Government sidelines SME Innovations

Innovation in Decline

Innovation is needed to kick start the economy, but the old ways are holding back growth. The public sector has been hit by budget reduction.  Large suppliers to the public sector are being squeezed in contract renewals and replacements.  Nobody is demonstrating an appetite for investing in innovation or intrapreneurship.

The old, arcane, procurement regulations are another inhibitor.  Invitations to tender published in the OJEU not only slow down the procurement process, they effectively bar entry from SMEs.  SMEs are the very companies who are most likely to have entrepreneurial ideas and innovative products.

Ministers support SMEs, understanding that they dominate the wealth creating economy.  For example, the Government ICT Strategy aims to:

“deliver policy and capability improvements covering EU procurement regulations; transparency in procurement and contracting; removing barriers to SMEs;”

But inertia in the Executive merely extends the status quo.  SMEs with innovative ideas are not welcomed with open arms into the market place. SMEs are sidelined by Government with the complicity of the big suppliers – neither of whom have the appetite for the perceived risk of innovation.

One Example

DWP’s Universal Credit programme states:

“We estimate that £5.2 billion a year is wrongly paid out as a result of fraud and error: £2.1 billion of fraud and error in Tax Credits and £3.1 billion in Department for Work and Pensions benefits.”  

An OJEU notice was duly published with a value of £15m to £45m for a “Data Access, Processing and Analytics Pan Government Framework”.  Interested SMEs are informed that “Organisations expressing an interest are expected to have a minimum turnover of £9,000,000.”

Any young SME, believing that they have innovative technology to make a £ multimillions impact on reducing error and fraud, are immediately blocked.  They are also unlikely to pass additional financial criteria.  There’s a further off-putting condition: the envisaged minimum number of suppliers is 8 and maximum number of 12.  SMEs are most unlikely to wish to spend valuable resources with virtually zero chance of jumping the pre-tender hurdles.

There’s also a sting in the tail: “DWP wishes to establish a framework agreement that may be used by or on behalf of UK public sector bodies.”  This is not just central government, but also every local authority and even Channel 4.  Does this now mean that they could also be disadvantaged from supplying throughout the public sector?  All public sector bodies should be aware of the DWP negotiated framework, including it in any data analytics contract selection.  The appointed framework suppliers will be in a monopolistic position and easily able to deflect innovative entrants into their market.

A start-up technology company, which may have developed a more effective fraud and error mousetrap, cannot enter the market.  The best it can do is treat with the usual suspects for winning a framework contract and hope to become a sub-contractor.  They may even risk being excluded from directly competing for any other contracts in the public sector.

Such is the fear in SMEs, that they dare not make such examples public. A group of SMEs had to report in camera to the Public Administration Select Committee. See their infamous report “A Recipe for Rip-Offs”.

Portfolio Planning

Every product or service passes through a life cycle of inception, growth, steady state and decline.  In the public sector, it is convenient to map this into a matrix of service portfolios with four categories.

1. Innovating for the future
2. Transforming business processes
3. Reducing transaction costs of customer facing operations
4. Improving essential internal administration and services

There may be overlap of categories, but each should be allocated a percentage of total resources. If any drops to 0%, it is a most unhealthy sign. Large suppliers excel in Transformation, Operation and Administration but Innovation is where SMEs thrive.  Innovation can be a threat to the income streams of big suppliers, so it needs special protection by the Government.  Today’s innovation could become tomorrow’s transformation and eventually the key to efficient operation.

 

 

Message to Government Ministers

Support innovative SMEs with policy changes that will:

1. Guarantee access to Department’s senior levels with a frequent opportunities to make proposals for innovations.  Encourage proposals for cross-departmental funding of joint projects.  Exclude big suppliers from the process, who already have access if they wish to innovate.
2. Reserve some funds for small contracts with SMEs.  Constrain contracts to strict time limits and learn from both negative and positive results.
3. Monitor investment in the Innovation Portfolio across all departments.  Communicate successes and recommend candidates for growing into transformational projects.

Recipe for Rip-Offs – Quarkside Dunnit

How encouraging that Quarkside produced the strapline for the PASC Report Government and IT — “a recipe for rip-offs”: time for a new approach.  The author was quoted in paragraph 102.   It was taken from a longer statement  made in January.

“Complete outsourcing is a recipe for rip-offs. “

It even made the morning BBC news bulletins.  More importantly, it has been open and frank with criticisms and  recommendations.  There is little to cause negative comment from Quarkside.  Just read the full report.

The only area for improvement would be to link the concept of outcome based commissioning in paragraph 75:

“The Government must stop departments specifying IT solutions and ensure they specify what outcomes they wish to achieve, within the broad technical parameters to ensure interoperability.

with the discussion on Waterfall versus Agile Development.

The model in paragraph 81 does not mention outcomes.  Outcomes are the starting point of Quarkside’s Seven Dimensions of Information Governance (7DIG).  This is a nice example of using 7DIG to test validity of governance plans.  Agile is also seen as experimentation.  That’s fine, but the scientific method creates research goals.  These goals can be set at each iteration and possible future goals reviewed – and the outcomes must be re-visited.

Agile: Challenge for Universal Credits

The PASC MPs were earballed by DWP about how Agile development would  guarantee that the Universal Credit (UC) system will deliver all that is needed within two years, without a fiasco.  This was shortly after Martin Ferguson (SOCITM) challenged the UC change process, which has not brought in the skills and experience of local authorities.  The inquisitors did not follow up this challenge and seemed to swallow the promise of technology without really understanding why agile is different.

Twelve principles underlie the Agile Manifesto:

1. Customer satisfaction by rapid delivery of useful software
2. Welcome changing requirements, even late in development
3. Working software is delivered frequently (weeks rather than months)
4. Working software is the principal measure of progress
5. Sustainable development, able to maintain a constant pace
6. Close, daily co-operation between business people and developers
7. Face-to-face conversation is the best form of communication (co-location)
8. Projects are built around motivated individuals, who should be trusted
9. Continuous attention to technical excellence and good design
10. Simplicity
11. Self-organizing teams
12. Regular adaptation to changing circumstances

It’s a superficially attractive philosophy, but endorsement by the Institute for Government would not convince many CTOs.  What is more relevant is advice from BT, who have had some success with Agile devekopment:

“To be truly effective, the agile approach needs to reach right across the business, not just the IT organisation. You might expect that the business would be excited at the prospect of having regular deliveries of valuable functionality. However, the business also needs to move away from traditional waterfall practices and change how it engages with the IT organisation.”

Knowing what we know about the risk aversion of public sector – the reliance on Agile may be ill-founded.  Many of the twelve principles run counter to decades of bureaucratic behaviour.

PASC 10: Politics must lead technology

The tenth of the Public Administration Select Committee (PASC) 12 questions, asks:

10. How well does Government take advantage of new technological developments and external expertise?

Local government is unlikely to much capacity for developments or purchasing external expertise. Government is too abstract a concept here. People identify opportunities where services might be improved by the use of technology.

Very rarely does technology inspire the development of new or improved services. Most technology experts respond to the commands of service and business managers. They often do not have the big picture that takes in all the process and governance constraints. Many are attracted to the technology itself, not the underlying objectives or desired outcomes, as Ralph Waldo Emerson said:

“As to methods, there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles is sure to have trouble.”

So government should look at principles first. Adopting principles could become policy. Unless there is a policy to ring-fence innovation, standards development and skunk works, then it is difficult to analyse the potential value of new technology. It may be fundable in central government, but virtually impossible in local government.  Once again, this demonstrates the need for IT policy and leadership from the very top.

The final point is, who has the power take advantage of new technology? Very few, is the answer – and they are not the technologists.  Are People empowered? From a previous blog, Quarkside noted:

“Power seems to be a prime motivator for all our politicians and senior officials. That’s in both central and local government. There’s Power to develop policy, Power to spread ideas and Power to influence more Powerful people.”

Politics turns out to be the prime mover for taking advantage of new technological developments in the public sector, not the technology. Read Philip Virgo’s blog for more insight.  For example, unless there is political pressure for federated single sign-on across all departments, agencies and local authorities, it will not happen. The technology is already available.

PASC Evidence in Full

Well, the House of Commons Public Administration Select Committee (PASC) have published their evidence.  It is not light reading, consisting of 52 responses on 304 pages of text.

Quarkside published preliminary thoughts in several parts, eg PASC 11:   Plea for Information Governance leadership.  If you want to see the final edited version you can find it on page 73.  It must have been submitted just before the Information Commissioner’s Office (page 80).

The PASC will need a lot of endurance to consolidate the evidence, but from what I have scanned there are a lot of common messages with lots of room for improvement.  Quarkside will look for governance matters.

SRP: DCLG ICT healthcheck

DCLG has a large impact on local authorities.  We expect some improvements (aka reductions) in reporting requirements and the signs look healthy.  For example the current SRP has:

1.3 Remove reporting burdens on local government from central departments

• 1.3.i. Abolish Comprehensive Area Assessment and cut local government inspection (Completed)
• 1.3.ii. Identify exceptional areas where central government needs to retain an oversight role (Completed)
• 1.3.iii. Develop a single, reduced, list of the data requirements placed on local government by central departments, working with other departments and local government (In progress)
• 1.3.iv. Develop and implement a process for managing new data requirements from departments, and from their associated inspectorates and regulators (Yet to start)

Let’s hope that DCLG also links up with the Cabinet Office SRP targets for ICT.

If the Public Administration Select Committee (PASC) study the inter-relationships between departments, agencies and local authorities, then they will surely find a complete lack of a coherent ICT policy.   Each department still seems to have an isolated approach to data management.  Interoperability between systems, or collaboration on shared services, is not on every department’s menu.  They all need a common approach to Information Governance.

Pasc 8: Standards, standards, standards

The eighth of the Public Administration Select Committee (PASC) 12 questions, asks:

8. What infrastructure, data or other assets does government need to own, or to control directly, in order to make effective use of IT?

Ownership of processors, data stores and communication networks is not a major issue. They are commodity products and most are not core government assets. They should be procured and operated at the lowest cost to the public purse. If a Government Cloud is trusted, secure and economical, then it should be used.

Control of data is a core custodianship function and must not be relinquished. Data is best regarded as a triumvirate of Operational, Reference and Derived data. Public services may use any or all of these.

• Operational data is front-line, perhaps with high transaction volumes, eg school attendance or DVLA registration. Nobody would contemplate providing this type of service without IT.
• Reference data, commonly shared between many systems, is of variable quality, such as addresses. The reason is often that different operational systems have different versions and incompatible formats. Interoperability between systems is impossible without adoption of data standards. The public sector, as a whole, does not have a functioning standards body, or the power to enforce them.
• Derived data is combined or abstracted from several sources. It is the basis of planning and performance measurement systems. It may reside in data warehouses or complex spreadsheets. Systems may collect data from operational, reference or other derived data sets.

What make it more complex is that the quality not only depends on knowledge of standards, but also the context and timeliness of the source data. Martha Lane Fox seems to understand the need for standards. That’s what Government leadership should control.

By standards, don’t assume the detailed documentation published by BSI or ISO.  Standards can also be the accepted frameworks and governance structures that form best practice.  But somebody independent should assess that they are being followed and avoiding prima donna assertions.  Above all it needs IT functional leadership.

PASC 11: Plea for Information Governance leadership

The eleventh of the Public Administration Select Committee (PASC) 12 questions, asks:

11. How appropriate is the Government’s existing approach to information security, information assurance and privacy?

The question is limited to a small part of the much more comprehensive field of Information Governance. But taking them in turn:

• Information Security: Developing federated identity management is critical to future efficiency.  Trust between all departments, agencies and local authorities should be high on the agenda. The model that links authentication, credentials, authorisation and consent is incomplete. Isolated departmental strategies should be coordinated and leadership demonstrated to synchronise disparate initiatives.
• Information Assurance: SOCITM has a good route for assessing and promoting Information Assurance in local government. See .
• Privacy: has many pressure groups that will no doubt respond with their own reasons.

The main point, and it can be applied throughout all the PASC questions, is that Information Governance is much wider than just Security, Assurance and Privacy. The Government’s existing approach is too narrow and needs to be broadened into a policy framework that leaves no holes. Eurim attempted this approach. The Information Governance group looked at Basic Principles. This holistic approach to broad information governance can be summarised in one sentence:

“Information Governance is the setting of objectives to achieve measurable outcomes by people using information assets in a life cycle process that considers both risk and time constraints.”

Information Governance standards could be, and should be, developed by the Government CIO. Then there will be a baseline for quality assurance at all operational levels of public service.

PASC 9: Austerity propagates insularity

The ninth of the Public Administration Select Committee (PASC) 12 questions, asks:

9. How will public sector IT adapt to the new ‘age of austerity’?

• People will leave public sector employment.
• Innovation and development will diminish.
• Training will be embargoed.
• Morale will flag.
• Productivity will reduce.

There may be more flexibility in central government, but local government IT runs the risk of failure of some services.

Austerity has already had an impact on professional development and knowledge sharing events. Some local authorities have been told to stop all external meetings. In central government, Dr A heard someone say that visits to Brussels have been banned, missing opportunities to influence vital EU legislation.  Austerity causes people to economise and only look inwards for solutions – when better ideas may exist outside.

“How should it adapt?” would be a better question. It should not be a headless chicken reaction, people should look at the principles of Information Governance and commence a ranking exercise. Every public sector organisation should review its services and quickly develop a portfolio of current and future needs. The least important IT services could be ceased or support stopped.

Innovation and training should be protected. Internal administrative systems should be culled or drastically reduced, just look at the £1.4 billion being spent on college administration.

PASC 7: Procurement = Parson’s Egg

The seventh of the Public Administration Select Committee (PASC) 12 questions, asks:

7. How well do current procurement policies and practices work?

The evidence is mixed. Sometimes they do. Sometimes they don’t. Most local authority projects work to budget and many are delivered on time. The headline problem is the failure of big projects. There’s an adequate OGC Gateway process. It just isn’t followed, or improperly understood. If private sector projects are aware of a great risk of failure, they will often cancel projects on behalf of the shareholders.

Good programme management, and all that it entails, is the missing ingredient. The best programmes integrate the work of clients and suppliers in a working partnership. They have common goals and clear leadership. There is clarity of governance and accountability.

Complete outsourcing is a recipe for rip-offs. The client must have matching skills or employ an independent programme management consultant.