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Whitehall’s Cloud Progress

Is the G-Cloud delivering on its promise? Our report

 

Whitehall’s IT procurement has begun to improve under the Coalition’s leadership, and the G-Cloud programme has been a modest success. However, that success is now threatened as the programme languishes in the mainstream Civil Service where some buyers are beginning to misuse it. Stuart Lauchlan and Chris Middleton report.

LEADERSHIPThe UK Government’s track record in major technology deployments has often been poor, and at times disastrous – in the case of the NHS National Programme for IT, for example. Matching a fast-moving, hype-filled supply sector with a slow, complex, bureaucratic client inevitably creates problems, not least of which is the frequent gulf between political ambition and programme delivery.

It also risks handing too much power over the decision-making process to suppliers, integrators and consultancies, who may be the only constants in a high-churn environment as ministers, officials and entire governments come and go. The suppliers, meanwhile, would argue that a combination of poor specification and management by the buyer is responsible for many failures and overruns, as opposed to incompetence or greed on their part.

Both sides agree that the balance needs to be reset. However, that requires overturning decades of bad practice in Whitehall’s IT procurement and deployment: a major strategic task that demands strong leadership, a determination to cut through bureaucracy, and also to ensure that change is substantive and measurable, rather than political hot air.

Working together

For all its internal arguments and challenges, the Coalition has made more effort than previous administrations to reform and improve the IT procurement process, and has achieved some demonstrable cost reductions as a result.

In 2009, government technology cost the taxpayer £16 billion – one per cent of the entire UK economy. In 2012, the Coalition knocked £213 million from that bill, a figure that more than doubled in 2013. In 2014, the cost savings are expected to top £500 million.

Francis Maude MP

Cabinet Office minister Francis Maude.

In part, this has been the result of determination on the part of Cabinet Office minister Francis Maude to push through changes, and a realisation that high churn rates within Whitehall have, historically, made strategic change more difficult to achieve in the long term.

Maude told Strategist media partner Diginomica last year: “There were plenty of people who thought we couldn’t do this. They didn’t take us seriously, because they didn’t think I’d be around long enough to make a difference. And when you consider that none of my eight predecessors lasted more than 18 months in this job, you can see why they might have made that mistake.”

Alongside Maude in this reform drive has been Liam Maxwell, the country’s first chief technology officer (CTO). At the 2014 ‘Think Cloud for Government’ conference in London in March, Maxwell reaffirmed his commitment to breaking up what he has long called ‘the oligopoly’ of large suppliers to government.

“Why do I refer to a small group of large companies doing large amounts of locked-in business with us as an oligopoly? Because that’s what they are,” he said. “Oligopoly is about the only collective noun that describes their behaviour. But we aren’t having a big conflict with the suppliers, because that’s not worth doing. We are just buying something different.”

CTO Liam Maxwell

Government CTO Liam Maxwell.

A stronger buyer

As a result, central government has started to act more as a single entity in its purchasing of technology – ironically for an anti-centralisation, ‘small government’ party like the Conservatives – and thus benefit more than it has in the past from being the single biggest IT customer in the country.

But as well as facing down providers – some of which Whitehall has accused of over-the-odds pricing – the Cabinet Office has overseen a range of new initiatives, such as the creation of the Government Digital Service (GDS) to help digitise public services, and the Crown Commercial Service (CCS) to assist in getting the best deal from suppliers.

Head in the cloud

But the most successful programme to date has been G-Cloud. Proposed under New Labour and delivered by the Coalition, G-Cloud – currently in iteration five – allows government departments and other public-sector customers to make commodity purchases from an online app store, secure in the knowledge that all vendors in the CloudStore are certified by and for government.

Pricing among the participating vendors is transparent. Importantly, the store also enables small and medium-sized enterprises (SMEs) to compete with large suppliers on a level playing field, offering them a foot in the door to the public sector, the UK’s largest IT market.

At the end of February 2014, total spending through G-Cloud stood at £124.1 million, a mere drop in the ocean compared to government’s multibillion-pound annual IT bill. But all that may be set to change. Several long-running contracts with ‘oligopoly’ vendors across government will be winding down in 2014 and 2015, and the expectation is a major uptick in G-Cloud spending over the next two years.

In preparation for that – and to put G-Cloud at the heart of the government’s wider digital drive – the programme was brought under the umbrella of the GDS last autumn, having operated as a standalone unit for two years.

Chris Chant

First G-Cloud director Chris Chant.

Enthusiastic amateurs?

The original G-Cloud initiative employed only a handful of people, with most of them working part time. This included its first director, Chris Chant, a man whose Twitter handle ‘@cantwaittogo’ told followers everything they needed to know about the frustrations of a long career in public sector IT. On his retirement, responsibility passed to Denise McDonagh, another strong and outspoken leader, but also a part-timer with other responsibilities in Whitehall.

Moving across to the GDS has more closely aligned G-Cloud with existing government reform programmes, but it has had other, less welcome, effects. For one, its public profile has all but vanished in recent months. Another problem has been that, despite the promise of access to more staff, the G-Cloud team is rumoured to be smaller than it was before the move.

The shift also means that G-Cloud’s former culture of committed cloud enthusiasts has been replaced by the mainstream civil service, an organisation whose bureaucratic inner workings, some might argue, have contributed to Whitehall’s procurement problems. Certainly, the last minute, non-appearance of the current G-Cloud leadership at the 2014 Think Cloud for Government conference was noted by many attendees.

But Chant and McDonagh did attend, the former in his role as founder of G-Cloud consultancy Rainmaker Solutions, and the latter as CTO at the Home Office, where she has pledged to remain a cloud champion.

McDonagh was particularly forthright when a number of vendors criticised the two-year limitation on contract terms that is a requirement of participating in G-Cloud.

Denise McDonagh

Denise McDonagh, CTO of the Home Office.

“The two-year timeframe is a bit of a red herring,” she said. “I am in the middle of moving huge legacy contracts out, but just because I have a two-year clause in the contract doesn’t mean that I have a huge transitional issue. I need to think about transition and I need to think about exit in two years, but I have the choice to move at the end of those two years or not.

“I have that choice based on whether the supplier is doing a bloody good job or not, while they’ve got the opportunity to lower their prices. What that gives me – which I’ve never had before – is choice. The choice to move, the choice to get to rid of someone that is providing appalling service.

“That’s far more positive and beneficial than sitting with a supplier arguing about ‘agility’ and the need to get things done, but not having any leverage. It’s better for my business, and for the end user. Much better for them than not being able to respond to policy changes, changes in legislation, and customer experiences.”

Long contracts: big problems

Chant was of a similar mindset. “Short-term contracts are a key part of this; you don’t need to go more than two years,” he said. “It’s just bollocks, really, telling people that you do, because there’s loads of services out there already. I’ve sat there and been through this [many times].

“[In the past] we’ve watched the arrival of a new contract over ten years, and people have told us that this was the way to get value for money. But we’ve watched it not be value for money, we’ve watched it not delivering, and we’ve watched the excitement at the beginning, which drops away in the middle, before there’s a mad dash in the last 12 months to do everything. That gives us nothing. Long-term contracts give us nothing.”

As for whether the more ‘mainstream’ leadership approach that is now being applied to the G-Cloud is the right one, McDonagh had to be diplomatic, but she clearly believes that government buyers need more help in getting to grips with the G-Cloud model to prevent them defaulting to more traditional procurement options.

“I would like to have seen a lot more education from the Cabinet Office for people who need to architect and buy solutions,” she says. “I can understand some of the challenges with that, but we could all benefit from a bit more education on how to buy.

“It’s one of my bugbears. The challenge is not about how to procure; the challenge is about how to become a proper buyer. How can I design and develop so that I can buy properly? There is a huge lack of education there. But we are recognising that and are beginning to do a lot more.”

Why education is necessary

Education is essential to help buyers move away from dyed-in-the-wool ways of procuring IT, she says, particularly at a time of sweeping budget cuts in Whitehall. “It’s not easy, because we’re starting to do things in a very different way, and when we talk about buying a ‘commodity’ solution, no-one really understands what that means.”

Indeed, there is evidence that some government buyers are simply using the G-Cloud’s services to buy the same solutions from the same providers that they always have.

On 1 April 2014, it was announced that the Foreign and Commonwealth Office had awarded a £6.3 million, two-year contract to Capgemini to support the upgrade of its Oracle ERP system. The deal was pitched as a G-Cloud success story, with the two-year contract term limit that entails. However, in reality it seems to be an extension of existing arrangements with both suppliers, within which there is – apparently – no cloud element.

At the conference, McDonagh admitted that some buyers still don’t understand the new alternatives that are available to them in the cloud. “I still see people saying, ‘I want to buy something off G-Cloud, but I just want to change the terms and conditions’, and ‘that piece of the service doesn’t actually work for me so can we change that?’ Then they put out invitations to tender. That’s just not what the ethos of commodity buying is all about,” she said.

It’s a passion for cloud computing that makes McDonagh and Chant stand out from their peers in public sector IT, alongside government CTO Liam Maxwell. But as G-Cloud rolls into its next iteration, passionate ‘fire in the belly’ strategic leadership on the ground would not go amiss.

After all, there are plenty among ‘the oligopoly’ who would be only too pleased to see G-Cloud fail so that they can put themselves back in the driving seat with more of the same 10-year deals that suits the suppliers down to the ground. TS

*: THINK Events are a Strategist media partner.

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The Strategist says

Cloud computing involves a lot more education for buyers than many people realise, particularly in the public sector where dyed-in-the-wool procurement methods are commonplace. Meanwhile, the Cabinet Office has done much to improve and strengthen central government’s procurement processes. The question now is whether the G-Cloud programme will thrive in the mainstream Civil Service, away from its original ‘enthusiast’ backers. For it to succeed, strong leadership must continue.
Stuart Lauchlan is co-founding editor of Diginomica, a Strategist media partner. Chris Middleton is editor in chief of Strategist magazine.

 

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