Government IT cost cutting in five big bites

The government spending review is on October 20 it is guaranteed to lead to nserious cost cutting . For the first time, almost everyone of voting age is not only aware of it, but interested.


In the IT profession it is particularly relevant because spending cuts often mean IT cuts. But should it be this way? IT should be seen as a way to help cut costs across the business.


A detailed plan comes from Compass Management Consulting. I met one of its directors, Steve Tuppen, recently to discuss government cost cutting and he gave me a detailed plan.


It breaks the changes into four focus areas. These are: IT Costs, Governance, Programme Delivery, Contracts and Retained Organisation


Here is a summary of five focus areas.



1 – IT Costs


Current position      – The amount spent on IT in government is unknown. Estimates are between £13bn and £20bn per year


Future                         – The government needs to know exactly how much it spends and then reduce it by 40%


Enablers                     – League tables are required based on true value for money assessments to drive change.



2 – Governance


Current position      – The government has federated committee based decision making which is slow and can cause obstacles to change.


Future                         – The government needs strong regulation and control of a single set of standards. A single Services Framework to ensure consistency of service definition is fundamental.


Enablers                    – The government should create an IT regulation model to provide the required level of central control. It should publish clear standards and give someone the teeth to ensure buyers adhere to them.



3 – Programme Delivery


Current position       – There are lots of large scale and high cost programme failures.


Future                         – Smaller programmes which have a lower risk. These should align to government policy.


Enablers                     – Evaluate major programmes against new policies, Strengthen governance against funding allocation.



4 – Contracts


Current position       – Dominated by large contracts with a small group of major suppliers. This is delivering poor value and is heavily constrained.


Future                           Multi-supplier models. Open marketplace. Smaller contracts with increased innovation. Leverage utility style pricing and delivery.


Enablers                    – Realigned mid-term contracts, Standardised services framework, new SME supplier framework, build an App Store



5 – Retained Organisation



Current position         – There is duplication between in-house staff and suppliers and a lack of trust of suppliers exists.


Future                         – Smaller, leaner and higher skilled in-house staff. In-house staff focussed on demand management.


Enablers                     – Enforcement of standards. Programmes to up-skill in house staff. In the short-term external support will be needed to support a significant change in culture and IT delivery practices.