It was disappointing to read the Public Accounts Committee (PAC) report, which raised concerns about the delivery of major Government projects: "We are concerned about the value for money risks resulting from the significant increase in investment, speed of delivery and changes to how government makes investment decisions."
While this report refers to major national infrastructure projects, it is important because it should act as a warning to all of us in the sector – vendors, service providers and customers alike – that we must break the cycle of the public sector being known for costly overruns in project implementations.
Last year, Michael Gove admitted: "Of the 108 major programmes for which Government is responsible, only 8% are actually assessed to judge if they have been delivered effectively and have brought about the desired results."
That is simply not good enough. So where do the problems lie?
The Public Accounts Committee talks about several contributing factors, but the ones that stand out are a lack of skills and leadership and cultural attitudes.
However, I believe there is a deeper culture issue: a rigidity of thinking.
One size does not fit all
The Government’s approach to cloud computing, in particular “cloud first,” underlines this concern. If the UK public sector is to deliver “genuinely transformative” initiatives, as Michael Gove said last year, IT projects must move beyond statements such as this: (cloud first) "…is mandatory for central government and strongly recommended to the wider public sector." That advice was offered in 2017 and four years later it has not been adjusted.
There needs to be some myth busting of ‘Cloud First’ as it is not the only way to deliver value.
Myth one: there are advantages to lock-in
Even when looking at the potential risks of moving to the cloud, the language isn’t right. Vendor lock-in is described as "cloud concentration.” While the same article talks about the commercial and technical risks of vendor lock-in in the cloud, material elsewhere suggests "…in the cloud the advantages of being locked in can often outweigh the disadvantages."
While lock-in might offer ‘peace of mind’ for those choosing one cloud vendor, it can remove healthy competition. If a vendor knows it is unopposed there can be less pressure to deliver value for money. It can also limit an organisation’s ability to leverage cloud solutions from other vendors that may be a better fit to support goals for growth and innovation.
Myth two: cloud transition is painless
There is a telling statement about transitioning to the cloud: "You will need to manage old and new systems side by side for a significant period of time.”
In any organisation this can equate to cost and resources being diverted to an implementation that probably will not contribute to improving the business and could be better used on innovation projects. In the public sector such resources are already scarce, particularly in the pandemic. If you are moving an existing enterprise software application to its Cloud ERP equivalent it will require significant investment to test it, deploy it and ensure it is not disrupting other systems.
Myth three: existing systems
In a document from 2020, the advice is: “Where possible, you should try to move away from and manage legacy technology as they can be difficult and expensive to maintain, and expose you to security risks.”
The key concern is that as these systems age, vendors switch off full support, so customers do not have the insurance of 24/7 cover. In fact the opposite is the case:
- The total cost of ownership for existing, stable systems can be reduced by up to 90% if third party support is utilised
- Existing systems can be far more secure. At Rimini Street we have adopted an approach called virtual patching, which offers a far faster and robust approach to security updates and protection.
Myth four: the cloud isn’t complex
There are different types of cloud which offer different types of value and usability. When you see the Scottish Government considering a single, integrated cloud ERP solution to replace disparate internally-deployed instances it underlines the point. This is a hugely complex task. Another tender from the Shared Business Service is extending an existing Oracle contract and could cost up to £9 million to the taxpayer, because: “Changing such a highly customised BPS system any sooner whilst UKSBS and its clients prepare to enter a new environment would incur significantly disproportionate costs in both operation and maintenance.”
The scale of ambition for the long-term strategies of both organisations is commendable, but the complexity of both projects should be cause for consideration of all options.
In our experience stable business applications like HR and Finance are not going to be the source of innovation and shifting them to the cloud could create the type of disruption which leads to questions around value for money.
Kent County Council has understood the benefits of taking a more gradual approach. It is currently on version 12.1 of Oracle E-Business Suite and given Oracle’s end of full support in December 2021, it was faced with either an upgrade to 12.2 or a move to the Cloud. It chose neither, because the former would have meant a significant re-implementation, particularly of the middleware layer, and the latter would have entailed significant time and resources. At a time when Kent is dealing with the pandemic and prioritising essential services, such expenditure was not seen as what Michael Gove might have called “genuinely transformative.” Instead, Kent has moved to Rimini Street Support and immediately saved 50% on support fees. It has also achieved significant savings by doing a ‘lift and shift’ to the Cloud to reduce existing hard costs, as well as reducing use of the data centre. Most importantly, it has bought time to consider its long-term needs.
Given the immaturity of many cloud platforms today, such time is invaluable because customers can maintain existing business applications, minimise risk to the organisation and carefully map out how and when they want to modernise. Such an approach offers public sector organisations a far more realistic and value for money driven approach to modernisation.
The priority for Government now should be to communicate to the public sector that achieving genuine transformation does not just need to be achieved by the “cloud first” vision, but that there are many routes to delivering efficiency and improvements to services.
Mike Cattermole, Public Sector Director, Rimini Street UK
This article was sponsored by Rimini Street UK
