The government is missing out on innovative low-cost IT solutions, because too much of its IT is owned and run by a handful of powerful prime contractors, a report claims.
The report, "Government IT: The way forward", by specialist IT supplier Erudine, claims that the current government IT procurement policy encourages suppliers to maintain the status quo rather than reduce costs and increase flexibility.
"We have reached a dangerous imbalance where too much government IT is owned and run by too few, too powerful, incumbent prime contractor third parties, which are in practice rewarded for incremental changes achieved at the cost of long-term sustainability," it claims.
The report claims that, despite successes in some areas, UK public sector IT consistently underperforms and costs more than other comparable countries.
It urges the government to abandon intricate service level agreements and long-term contracts with suppliers, in favour of running standard IT infrastructure on the cloud, which could be shared across the government.
The government will need to take a tough stance against suppliers that block innovative approaches to system changes or make it difficult to take advantage of economies of scale.
The report calls for the government to follow the example of the Dutch government, which breaks large projects down into smaller sub-projects, each with a clear payback. "Each supplier is thereby incentivised to be efficient and seek the necessary innovation and expertise to achieve their targets, knowing that if they fall short a competing supplier can take over, and can do it from a running start," it says.
The report advises the government to look at innovative solutions before the procurement stage, by considering ideas from smaller companies and entrepreneurs.
"It should be possible legally to run short-term concurrent funded experimental design projects at the £50,000 level without requiring lengthy tender processes. Such a capability would significantly de-risk IT projects," it says,
The report urges the government to buy IT centrally, rather than allowing each department to purchase its own IT. These "Crown purchases" would allow government departments to share IT systems without having to undergo lengthy tendering processes required by European rules.
- Empower the government CIO: the position needs to report directly to the prime minister, especially in the transition to shared services delivery
- Create supply chains that benefit from reducing costs and providing better service to the citizen
- Ensure that government has the right skills to regain and retain ownership of its processes
- Introduce open competition to open up innovative approaches to services delivery
- Recognise that multi-year projects are prone to failure