Deputy Director and Chief of Staff in the Office of the CTO in government, Alex Holmes, has outlined to buyers and suppliers that the increasingly popular SIAM tower model is no longer an acceptable approach to procurement for Whitehall departments.
The hard line taken by Holmes, outlined in a blog that was published at the end of last week, will come as a surprise to many – given that there are plenty of frameworks, both live and upcoming, that have adopted the approach.
For those unaware, SIAM tower models became popular under the current government, as buyers attempted to shift from away massive outsourcing contracts to a multi-sourced, in-house approach. Tower models provide a sort of a middle ground, whereby the design of the framework breaks up outsourcing contracts into smaller pieces.
For example, instead of outsourcing all of your IT to one service provider, a tower model would appoint a lead integrator, which would then manage a number of siloed, smaller outsourcing contracts with a number of other providers – all arranged by technology type e.g. desktops, networking, etc.
See this picture, taken from a Lockheed Martin presentation, for an example:
A number of government departments have procured using the approach, including DWP and HMRC. Using the government contract opportunities finder and typing in the search phrase 'SIAM tower model' brings up plenty of results too.
However, Holmes states in his blog that SIAM towers are not what the government wants and are not in line with Whitehall IT policy. He said:
A fundamental part of our guidance was about taking accountability for decisions about technology and digital services back into government. For large parts of the Civil Service that had so completely outsourced their IT, this meant a massive shift in approach, which takes time and can be scary.
This fear of change meant some organisations clung onto the concept of outsourcing, which they understood, but they also wanted to comply with the new policy of multi-sourcing IT provision – something that is recognised as best practice across the industry.
Unfortunately, the combination of these two forces created a hybrid model unique to government. The model is usually referred to as the Tower Model. It combines outsourcing with multi-sourcing but loses the benefits of either. The model has arisen because organisation have used a procurement-led solution in response to legacy outsourcing contracts ending. Rather than changing their approach and emphasis, they have ended up outsourcing their IT again, but in pieces.
It was still all about us, not about the needs of our users.
Organisations have adopted the Tower Model, believing they are following government policy and using best practice, but they are doing neither. I am now writing this post to be clear that the Tower Model is not condoned and not in line with Government policy. Government should use the best of what is already out there – not develop its own model.
Holmes points to a couple of other blog posts that provide guidance for buyers on how to purchase IT, which essentially urge teams to focus on user needs and buying commodity services and cloud-based applications where possible. He adds in his post that multi-sourcing – which is the desired approach – still requires an element of outsourcing, but only when it suits the user need.
For example, hosting will still likely be outsourced to utility suppliers, but Holmes adds that novel or unique things close to the user may be built in-house. And components should be able to be, and often will be, changed. He adds:
The Tower Model doesn’t work because it doesn’t fully consider what services are needed, or how they fit together and it uses a “one size fits all” methodology. It relies on procurement requirements to bundle together vertically-integrated outsourcing contracts called things like ‘network’ or ‘desktop’. It also usually outsources the service accountability, architecture and management to a third party.
Georgina O'Toole, director at TechMarketView, expressed her surprise at Holmes' post and said that whilst she was aware that the SIAM tower models approach would be phased out over the coming years, she had not seen any indication that a change in approach would happen imminently.
O'Toole says that the situation has becoming confusing for suppliers and she raises a number of very important questions that will be at the forefront of buyers' minds.
It is not clear how departments will make this transition (will existing procurements be stopped?). Holmes wants: 1) to bring accountability for decisions about technology and digital services back into government; 2) for Government to own accountability and architecture; and 3) to buy different things in different ways, e.g. commodity products like hosting outsourced to utility suppliers, but novel or unique things “close to the user” built in-house.
Personally, I am not sure the Tower model precludes any of these things. It is not a rigid model. One tower, e.g. for networking, can be procured via commodity frameworks, while another can be served by an in-house team. And there’s nothing to say that Government can’t retain control over decisions such as the technology architecture; that all depends on how you design the SIAM. So what will really be different, apart from the name?
Isn’t what this really advocates a further disaggregation of the ‘Towers’, which will inevitably lead to more complexity and an even tougher task integrating all the parts. It might have worked at smaller organisations such as the Cabinet Office and DCMS but can Government really handle that on a larger scale?
O'Toole's points are valid and she is absolutely right to question the governance challenges that face central government departments – very few have a decent track record at handling and managing contracts in an effective way. Further disaggregation will put the fear into many.
However, Holmes' stance is essential for the development of government-as-a-platform. My instinct when reading his post was that taking a hard line on towers is being done because there has been a realisation that if the government wants to get itself into a position where government-as-a-platform is workable, then they need to be expelled.
How would you build common goods and services based on open source, shared across government departments, if each department is tied into a complicated outsourcing agreement? It just doesn't seem feasible. By focusing outsourcing efforts on commodity services – such as hosting via the G-Cloud – and building more digital products in house, government-as-a-platform has some potential to get going.
Holmes noted in an exchange with me on Twitter that towers put IT into silos, which is a problem for government-as-a-platform:
@Derek_duPreez They're designed to be vertical silos, so yes.
— Alex Holmes (@alexholmes24) February 23, 2015
As O'Toole notes, what will be interesting is whether or not the government will go as far to say that futureprocurements using the tower approach are not allowed. If that's the case, a lot of procurement teams in Whitehall will need to have a long hard think about what they're going to do. And let's be honest, the Cabinet Office isn't afraid of using more stick than carrot.
Questions about governance are also fair – but just because government has a bad track record with this, doesn't mean we should avoid the topic and outsource. It means we need to up-skill and focus our attention on it.
Breaking down these outsourcing agreements are absolutely essential if government-as-a-platform is to have any chance of success.