - now a new government must accelerate the momentum

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It's rare that I'm inclined to congratulate George Osborne, but recognition is due to the Chancellor for making his latest budget the most tech-friendly ever.

Every year, Computer Weekly is inundated with press releases before the Budget from various interest groups calling on the Chancellor to include this or that technology policy. Typically, the day after the Budget we then get the follow-up release chastising the Chancellor for failing to deliver on their hopeful wish-lists.

But this year, few could complain - the list of supportive announcements was long. Tech startups, science and technology research, internet of things, driverless cars, smart cities, skills, broadband, mobile networks - all received funding or government support of some form.

The government's digital strategy even underpinned one of Osborne's headline-grabbers - the abolition of tax returns, made possible by the planned introduction of personal online tax accounts and HM Revenue & Customs' real-time information system for tax collection.

There is little doubt that whoever wins the election in May, digital and technology will play a bigger role in the next government than ever before.

Labour must be a little frustrated - since the party's digital government review was released last year, the coalition has slowly nicked most of Labour's most popular recommendations. Osborne added another - extending the remit of the Government Digital Service (GDS) to help local authorities with their digital plans (although the Cabinet Office was unable to offer any further details on this, which makes you wonder how much they knew about it beforehand).

Some of the announcements promise to be truly transformational - not least a commitment to produce a standard banking API to open up the big retail banks' data and systems to new entrants.

We are, slowly, getting the UK onto a digital roll. Whoever wins the election must commit early to protecting, continuing, and preferably accelerating this momentum. The UK has a genuine opportunity to be a world leader in the digital economy, for the betterment of everyone - creating jobs, wealth and social opportunity; improving healthcare and education; making this country a base for science and technology innovation that is the envy of the world.

We look forward to whichever party or coalition of parties is willing to accept and deliver on this defining challenge for the next Parliament.  

Does IT have a problem with people?

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Does IT have a problem with people?

That's a question I found myself asking, after listening to the speakers at a BCS event last week. It's not a new question by any means, but when you consider a few topical challenges facing IT leaders and the IT industry, it's one that perhaps gives an insight into the radical changes taking place through the technology supply chain.

In companies, the question goes to the heart of the changing relationship between IT departments and their users - the rise of "shadow IT" and "bring your own device" (BYOD) have come about as a rebellion against the historic "command and control" culture of most IT teams.

In government, it relates to the mantra of "user need" espoused by the Government Digital Service (GDS); it goes into how GDS wants to change the procurement and delivery of IT in Whitehall, and the irritation that seems to be causing for IT suppliers.

Let me explain.

One of the speakers at the BCS event was Will Whitehorn, Richard Branson's right-hand man and currently president of Virgin Galactic, Branson's ambitious space travel business.  His simple explanation of Virgin's approach to risk and failure should be mandatory listening for anyone involved in IT. He highlighted lessons that the IT sector - typically so risk averse - is only starting to learn.

From Whitehorn and other speakers, there were, for me, three key points to consider.

IT today is led by products not people

Whitehorn gave an example of Virgin's focus on customer needs throughout its supply chain, which came from his time setting up Virgin Trains, and in particular its West Coast main line franchise. Virgin wanted a totally new train design to meet its goals for speed and passenger service - the end result was the Pendolino tilting trains in use today.

Whitehorn went to suppliers and outlined what their customers wanted, and told the train makers to design and build something to meet that user outcome. He felt that was delivered.

Consider by comparison the typical conversation between an IT leader and their suppliers, where an explanation of business outcomes and user needs typically leads to the offer of a "solution" based on a series of products. "You want to increase customer service levels by 10%? Here - buy my CRM software!"

The IT industry has yet to understand and manage risk well enough to meet that user need challenge - and its thinking all too often is not yet mature enough to go beyond products. There must be a huge opportunity for any suppliers that can genuinely offer user-focused outcome-based solutions in that way - but where are they?

IT thinks "big" when it needs to deliver "small"

"Risk means accepting failure" said Whitehorn, and explained how this was a fundamental principle behind the success of Virgin Group.

The company has grown big by keeping its parts small. Every Virgin-branded business operates independently of every other, so if one fails, the overall brand is not harmed.

Failure is a particular challenge for Whitehorn at the moment, after the tragic crash of Virgin Galactic's test plane last year - a disaster that Whitehorn said is likely to be proved as human error, not equipment failure. But he said that Virgin always knew that going into space was likely to bring high-profile failures along the way, and that the end goal is worth the risk.

But the way they manage that risk is by keeping things small.

Compare that with the historic approach to IT delivery, of "big bang" projects specified to death at the beginning then failing to meet user needs once finally completed. The move to agile - or, better described as breaking down projects into smaller tasks, individually managed and delivered within an overall architecture (for those who recoil at the word "agile") - is an overdue response to that monolithic approach to IT.

It's not about waterfall vs agile - you can use waterfall techniques in smaller tasks as much as you can agile. You can see it coming through in the datacentre too, with the growth of microservices and container technology - keep things small, even within the constraints of something inevitably large such as a corporate datacentre (or better still just put it in the cloud).

The IT industry has always liked to use engineering analogies to explain how it works - that delivering IT projects is like building a bridge or a skyscraper. I've never been comfortable with that analogy. The best and better analogy I've heard recently is from consultant Mark Foden, who said IT has to be grown like a garden, not a bridge that has to be built.

A garden needs a design and an architecture - big plants at the back, small ones at the front; matching colours; hard landscapes mixed with soft - but each element of that garden is independent of the other while intrinsic to the whole. Each plant needs individual nurturing; each pathway laid and maintained. To make the whole garden a success needs different approaches for different elements - shady plants that don't need much water; sun-lovers that need regular feeding; different flowers that bloom at different times as long as you treat each according to their needs.

In IT, you see too many adherents to one methodology - we are waterfall; we are agile; we use Six Sigma; we use Lean; etc. Ironically, IT is not binary; it's not one thing or the other. It needs a flexible (and often complex) mix that recognises the different needs of each element, focused on users not on a finite set of supplier products that in reality vary very little from each competitive offering.

Trust your people

Perhaps it's not surprising that so many IT leaders are not entirely trusted by their CEOs. Too many big failures, too much over-run, too many unhappy users. But it is true to say that too few boardrooms really trust their CIO.

Another BCS speaker, Phil Pavitt, global CIO of Specsavers and former HM Revenue & Customs CIO, made the point that the people in your own IT organisation almost always have the answers to the questions that matter - they just need to be trusted, and to have an opportunity to step forward.

Pavitt bemoaned the typical state of big corporate IT, with expensive consultants brought in to gather information from employees, then report back what they said as if the consultants were the enlightened ones.

I recently talked to a highly experienced CIO, someone with success in major multinationals, who had been employed to overhaul IT strategy and delivery at one of the highest profile organisations in the UK. He has recently left - of his own accord - as a direct result of a new leader of that organisation who insisted on bringing in a consultancy to audit every element of that strategy after it had been completed.

Risk aversion and a lack of trust towards IT are endemic. IT needs to earn that trust, and to convince CEOs to trust them.

So what?

Perhaps it's inevitable that technologists feel more comfortable with neatly defined products that meet a clearly defined purpose. People are complex and unpredictable - how can you deliver IT to satisfy such flaky users who don't really understand IT in the first place?

But this is where IT sits today - at the cusp of change from a product-focused industry to one that is able to deliver user-focused, outcome-oriented business (and personal) offerings composed of small, interchangeable components, with no single points of failure. IT still wants to dictate to its users; its users now know enough to say no.

Perhaps that's the biggest challenge for the maturing IT community as it seeks to exploit the digital revolution and sit at the top table of business and government - to become less risk averse, to manage failure better, and to put people first.

Mobile and cloud adoption is accelerating - don't miss out

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With 90,000 people attending this year, Mobile World Congress has become one of the definitive events on the technology calendar. Nobody is surprised to hear experts saying mobile is the number one issue - and the same applies to corporate IT.

Computer Weekly's annual survey of our readers' IT spending priorities shows that mobility has leaped to be the top priority for IT leaders with 42% of respondents implementing mobility projects this year - well ahead of the second placed issue, compliance at 31% (see graph, below). As recently as 2012, mobility didn't even feature in the top 10 IT spending priorities.

Thumbnail image for 2015 UK-IT-Cloud Priorities UK - NEO.jpg

As mobility has risen, so has cloud. In our latest survey, for the first time more organisations are increasing spending on cloud than for on-premises IT - a significant milestone. In 2012, the research described IT leaders' cloud plans only as "modest and moderate".

But tracking the survey over the last three years shows not only that mobility and cloud have risen naturally to the top, but they are accelerating at the expense of almost every other category of spending. The strategic shift to mobile and cloud in corporate IT is really happening, and is now unstoppable.


Slicing into the survey data also shows a notable fact - demonstrated in the graph below. If you look at readers' responses on technologies typically associated with digital transformation - areas such as collaboration, big data, social media and virtualisation - you see there is a significantly higher tendency for spending in such product categories among those companies also prioritising cloud.


Cloud is not just a major shift in IT delivery, it is a signifier of greater intent to transform the IT estate using emerging technologies. For IT suppliers, that's hugely significant. If they are not having the cloud conversation with their customers - or are simply tagging a "cloud" label onto their existing products - they are missing out on nearly every other major IT change taking place at that organisation.

For companies such as IBM, HP and others, desperately trying to protect revenues from legacy products and unable to grow sales from emerging technologies sufficiently fast to replace them, that's a huge problem. Who would seriously have thought five years ago that Amazon would become the dominant force in cloud, at the expense of such bellwethers?

For those IT leaders whose employers are still reluctant to invest in mobile and cloud, it may soon be too late - their competitors are changing the game at an accelerating pace. 

Do the UK government's SME spending figures make sense?

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The government this week touted its success at delivering on a policy objective to put 25% of all purchased spend through SMEs - in 2013/14, that amounted to £11.4bn, slightly ahead of target at 26.1% of all spending.

But, at the same time, many SMEs are up in arms about the way they are being treated by Whitehall, and in particular the Cabinet Office procurement agency, Crown Commercial Service (CCS). The numbers published by the Cabinet Office tell one story, the market seemingly tells another. So which is true? Let's examine the official figures that make up that 25%.

Direct vs indirect spending

First, it's important to understand what the goal was. That 25% consists of direct spending - contracts between government and SMEs - plus indirect spending, which means large firms passing some of their government business to SMEs as subcontractors. Of the 26.1%, direct spend was 10.3% and indirect 15.8%. So in contractual terms, about 90% of all contracts by value still go to big companies.

But government relies on those big firms to report back how much they spend with SMEs - the number is not audited, and is based only on a survey of its 500 largest suppliers. The Cabinet Office admits that "the approach to indirect spend should be regarded as indicative". The indirect figures add a few further caveats:

  • "MoD total procurement and direct spend figures are for the core department only, therefore excluding its Executive Agencies and NDPB."
So, the Ministry of Defence - by far the biggest spending department - does not measure the SME spend through its many external agencies and non-departmental public bodies (NDPB), of which there are 29 different organisations.

  • "FCO direct spend is based on UK spend only"
The Foreign and Commonwealth Office (FCO) - most of which is, inevitably, housed overseas, does not measure direct SME spend in all those overseas operations.

  • "Data as reported by suppliers for central government with no departmental association"
This is the description given for £1.5bn of indirect SME spend - 22% of the total figure - that is not attributed to any Whitehall department. This means that large suppliers claimed they passed £1.5bn of money to SMEs, but cannot account for which departments that work is attributed to. Really? For more than one-fifth of all the sub-contracts to SMEs across all large suppliers, the prime contractor has no idea what department that work is for, or cannot associate the work with any department? That sounds somewhat convenient for those big suppliers, all of which have been pressured by the Cabinet Office to demonstrate an increase in their SME spend. The government admits that the indirect spending figures have not been supplied by departments, so it appears we are to take the word of the large suppliers entirely on trust over that £1.5bn portion of the spend.

Direct spend

Look next at the direct spend - the numbers for which the government can account for itself through contracts placed with SMEs. Those figures have flatlined - representing 10%, 10.5% and 10.3% of total spending respectively in each of the last three financial years.

In the year before - 2010/11 - only 6.8% of spend went direct to SMEs; the prior year it was 6.5%. The jump from 2010/11 to 2011/12 went from £3,200m to £4,439m - an extra £1.2bn. The Cabinet Office attributes that leap to the new coalition policies introduced at the start of the parliamentary cycle taking effect. It was suggested to me by a source that the measurement methodology for tracking SME direct spend changed between 2011 and 2012 - although the Cabinet Office denied this.

So what did cause that jump? The two main policies introduced in 2011, alongside some changes to process such as a mystery shopper service, were:

  • Advertising tenders below £100,000 (tenders greater than £100,000 were already advertised)
  • Abolishing pre-qualification questionnaires (PQQs) for contracts below £100,000 to make it less onerous for SMEs to bid for business.
So, in theory, the only real change for SMEs was in their ability to win contracts worth up to £100,000. There is not yet any published evidence to suggest that from 2011 SMEs suddenly won a greater share of the contracts above £100,000 that were already being advertised.

It's true that in government IT there has been a push to smaller contracts, which opens up more opportunities for SMEs - but the main vehicle for that is the G-Cloud framework, which launched in February 2012, so cannot have accounted for any of the £1.2bn increase in the prior year.

G-Cloud has been widely applauded and has awarded more than 50% of its spending to SMEs - but the total amount spent through G-Cloud since its inception is still only £431m to the end of 2014. Clearly G-Cloud made no contribution to that £1.2bn leap in 2011/12 - and has not had a material effect as overall direct spending has flatlined since its launch.

How many SMEs?

So, we are left to assume that most of that £1.2bn additional annual spend came about as a result of SMEs winning more contracts worth up to £100,000. Even if you take a generous outlook and say that the average contract value was the highest amount of £100,000, that would imply 12,000 new contracts won by SMEs. That's 1,000 per month, or about 50 every working day. Somebody in CCS would be getting through a lot of ink signing all that paperwork.

Of course, if a lot of SMEs won a lot of contracts worth over £100,000, that would account for a greater chunk of the £1.2bn - but that would have happened anyway, as the 2011 policy changes were mostly focused on opening up smaller contracts. If you were generous, then perhaps 1,000 SMEs won contracts worth £1m on average that had never before been won by SMEs, and that would account for most of the £1.2bn. That's still four contracts every working day.

But the government has not been able to say how many SMEs have been awarded direct contracts - Computer Weekly has asked, we've not yet had an answer - but it seems unlikely to be 1,000 additional firms, and even more unlikely to be 12,000. So where are all the SMEs that won that extra £1.2bn?

It's also possible the definition of an SME includes individuals providing temporary services through a company of which they are the only employee - fairly common practice for contractors, to reduce their tax burden. But does direct spend with individual contractors really support the ethos behind the desire to grow UK small businesses through the government estate?

If you apply the same logic to the indirect spend - which increased from £2,946m (6%) in 2011/12 to £6,909m (15.8%) in 2013/14 - that's an increase of nearly £4bn annually. At an assumed average contract value of £100,000, that's 40,000 additional contracts with SMEs let by large suppliers in a year. Again, you might ask - really? Where are they all?

Not lies, just statistics

There is no evidence to suggest the government is lying about its SME spending - but even a casual, entirely non-forensic analysis like the one above raises some significant questions over the extent to which government largesse has really been spread around the UK's SME community.

Of course, the existence of a policy to increase spending with SMEs is welcome, and is clearly having an effect - even if nearly three-quarters of all spending still goes to large suppliers.

G-Cloud has been hugely popular - most SMEs that have engaged with it love it, and some have grown so much as a result they can no longer be categorised as SMEs. But G-Cloud was not created by CCS, which still appears to prefer old-style procurement frameworks managed by outsourcing giants such as Capita, which are coming increasingly under fire from disgruntled SMEs who say they are losing millions of pounds in revenue.

Plenty of SMEs who deal with CCS say they are less convinced that the purchasing agency has bought into the SME policy, and that CCS still feels more comfortable dealing with big suppliers where they can aggregate demand and use that to negotiate better prices.

The progress made on growing SME spending by the coalition government is very positive, let's be clear about that - but it may not quite be as impressive as it wants us to believe. There is still much room for improvement.

Why it's time for the IT community to engage with politicians

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No blood was spilled, but listening to the three main political parties debate their digital policies together for the first time this week laid out the battleground for their likely general election technology manifestos.

Computer Weekly, with help from TechUK and the BCS, brought together the Conservative, Labour and Liberal Democrat parties to face questions from an audience of IT executives about their priorities for supporting the tech sector and growing the UK's digital economy.

Reassuringly, there was much agreement between the three. On further support for the burgeoning tech startup sector; on expanding the work of the Government Digital Service (GDS) and supporting local authorities in their digital plans; and on the need for reforms around data protection and privacy - all three parties concurred.

You can read all about the debates in our coverage here:

And you can watch video highlights from the event here:

But perhaps the most significant theme from the debate was the need for better engagement between politicians and the IT sector.

In past elections, the IT community has been at the back of the room, desperately waving its hand in the air for the politicians to take notice, trying to tell them how important it was. This year, for the first time, the main parties have invited us forward to sit closer to the front.

There is widespread recognition - at last - that technology can and must play a major role underpinning some of the major reforms needed in the UK in the next five years, in the economy, health and social care, national security, education and welfare.

The IT community has, justifiably, pointed to the lack of digital literacy in Parliament, urging MPs to become more aware of how technology can help deliver the changes they all call for. But all three of our panelists - digital economy minister Ed Vaizey, shadow digital government minister Chi Onwurah, and the LibDems' Julian Huppert, agreed that IT itself needs to become more politically aware too - "The challenge for the tech industry is to meet politicians half way," said Vaizey.

And they're right. For the digital community, your time is now - the doors are open at last. There has never been a better opportunity to engage with the UK's political leaders and show them how technology can make all our lives better.

Banking industry is finally ripe for digital disruption

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The financial services industry has yet to experience the digital disruption that radically changed other sectors, such as retail and media. But the influence of the commoditisation of communications, processing power and storage - more popularly known as the internet and the cloud - is going to hit finance too, that much is inevitable and unstoppable.

Arguably, the 2008 crash protected the banking industry from such disruption - increased regulatory scrutiny made it impossible for new entrants and restricted innovation from existing players. But everyone can see the cracks emerging from the lack of digital investment - those ageing, batch-processing mainframe transaction engines at the core of every major bank were simply not designed to handle real-time web and mobile services.

Governments have realised too, that they need to introduce more competition to the market, to reduce the dependence on the global players that let down the world economy so badly.

And what is the one, proven way to increase competition, and break down barriers to entry? It's technology, of course. Once you could sell online without the cost of a physical store, it transformed retail. Once you could publish content on the web without the cost of a printing press, paper and ink, it transformed the media.

We are seeing the emergence of new, challenger banks based on digital technology, which do not suffer from the complex, legacy IT that the incumbents depend on. Also, banks find some of their services being cherry-picked by the new tech giants - payment services such as Apple Pay, for example, not to mention Paypal. Research suggests more of us will use smartphones to pay for things than credit or debit cards by 2020.

Some banks are responding, of course. Barclays is pushing hard on new mobile services, and even providing training in branches for children to learn coding. Santander is going further, and taking on the cloud suppliers at their own game, offering cloud storage to corporate clients. If data is the new currency, there's a logical progression to store it with your bank, even if the chances of one bank building the scale of cloud infrastructure needed to compete with Amazon, Google or Microsoft is unlikely.

Banks still control the global flow of money - but trends like Bitcoin are starting to demonstrate that even here, technology can offer alternatives.

The big finance players are vulnerable - even if they don't want to see it - in the same way as Woolworths, Blockbuster, Comet and others were vulnerable and missed the digital boat. Expect the banks to go through a decade now that will change their industry as much as the last 10 years has done for so many other sectors.

Apple success shows the importance of making IT invisible

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It's been impossible to ignore the biggest technology headline of the week - especially as it became the biggest business headline in many places too. Apple declared the largest quarterly profit in corporate history - not bad for a company dismissed as a failure 15 years ago and derided as behind the times when it launched its first smartphone.

Apple sold 74.5 million iPhones in the last three months of 2014 - that means 1% of all the people in the world bought an iPhone. You can't say anything other than it was a remarkable achievement - perhaps the zenith, so far at least, of the consumer technology revolution.

I must admit I wasn't convinced by the iPhone when it first launched. I feel the same way about the Apple Watch, which means it's guaranteed to be an instant blockbuster product.

Apple's success has been widely attributed to its focus on product design - making tech cool, fashionable and desirable for the first time. But great design underpins the real reason Apple has changed the tech world - it made the technology secondary, invisible even.

People bought iPhones in their millions because they didn't need a user manual - the intuitive nature of the product meant they looked at its utility not its functionality or technicalities. Even the simplest Nokia phones in the past typically needed you to read through the manual first. That's also a contributor to why Google Glass failed - it was the complete opposite of invisible.

Technology works best when you don't notice it. The suppliers that realise this will be the winners from the digital revolution - I'm not sure, for example, that IBM, HP and Microsoft quite get this yet.

The smartest CIOs that Computer Weekly meets get this - and in some respects, it's what makes them stand out from their IT leadership peers. If your CEO notices your technology, it's usually because it's gone wrong, or when it causes endless frustration to use. "We need to turn that irritant into something that has value," as one such CIO said to me recently.

Technology is great, we all love it, and it's a part of our lives. But the technology that works best - and in a corporate environment in particular - is invisible. For IT to lead in business, it needs to disappear.

Windows 10 proves this is a different Microsoft - but is it different enough?

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The software company with 14% share of the global operating systems market announced the latest version of its flagship product this week. It's called Windows - you might have heard of it.

It's not that long ago - barely six or seven years - that Microsoft could claim that Windows ran on more than 90% of all the computers in the world. Since those computers disappeared into our pockets, its global influence has plummeted like no product ever before. More than 90% of PCs still run Windows - but that's a declining market.

Of course, those statistics don't tell the true story of Windows today, and in particular of the Windows 10 launch this week. A 14% market share or not, Windows is still every bit as important as iOS and Android - especially for business technology buyers - even if it has failed to extend its PC dominance into the mobile market.

Perhaps the most important reaction to the latest announcements was not the product reviews, but the widespread acknowledgement that, under CEO Satya Nadella, Windows 10 proves conclusively that Microsoft is a very different company than it was under his predecessor, Steve Ballmer. Nadella has taken the company a long way in his first year in charge.

We now have Office apps for Apple and Android devices - anathema in the Windows-centric Ballmer world - and this week we even have the first version of Windows that will be given away for free, albeit only for its first year, and to Windows 7 and 8 users. Better to get that user base onto Windows 10 for nothing than lose them to non-Microsoft devices.

Most of the coverage of the 10 launch focused on the mobile and consumer features, but actually much of the work went into satisfying the enterprise buyer, with advancements in security, cloud and mobile device management.

The failure of Windows Phone compared to iOS and Android hasn't dented Microsoft's revenue or share price, and corporate sales of Windows and related products on PCs remain the bedrock for the Seattle supplier. The HoloLens "holographic" headset will excite gadget lovers, but will be much less important to IT managers than the claimed software portability for Windows 10 applications across every device from smartphone to tablet to PC.

Much like Windows 7 was the operating system everyone hoped Vista would be, it looks like 10 will make up for the botched job that was Windows 8. So, most importantly for Microsoft, Windows 10 ensures it stays firmly in the plans of its corporate customers. And yet...

For Microsoft to really prosper in the new age of mobile and cloud, it still has to shake off some old habits. The 12-month giveaway for Windows 10 will be welcomed, but there are too many lucrative Software Assurance deals in place for Microsoft to make Windows free forever, like iOS, Android or Apple's OS X for Macs. The company described its approach to supporting 10 as "Windows as a service", which implies it is slowly moving towards a pay-as-you-go or subscription service, rather than the complexity of Software Assurance - a move already evident with Office 365.

If Microsoft really wants to win IT managers over once and for all, a radical simplification of its software licensing would be the number one priority.

The availability of Office on rival mobiles was a big step to existing in a multi-vendor world - but was also a defensive measure to protect Office revenues against the "bring your own device" (BYOD) trend in corporate IT. Ease of integration between Microsoft's enterprise products has always been its biggest attraction for IT managers, but the future is far more heterogeneous than that and IT leaders would far prefer to see more Microsoft products unbundled and better able to integrate with rival software.

I would expect that in five years' time, Office will be a far more strategic product for Microsoft than Windows. You will only pay for the PC version of Windows, and that market will be a lot smaller as more employees use tablets for work - even if they are Windows tablets, where the operating system will be effectively free, with corporate integration features charged extra.

Windows is still too important for Microsoft to ever admit this, but the operating system is no longer the long-term future for the company - that's going to be Azure and Office 365.

The new, different Microsoft is welcome and necessary, and Nadella deserves plaudits for making it happen so quickly. But a lot of this is about playing catch -up - all he has done is bring the company back up to date, and brought back a little of its old buzz. The Microsoft of the near future is going to be even more different yet.

Privacy vs surveillance debate is nuanced and needs more education, less tribalism

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It doesn't feel that long ago that the information security community were bemoaning the lack of attention they received from the government, national press and wider public. No danger of that happening now, is there?

Data protection, privacy and surveillance are leading front pages and parliamentary debates, particularly after recent high-profile incidents such as the Sony Pictures hack and internet snooping by the intelligence services.

The Paris terror attacks have brought widespread calls from politicians for greater powers to monitor our internet activities, countered by privacy campaigners pointing out the terrible irony of terrorism causing a reduction in our civil liberties as a result.

David Cameron's naïve and careless call to outlaw "communication between people which we cannot read" has rightly led to criticism of what would be a technically unfeasible and highly dangerous attempt to ban encryption.

I can remember writing nearly 15 years ago that privacy would be the defining challenge of the internet era, and so it has proved.

Nobody can argue that targeted electronic surveillance is anything but a good thing for fighting crime and terrorism, but blanket recording of all our communications - even if it is only the meta data - on the basis the data is stored "just in case" is self-evidently a step too far in a liberal democracy.

When the Regulation of Investigatory Powers Act (RIPA) was passed in 2000, many observers warned that its loose language and broad powers could be misused. Politicians assured us that no such thing would happen, relying on the common sense and altruism of the authorities.

Fifteen years later, we have seen how the law has been abused, just as those experts warned, with councils citing RIPA to snoop on parents trying to get their children into schools outside their catchment area, and the police using it to uncover journalists' emails and expose their legitimate sources.

Let's not forget too, that the French authorities already have greater surveillance powers than the UK, and it was still not enough to prevent the Paris attacks by known extremists.

There is no easy solution, and none will be found in knee-jerk reactions or a tribal approach that creates a binary debate when nuance is needed. Both politicians and public need to understand the arguments and issues, and to reach an informed consensus on how best to balance privacy and national security. That debate is not currently taking place, and more education and awareness is needed before it can be conducted sensibly and fruitfully.

This, then, is the opportunity for the information security community. They are, finally, in the centre of the debate they have always called for. They need to lead, to educate and to listen - and most importantly, we and the UK authorities need to listen to them.

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