13 Sep, 2010

Public Sector

Chancellor George Osbornes predicted cuts of 25{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} in Public Sector expenditure will have huge impact on all of the UKs businesses – many of which count the Public Sector as a major client. As they all wait in trepidation for the 1st October announcement when swingeing cuts predicted to be the biggest in a generation – are expected to be announced, there is re-focus on how to lessen the impact by increasing efficiencies and reducing costs still further. In a week where another catastrophic IT disaster hit the headlines (the Tax Office this time) costing six million taxpayers hundreds, and the government itself, billions of pounds, critics argue that it is time for the government to seriously revise its IT tendering system to prevent a catalogue of IT failures and non-delivery. The current system is weighted towards large IT companies (Tier I) who charge a premium for their services because of their recognised names. It is clear the Government needs to focus on credited Tier II suppliers who are viable and offer better value for money, saving millions in the process, while the savings can be used to bolster front line services. Chris Papa managing director for communications specialist company Qubic said, Tax payers deserve a better deal than the millions they are paying for successive over runs, over budgets and disasters that occur on a regular basis. Historically, the bigger suppliers have taken the lions share of Public Sector contracts partly because of the tendering requirements, and partly because of the fear factor as there existed a perception that bigger provided a measure of security. However over the years there have been some very high profile failures and there has been a lot of publicity where suppliers have been taken to court because of failure to deliver on time and on budget. He continued, In todays tough economic environment smaller companies and Cloud computing have driven wholesale change, and as public sector departments look for specialisation as well as savings, this has opened the door to smaller suppliers which typically are specialists, can move fast and have a more favourable price strategy a now critical consideration. One Public Sector department which has seen the benefits of new technology provided by a smaller supplier is the Ashmolean Museum in Oxford which has used PC Power Down technology from the Qubic Group to reduce the costs of running its 200 workstations needed to meet the increasing number of public-facing ICT initiatives (eg gallery touch screens), needs of staff and academic researchers. Dr Jonathan Moffett of the Ashmolean Museum said, Computers were frequently left on day and night and even over the weekends and understanding that a single PC can waste as much as £50 per year and be responsible for a quarter tonne of C02 if left on is quite shocking. Typically in an educational establishment or public space it is often unclear who should be switching off equipment and we needed something that would address this issue.While this years research from Gartner predicts that the widespread adoption of Cloud computing is now here, more forward-thinking companies are looking at the next generation of Cloud computing which takes a more holistic approach to all IT and communications factors and promises to supply further increases in efficiencies and cost savings through the true integration of computers and telephony, enhancing collaboration and communication and providing savings in time, effort and costs. Cloud computing has barely permeated the consciousness of the business world when the next development in this technology is making waves. Cloud technology has gained wide spread adoption over the past year as the recession has caused pressure on businesses to cut costs and seek greater efficiencies in an effort to remain competitive. Additionally, the impact caused by the way Cloud computing is paid for has turned the IT industry on its head and changed IT expenditure from a CAPEX to an OPEX cost, a factor highly attractive while the banks continue to resist all attempts to increase lending to businesses and debt finance is tough to obtain. This should not come as a surprise to government officials as the 2004 Gershon Report*, which warned of the needs for savage cuts, sounded warning bells years ago – which apparently fell on deaf ears. It highlighted that radical changes were needed, and was focussed on achieving greater efficiency across the whole of the Public Sector in a continuous drive for improved public service delivery. *Background on the Gershon report The report identified efficiency measures which by 2008 could have produced annual savings of some £21b. It found that, despite an investment of £6b in Public Sector IT since 2000, there had been a failure to restructure processes to reduce paper handling. Public bodies also preferred a policy of self sufficiency in which they provided all their own services, such as back office systems, which were replicated across many organizations. As well as citing the importance of evidence based policy as a lever for improving performance, the report identified target areas for efficiency gains e.g. human resources, finance, IT – and the simplification and standardisation of transactional services. Procurement can be sharpened up by ending multiple buying by many purchasers from a single supplier. The productive time of teachers, doctors and police officers can be increased by reducing bureaucracy and providing assistance to relieve pressure. Responsibility for delivering the efficiencies would rest with central departments, which will cascade their commitments to health trusts, local councils, police and other public bodies. This would create a public service efficiency delivery chain.

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