Cutting the cost of cutting by turning crisis into opportunity

Some suppliers to the public sector are laying-off staff because they fear that even agreed cost-cutting projects will have to be retendered under new rules after the moratorium. Others have decimated government relations and account management teams in expectation of delay of years before business begins to flow again after the last governments end-of-an-era splurge committed budgets for the foreseeable future. Both reactions are short-sighted. Those who wish to survive the hard times ahead would do much better to help expedite transition to good practice in rapid procurement for that which gives rapid payback – perhaps in in line with the Dutch, German and Scandinavian interpretaiton of the EU “rules”. The other way of slashing procurement time and cost is to follow private sector best practice for complex services – and build third party alternative dispute resolution processes into the simpler contracts – as opposed to trying to predict the unforeseen (and often unforeseeable).

The Information Society Alliance is trying to put together a consortium of those willing to work together to help publicise and build on the excellent Audit Commission and National Audit Office review into experience with Collaborative Procurement  particularly in the context of the shared, secure and resilient network services that are key to transforming public service at affordable cost – as well as to bringing world-class symmetric broadband to most of the UK. 

In the mean time we are putting relevant material on-line: including a preliminary guidance note from the Centre for Effective Dispute Resolution . CEDR is one of the jewels in the Crown of London as a global trading but its operations appear almost totally unknown outside the CIty – perhaps because it does not court publicity. One of its triumphs was the organisation of processes to handle the winding up of the Maxwell Pensions so that most of what was left went to the pensioners, not the army of lawyers representing the players involved. Another was to set up routines to similarly handle the legal side of the Alderhay Organs scandal, which had the potential to bankrupt the hospital.     

I have long believed we need to apply similar approaches to contracts for complex ICT products and services, including in the public sector. Action is now urgent – if any funds are to be left to cover redundancy payments, let alone pay for ongoing services, after deducting the legal costs of winding up some of the more disastrous PFI contracts – including those which never made financial let alone operational sense – other than to the lawyers and consultants who negotiated them on both sides. 

The problem is not confined to projects involving ICT. But the damage to the UK ICT industry is likely to be more serious and longer lasting if we fail to turn crisis into opportunity.