Wanted - a Radical Makeover in Public Sector IT Procurement

Many government IT projects are doomed to failure

Posted Saturday 5th December, 2009

Matt Howell

Matt Howell, Head of Public Services, Technology at Capgemini UK, thinks that many government IT projects are doomed to failure before they even begin, and argues that the problem won't be solved without a much better approach to procurement.

Another day, another scandal involving a failed government IT project. Yet more blamestorming, recriminations, finger-pointing and hand-wringing. Eye-watering numbers are quoted on the millions of pounds wasted, and on the dire over-runs in timescale and cost. And another batch of 'told you so' experts coming out of the woodwork to offer their wise-after-the-event analysis of what went wrong.

That may sound like hyperbole but it is in fact the literal truth as I write this article, having just scanned the morning papers and tuned in to the Today programme. And although such news is, thankfully, not a daily event, it is a story that occurs with depressing frequency.

And in today's profuse media coverage, one thing is conspicuous by its absence: any well thought-through advice on how such disasters can be avoided. Instead, there is the widespread belief (a) it's all about over ambition and that we should somehow be less ambitious in government, and (b) somehow it all goes wrong in the design, in the build or in the rollout phase of the project. Both notions are in my view fundamentally wrong. The reality is that many government IT projects are seriously handicapped before the business users and IT providers ever meet.

Why is this so? Simply because the normal template for government procurement is one of rigid compartmentalisation, with the people supplying new IT systems (or hoping to supply them) kept isolated from the people needing and demanding those systems - the business users. In my experience the procurement function too often acts as a barrier between the users - the ones who need new IT and who initiated the procurement exercise - and the providers - the ones seeking to understand and provide what the users really want and need. There have been plenty of examples in recent years when a procurement exercise, lasting months or even years, takes place without anyone from the business and the IT provider getting to speak meaningfully. Instead we often meet one another for the first time on day one of the project. And of course, we find out then that we have different views of what the really important things are.

Of course the motivations of the procurement teams are entirely laudable. It is, after all, their job to ensure fairness, equitability and a level playing field for all the hopefuls seeking to bid for the project (and people like me would be the first to complain if they didn't!). But the truth is that buying IT needs real dialogue between the business and the provider. As technology becomes richer and its capabilities greater, this is even more the case. The supplier needs to understand what the user really needs, and to explain what is and is not possible, what different options are available, and how they differ in cost, complexity and risk. In return, providers need to understand what is of most value to the business and what the business risks are

Such mutual understanding is an absolute must for the success of any large-scale IT project and should exist on day one of the project. But it doesn't because in many cases the procurement team - lacking understanding of the users' real requirements - acts as an imperfect filter and hampers success. Another consequence of this approach is that procurement has become an industry. What should be a simple process becomes multi-stage, lasts years and increasingly involves layers of expensive procurement advisors - who often act as yet another filter between the providers and the business. Everyone wastes time and effort in this process that we should all spend delivering the project.

The upshot is that often, before the project even starts, the business finds that they still own most of the risk and their provider, after months of procurement, still doesn't fully grasp those risks, and is locked into an inputs-based contract forcing them to focus on the wrong things..

Three simple things would enable us to get more government projects right, and reduce costs:

1. Business Led Procurement

Refocus on what the project is intended to achieve, and what success really looks like. Don't focus on just the inputs, rather focus on the results the stakeholders (users and customers) really want from the project. Particularly, let the business identify what outcomes they want, and what risks they want to transfer. Also, recognise that the business environment may change, and that some flexibility in scope and price is not a bad thing. Ensure that the business is fully involved in the procurement exercise throughout, and enable and encourage communication between senior business sponsors, users and potential providers. Professional advice from the procurement team will be vital to avoid the pitfalls and provide experience but not at the expense of business and user involvement. Enable the business to procure a delivery partner who will share their risks and focus on their business outcomes. In the private sector, the procurement and business objectives are more closely linked, and this should be the norm in the public sector.

2. Make more time for delivery

Simplify and shorten the procurement process. We need to buy intelligently, but every month spent in procurement could be a month in delivery, helping meet tight deadlines. It should not take as long as it does to procure technology services in government. There have been over 2000 OJEUs and PINs this year, and countless more non OJEU procurements. If we saved 2 months off each, that's years of delivery time gained. It stands to reason, with immoveable go-live dates, if we save time in procurement, we will miss fewer deadlines! If we can speed up the procurement process, government could buy in smaller packages and create less risk and flexibility - but you can't do this while it takes 6 months to procure a standard IT service.

3. Share Responsibility

Accept that in any major IT project, success will depend on the efforts of the vendor's team and of the user community, and their ability to work effectively together. Responsibility for success is shared. Remember this in your procurement approach and you will start on the right footing

Such an approach is almost the norm in the private sector, and has been adopted with good results here and there in the public sector. And if only the collaborative approach could be applied to all government IT procurements, we could see an end to the era of costly and embarrassing scandals.

This article was posted on Saturday 5th December, 2009.

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