Transformational government ?

1. Post-bureaucratic government, open platforms, and innovation: Why government IT should never be the same againMark ThompsonJudge Business School, CambridgeStrategy Director, Methods ConsultingICT Futures advisor, Cabinet Office

2. Transformational government? • ‘Joined up’ public services • Disaggregation & outsourcing • ‘Agencification’ private sector commercial practices • Top-down, managerialist concepts • Business people appointed to senior public sector roles • Emphasis on ‘customers’ and ‘contracts’

3. Digital-era government? Dunleavy & Margetts, 2010

4. …sounds innovative, but • …actually, this is not really what happened! • Public sector aggregated supply, not demand • No reference model across government; widespread “we’re special” • Government ‘outsourced’ strategy & architecture • Contracts priced for risk, which was never outsourced • ‘Intelligent Customer’ skills leeched away from public sector • Track record of “stupendous incompetence” and bungling Bespoke, complex, siloed, duplicatory, risky, and constrained - but why would anyone want to do anything differently?

5. Level playing field?

6. Baked-in failure: IT is a good place to start • An array of high cost programmes have run late, under-performed or failed (terminated) over the last 20 years: • Inadequate information, resulting in the Government being unable to manage its needs successfully • Over-reliance on a small number of large suppliers and the virtual exclusion of small and medium sized (SME) suppliers, which tend to be less risk adverse and more innovative • Failure to integrate IT into the wider policy and business change programmes • A tendency to commission large, complex projects which struggle to adapt to changing circumstances • Over-specifying security requirements • Lack of sufficient leadership and skills to manage IT within the Civil Service, and in particular the absence of an “intelligent customer” function in Departments

7. Further issues… Lack of real understanding in government Disjointed, ‘initiative’ approach No real mechanism for holding govt to account No concrete plans for cascading into depts ‘Commercial confidentiality’ as barrier to transparency Ignored recommendation to commission independent investigation into suppliers Insufficient attention to developing intelligent customer capability within govt Need to engage in honest debate with question of public service redesign

8. Does this matter? • 105 outsourced public sector ICT projects with significant cost overruns, delays and terminations: • Average % cost overrun 30.5% • Total value of contracts: £29.5 billion • Cost overruns totalled: £9.0 billion • 57% of contracts experienced cost overruns • Average percentage cost overrun: 30.5% • 33% of contracts suffered major delays • 30% of contracts were terminated • 12.5% of Strategic Service Delivery Partnership contracts terminated or substantially reduced Analysis (2007) of 105 projects outsourced by CCG, NHS, LAs, public bodies &agencies with significant cost overruns, delays and terminations. Cost increases are often underestimated as numbers reported usually only include payments to contractors, and not costs born by the client such as additional client staff engaged.

9. An Intelligent Customer? The Government’s inability to act as an intelligent customer seems to be a consequence of its decision to outsource a large amount of its IT operations to the private sector. The NAO noted that many IT contracts: Are for a government body’s whole ICT service, meaning that Civil Service Staff, knowledge skills, networks, and infrastructure have been transferred to a supplier. This has effectively locked government into specific contracts for the long-term.

10. So what’s different now? • Cabinet office is starting with IT… • …But the prize is public services itself! • Progressive recognition of: • Focus on outcomes, open standards • Commercial implications of emerging open platforms • Ability of ‘utility’ services marketplace to deliver citizen-based services • An emerging reality: • Systems & processes were traditionally integrated & clustered around supplier/technology • Dis-integration of systems & processes • Re-aggregationinto blended services, clustered around citizen

11. Public service delivery will become unrecogniseable • Organisations will: • transition from focus on inputs to outcomes • play the emerging utility marketplace • become increasingly fixated on standard ways of doing things • ratchet up focus on TCO • dis-integrate • become a Component Trader • re-aggregate • redefine what ‘projects’ are • The market will: • Re-organise around platforms • Penalise idiosyncrasy

12. Do YOU have… • An undifferentiated outsourcing contract? • A clear idea of TCO across your business? • An idea of how you will be able to deliver new services, differently, using the utility model? • Confidence that you’re paying bargain-basement rates for bargain-basement commodities? • A Target Operating Model? • A comprehensive plan for exploiting the economics of the Open Innovation revolution? • …a way to transition from focusing on inputs to outcomes, across IT and then services?

14. IT has become an economic model

15. Bespoke products/services are expensive

16. Moving from innovation to commodity…

17. Innovation to commodity…

18. Supporting the innovation-commodity process

19. Supporting the commoditisationprocess

20. Different skillsets to manage these…

21. …and different activities

22. A new way of looking at IT-driven services

23. Skilling up

24. Open Platforms & Innovation

25. …an unprecedentedly radical agenda

29. “…Aaahh, but of course this model applies only to hi-tech / startups like Amazon or Google, and certainly not to government!”

31. Extension of Open Innovation to business logic • True… • Open innovation lent itself particularly to tech artifacts, e.g. code, that could be standardised, chopped up & recombined easily • …And then along came… • XML, wrappering, SOA, open APIs, web services etc, allowing business logic to be standardised, chopped up, parsed, and purchased more accurately

33. Systems Integration

34. Systems dis-integration

35. Services re-aggregation

36. An increasing interest in/appetite for… • Open standards • Modularisation • Commoditisation • Virtualisation • Utility/consumption models • Post-bureaucratic delivery/new TOMs • Shared services • New, innovative services • Cloud • Resale/co-creation/revenue sharing • New ways of working/mobile

37. The need for a ‘roadmap’…

38. …with a clear business case for savings realisation Cost Constrained Harmonised Embracing Exploiting

39. Service dis-integration • Process • People Shared Utility Dedicated • ICT Services

40. Service Re-aggregation

41. ‘Revs and Bens’ in local govt will become unrecogniseable

42. Local government example: people

43. Building a component-based reference model + “service C” + “service B” “service A” + “service D” Opportunity • Document Management Infrastructure services Training provision • L&T Resources (on-line content) • Payments On-line resources (e-learning) • Third party payments • Mail / messaging • Payments (utility-based) Payments • Processing • Video conferencing (media services) • Cash receipting • Workflow • Output • Mail (collaboration) • Data Input Market Maturity

44. Public service delivery will become unrecogniseable • Organisations will: • transition from focus on inputs to outcomes • play the emerging utility marketplace • become increasingly fixated on standard ways of doing things • ratchet up focus on TCO • dis-integrate • become a Component Trader • re-aggregate • redefine what ‘projects’ are • The market will: • Re-organise around platforms • Penalise idiosyncrasy

45. …and IT lies at the heart of new delivery models!Thank you