The secret to cutting the costs of public sector computer systems

One of biggest problems facing the public sector is the question of how to make ICT work to bring productivity and savings. On the face of it, technology has advanced in so many ways, the potential is obvious: but experience shows that the public sector is not very good at using technology effectively. What has gone wrong?

I am going to propose that the reason the public sector fails in its use of ICT is that it acts within a system based on false premises. I hope I will engage your interest early by laying out those false premises. They are:

1. Procurement is an effective way of selecting the best supplier of a service.
2. Competitive tenders provide a competitive environment that force suppliers to deliver competitive prices.
3. A new computer system that delivers a single service to the UK population or the population of Scotland must be delivered by a single provider. To do anything else would be expensive and more complicated.
4. Strong governance is critical to ensuring that services are delivered in budget and on time.

Ineffective procurement

Procurement of new IT systems is different from many other forms of procurement. Creating IT systems is a creative task: not one of production and delivery. As such the procurement process is much like the process of recruiting a member of staff, choosing an architect for your new building or the artist who will produce a portrait of the Queen. We can look at previous work and assess it but there are no guarantees that the end result will be what we wanted.

However, the added, and very critical, complication is that government procurement is not, usually, about contracting the services of an individual: it is usually about contracting the services of a large company. So there is no guarantee that the individuals delivering past results will be the same individuals serving you. Indeed the service you receive may be subcontracted and delivered by a smaller company that the government would not have considered awarding the contract to because it had no known track record in the public sector.

As many people in the industry understand: at best, procurement is a good guess at which supplier might end up delivering on what is required. At worst, it is just a process that ensures that, out of a range of suppliers, the government can be seen to have been objective in making a random decision.

Competition in name only

Competitive tending sounds like competition—it has ‘competitive’ in the name! But how many large IT systems can you remember that were delivered on time and in budget?

It seems that the competition, which takes place at the point of tendering, is not a competition that determines the cost of delivery. In other words, the price of the end product changes after the contract has been awarded. What is worse is that we all know this. Somehow, we just choose to ignore this awkward truth.

Competition is only effective if it continues to be competitive not just once every five years, but year upon year, week upon week.

Competitive tenders cannot work if the resulting contracts give suppliers a guarantee of being able to provide a service for any substantive length of time. This is not a criticism of any supplier it is simply a fact about what competition is. Competition is competition: a contract for five years is not a competition!

A single service does not demand a single provider

Computer systems have evolved whilst the public sector was sleeping.

How many of us are aware that when we log onto Amazon to buy something we are not all logging onto the same computer? Are we aware that the computer we actually log onto may be in any number of countries in the world and that the computer system may have selected us to trial a new service which is different from the service being offered at the very same time to the person sitting beside us on another computer logging onto Amazon?

The age of the single centrally run mainframe computer are past. The computer industry has discovered that it is cheaper to run vast numbers of anonymous and relatively small desktop like computers than trying to develop and maintain highly complex single supercomputers. (Spot the irony!) The industry is learning to take big tasks and break them down into small numbers of small tasks which can then be farmed out to lots of computers and processors to carry out the work and report back. This system is far more robust because the failure of one computer system is a small setback that can be worked around whereas the failure of a dedicated mainframe may be a disaster. Indeed, modern distributed computer systems expect computers to fail.

So when we log onto Amazon, we are identified and allocated to a computer that deals with our requests. There is no reason why everyone in the UK or Scotland should have their requests serviced by the same computer, nor even the same service provider.

But we are wedded to the idea that centralisation and large scale delivery brings ‘efficiencies of scale’ and mass production. We still believe in the mainframe, even if it is a thing of the past!

But suppling the same service from multiple providers would be complicated and expensive

How could two different suppliers provide the same service to different groups of the public?

This question turns out to be as bizarre as the answer is familiar. How about if I asked, “How could two different plumbers fit gas central heating to different groups of the public?” Well of course they could!

So, why can’t two different providers provide the same IT based public service to different groups of the public? As soon as we see the reference to IT, we focus on the IT system and not on the service. We start to be convinced that the computer system has to be the same. But we don’t mind if two plumbers do their job differently as long as they do a good job and the system works. If one supplier does a bad job, we won’t use them again. It’s called competition!

Do we really believe that plumbers would be cheaper if there was one central plumbing company for everyone serviced by their own central call centre?

I understand that some people still believe in a non-privatised public sector run by people of integrity concerned to deliver a good service. But we are not talking about public servants here. We are talking about public services that are already delivered by the private sector.

For “governance,” substitute, “delay and cost”

The word ‘governance’ is all the rage. Wikipedia says, “Governance is the act of governing. It relates to decisions that define expectations, grant power, or verify performance”. It seems to me that most of the governance I hear about is none of these. It is a governance centred around avoiding doing the wrong thing. It reflects a politics more fearful of mistakes than inspired to deliver innovation and greatness.

I would go further and say that governance in the world of public sector ICT in Scotland is all about avoiding making mistakes.

Sadly we will never innovate if we don’t allow people to make mistakes. We may all grow old and die but the ‘governance’ we are talking about here will never give us innovation. I am minded to point people to read Tim Harford’s book “Adapt”. A book which presses home the critical importance of experimentation in innovation whilst reflecting on why this is so hard for governments.

Why are we fearful of mistakes? We are fearful of mistakes because the costs of mistakes are enormous. Why are the costs enormous? Because we believe in delivering centralised services from single providers for contracts lasting as long as ten years. Why do we do this? We do this, because we believe it is the only option.

It isn’t.

Reactions to the Christie report on future delivery of public services in Scotland (or "why a little knowledge is a dangerous thing")

Yesterday saw the publishing of the Scottish Government report "Commission on the Future Delivery of Public Services" chaired by Dr Campbell Christie. Despite presenting a radically different way of delivering public services, it has met with repeated media criticism that the report says nothing new or actionable. Damning with faint praise, the SNP Finance Minister, John Swinney, in a Newsnight television interview, indicated that the proposals were broadly in line with what the government was already doing.

So is this report 100 pages of predictable "Motherhood and apple pie" or is there some substance? If there is substance to this report, then why is the media unable to see it and why are contributors to the report uneasy to back it wholeheartedly?

Lacking substance?

It's clear why many people see this report as lacking substance. It doesn't provide specific steps on moving forward like saying that region X should merge it's 5 frontline services (1,2,3,4 & 5) into a single coordinated user facing service by May 2012.

But the reality is that this report was not commissioned to do this, nor did it have the capacity to get into that level of detail. Politicians know that the media like this kind of bite-size proposition and they are good at delivering them. We should think twice about criticising a report of this quality, depth and coverage for failing to feed the media.

The report presents and argues the case for long term focused strategies for delivering public services. These strategies may not appear radical on paper but the fundamental issue is that these are strategies that are completely different from what is happening today.

It doesn't matter that these individual proposal seem obvious. There is a reality gap between what most people see as obvious and what happens in practice every day. It is a scary truth that a large number of the people who deliver our public services are either working with systems that prevent them from doing the job they want and need to do, or are so isolated from the underlying purpose that they cannot see why they are failing to deliver value.

I shouldn't need to explain these things, because the report actually says them very well. But there is clearly a need to explain how this report will make a difference.

Making a difference

If the proposals and implications of this report are delivered then we will see a massive change in the delivery of our public services. The changes, whilst following common themes, will differ from region to region and service to service. They will be driven by the needs of the communities they serve and those needs vary dramatically across the country.

These proposals are based around service delivery and organisational change that have been tried and tested. If you need evidence then search the internet for some of the books or online video presentations of John Seddon whose company "Vanguard" has become synonymous with the practice of 'Systems thinking' in the UK public sector. Like him or loathe him, John Seddon has applied these principles throughout the UK and collected the evidence to demonstrate the results.

If you want something even more radical but closely aligned to this reports proposals of reducing organisational complexity, get your hands on the BBC Wales series, "Ban the Boss" and the work of Paul Thomas. His truly radical and fairly risky work in the public sector in Wales claims up to 300% increases in productivity. Yet, on paper his strategy of reducing "managers" could so easily be criticised as being nothing new and could, so easily be implemented in a way that delivers a disaster rather than reduced cost and improved service.

The problem

The problem is that most people who read this report have no idea how to implement the changes. These changes might as well be written in a foreign language or complex scientific notation.

Despite being in English, the language of much of the proposals of this report is the language of organisations, systems, complexity and change. This language draws us in to a false sense of understanding with terms that seem to make sense yet hold vast meaning beyond common usage.

Page seven of the report makes cursory reference to "failure demand" which is explained as "demand which could have been avoided by earlier preventative measures." That sounds so obvious and yet the topic of 'failure demand' is the subject of whole chapters if not whole books. It is neither an obvious concept nor one that is well understood or applied either in the public or private sector.

In other words, this report contains big ideas that are compressed into succinct and specialist language that should be fully understood by those who need to implement the proposals but could so easily be missed by the general public or journalists or indeed politicians.

Actions

So, how can these ideas be turned into action? The secret sounds simple. They need to be implemented by people who understand the ideas.

Changing organisations is not something everyone gets taught about at secondary school. Even those with management degrees will be lucky to have received any guidance at all on how to restructure organisations to reduce complexity. Yet, unless something radical happens, this report will be digested and actioned by people who have no specialist knowledge or experience in organisational change and systems thinking.

The Christie report is a radical report. But it's proposals will have little effect unless the government can find and appoint a large enough group of skilled individuals who have the capacity to assess regional issues and turn them into practical proposals. Those individuals need to be given the authority to ask questions and initiate change.

Conclusions

In summary:

• There is no point in trying to turn this into a standardised and centrally driven policy of change across Scotland. It needs to be driven at a local level.

• It has to be implemented by individuals who have been selected because they fully understand the organisational issues being presented not because they are "solid and reliable people who have delivered good reports in the past". This also excludes appointing a group of "management consultants" from some "safe" big brand consultancy.

• By delivering these policies locally the government benefits from spreading its risk. Not every plan will go according to plan. Some of the people chosen to drive change locally will not live up to expectations. But only fudging the facts or avoiding the issues will avoid this and the cost of doing nothing is far, far too high.

• If the government acted quickly they could have a handful of specialists in place by the end of August 2011. Acting locally with central backing they could provide the skills and energy to start delivering the first steps of change immediately.

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Postscript

There is clearly a large overlap in Scope between the Christie report and the last week's McClelland report on the ICT Infrastructure of the Public Sector. If the government is going to deliver joined up services then the proposals of these reports should be joined up too.