Whatever you think about the budget cuts that are now affecting public sector organisations, there is no denying that they will fundamentally affect how IT services are thought about. How can the public sector address the new drives for efficiency and cost savings, yet at the same time manage its own position with the threat of lost skills, staff and spending power? What is certain is that new models for delivering IT have to be considered.
Cloud Computing has already been pushed forward as the panacea for today’s IT infrastructure problems: instead of running separate services and data centres to meet the same requirements, everything should be centralised, computing capacity and server resources should be pooled and then consumed on a “pay as you go” basis.
There are two approaches to this: public and private Cloud. Public Cloud would have these shared resources available in one place and accessible to all organisations, while a private Cloud would sit within one organisation or a pre-selected group of organisations, offering the same benefits on delivery of IT but just for them.
While these public and private Cloud models would be beneficial in theory, the truth is that in the public sector, full-on public Cloud deployments are not yet ready. The proposed G-Cloud is still a very distant proposition, and local councils, healthcare trusts and other public sector organisations have requirements for IT that have to be met now.
The promise of Cloud for the public sector is the ability to reduce costs and duplication of resources. But this is already being delivered in other ways using service delivery models that fit with the definitions of Cloud, but aren’t being called this. For some organisations, they are already at the forefront of this new model of IT, but they are not actively marketing themselves internally or externally as providing “Cloud” services.
Shared services is one approach. Instead of running its own applications or business function, a council can work with other local authorities to run this service. The immediate benefit is lower investment requirements for managing the IT, while users of the service should not see any difference in how they deliver front line services.
Shared services projects have already been undertaken by some organisations in the public sector, and while they are not called “Cloud” implementations, they share a lot of similarities. They tend to be based on a pool of resources, are often heavily virtualised environments and the ability to track use data is critical.
In order to make shared services deployments successful, all of the organisations involved have to know which of their staff require access to the service. This information is important from both a business perspective as well as on the IT side, in order that the right amount of hardware and application licenses are in place. This can be an opportunity to reduce costs further by ‘rightsizing’ the number of licenses bought, as well as ensuring that the number of staff that require access to the service is appropriate.
Organisations operating shared services must determine how the services are actually hosted: will one organisation take on the whole service and share access to it with the others involved, or will a more distributed approach be taken? They must also take availability of a service into account. Having a secondary site in place in case the primary data centre location is affected by a disaster can be a worthwhile investment if the service to be offered is critical to staff across the organisations involved.
Successful shared services deployments consider the potential political impact of any move as well as the IT side. Managing the transition between internal IT and the shared service requires an awareness of what the overall goals are for all the organisations involved, as well as the individuals responsible.
Presenting usage data back to the organisation teams using the shared infrastructure can ensure transparency around who is using the service, and that all the participants are paying their fair share of the costs. Similar to Cloud, the promise of a model where you pay for what you use rather than overinvesting in assets that don’t provide direct value back to the organisation is very attractive at the moment.
Another approach that is providing new opportunities for public sector organisations is around procurement. How things actually get paid for has always been a sticky subject for IT, as it has tended to require large upfront capital in order to get going in the first place. In response to the current financial climate, new funding models are becoming preferred.
For almost all organisations, capital expenditure on projects will be incredibly hard to justify. Consequently, leasing or finance arrangements and deals are being used to pay for equipment and IT services that are necessary to the organisation. This change in procurement policy will put more focus on the initial planning stages of any project, as well as how it is budgeted for over the lifetime of the deal. The preference is to move IT assets off of the balance sheet.
This shift in model – from capital expenditure to operational costs – will lead to two things. First is that IT will have to work much more closely with the procurement team around how IT goods and services are bought in. Models could be based on pay-as-you-go expenses similar to utility payment models through to regular monthly charges for as long as the service is used; similarly, using concurrent or pooled licenses for an application can offer better budgeting compared to individual or named user licensing.
The second change will be around the potential variability in budgets – while costs for a capital expenditure project are fixed, pay-as-you-use implementations will require an understanding of how to manage that use of services so as not to overspend. IT teams that deal with telecoms or mobile contracts may already have this experience from dealing with these utility contracts; for other teams, modeling your previous use and applying this information can help prevent any nasty surprises due to fluctuations in demand.
One area that has seen intense debate is that of public sector tasks being taken over by social enterprises. Should individuals looking after public sector IT at the moment look at setting up their own enterprises and selling their services back into the organisation? Their understanding of the current environments that are in place would be invaluable to the organisation, but it would also be an opportunity for the organisation to move both staff and processes off the balance sheet.
For the IT professional, there is the prospect of providing IT services without the overheads that can be associated with being a public sector organisation. There may also be the possibility of providing a service out to other public sector organisations in future, as the success of any initial project is secured.
What would the public sector IT social enterprise look like? Probably very similar to the existing IT within many organisations, with the same staff and equipment in place. What would be the crucial difference is the freedom to make choices around how IT is set up, funded and delivered to meet organisational needs.
Competition for budgets will continue to be fierce within the public sector for the next few years. As new models of delivering IT come onto the market, the public sector can look at how to make use of these where it is appropriate. However, the most important consideration has to be making sure that public services are delivered to the same or better levels of quality and standards that are present at the moment.