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A response to the G-Cloud abstainer

By Denis | Published February 28, 2012

This post is a response to the article published on PublicTechnology.net – please see this link..
http://www.publictechnology.net/sector/central-gov/uk-tech-firm-why-we-declined-bid-g-cloud-work#comment-8197

The above response is very typical of “sour grapes” and protectionism from a company unable to openly compete in a commodity market. Contract terms, open pricing, definitions are all designed to give the same – identical in fact (to the greatest extent possible) to all providers, large and small. Even in this first version of G-Cloud they are adequate, hence there are plenty of companies (255) including tens of private Cloud providers, that have bid. They believe that the definitions are flexible enough to accommodate their services.

Having read the above letter in detail, I can say that it shows why G-Cloud is a great idea. It helps to weed out “special” companies that mistakenly believe that what they sell is unique. It is not. It never is in a commodity market. Even if it is a private cloud, special software or whatever, it is exactly the same as the next persons with comparable SLA. There is a service dimension, and of course price…

It is time to end “complicated IT” where it is not appropriate and end public sector rip-off. The debate between private / public clouds or pointless scare mongering will not stop or even slow this process down – there are already plenty of case studies showing savings of 80% on traditional providers (each one of who was apparently delivering cost reductions already).

Further, the observations on public Cloud are incorrect – simply put public cloud or larger providers, will give a true SLA much higher that “traditional hosting” companies have done in the past… Amazon, for example, offers 99.999% or 11 “9s” on storage. This is a true SLA (meaning it is not financial – their network really delivers that). in any case, the true uptime will depend on the WAN / Internet link, which is the weakest point, hence it worth considering SLA consistency across IT architecture.

On the longer term pricing – if you believe that you have a fantastic deal, great service and technology – you don’t need long term contracts to give you clients a discount – give it anyway – surely they will come back to you… If you wish to lock them into the contract in return for a “discount”, then your offer is not that good to start with. This is simple economics – the more competitive the market, then better the price and value. Lock-ins are designed to reduce competition – so there is your answer.

There are too many biased and incorrect points to mention in the response. it is clear that the author is mostly afraid of the flexibility and power G-Cloud provides to its clients, and wishes, at all costs, to avoid disclosing “special” prices to new clients, but most importantly to their existing ones. Well, the good news, like other Cloud, G-Cloud does not need individual companies support – it is the future, and will happen anyway…

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Role of Developers in Organisations

By Denis | Published December 2, 2011

As Cloud and especially SaaS and PaaS is quickly becoming reality, many internal IT pros working the public sector are asking themselves whether the skills and career paths are shifting. Is it required to have a development team to cater for “small” user requirements such as a DB here and there, or perhaps a complex spreadsheet. These requirements are what fed work to “small” dev teams across public bodies, and created huge potential revenues (if not controlled) for the outsourcers.
In fact, outsourcing muddies the water significantly… A real example from one of our clients: due to a long term outsourcing contract, where the provider would always charge high rates for any “End User Computing” developments, users simply used the tools at hand: namely MS Excel and Access for application development. After 7 years, one “mission critical” app was (is) run off a giant excel spreadsheet, linked to over 250 other excel spreadsheets, taking 15 minutes to load and having 2 FTEs maintaining it. The amount of access DBs is unknown, but between 24000 and 48000 have been discovered.
This will happen when the service is not provided to users, and becuase of this, many IT teams have a super user or a team helping out. This can be expensive, as even 2-3 people costs of 150K+ per year to the council.
Given the advent of PaaS and easy config options, users should have reduced requirements (if trained), however a level of support and small dev will still be required. For this reason, should the Development as a Service (or Coding / Config as a Service) or CaaS, become the norm?
I certainly hope so, and we are beginning to think in those terms and streamlining our internal teams to be able to deliver on a much more “small” dev mentality. This, in the end the vision behind the Agile methodology.

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So the G- cat is out of the bag!

By Denis | Published November 10, 2011

Earlier this month, central government released the first iteration of the G-Cloud Framework. It is being wildly discussed on the partner networks, with lots of cloud providers planning to bid. Indeed, according to a Linked in post by Mark Craddock, it attracted something like 80 suppliers on the first day.

This is hardly a surprise. Despite its short duration, this is the first opportunity for SMEs and disruptive suppliers (Google, AWS, Salesforce and many others) to sell to the government directly (or at least be part of the same crowd as traditional oligopolies). We have certainly been waiting for it for ages, and despite its duration, hope to use it lots.
This framework has already save a public sector organisation money. We are doing some cloud piloting at a large county council. Earlier in the year, they were planning to launch their own custom framework procurement in order to be able to buy the apps / services off the cloud. Now they don’t have to. The cost of getting a framework set up is 150K+, so there is a saving right there. I imagine they are not the last.
There are a couple of small niggles though. I suspect that LOT4 (Other Services) of the framework will have 90% of respondents in it, as it will catch now only the consultants and deployment houses, but also resellers. It would be good to separate “consulting” from technology services such as deployment, development or Cloud brokerage. From our perspective, we will be bidding on several lots, bringing SaaS (our own products + several partners that will not bid themselves), as well as a number of offerings in Lot 4. Indeed, it would be better if roles for resellers / brokers could be better defined at the start, as there are differing opinions about how to handle the current situation amongst larger cloud vendors.
I also have reservations about using the somewhat wide NIST definitions, or at least I hope that they will be narrowed. There is little to stop “fake” and rebranded cloud offerings to join the lots. Specifying modular pricing, or minimum / maximum contract commitment would be great. In fact, I had a conversation recently with one of the major vendors who complained that they cannot differentiate themselves enough, as a minimum contract length under the framework is 1 month, where as they could offer 1 hour… It would help to sort “new” utility and client centric models to rise head and shoulders above the traditional lock-in (contract and tech) model.
Having said the above, even in its current guise, this framework is fantastic! I can really see how it will evolve and grow over time, and how it can, if used properly, start to “de-departmentalise” government and bring value to citizens. Ultimately, the test will of course be the amount of business going through it, however I know that several of our clients are already planning to use it. No doubt this first iteration will have its challenges – but as, one of my recent tweets said (paraphrasing one of our major partner Public Sector business development managers) – It will only work for those progressive public sector teams, who have already decided to innovate. The ones that still need convincing, will find plenty of excuses to wait..
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Getting Closer to the Dream

By Denis | Published April 4, 2011

I have been a bit silly last week, and forgot to bring my laptop to work. Simply forgot that its on my desk in the study, just picked up an empty laptop bag and got in the car.

I then drove for over 1 hour to client site, and upon arrival, realised that I dont have my only tool for the job. Not smart.

However, what followed left a huge positive impression on me. The client is a large public sector organisation, with a number of devices kept in storage for quick provisioning.  Whilst it would take some time to set up a corporate account, actually provisioning a guest log-in on a blank laptop taken out of storage is quick. I could have always borrowed a laptop from someone who is not there…

I borrowed a machine from them, logged in as a guest (no access to corporate network, or anything). I then got onto the guest wi-fi connection, using the same login as I had for my normal machine.

Arcus is fully running on Google Apps (free edition for now, although we are about to upgrade).  With ad-hoc file storage in Drop Box, and a simple Wiki solution (MindTouch) for knowledge capture and structured document management. All other apps are SaaS.

So, from starting on a completely foreign laptop (only borrowing it for a day), I have installed Google Chrome (IE7 did not support Google Apps properly, but IE 8 would…) – which takes about  minute (download is 3.6 MB in size). That was it…

I could access the rest over the internet:

DropBox has a web client that allows you to see all your files – this only needs a login / password. I had access to an up-to-date copy of my entire hard drive (work files only). Structure, folders and everything else.

Google Apps gives me access to all shared documents and drives that are “work in progress”.  Also, e-mail, full address book, chat to everyone in our company, as well as domain control tools.

I also had full access to MindTouch (which I didn’t need that day). Xero, our accounting programme is SaaS. We use Zoho CRM to track engagements – happy to see me log in from any browser (not IE6). Both of our banks have full web access. Even HMRC (I had to briefly log in to change someone’s employment details) gives a full portal access.

So I was up and running within about 2 minutes. Not partially, but fully up to speed! I have never been part of a corporate environment where this was a reality. Sure – this state of events is always discussed, but how many people are still storing files on hard drive? How many still have PSTs from Outlook. What about local software? Here, I had my normal working environment. The only thing really missing, was my player history on Freecell.

I appreciate that not all applications are available online just yet – but this could be done through virtualisation in the short term. I appreciate that a different level of security will be required for some – but it would take little effort to introduce single sign on two factor authentication to all of the above. I also understand that people are nervous about this whole thing. But surely – for the sake of never having to worry about losing/forgetting you number 1 corporate tool (if no data is ever kept on it) and being able to be up and running in minutes on ANY internet connected device – isn’t it worth at least trying? This was a fantastic “real” pilot for me – and it worked!

 

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New Commercial Models Emerging from the Cloud (PART 2)

By Denis | Published February 23, 2011

Choosing the right solution for the right capability. Although standardisation undoubtedly brings benefits, easier interoperability of cloud systems means that, ultimately, the council can afford to have 3 different systems delivering the same capability to different user groups.

Example: in a borough council, the desktop productivity solution could be Google for 800 or so users, with about 600 on Microsoft (most of these will be on the cloud hosted version (Office 365, with others on traditional Office).

We ensure that this “horses for courses” approach is always considered when deciding on an appropriate solution.

Maximising the “Platform Advantage” Whilst Cloud computing does not allow deep software customisation, its architecture (Service Oriented Architecture (SOA)) allows very powerful configuration options – effectively this means that on more mature platforms, such as, for example, Force.com or Acumatica, it is possible to use the same platform to deliver many different capabilities to the same or different users (replacing entire groups of previously separate applications) – in turn “stretching” the same monthly licence fee to cover more capability – the overall effect is larger cost reductions.

Example: a large district council is currently piloting an ERP (Acumatica) system. It will be licensed for the organisation for £X per month. If only the finance system uses it the price per user is comparable to the existing solution. However, if HR and Customer services users will also migrate (which is the plan), the same £X pounds will be shared between all of them, replacing 4 major council systems and making a significant saving. Each team will “see” a completely different interface, specific to their use, but running on one platform.

Clearly, in some cases, maximising on one platform will deliver the biggest commercial benefits, while in others it will be easier, cheaper and better to provide deferent applications to support different capabilities. It remains to be seen which of the above two models will become more dominant as the market place matures.

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New Commercial models emerging from the Cloud

By Denis | Published November 25, 2010

As many people are no doubt aware, Cloud Computing is presenting a growing number of innovative commercial models.

The next 2 posts will explore some of the ones that we have deployed with out clients. (Stafford Beer’s VSM diagram, representing a human control model is for illustration purposes only…)

We can ensure that the maximum commercial benefits are achieved from a Cloud focused programme by implementing a number of measures designed to take advantage of the new type of delivery. For example:

Pay for what you consume. There are several key aspects of this model that must be in place in order to ensure continued cost reduction and efficiency from a cloud strategy. Firstly, business demand management has to be effectively implemented. If it is not, commodity procurement may effectively increase costs if business users do not realise that their actions increase costs immediately. Indeed, the old days of “poor” licence management are over – as majority of SaaS applications do not offer an enterprise licensing model. Thus an effective cost / demand control model as well as easy to use toolsets must be deployed in parallel.

Secondly, on demand pricing allows to significantly reduce business planning burden, thus a simple re-charge model  must be in place to allow business users to effectively estimate their ICT costs in an increasing maturing and on-demand commercial environment. This will become increasingly important as more products become available from the Cloud. As the council moves into becoming a service provider (if that is the goal) for other authorities (by leveraging the scalability and effectiveness of its Cloud based ICT), a recharge model will need to be deployed for passing costs onto its users. Arcus and our partner, Methods are currently working with a unitary authority on developing one such mechanism, which is unique in the market place

Benchmarking and Value Assurance. Similarly to the existing, non-Cloud applications, there is increasing competition in the rapidly maturing Cloud market place. Thus we offer a benchmarking and value assurance model, that monitors deployed solutions and examines credible alternatives. Whilst commercial discounts and negotiations are ineffective in the Cloud environment. Short commitments required by Cloud vendors (typically 1 – 12 months) allow for a potentially rapid migration if a cheaper solution becomes available. This is enabled by a robust Architecture model covered in the paragraph below.

Architecture designed to  avoid technology lock-in. In order to be able to maximise the long term value of Cloud computing (this is true all types of As a Service providers) and credible and effective architecture has to allow for easy migration between vendors and solution. This is also required to reduce the risk of immature vendors and a market consolidation that will no doubt take place over the coming years.

A solid methodology for application deployment and configuration that includes such technical configurations from the beginning is essential. In fact, we utilise this same model to significantly reduce the costs during pilot stages. This methodology is effective for shared business applications, as well as larger, more complex ERP packages. We have worked with an organisation that has migrated their entire CRM system 3 times in 4 weeks between 2 competing vendors to achieve the most effective price point. In each case, the cost was minimal, as an automated process was “designed in” for migrating data, accounts customisations and integrations between the packages.

I will cover off some more models in the next post. If you would like to hear more details on the above, please get in touch via our website or e-mail me.

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Outsourcing Debate part 2

By Denis | Published September 29, 2010

There seems to be a debate about the current drive for cost reduction forcing some of the councils to consider outsourcing. Sure: you are promised same or better for less, and you don’t have to worry your pretty little head about a thing. Your headcount drops too, and you may even get a capital injection – if not now, then perhaps in a few years time.

As you can imagine, its never that simple…

I have spent my career as the outsourcing (on the buy) side, with deals over 300M to manage and award.

Firstly the cost of proper selection and evaluation is high (several million), and has to be part of the business case, but almost never is. (Bucks county council recently cancelled a project with 4 of its districts – this was supposed to be a shared services outsource. After a year of work and several million spent internally, they cancelled it and it never happened). Will this cost be included in the cost of the next outsourcing project?

Secondly, in terms of lessons learnt: outsourcing will only work if:
1) councils really understand the cost drivers in everything they do, and what is needed
2) councils are prepared to standardise and accept a more “vanilla” approach to services
3) You are prepared to spend a bit more money to be able to truly focus on your core products and services

In my experience of Local Government, all of the factors are a firm NO. First one because if you do that, then you should be able to reduce costs yourself, if its cost reduction you are after. The second, Local Government always has a special way of doing things – that has been the major problem of shared services. On the surface the same, underneath, workflow, paper, people and process completely different. Some authorities perform over 2000 services – they simply cannot have “vanilla” because their residents aren’t. Third one, simple – age of austerity + so many of councils core services are delivered by the same people/systems/process who deliver internal services. Separating them is therefore difficult and counter productive.

The bottom line is: whilst a great idea, outsourcing is also very risky: its a catch 22 – in order to create a good contract you need to know the right SLAs, be able to protect your costs in the future, be able to manage demand, be able to understand cots (see above), and must find a vendor who is not much larger than you (or you will be ignored), wants to respond, will be reasonable and will not take you best people, and then sell them back to you for 2x the cost, whilst letting you deal with the costs of TUPE. If you can do all that, then you should be selling outsourcing, not buying it.

As a final “smack” consider this – more councils are trying at the moment to rip their existing outsourcing deals that to get new ones. I know of 5 that are doing it, or have just completed.

My opinion is that rather than outsource “your mess for less” (a total myth, no matter how much sharing you throw at it), councils should focus on improving the way they work internally. I am talking about efficiency, not cuts. Better systems, new working practices, resident service co-creation. There is a wealth of untapped potential there.

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Threat to ICT jobs

By Denis | Published September 14, 2010

Many more organisations in the local government are starting their move to at least hybrid provision of services. The path is pretty well etched now: ICT organisational restructuring -> Policy and Capability review (including data analysis and separation) -> TCO analysis -> Pilots / Migrations -> Integration -> Support and Management.

This post is focused on the first part – the organisational restructuring, and the inevitable questions regarding ICT jobs that this brings. At least 3 of our clients have recently gone through or are undertaking an major ICT organisational restructure in light of their choice of cloud as a strategic direction. This is less traumatic than it otherwise could have been, as they are required to make budget cuts anyway, and with labour being the biggest part of any budget, it is obvious choice to make. Nonetheless, it is a grave mistake to equal the simple reduction across the broad range of ICT skills, with the restructuring and change required by the cloud strategy.

Firstly, cloud strategy requires refocusing from Infrastructure Support and Delivery to Service:

Before 70% were keeping the lights on, 30% of managers / project managers were interacting with customers / users (helpdesk is included in the 70%). As a result, there was simply not enough bandwidth to be able to train the business lines or teach them how to use ICT more effectively, or indeed perform all of the projects they require.

Secondly, entirely new skills will be in demand for the cloud strategy:

  • Enterprise Architecture
  • Understanding of key Cloud technologies and platforms
  • Security and Compliance in infrastructure free environment
  • Application testing and analysis
  • Project Management – ALL staff will need to have the skills to manage projects in order to run the short term pilots.
  • Systems Integration and Data Migration
  • Business Analysis Skills to match requirements to solutions
  • Detailed Understanding of council business strategy and working
  • Business Transformation
  • Change Management
  • Procurement – Contract & supplier management
  • Service desk re-skilling to interface with suppliers with loose SLA

In summary, there are multiple additional requirements on the ICT organisation, to replace the ones that become redundant with the full move to the cloud. In a full cloud strategy, appropriate training and support have to be included in order to ensure that the skills are available in time. Existing ICT employees might appreciate that the transformation programme is a significant opportunity to learn the skill that will be in huge demand for years to come, instead of a technical skill (such as server management for example), that is becoming increasingly rare in the cloud world. A simple analogy is readily available from 30 years ago as the world has moved from mainframe to PC. ICT professionals who re-qualified to PC skill sets early, have enjoyed a huge boost to their career, even if it meant they have moved organisations. The move to a cloud skill set can be seen as strategic move in exactly the same way.

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Public Sector Entrepreneurship

By Denis | Published July 12, 2010

As everyone knows (and is almost tired of hearing), there are huge pressures on local government to cut costs.
ICT teams, traditionally seen as being on the fringes of the organisation, are typically the first port of call for such cutbacks. Slashing systems, support, outsourcing solutions, consulting, and most importantly people, is the expected course of action. At the same time, new challenges are pouring in: business teams want to do things differently, work from home perhaps, all data that should be transparent, now needs to be made public. New employees from the private sector (if there are any) expect to be able to work remotely, without having to request or pay for additional access licenses.

So there is this mis-match. Yes, do more with less, we have heard it all before. Yet this cloud does have a silver lining.

Some ICT managers that we work with, also see the potential. Specifically, what would happen if one particular council would get very good at providing ICT services (including cloud ones). They would save their own money, use the savings to up skill and develop their team, and perhaps become able to provide solutions for their neighbours? I know of at least two amongst our clients who are doing just that. In fact, they already are earning revenue from other councils for some services. Once they got going with pilots and got past the headlines to the details (of implementing cloud solutions), with a bit of knowledge transfer and coaching.

This effect is directly enabled by cloud technologies. Not only cloud solutons are configurable, but also infinitely scalable. If one council resolves security and data protection issues and has the know how (even in one particular application, such as ERP or e-mail) – they are in a strong position to tell others how to do it, or, as in this case, simply do it for them.

There are clear advantages if you become one of those “cloud ICT best practice hubs”. Your ICT organisation grows – as do its skill sets and rewards. You become the beacon of shared services, least likely to suffer cuts. You have the trust and leeway of being able to try newer, more risky solutions, prove them, adapt them, and generate revenue from them. In short, your organisation becomes a public sector enterpreneur.

Give the current state of affairs, organisations that have convinced their politicians that this is the way to go, are likely to be the main winners of the age of austerity. I am proud to say that I know of at least two who are doing this – right now, supported by their strategy (which Arcus helped build), and pilots, projects that we help them run.

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Local Government Moving to the Cloud

By Denis | Published June 10, 2010

As farfetched a vision this may seem, the change in attitude towards Cloud in local government over the last several months is astounding. Just 12 months ago, when we started going around local authorities offering free consulting on how to move their services to the emerging industry, we frequently were met with blank stares, or at best nods and grumbles about security problems and the challenges. A frequent questions was: What’s cloud?

Even 3 months ago, AT A CLOUD conference, I have been surprised by the level of negativity towards the cloud. Many saw it as a threat, to their staff numbers, their department, or even their own jobs.

Vendors were met with the lack of trust, and out of 90 odd people, two have followed up, despite the fact that were offering FREE work. Clearly, there legitimate concerns, and watch out fo future blog posts on those.

The election result it seems, is changing the negative outlook. As more cuts get demanded, more ICT managers get inventive. Before you used to see option papers consisting of 2 options:

  1. based entirely on one dominating software vendor, with the intro and the pros / cons written by their re-seller (you know stuff like on ” Benefits side”, “this is the best package, world leading, offers 70% saving in productivity etc…, and on the “Risks” side something like – well you risk that you workers will work too hard with our product, sometimes our product has been accused of being too good etc…)
  2. Open source alternative, which contained more risks than benefits, had pages about how it’s a good idea, but could never work here, etc…

Now, we are starting to see a serious push towards other options, and more importantly, a serious examination of underlying demand. Don’t get me wrong, a full, comprehensive, market leading bells and whistles productivity package might be great if you use it, but in Local Government, barely 1% of users are even aware of the features it offers, let alone utilise them. These kinds on commodity applications are 30-40% of S/W budgets, and it seems the austerity measures are stimulating people to go back to the business and ask the “feature” questions: do you need this to be able to solve “Binominal Theorem” equations in your word document? have you ever used automatic “Turabian style” referencing features?

Then there is communications and collaboration. There is even wider choice here. We now ran 6 e-mail pilot projects over as many months in local authorities. Only 2 have not involved new vendors. The lure of having bullet proof AV, back up and other options are overshadowing concerns about the routing and firewall changes.

Further, the ERP (non-CRM) systems get a serious look too. We recently had a demand signal about someone wanting to trial and pilot an ERP solution spanning HR, finance and payment systems. Fantastic news!

All of this movement is building to the attitude I believe is required in today’s climate: look at your needs in terms of capability you want, not applications (We can help you do that). Look at your total costs of ownership (include the soft features in this – we can help you do that and compare Cloud / in-house on like for like basis). But most importantly – adopt the key slogan of innovation: Ask for forgiveness, not permission.

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