Government IT practices are routinely criticised as being ineffective and renowned for their poor productivity. But despite publicly saying it will use more small to medium sized enterprises (SMEs), the government has deliberately set out to stop them from competing. Policies such as those issued by the Cabinet Office as recently as June 2011 are specifically designed to stop contractors and other small suppliers from accessing government IT contracts.
Not only does this lead to the breathtaking abuses highlighted by the recent report from the Commons Select Committee on Public Administration, but it also leads to inadequate, late and ludicrously costly IT projects. At worst, it ends in failed projects being scrapped after tens or hundreds of millions have been spent on them. Or whole departments have to struggle on with useless new IT, making government less efficient and stopping the public sector headcount from falling.
That’s certainly not offering the taxpayer any value. So why does the government persist?
The Select Committee report highlights new depths of mismanagement and malpractice. “Appalling” and an “obscene” waste of public money are some of the more polite terms used in the committee’s report Government and IT – “A Recipe for Rip-Offs”: Time for a new Approach. The Select Committee urges government to rapidly rebuild its core IT skills and knowledge, but is a pure lack of specialised IT knowledge really the root of the problem? Or are IT blunders symptomatic of a wider problem within government and the civil service and an inability to engage with the smaller suppliers who could meet the government’s IT needs?
In the commercial world, IT project implementation is far from perfect, but generally achieves its aims. And alongside productivity gains and cost savings are usually job losses. That’s strike one against the successful implementation of government IT projects. Job protection is, from an outsider’s perspective at least, one of the prime functions of the civil service. No wonder, then, that IT projects leading to job losses meet with resistance.
The Select Committee also criticises government for trying to specify solutions rather than outcomes. Poor requirements management is a chief cause of increased costs for IT projects in the private and public sectors. It’s also why some projects are doomed to fail from the start. So, identifying specific measurable requirements for an IT project means that someone has to take responsibility and be accountable for the project. That’s strike two against the successful implementation of public sector IT projects. Civil servants don’t do ‘accountable’, which is why IT projects end up with ill-defined and woolly objectives.
Government IT is dominated by a few large suppliers variously described by the Select Committee as a ‘cartel’ and an ‘oligopoly’. No wonder, then, that without the normal competitive landscape of the private sector, IT development can get very expensive. But dealing with SMEs on performance-related, fixed-price contracts means taking risks and decisions. And there is no big IT brand to hide behind and blame if something doesn’t go according to plan.
That’s strike three against the successful implementation of IT projects. Civil servants don’t do risk. You might argue that, with the defence of the realm or the livelihoods of so many people dependant on benefits at stake, this is a sound strategy. But financial institutions manage IT projects using thousands of small IT contractor suppliers alongside big IT brands. These projects impact on hundreds of millions of customers globally, but the corporations manage not to lose all their money.
When I was an IT contractor working for City-based financial sector clients, I was often asked to define a test for project success. My response has always been along the lines of: define from the start what you are trying to achieve in monetary terms based on cost savings, time savings or other measurables. Then take a benchmark measurement at the start of a project and measure again at the end. If the cost of the development is less than what you’ve saved in terms of time, money or other measurables/deliverables, then the project has been a success. If there has been no measurable improvement, or the cost of the project outweighs the benefits, then you’ve just been playing with technology for the sake of it.
The government needs to drop its default setting of automatically commissioning big IT suppliers to address all its IT issues. It must engage with, and hire, contractors and SMEs. Those suppliers must understand what the IT project in question is trying to achieve and should be paid by results. That way, they will be accountable, alongside the civil servants and ministers who commission them.
In line with the Select Committee’s recommendations, public sector IT challenges should be broken down into much smaller, more manageable chunks, each of which has clear objectives. Multiple suppliers, including contractors, should be engaged on performance-related, fixed-price terms using Agile iterative measures that can adapt the project’s outcomes as needs change.
What’s the alternative to consistent root and branch reform of government IT procurement and project management across all departments? Can the government really defend its new, automatic requirement to hire major IT firms? Without opening the public sector IT market to contractors and SMEs, we’re doomed to many more years of “appalling” IT projects wasting “obscene” amounts of public money, whilst at the same time failing to deliver frontline public services.