Kelly’s eye on not bankrolling the IT sales guy’s BMW

SUMMARY:

“Some [suppliers] get it, some of them don’t. But our job is not to support sales of BMWs in the M3 corridor.” Tough talking from the UK’s Chief Operating Officer as the journey to digital reform gets underway.

Stephen+Kelly+no+jacketI’ve been crossing paths with Stephen Kelly for more years now than either of us would care to remember I suspect.

We first met when he was one of Oracle’s highest profile sales people to the public sector and I was Oracle watcher at Computing magazine.

Then over the years we  met in various guises on both sides of the Atlantic. Most notably on Kelly’s part as CEO of Chordiant and latterly Micro Focus.

But last week was the first chance I’d had to sit down alone with him in his current role as Chief Operating Officer  (COO) for the UK government, a role in which according to his bio on GOV.UK he:

leads the efficiency and reform agenda, improving the way government operates, making efficiency savings and supporting UK growth.

The Chief Operating Officer works closely with the Minister for the Cabinet Office and the Chief Secretary to the Treasury to make sure there is a co-ordinated approach to tackling waste and improving accountability across all government departments.

It’s a massive job and he’s the first person to fill the role, created by the current Conservative-Liberal Democrat administration, so it’s his to shape as he sees fit.

But one of his primary functions is to push forward reform of the way government procures services – with IT right on the front line of the reform battlefield:

“We started in a bad place in 2010. We were spending £6 billion a year on IT and we thought that the quality of the IT provision was not best in class. I’ve got my personal example I use of the time it took my computer to boot up – which was 7 minutes!

“Where we are now is we have got a situation where major contracts are coming up for renewal and we are engaging with the strategic suppliers to government to be shown the strategy for the future.

“As part of the whole civil service reform agenda we aim to provide the most productive tools, including technology, to enable people to do their jobs.”

He adds:

“The goal is to enable high quality procurement quickly and to reduce the cost to industry. We’ve still got a long way to go on that. If you talk to industry, they would say that we need to to do a better job and be a smarter and more intelligent procurer.

“Industry has recognised the change of tone.”

Sticks and carrots

In fact, some of the government IT establishment have spent a large part of the past couple of year grumbling to themselves about how things aren’t being done the way they used to be. Others have been more open in the criticism.

Earlier this year, Derek Du Preez at ComputerWorld UK flagged up comments by CGI’s new man in Europe who claimed:

“You’ll be aware that the government is making life difficult for IT vendors. I find this adversarial approach quite unhealthy.”

Last month Kelly himself conceded to the Public Accounts Committee of the House of Commons that in the early days of reform there had been more stick than carrot bandied around:

“In the first phase, some blunt instruments were applied to reset the marketplace, and that was necessary. We are now at a stage at which we need to be more sophisticated.”

I wondered how this shift in supplier relationship management emphasis for big ticket providers would be executed in practice, particularly given the UK government’s emphasis on providing more opportunities for Small and Medium Enterprises (SME) which again has rung alarm bells in some corners of the ‘traditional’ supplier market.

Kelly seems keen not to scare the horses too much here. Government does want to make life easier to SMEs, but it’s not a case of ‘new best friend’ taking over from ‘old best friend’.

“There is an important message here that is not just about the SMEs. While we want more SMEs to engage with us, we do also want to encourage big businesses to work with government.

“Phase one of the reforming probably was a bit shock and awe in terms of rebalancing the relationship between us and the suppliers.

“As a customer, we hadn’t had good value. There had been 15 years of the civil service de-skilling itself as we rushed towards outsourcing as a first response. We didn’t appreciate then that you don’t transfer risk.

“We had to reskill, we had to bring people into the government centre with experience who could change that.”

Outside in

p7-kelly-675pxThat has meant bringing in people from the private sector and turning them into public sector champions – much indeed as Minister for the Cabinet Office Francis Maude did when he appointed Kelly.

Kelly explains:

“The Chief Procurement Office Bill Crothers has been hiring some senior people from outside government as Crown Representatives.

“These are people who have domain expertise around software and telecoms and business process outsourcing. Their expertise enables us to work with the IT industry to reframe the outcomes we’re looking to achieve.

“We’re now moving into phase two. So we’re maybe 3 years into a 7 to 10 year programme that is all about us becoming a smarter and more intelligent customer.

“We will have intelligent people on our side of the table so that we can engage in much more mature partnership-oriented conversations about stuff that will deliver what it says on the tin.

“We want a vibrant, competitive marketplace in which we play a very active role as customer.”

Collision course

A lot of the reforming focus has appeared to fall to date on the big systems integrators and services houses, an inevitable effect of the wholesale outsourcing of public sector service delivery by governments of all persuasions for the past couple of decades

But there’s another demographic that’s about to get a wake-up call. Kelly declares:

“As a customer we are on a collision course with proprietary technology vendors.”

No names are mentioned -use your imagination! – but Kelly goes one:

“Proprietary vendors are the last bastion of behaviours that we don’t want to support. From a customer point of view, they’re still enforcing very aggressive sales tactics.

“Proprietary technology vendors like pushing the deep integrated stack of technology, a stack which from a users point of view can see us use less than 5% of the total functionality.

“Part of our strategy is all about open standards and a move away from the proprietary-closed world.”

Strong words from an Oracle alumnus of the class of the 1990s, but Kelly is clearly sincere when he alludes to this front opening up even if it’s an uncomfortable message for the sales directors of tech firms in the Reading area. He adds:

“Some of them get it, some of them don’t.

“But our job is not to support sales of BMWs in the M3 corridor.”

But then there’s Universal Credit…

All of this good and well and there are clearly successes that can be ticked off on what is still a long road to travel as discussed with Kelly’s boss Maude last week.

But while Kelly can point to examples such as G-Cloud, the Digital Services Framework and the award-winning GOV.UK single government website, critics can cite the likes of the Universal Credit IT debacle as evidence that bad habits die hard.

Kelly admits:

“It will take time. GOV.UK is a shining star – 80% cost reduction, millions of hits per day.

“But there will be stuff that started in the past or in mid-flight or where there is just resistance to the new way of doing. Government is federated so departments have their own responsibility.

“We did what we said we would relative to Universal Credit. We helped hire a Chief Digital Officer into the Department for Work and Pensions. We developed functional code that as been user reviewed. We’ve handed over the code and helped with the transition plan.”

Bringing CDOs into all the big citizen-facing central government departments is something that we’ll see more of, with the public sector drawing on private sector best practice:

“Many of them will come from the private sector. What success will look like is departments having greater levels of capability internally to accelerate the digital drive.

“If you look at any business service, we are still behind the curve on digital. Take car insurance – up to 80% of renewals are done digitally online. We’ve got a lot of catching up to do.”

Verdict

Kelly is a prime example of the idea of bringing private sector skills and experience into a public sector market that had grown fat, complacent and lazy.

Along with Cabinet Office Minister Francis Maude and Chief Technology Officer Liam Maxwell, Kelly makes up the Father, Son and Holy Ghost trinity driving reform through the UK public sector – and beyond? Kelly talks openly of visits from representatives of other governments keen to see at first hand the changes being wrought in the UK.

As we noted last week when we sat down with Maude himself this is a very long road to travel. At some point Maude will depart – he’s a politician so he’ll be moved on the Prime Minister or by the electorate.

The challenge for the ‘Trinity’ is to ensure that the appetite for reform is so hardwired that it will continue as a ‘business as usual’ action.

As the big contracts with the IT establishment begin to wind down next year and into 2015, the really hard work could just be starting.