If any of the big, incumbent Whitehall IT suppliers have not yet done so, they really need to read this web page.
It’s part of the new Government Service Design Manual, launched earlier this week by Whitehall CTO Liam Maxwell – it is effectively a guide for how to select, purchase, design and run IT across government.
It’s not an IT strategy – there have been numerous of those in the past that failed entirely. It is instead a set of guidelines that state, among other things, how government IT buyers should engage with IT suppliers from now on.
The page, “Creating a culture that supports change“, is, frankly, a scathingly public critique of the cosy relationships forged by the so-called oligopoly of system integrators and big software firms that have dominated Whitehall IT spending for many years.
It also reflects the denial that many of those suppliers maintain as reformers led by Maxwell try to drastically reduce or even eliminate the comfortable, ongoing, large revenue streams that have poured in from the public purse through long-term outsourcing contracts.
Take some of these excerpts from the official government manual as examples:
“It may be necessary and more cost-effective to write-off previous financial investments, so you will need courage and conviction to stop spending on old, legacy systems.”
“Your existing supplier base will tend to resist change – and the more successful a supplier has been working under the old model, and the more entrenched it is, the greater this resistance is likely to be. The changes needed will often be more successfully initiated and delivered by those not encumbered by past success – new market entrants and those traditionally closed-out from government business, such as small or medium-sized businesses.”
And these paragraphs are perhaps the most remarkable public statement of intent from any government IT leader:
“If you have incumbent suppliers, it is important that you understand and anticipate their likely reaction as they struggle to maintain the status quo and resist change.
“Incumbent suppliers will have data that reflects the past success of their business models and the way their business worked. They will be less certain about the future and may be concerned about the weakening of their market share and their exposure to genuine, open competition.
“The rewards and culture of these companies are likely to be built on their current business model. That will reinforce their internal resistance to change. It is difficult for them to persuade shareholders and financial investors to replace a well-understood, if obsolete, business model with an approach that favours the treatment of some IT products as commodities.”
That is a direct challenge to every major incumbent supplier; practically a determination to break the existing relationships – one that may even tread dangerously close to breaking competition law as it could be interpreted as a specific bias against such incumbents.
But the document doesn’t spare old attitudes in Whitehall either:
“You will also see similar resistance in-house, where many staff may have long grown accustomed to old ways of working… Some may have become dependent on external suppliers’ advice. Some may even have built their career on accreditation in a single supplier’s technologies.”
These statements are, of course, precisely what critics of government IT have been saying for a very long time – and what reformers have been saying privately for the past couple of years. But to see them in a formal government document is really remarkable.
There was a notable moment in Maxwell’s interview with Computer Weekly to coincide with the launch of the Service Design Manual. Our reporter, Kathleen Hall, asked him if the manual would help departments who have big outsourcing contracts coming up for renewal in the next two years (of which there are many).
Before she could event complete her sentence, Maxwell interrupted to correct her: “No. A lot of departments are having contracts FINISHED in the next couple of years.”
It is certainly the case that some suppliers have yet to grasp this reality.
Computer Weekly wrote a story recently revealing that the Department of Environment and Climate Change (DECC) is the only Whitehall department unable to adopt cloud computing yet, because of a lock-in with system integrator Fujitsu.
The DECC press office confirmed this in a statement: “Nearly all of DECC’s IT services are currently outsourced to Fujitsu as part of a contract that expires on 31 March 2014. There are significant cost implications in moving to cloud services in advance of this contract expiring. Therefore DECC has planned the introduction of cloud services to coincide with the end of the Fujitsu contract, meaning DECC will adopt a range of ICT cloud services starting on 1 April 2014.”
Fujitsu responded to us, claiming the story was inaccurate, and politely suggesting we remove it.
Needless to say we disagreed – backed up by the strength of the DECC statement. Lock-in is not only technical or contractual – having your budget tied up by a major outsourcing deal is just as much of a lock-in to any supplier or technology solution.
“Technology lock-in happens when previous decisions regarding technology limit future decisions, possibly so that only one real choice exists.”
“In general, you should avoid making long-term commitments to any particular technology, product or supplier until you fully understand the problem you’re trying to solve – and even then, you should ensure you maximise your future development options.”
It’s important to add that there is nothing in the Fujitsu contract that specifically restricts DECC’s ability to use cloud – it is purely a budgetary decision from DECC that it cannot do so while that contract is in place. And I’m using Fujitsu purely as an example – this is not meant as a specific criticism of that company, which continues to work closely with DECC on its current contract and commitments.
But it seems likely that several major outsourcers are yet to fully accept that the landscape is changing and their relationship with their government customers will be very different when their contracts expire.
As the Service Design Manual states:
“Your existing supplier base will tend to resist change – and the more successful a supplier has been working under the old model, and the more entrenched it is, the greater this resistance is likely to be.”
There will be a lot of big suppliers resisting change in the next two years, hoping that the 2015 General Election will sweep away the reformers. Their chances of success in t hat resistance are receding rapidly.