Back in the last century when it was widely believed that computers could do everything, the government of the day would embark on projects such as the holes in the road project.

It was a simple idea. Build a database of all scheduled utility works that involved digging holes in the road. Then each time a water company wanted to close off a road to upgrade a water pipe, the gas, telephone, electricity people and the local council could schedule their works to take place at the same time.

It was the kind of project that computers were meant for. It was also the kind of project beloved of suppliers with lots of expensive consultancy up front and no actual systems to deliver. It never happened. Competing utility companies refused to share information and it became known as the pouring money into the holes in the road project. It was scrapped quietly within a couple of years and £30 million later.

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The premise was that money could be saved by avoiding duplication of effort. Adding some structure to the information would lead to controllable and rational behaviour. This sounds a little bit like the government’s shared services mantra.

Another new dawn
Thankfully all that feasibility study nonsense is over. From now on we’re told, public sector IT will be based on systems that are standardised and services that are shared across central and local departments and agencies. But are shared services delivering what they ought? Or are government departments being side-tracked into self promotion of their own chosen shared services in competition with other departments? Shouldn’t public sector CIOs be focusing on putting the IT and other systems in place that do the job in hand, which is delivering better services to the public, not selling their services to each other?

Proponents say that shared services are about fulfilling the government transformation agenda through de-duplication of infrastructure and processes. The system works by first building a framework, letting departments, agencies and councils choose which parts of it they wish to use and then serving them with repeatable processes. The idea of shared services for transformation is anathema to some people. “Government transformation is a mirage that will have to be abandoned,” believes Ross Anderson of the Cambridge Computer Laboratory, an outspoken critic. But whether Professor Andersen is correct or not is certainly not going to stop them trying.

The issue appears to be the number of shared services schemes out there and also what exactly constitutes a shared service. Two government departments using one water cooler could be an example of a shared service.

The shared services agenda is also a competitive marketplace agenda. The Department for Work and Pensions (DWP) is currently assessing its own shared services efforts because it wants to sell them on to other parts of government. David Myers, director of shared services at the Home Office, is on the record as saying that: “My team’s first goal is to share services within the Home Office, and over the next two years we will turn our platform into a fully-fledged business for other parts of government.” The shared services Myers is responsible for includes information technology.

And flex and stretch One of the most high-profile shared service attempts is Project Flex. Flex is a deal struck between the Cabinet Office (CO) and the Fujitsu government business division, after it put its ICT Service Acquisition and Change project out to tender in 2006. The CO also has Pygmalion, which is a shared services framework. In legal speak the CO provides overall ‘client side’ framework management while Fujitsu delivers the service. In effect, the CO acts as a promoter for Flex to other government departments as well as being a user of the framework itself. What Flex covers (see box) is a framework for supply of desktop hardware and software including thin and fat client devices, laptop computers, service desk provision, network management, security, disaster recovery and flexible working abilities. In essence it is an attempt to find repeatable patterns for desktop technology strategies.

Although complicated in detail (Flex involves legal, HR, IT and frontline services departments) it basically means that the CO has set up a framework deal with Fujitsu under which the vendor sells its services (see box) to the public sector and it promises to hit certain service levels and costs. A Flex engagement is a two-phased project. Fujitsu takes over the running of existing systems then after a set time it moves the customer over to the Flex framework, delivering the core services and any additional options agreed with the customer.

Those signed up so far include the CO itself whose systems move to the second phase in June, the Department of Innovation Universities & Skills (DIUS) and the Office of National Statistics (ONS). For each new customer committing to Flex, the overall cost rises, but the benefits of the economies of scale are shared. Following the initial flurry of activity new signings are awaited, although dialogue between 60 to 70 departments, agencies, police forces and local authorities is ongoing. The reason for the delay is that each new engagement is complicated. All users are different and are at various stages in their current desktop strategy. The initial engagement phase is one of six or seven consultancy meetings over three to four months. But that’s not unusual, says Fujitsu’s head of shared services, David Tryon, who adds: ‘if we can‘t find any benefits after that, they‘re not there.”

If nothing else this explains why DIUS was able to sign up its permanent secretary Ian Watmore within five weeks, who as government IT head at the CO at the time the Flex contract was being awarded, is a man who should know all the finer details. At the time Watmore, a former MD of Accenture, said: “I want DIUS to live up to its name in being innovative and I am delighted to be at the forefront of government best practice in a shared IT solution. Following the recent formation of DIUS, a key priority for the new organisation has been to select an IT service that would not only provide an existing, class-leading standardised IT facility, but one that would also provide a low risk transition to a shared service approach in order to make considerable cost savings and free up resources for frontline services.”

At the ONS it was not so straightforward, with controversy surrounding the shifting of personnel to Fujitsu and issues with its back office function, which naturally, is data intense, making it an on-off deal which has only recently been confirmed.

Tryon believes that Flex is being watched closely in the marketplace and is causing some concern among his competitors who fear being frozen out. He says that he gets lots of approaches from software vendors who want to be part of the deal. He also says that the CO is very excited about the whole thing, and that for the first time in his career he is pushing at open doors.

Kevin Doherty is the CO’s relationship manager for Flex. By his own admission his job is to proselytise Flex and get others to do so once they start using the framework. He says that shared services projects such as Flex actually offer greater transparency and put vendors under the spotlight to deliver. “It doesn’t make life easier for suppliers. They are under pressure to deliver. It is as big a change for them as it is for the customers. They need to show ROI over short periods of time. There is a growing body of knowledge in the service and there are softer benefits such as collaboration and sharing of experiences.”

However, none of this impresses Professor Anderson. He says: “The CO shouldn’t be in the business of setting IT strategies for other departments, and it shouldn’t be selling computer systems on behalf of IT companies. Government is not about subsidising the IT industry, which it has been doing since Blair decided to spendall that money on the NHS system back in 2002. The public sector has been getting it wrong for years and the government‘s record on IT delivery is miserable. We’ve got to the stage where IT spending in the public sector exceeds that of the private sector. [It] has subsidised the IT industry and kept it in profit following the collapse at the end of the dot com boom.”

Professor Anderson dismisses the claims that shared services and projects such as Flex will save money and divert resources to frontline services. “Don’t listen to their boasts,” he says. “That’s not what actually happens. Unfortunately money gets diverted to the pockets of rich, greedy computer companies.”

He believes that the UK’s whole approach to IT is misguided and says we should look to continental Europe where piece-by-piece evolutionary progress is preferred to big-ticket projects. He says these deliver better services and accountability.

“Voters don’t care about computers or civil servants in Whitehall who want to expand their power base and make their departments bigger, or politicians who want to use the internet to make themselves look modern. When this lot get thrown out by the voters, the NHS database, ID cards and the children’s database will all be scrapped.”

Health check: Derwent Shared Services

“The NHS is constantly addressing change,” comments Nicola Smith, assistant director of finance, workforce and performance at Derwent Shared Services – an NHS organisation formed in 2002. “With constant pressure on budgets it’s important to implement systems that can adapt easily without incurring huge consultancy and support costs.”

The increasing growth in shared service clients meant that Derwent needed flexibility to meet the demands of its various Primary Care Trust customers. It was already using a system from Agresso to look after the operations of its own organisation, and seven other NHS clients in Derbyshire. In Northampton, another shared service organisation was using Agresso to look after, among other clients, Leicestershire, Northamptonshire & Rutland Strategic Health Authority.

The data from Northampton was migrated to the small team at Derwent and within a couple of weeks the newly formed East Midlands Strategic Health Authority was up and running with all the historical data in place.

“This was achieved without a single day of consultancy assistance from Agresso,” says Smith. “We had a team of three people who made the changes and prepared the way for the merger of eight PCTs into two which also went smoothly.”

Smith adds that in terms of cutting back office costs the ability to manage and change systems internally as well as bolt-on additional customers without having to re-deploy a system is essential if NHS organisations are to quickly realise the benefit of shared services.

“Managing organisational change in-house has helped us to keep and expand our client base while also delivering value for money,” says Smith, who adds that cost-benefits are passed onto the PCTs which can then divert this resource to frontline services.
“We have been able to cope with periods of intense change with relative ease and in an environment where change is an ongoing fact of life.”

Whether one believes in the power of IT to change government services for the better or not, there is a burgeoning competitive marketplace being built around shared services and suppliers and departments are working closer than ever before. As for project Flex, it has yet to tested in a major government department. Only then will we know if the framework is robust and flexible enough to stand up to the tasks assigned to it or if, like so many other public sector IT agreements before, it disappears down a giant pot hole.