Socitm Spring Seminar

1
Socitm Spring Seminar

• Kable
• Public sector information and research services
• Paul Smith
• Research director

2
Agenda

• The future of outsourcing
• The scale today
• The scale in local government
• The changing shape and style of IT
• The impact on you

3
Outsourcing the big picture
4
Outsourcing local government

• Outsourcing in local government 2004/05 - 7bn
  spend
• Social services - 4.3bn
• Central services - 0.5bn
• Environmental planning services - 1.9bn
• Culture and leisure services 0.4bn
• Central services UK total spend 3.7bn
• Outsourcing is some 14 of this spend so plenty
  of room for growth
• Type of outsourcing (annual spend for 2003/04)
  (m)
• BPO 365.8
• ICT 144.3
• The major areas covered in business process
  outsourcing in local government are
• Finance Revenues and benefits E-government or
  frontline services (eg running customer contact
  centres, call centres etc) HR and payroll and
  Pensions.

5
IT/BPO outsourcing local government
6
IT BPO BTO the big trends

• IT outsourcing
• Business process outsourcing
• Business transformation outsourcing
• Centralisation
• Improved buying power
• One system not many
• Centralisation does not mean the absence of
  localisation
• More means more attractive to suppliers
• Major trend is to outsource customer access
  services
• And early signs of a swing back towards IT
  outsourcing ... er... BTO

7
After e-government

• Centralisation agenda
• Defence Information Infrastructure
• One tax department
• NpfIT (Connecting for Health) and NHS direct
• One-stop shops
• eGovernment Unit priorities
• Focusing government on the needs of citizens not
  provider
• ID and authentication
• Self-service with government
• Intermediaries
• Supporting the front line
• Back office efficiency
• National Critical Infrastructure plus
• CIO professionalism

8
The challenge for you a double whammy

• The e-transformation agenda
• Can your teams deliver a service that leads the
  use of technology?
• The citizen agenda
• Do you and your team really understand what
  delivering customer-centric services means
• Not your internal customers but citizens and
  businesses (and other parts of government)
• And not forgetting....
• Gershon
• More IT - to deliver efficiencies
• But IT is a cost centre
• More scrutiny more focus on return on
  investment better business cases

9
The challenge for you a double whammy

• Political struggles
• Who is leading IT? Business units? Or new units
  (customer service centres)
• The role of the CIO
• Move from operation to helping business managers
  identify and use technology
• IT's contribution to overall performance
• Kable research indicates a broad correlation
  between good IT and a good CPA rating
• BUT there are some indicators that an outsourced
  revenues and benefits service tends to be
  related to a below average CPA rating
• Continuing as is is not an option
• We will meet the 100 target
• There is no sign of any central funding for
  investment beyond this target
• Citizen expectations will continue to rise
• Politicians will have to make the tough decisions
  about what is efficiency

10
Summary

• IT has to move from providing a service to
  enabling the transformation
• Customer means citizen or business (or other
  parts of government) NOT your internal customer
• In house IT faces a real challenge from
  transformational service offerings
• Skills
• Budgets/funding
• Exposure to broader issues
• Public sector IT faces a real credibility test
• Where is the benefit to citizens of the 14bn
  spent annually on IT?
• Expect more scrutiny
• Expect more disasters
• Expect a backlash against the identity card
• Expect best value to focus increasingly on
  challenge
• After e-government welcome to e-government
• Enabled government, efficient government,
  excellent government

11
Come to GCExpoEarl's Court, London, June 21/22
2005www.gcexpo.com

• Kable
• For a free copy of our report on public sector
  outsourcing