Newham is one of the poorest boroughs in the UK, yet it is pushing forward a digital strategy with the aim of putting two-thirds of all council transactions online.
Newham Council originally signed a 10-year deal with Microsoft in 2004, after CIO Richard Steel took the audacious decision to pit open-source against Windows technologies in a competitive tender.
Microsoft and HP won and, through this relationship, the council has expanded online services. Present CIO Geoff Connell (pictured) has expanded the remit of the IT department beyond pure technology infrastructure.
"We have become digital while taking out £12m in costs and increasing resident’s satisfaction," says Connell.
Connell has spent the last five years creating a shared service by joining up the IT services for the London boroughs of Newham and Havering through a joint venture called One Source. "There is one set of IT, one set of servers and one set of staff," Connell explains.
"Today the IT is fully merged and the model we have – to provide an IT service for less money – allows us to support both boroughs’ back office."There are now 1,300 staff covering IT, finance and HR. The two councils decided to extend the shared service beyond IT a year ago. The service went live in April 2014. "We are making a minimum of 20% of cost savings, based on 11% duplication and 9% in efficiency saving."
Newham and Havering CIO Geoff Connell says Newham Borough Council has used a Microsoft technology stack to support a change programme, which has transformed the operating model of the council. "We have changed the way the council interacts with residents and changed the end-to-end business process," he says.
He says a lot of local authorities have held back their digital citizen programmes due to the uncertainty that comes with supporting people who do not have internet access. "If you move 40% of the transactions online, you actually free up your dwindling capacity to support the people who cannot help themselves."
When the council cut eight local services to one, Connell says Newham kept the libraries open, a bid to give people the chance to gain digital skills. "The libraries allow you access to online council services. We have PCs in the libraries and we have free Wi-Fi. If you don’t know how to do that, there are people at the library who will show you what to do.”
While it clearly makes sense to join up the two councils, no one willingly gives up something for nothing. From the political point of view, Connell has taken a very pragmatic view. "You have to look at the pain points and the needs of the councils."
With the head of IT at Havering leaving due to ill health, the council tried an interim CIO, but a CIO replacement was not strictly what the council needed. "Havering took a different approach, and looked at shared services." Initially Connell through he would be able to make savings because both Newham and Havering would be running similar IT. But as it turned out, he says: "I looked at Havering’s transformation objectives as a borough and I realised the technology stack it had in place was not fit for purpose."
At the time, running IT at Havering was not his day job. Connell says he felt brave enough to advise the council to throw out its infrastructure and transformation programme and replace it with the IT programme Newham had already. "I already knew the costs, how long it would take and the capabilities." The council bought into his vision. But he says: "Where I did not push hard was where there were line-of-business applications – like social care – that were different to Newham’s.
"The cost of replacing IT is relatively low compared to the cost of changing a business process." That said, there are always opportunities to improve line-of-business applications. "Where I could see a housing system in one borough operating rather poorly, while the other borough’s housing system is doing a really effective job, then there is an opportunity to bring the two systems together," says Connell.
Then there are complementary skills. "When I look at Havering, it was very strong on Oracle skills, while Newham was very strong on Microsoft skills, so I could actually buy less Oracle consultancy, while Havering did not need to buy in as much Microsoft skills."
When services are consolidated there is an opportunity to reassess IT contracts. For instance, he says: "We have one Microsoft agreement instead of two."
But grander plans of sharing and aligning services do not always succeed. "A number of East London councils had a 20/20 vision a few years back to see if we could align IT over time. But those councils that had outsourced struggled to do shared services, because they were tied into contracts, which were difficult to get out of," Connell explains.
The contracts also lacked the flexibility to support shared services. In Connell’s experience: "Outsourcing works well if there is a growth model and you want to do more. But if there is a reduction, and you want to spend less with the outsourcer – this is not a conversation that goes particularly well."