For many years the government purchasing pendulum has continued to swing from centralised purchasing to fully decentralised. In the end, constant change in itself, may be contributing to some inefficiencies, and certainly to significant frustrations.
The case for centralised purchasing was powerfully argued by former Federal Finance Minister Lindsay Tanner, immediately after Labor came into power. His case was further strengthened with Sir Peter Gershon’s landmark recommendations on government IT. State governments have also taken a strong interest in central coordination of some purchasing, and coordination of shared services.
But the path to centralisation has not been a smooth one. This year’s failure of the Queensland Government’s Health payroll system was largely attributed to problems in balancing the needs and responsibilities of individual agencies against the relative efficiencies of Shared Services arrangements. The government’s subsequent audit report noted the governance difficulties in such arrangements, particularly in identifying who was ultimately responsible for particular deliverables.
Any such arrangements appear to have a natural tension between Ministerial responsibility and whole of government one size fits all solutions. Whole-of-government commodity contracts and shared services arrangements can be far too rigid, and unable to easily evolve to meet changing business and policy needs.
The UK government is currently developing an alternate approach based on the combination of their G-Cloud and Apps Store initiatives.
Essentially, the building blocks of new government systems are planned to be made available through the systems’ central Apps Store and delivered at an agreed government rate. A government agency, or their contracted systems integrator, could go to the government Apps Store and procure the necessary components for a new system. This could include software modules through to complete systems. This approach is differs significantly from other whole of government approaches, as it encourages consistency and cost savings, while still allowing each agency some flexibility to develop solutions to meet their own specific needs.
Closely integrated with the Apps Store, the G-Cloud initiative will provide an approved “cloud of clouds”. Public and private cloud providers will be able to provide services to government agencies through approved contractual relationships. This saves individual agencies from checking credentials and negotiating arrangements with individual cloud providers. It also enables Apps Store building blocks or entire systems to be delivered as a service, through agreed cloud environments.
At a high level, this approach does seem to have the right ingredients to get the right balance. However it is far too early to declare success. So far progress in the UK has been slow, with industry representatives having raised concerns that much of their efforts have delivered little result so far. The Apps Store, for example, is still in design phase and is planned to be delivered initially as a portal next year.
In the end, responsibility for the ultimate success of these initiatives rest squarely with the UK government. It would be easy for us to write off as Australia is, after all, half a world away.
However, there are some important issues for us to also consider. The UK Government’s approach has succeeded in moving the cloud computing discussion away from the tired old arguments about definitions and security. Instead, they are using this new technology to think about old business problems in a new way.
This implementation offers the potential to bypass the rigidities found in existing shared services arrangements, while maintaining strong whole-of-government governance arrangements. Government agencies will be able to enter into outcomes-based contracts with their own preferred systems integrators, while drawing on their choice of common building blocks and common services delivered at commodity prices.
For many executives, cloud computing is still a solution looking for a problem. Perhaps some examples emerging overseas may help us to look at these problems in a new way.
Kevin Noonan is a research director in Ovum’s government practice. Email comments to firstname.lastname@example.org.
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