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back to article The target: 25% of UK gov IT from small biz... The reality: Not even close

The UK government is way off its target of sourcing a quarter of its IT gear and services from small businesses by 2015. That's according to a report out this month by Parliament's Public Accounts Committee (PAC) that criticises the government's ICT strategy. The panel, chaired by Labour backbencher Margaret Hodge, interviewed …

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FAIL

Considering all the hoops you need to jump through to become an authorised supplier, I can't see small businesses being able to afford the tendering process.

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I looked at tendering for a very small contract < 100k. The hurdle I couldn't jump was the fact I had to provide proof of a previously delivered gov project/contract. Er.... bit of a catch 22 that one. I was hoping to do a couple of small ones in order to be able to bid on some bigger ones. Seems it's a closed shop regardless of all the talk to the contrary.

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All very true, but I don't see the situation as being very different when it comes to bidding for commercial contracts with large businesses. I bet that less than 10% of IT expenditure from (say) a typical bank goes to SMEs. When I (as a one-man consultancy) do work for such businesses, it's invariably through some intermediary that can afford to jump through the hoops necessary to become a supplier. The managers that hire me are well aware that they could save ~25% by having me work directly, but 'computer says no'.

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Anonymous Coward

Too many vested interests, little empires and protectionism. That sums up my view of the Public Sector when I worked in it.

Department managers splashing £10m on a basic website because they can say they did it (not sure what's to be proud of, spending £10m on a website), departments geared around ensuring employment and resisting automation and efficiency tooth and nail and a whole "Let the supplier take the risk" mentality so that when things do go tits-up, it's the supplier not the agency that's responsible, so it's not the agency manager's fault. Never mind the fact that the requirements were so ill defined, decisions made by committee, expert opinions overruled because it brings up awkward questions, industry research ignored because "we believe our ideas are better and it will work" and expertise in house who can do the job vastly cheaper and quicker are seen as "outside our project control" and ignored in favour or tier 1 suppliers.

Truly bizarre world to work in...

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Holmes

So not really "demands" more mildly worded requests.

Good luck with that.

BTW I'd suggest that at £240Bn that does not make HMG a "large" customer.

It makes them a f**king huge customer who should be getting close to factory gate prices on those volume.

But otherwise not exactly an earth shattering revelation.

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Unrealistic target

Of course those Whitehall departments are not going to be anywhere near the 25% target by 2015, it was a pile of crap to start with.

For starters they are still locked into huge contracts with the big usual suspects that are too expensive and traumatic to get out of. It takes time to migrate the whole thing over which can only start towards to end of those contracts. Then the civil service don't have the manpower or the knowledge (no decent IT person works there on that salary) to be able to undertake the migration and so they need to draw up a new contract with a big trier 1 suppler and mandate that the supplier funnels 25% of the work to SMEs, which they will find all sorts of creative and self benefitting ways of doing.

Having tried to use those 'centralised services' I can promise you they are anything but quick and easy. The bureaucrafic hoops are horrendous and so why would anyone bother? They will just find other ways of getting hold of what they need, usually in a hurry, from an established route where some other poor sucker went through the pain of sorting out the red tape.

Government IT is a mess and the politicians are not making it any better. Maybe if they stopped taking bribes from the big companies they would look at the problem more objectively?!

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Re: Unrealistic target

25% to SMEs is very easy to do if you engage the actual workers via personal service companies rather than put them on the payroll.

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Re: Unrealistic target

Ah that much abused system used by several high profile individuals, including upper management in the BBC and local councils, to help them minimise their tax? The one where Treasury has banned Whitehall departments froms using?

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The main aim of the British ruling classes ...

... is to gain power and drop responsibility. Hence central government spending policy, Local government spending. Central NHS policy making , regional NHS 'trust' failure. Whitehall signs huge IT contracts but only private sector IT contractors fail.

I suggest the next 'independent review' starts from the top and works down not from the bottom up. 'Did the Prime Minister discharge his duty to put someone competent in charge and did that person have the power necessary to do the job. If so then ask the same of the Cabinet Minister and so on. It won't get very far down the chain before the problem becomes apparent.

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Its the corruption, stupid!

They have other names for it but that's what it is.

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Re: Its the corruption, stupid!

No it isn't. While the corruption label makes a good tagline for angry rants, the problem is more complex. Wasteful business fails due to competition, waste public sector has no such checks and balances. Normal business can take risks - public sector can't. It is a requirement to cover your back even if it means giving the same bad, inefficient/overpriced service to everyone. Postcode lottery in NHS anyone? Yep - answer is to drop standards everywhere. Pervasive auditors and procedure-jockeys mean no flexibility. Endless well intentioned but vague ticklist objectives, plus endless E and D, health and safety tickboxes to tick. Final salary pensions make up for bad pay, but mean people never leave so the empire building, job-for-life mindset if 20 times worse than in normal business.

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Re: Its the corruption, stupid!

Of course there is no corruption. The rtical exit of ,many top civil servants and military personnel happens to be directed at the upper (paid) echelons of large government suppliers (of course it goes without saying that politicians make use of the same doors).

So that's ok then, no corruption thinkable.

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Re: Its the corruption, stupid!

I don't think the OP suggest there was no corruption just that corruption was not the main problem. The private sector works by trial and error, risk and return: Bad businesses fail. The public should not be expected to underwrite a shareholding business. Let a hospital trust or a railway company try to get insurance against business failure and see how profitable they are then.

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Re: Its the corruption, stupid!

Are we really surprised?

Whitehall Mandarin's are probably aware that 'small biz' cannot provide them with the level of corporate entertainment budget -- err bribes/incentives/whatever you call it that 'BIG BIZ' can and usually does splash out, and that the Mandarins have come to expect as the norm.

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The Biz

The government needs rich, powerful friends, and you don't get those by giving business to small companies. You get it by giving bribes contracts and knighthoods to people in charge of megacorps. Then they bribe you make you a "non executive director" after you retire from govt.

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Unhappy

I'd say *some* corruption is *inevitable* on this scale, OTOH...

With the badly thought out policies (IE no impact assessment on existing systems)

With the moving goalpost requirements (partly due to the results of the assessment, partly due to every Sir Humphrey wanting some piece of shiny tacked on)...

With the locked in decades long contracts let to "The Usual Suspects (TM)"...

With the (reputedly) poor skills of Govt procurement staff....

You don't need much corruption to waste a hell of a lot of cash..

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Lack of Stability in Team Responsible

I've been selling into the public sector for a number of years - mainly with SMEs. There is a catch 22. If you do not have an established product in the public sector space then you really need to identify some highly ambitious KDMs in order to get a foothold.

Central Government have been trying to politically manage the enormous embarrassments they have had repeatedly for as long as I have been in the sales channel. They have gone through various incarnations of SME support strategies. The biggest issue is that the personnel involved never stick around long enough to achieve anything. The last effort to convince SME suppliers sounded encouraging. There was going to be an anonymous process for complaints regarding tendering processes / decisions, which should be a small step in the right direction.

However, the key players in that team have already moved on - either out of Government altogether - or up the food chain in Govt. You end up with the same silly advice from Govt. If you are small form consortiums for your bids. In reality that means hook up with a top tier supplier who will add around 20% margin onto the value of your solution. Looking at that through a cynics eyes it is nothing more than an indirect bribe.

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