Government plans procurement overhaul to slash IT spend

Bill McCluggage, deputy government CIO and director of ICT strategy and policy at the Office of the Government CIO, has outlined how the government will reduce IT spend by revamping how IT is procured and operated.

During his 360°IT keynote earlier today, Bill McCluggage, deputy government CIO and director of ICT strategy and policy at the Office of the Government CIO, outlined how the government will reduce IT spend by revamping how systems are procured and operated.

He said, "It is quite an interesting time, with some 120-days since the new government. The new administration's policy is to promote small business procurement so that 25% of government contracts should be awarded to SMEs [small and medium sized enterprises]."

This has an impact on ICT, he said: "We want to move away from large system integrators."

Further government IT spending will become more transparent, according to McCluggage. He said the government intended to publish all tenders online to show what contracts were available.

The government spends £16.9bn on IT services. McCluggage said 49% of this was spent on central government IT, representing a budget of approximately £7bn each year. The new administration is looking to cut costs across government departments and IT is in the firing line. IT is regarded as a commodity expense.

So IT projects are be re-evaluated across government departments. McCluggage said, "The [government] IT strategy is clearly focused on reducing the cost structure while improving current services."

According to McCluggage, a large number of IT projects are in the sub-£50m price bracket and can be managed quite well. But the government IT plan is to split larger projects into smaller components worth about £100m each, which McCluggage believes will improve the chance that the component project will succeed.

McCluggage said there was a freeze on all IT spending over £1m. "We are going through a process to authorise exceptions," he said.

Some 419 projects were submitted during the review. The first phase of the IT project review is now coming to the end of its first cycle, he said. "We asked departments to look at whether they should continue their projects, rescope the project or [terminate] it."

To date, Atos Origin are Capgemini are among a handful of IT suppliers that have had their government contracts reviewed.

Open source

McCluggage wants to provide a level paying field to enable open source suppliers to compete for business within government. He would like to be in a position where the government is not 100% reliant on a single supplier. Open source and open standards would allow the government to break supplier lock-ins.

"Supplier lock-in is an issue. We have locked ourselves into a long contract, and suppliers try to make themselves indispensable - right through the application stack. A number of [departments] are in this position," he said. "We want to rebalance or level the playing field for open source software.

"The biggest opportunity is in desktop productivity - and we need to do a hell of a lot of work over the next three years to get there. We have 600,000 desktop licences for one specific desktop productivity tool. How do we resize government to reuse assets which we already have, without the lock-in of new licences?

"We do operate in an environment where open source software is used. Legally we are not allowed to specify a product. We can specify open standards. Only yesterday evening I was pushing the idea that the department looked at the possibility of using open source/open standards - so we cn move to a different environment to stimulate an SME economy. The [suppliers] misunderstand our open source."


Government's IT strategy

McCluggage said, "Our desire is to simplify, standardise and automate - nothing radical." There are three specific areas of focus:

1. Common infrastructure components - application store for government, shared service components, datacentre consolidation (from 220 to less than 12), a public sector network, desktop standardisation.

2. Standards activity - open source, standards and reuse, info security and assurance and green IT

3. Projects metrics, supplier management and international alignment.

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