Public sector IT was depicted as a scene of prehistoric horror in evidence submitted to the Public Administration Select Committee last week.
300-pages of testimony described how a crass procurement regime and stunted technology has created an environment favourable to out-sized IT companies that dominate the rest of the industry. If the evidence before the Committee is anything to go by, everyone’s unhappy but the dinosaurs.
As reported by the National Audit Office in another report last week, just 18 IT suppliers command 80 per cent of all government IT contracts. These great, lumbering systems integrators (SIs) may be in for a shock on the scale of a mile-wide meteor. The G-Cloud may pack a wallop. But the government is wavering on its promise to end the £100m+ IT contracts that sustain the IT ecosystem.
Nevertheless, the environment has changed. The PASC evidence comprised a consensus (among all bar the dinosaurs) around the necessity of procurement reform and open standards of interoperability.
These changes promise to nurture the current surge of hi-tech SMEs, just as environmental changes at the end of the Cretaceous period of earth’s history led to a proliferation of flowering plants that fed the insects that fed the rise of the mammals.
SMEs may be similarly fluffy, but they have evolved a good set of teeth and will eat your babies if you don’t watch them closely.
The Cretaceous period is reported in the PASC evidence, and is often said, to have begun in the late 1980s when the last Conservative government (Libdem’s absented) started winding down the now beloved Central Computer and Telecommunications Agency (CCTA), the public agency that is said to have kept private IT suppliers in line.
What is universally described now as the government’s inability to behave as an “intelligent customer” is said to stem from a trend established then: for government to give contractors the job of telling it what it needs to buy from them.
This led to the situation exemplified by the National Programme for NHS IT and raised repeatedly in the PASC evidence, where the government must therefore also trust what has now become an oligopoly of SIs to sub-contract on its behalf.
They were asked to sub-contract to other tech firms in the public interest, when their first concern was for their own shareholders and executive pensions. This was a product of the naive, New Labour vision of public-private partnership, the precursor to government’s Big Society wheeze.
Just about everyone is exasperated with the pattern established under the National Programme for IT, where prime contractors were given the power to hire and fire SMEs vying for government business – or to cut everyone else out and do the work themselves, if they so preferred, which they did.
They call it the bums on seats rule: a large SI will sooner stick another over-paid consultant on the job than let an SME disrupt its business model with some new technology that does away with the need for over-paid consultants.
That’s more or less what Malcolm Harbour, chairman of the Conservative Technology Association, told the PASC submission, though he expressed no concern about pay inequality or executive pensions.
Stifled innovation is the terror in this tale: warm-blooded SMEs huddling in caves for shelter, only venturing out to steal eggs and pick insects off dinosaur hides.
David Chassels, CEO of software SME Procession plc, and a former executive with venture fund 3i, relayed for the Committee inquiry a rare public account of how he went cap in hand to Capita for a share of some public business and was thrown out by his ear.
Other SME’s will tell you similar stories, but they are scared of naming and shaming in case they get singled out for retribution by the all-powerful SI’s.
This unsavoury environment has been sustained by the UK’s “gold-plated” interpretation of EU procurement rules said testimony after testimony submitted to the PASC.
The procurement regime is complex and inefficient, they said. It’s therefore so expensive that only large firms can afford to take part, and is terrible way of doing anything well but fulfilling obligations set by the procurement rules.
The Office of Government Commerce had made matters worse by relying so heavily on Framework Agreements – backroom deals done to squeeze savings out of large suppliers by consolidating their government contracts.
Protecting it all, like the jungle crater round the land that time forgot, are the proprietary software standards that made it difficult for anyone to get in or out of these multi-billion pound IT contracts.
A lot of people are very peeved about this. The dinosaurs, it is said, build systems with which no-one else can interoperate so no-one else can create more innovative ways of doing things.
But the world has moved on, as described clearly in the PASC evidence. Interoperable systems and open standards are the order of the day.
The government hasn’t quite moved on, though its been talking the talk for a while. No less than the British Computer Society was reduced to asking in its PASC evidence to be consulted before the government concludes its now concluding policy deliberations on an inclusive IT ecosystem.
Westminster Council said the government’s long been better at talking the talk than walking the walk on standards. Similarly, the CCTA was trying to get software metrics established in 1990. That’s 20 years for anyone too old not to have noticed.
Metrics have been recommended by many a major report since. But nothing has been done, perhaps because government IT is in hock to a handful of large suppliers who have no interest in having their gluttonous bellies exposed.
The idea wot time forgot
“Software suppliers all measure their own performance and make healthy profits whilst the taxpayer suffers all the cost overruns and delays,” said Charles Symons a consultant with Common Software Measurement International Consortium.
“But it is not in the suppliers’ interests to educate their customers on how to manage them properly,” he said. The Australian State government of Victoria managed it, and apparently did very well.
Other revolutionary remedies were suggestion to the PASC, and none of them were far removed from government policy: prohibit commercial in confidence, make the sub-contracting supply chain totally transparent, publish procurement costs and performance metrics, break up large IT contracts, insist that all government software is open source and replace the common waterfall software development model with iterative, agile development methods.
In short, Alex Stobart of Enterprising Scotland Limited told the committee: less competition, more collaboration.
That won’t favour the dinosaurs, who have done well out of procurement laws imposed with strict adherence to the principles of competition. But What will follow, if the evolutionary metaphor stands, will be a period of adaptive radiation, when the innovators flourish.