IDC’s report suggests IT budgets will remain flat in 2012

According to a new report from public sector ICT leadership group Socitm’s public sector IT managers are exerting even more influence as local public services turn to technology to bring service delivery costs down and cope with dramatically reduced budgets.

IT Trends 2011/12, published last week also highlights growing emphasis on strategic, rather than utility use of IT, amid the largest reduction in IT staff numbers across the public sector in 25 years.

Socitm’s report finds that councils expect social media to play an increasingly important role in communicating with customers, alongside growth in the use of websites, email and e-forms.

The study also finds that mobile computing, home working and virtualisation have joined GIS, content management and e-forms as the top five technologies seen as delivering efficiency in participating organisations, while business process re-engineering (BPR), channel switching, and joint procurement remain the top three strategies for efficiency. 

Socitm President Glyn Evans believes the influence of ICT will continue to rise as more services are directly delivered through lower cost ICT-assisted channels. However, due to the greater dependence on ICT, organisations will have to ensure processes and procedures are kept up to date, and greater attention is paid to accuracy, provenance and security of information.

Cardiff Council implements procurement transformation

A major restructure of the procurement department at Cardiff Council is under way, with current purchasers applying for new positions in the function. 

In order to improve procurement and commissioning operations and achieve targeted savings of £18.5 million by 2015, Cardiff Council is expanding the function from 20 to 33 buyers and implementing category management.

The improved function will have three category teams, and will be made up of senior category managers, category managers, senior category specialists and category specialists.

Steven Robinson, head of commissioning and procurement, admits this transformation it’s not just about centralising activities but changing the way the council works in order to be more strategic.

The local authority has been working with the University of Glamorgan to implement the transformation.

Robinson is also developing guidance for all council staff in order to raise the profile of procurement and improve the internal business understanding of what commissioning is.

By integrating category management with commissioning, and understanding the needs of Cardiff communities to better inform category management, Robinson believes the team can more effectively influence spending decisions and thus reduce third party spending.

Procurement and commissioning is one of seven priorities announced by Cardiff Council.

Havering London borough’s £3m back office transformation aims to end paper chase

Through the implementation of new IT systems and business processes, Havering London borough aims to save £15M over the next five years.

Before the back office transformation project, which took place last year, Havering council’s services were mostly paper driven.

Numerous copies of documents and a complex reporting system coupled with the council’s administrative staff having to do excessive amounts of paper chasing, led the authority to re-think its entire administrative processes.

As in any other council, budget is one of the main constraints, especially when it comes to invest in such transformation projects.

The project was launched in April 2011 and this initial stage of the transformation project was completed in 10 months. It included the installation of finance, payroll, HR and procurement services, with the council migrating to Oracle's suite of business applications. The second phase of the project, to be completed by April 2012, includes the implementation of Oracle's performance management, learning management, iRecruitment and iSupplier tools.

Havering council’s group director of finance and commerce, Andrew Blake-Herbert recognises that although the previous systems were adequate, a more digitised environment will help streamline council processes and give managers tools to help them run their services better as well.

The council expects to save £15m over the next five years through the project, with estimated cost savings of £1.5m annually following the first phase of the process. This will rise to £2.5m once the whole project is completed in April 2012.

Havering is also open to sharing its services in the future if other public sector authorities show an interest. Blake-Herbert says that as back office functions often involve transactional services, there is a clear opportunity to provide such services in a common way. It already collaborates with other London authorities on procurement, which often involves London-wide contracts.

Shared services in the public sector success

2011 may have been the tipping point year for public sector shared services. We highlight three of the many were the factor contributing for this.

The shared services map published by the Local Government Association shows that 219 councils are now engaged in 143 partnerships. From these, 80% are up and running and already represent savings of over £80m.

Shared services can be complex to develop and deliver. Building public sector shared service skills and knowledge is very important to the success, and rapid delivery, of partnership projects. 2011 was also the year where “shared service project management” became a profession.

Although shared services’ prosperity was feared to be hold back by the announcement of VAT exemption for shared services, the release of partnership growth grants for shared services projects was a crucial factor supporting shared services expansion.

At Zipporah, we are proud of the role we played in 2011 on supporting the success and growth of this new reality within the public sector.

Zipporah’s international expansion continues in Australia

Following our first international deal in Ireland and our determined decision to face the recession head on and take advantage of the opportunities it presented, Zipporah has secured a new contract in Australia!

We have actively pursued business in Australia for 4 years, gradually making contacts with the help of the Welsh Government, leading to invitations to speak at conferences and meetings with individual councils. Our hard work paid off when we were awarded a contract with a council north of Sydney. Zipporah’s system with its open integration and one system providing for many requirements proved to be just what they needed and will lead to other opportunities.

Success in Australia has opened up the international market for Zipporah and we have our eye on other Commonwealth countries including New Zealand, South Africa and Canada.

National Audit Office warns our 'National IT Plan' needs bolstering by Cabinet Office

The National Audit Office likes the early progress being made by the government in implementing its ICT Strategy - but has identified areas where progress has not kept pace with the Coalition’s ambitions.

According to a six month review of progress published in December, NAO praises Cabinet Office for its new pragmatic and collaborative approach and has largely met the first round of deadlines for taking action.

It also notes that new arrangements are in place to implement the Strategy and the leadership, governance and mechanisms for making sure Departments comply with the Strategy are different from those in the past and have the potential to secubig re benefits.

It also praises the fact thirty actions from the Strategy have been rationalized into 19 delivery areas, resulting in "a more consistent plan" about how the new approaches and standards and the common ICT infrastructure will be taken forward.

However, NAO concerns lay on the fact that there are a number of areas where not enough progress has been made: 

• The Cabinet Office has not yet developed a system for measuring the extent to which the Strategy is resulting in sustained change
• Government has also been managing the resources to implement the Strategy informally up to now and, without a clear resource plan, gaps may start to hinder progress
• Gaps in ICT skills in the public sector also remain a serious challenge. 

ICT is going to play an increasingly important role in changing how government works and how services are provided and the public spending watchdog recognised that the ICT Strategy is in its early days and initial signs are good.

The Strategy is intended to tackle systemic problems in government ICT projects which in the past have tended to be too big, lengthy, risky and complex. Its broad aim: to reduce waste and project failure, create a common ICT infrastructure for government and use ICT to change how public services are delivered. 

IT spending forecasts

According to forecasts by research firm Gartner, worldwide IT spending is to hit $3.8tn (£2.4tn) in 2012, a 3.7 per cent increase on 2011.

The impact of Thailand's floods on hard disk drive (HDD) production, uncertainty surrounding global economic growth and the on-going eurozone crisis have meant that the previous forecast of 4.6 per cent growth in 2012 was revised downwards.

However, during 2011 there was stronger growth (6.9 per cent) than the research firm expected (5.1 per cent).

Detailing the extent of the reduction in production of Thailand's HDD discs, Robert Gordon, vice president of Gartner, said: "Thailand has long been a major hub for hard-drive manufacturing, both for finished goods and components.

Gartner is advising businesses to be cautious in the short-term given the uncertain economic climate, and to bear in mind and prepare for all the potential fallout scenarios from the eurozone crisis.

Despite these HDD and eurozone woes, there should be healthy growth in IT markets within emerging economies. Even though there is a slowdown in the US and EU, in the emerging markets in Asia, Latin America and Middle East there is quite a strong economic growth of 5% - 8%.

It is expected that certain sectors will see stronger growth due to strategic investments, such as telecoms equipment and software enterprise.

In the software enterprise sector in particular, as a resilient sector, a lot of strategic investment is expected with companies buying and updating infrastructure. The business model of this sector also means that spending on a subscription basis is ongoing (as opposed to a one-off purchase)

A growing trend towards more agile business practices will play a key role in the increase in IT spending.

What's around the corner for IT in 2012?

The global economy is creating an atmosphere of uncertainty in the IT sector, but what can we expect in 2012?

IT decision makers will always be influenced by variables such as the economic climate and security threats. However, the evolution of cloud computing, the Variables such as the economic backdrop and security threats will, as always, influence IT decision makers. Nevertheless, the evolution of cloud computing, an updated version of the Internet Protocol (moving from IPv4 networking to IPv6) as well as the introduction of Windows 8 will be worth watching over the next 12 months.

Public Sector will be one of the key industries, which is battling with massive budget cuts, and  financial services, which faces trouble in the form of the Euro crisis.

Economy

There will be another year of uncertainty and, according Deloitte, Chief Information Officers (CIO)  plans could be put on hold as many Chief Executive Officers (CFO) expect the UK to re-enter recession. This is likely to affect IT budgets alongside side the pressure to do more for less.

Delloite’s research also expects new IT investments to suffer as CFOs consider this a bad time to take extra risks in terms of spending

Securing the business

Security is always a challenge as new IT trends throw up new vulnerabilities. Many in the industry agree that new mobile threats are likely to be among the most pressing for businesses in the coming year.

This is due to the range of vulnerabilities that affect increasingly popular mobile platforms such as smartphones and tablets, and range from the high risk of data loss and the availability of unsecure applications from app stores, to the growing threat from mobile malware

Meanwhile, security threats that emerged last year such as those related to consumer cloud computing services are likely to continue to be pressing issues. With business take-up of the cloud expected to increase, these threats will grow.

New cloud debate

Research from Computer Weekly's parent TechTarget found that 24% of businesses plan to grow their expenditure for cloud services over the next year.

Most IT leaders now recognise that the cloud is an evolution, not a revolution, in technology delivery. But they are now learning how the cloud will radically redefine the relationship with their key suppliers. CIOs have bought into the concept of pay-as-you-go pricing, and the idea that cloud providers take ownership of IT risk elements such as availability and scalability.

This will reshape the relationship between IT suppliers and their customers, and provide opportunities for smaller, innovative firms that are not tied down by outdated software licensing models.

Outsourcing consolidation

As cloud adoption accelerates the supplier landscape will change. Traditional IT service providers, if they have not already, will have to re-engineer their service offerings. At the same time they will have to radically change how they charge customers. This combination could fuel consolidation in the sector as suppliers acquire the skills and technology to give them a foothold in the cloud.

Sectors to watch

Two of the biggest areas in terms of IT spending are financial services and public sector.

The public sector, in particular, will be looking closer at the cloud; it will switch to a "digital by default" model for public services

The significance of the cloud in government is set to grow in 2012 particularly after the publication of the G-Cloud framework in February, which will enable the public sector to buy from a list of accredited suppliers.

Meanwhile the digital-by-default agenda led by the newly-created Government Digital Service team will gather pace, as departments seek the most cost-effective means of delivering services in an environment of fiscal restraint. This year more services are set to go online, with Cabinet Office minister Francis Maude having stated the government’s approach will be "online-only" where possible. 

CIOs will have to yet again take a leading role in making technology do more for less. But at least, with the latest technologies utilising the cloud, they will have fresh options to consider.