Government Technology

The UK public sector is forecast to spend a total of £19.4bn on ICT in 2009/2010. This represents around 3 per cent of planned spend for every public sector organisation or around £3,300 per employee.
    
This pays for the ICT services provided by both internal ICT departments and external service providers; it covers major ICT capital projects tasked with developing new systems and services; and it includes a variety of consultancy and specialist advisory services.
    
Strategy
Taken individually, each of these costs can be managed to ensure value for money. A competitive procurement process will help to achieve the most economical price; managing suppliers and projects effectively will ensure they deliver on their promises; monitoring quality of service and customer satisfaction will allow service issues to be addressed; and identifying and eliminating unnecessary spend will reduce ICT costs with minimal impact upon value.
    
Taken as a whole, however, individual instances of value for money do not necessarily add up to overall value for money for the organisation. Part of the reason for this is well known: the various components of the ICT estate need to fit within a coherent vision and strategy, otherwise one runs the risk of duplication, fragmentation, inoperability and obsolescence. It can be likened to building a house without a set of plans: you might get a good deal on the bricks or even complete rooms, but unless they all fit together nicely, there is no guarantee the house will offer good value or even be habitable.
 
Investment
Unfortunately, having a coherent ICT strategy is not enough; even one that is aligned with the corporate strategy and future needs of the organisation. It may sound obvious, but an ICT strategy needs to be implemented well, it needs enforcing and it needs to adapt continually as circumstances change. Implementation means investment, and investment requires governance and informed decision-making from those at the very top of the organisation. Skilled resources, good project management, best practice development, exhaustive testing, effective business change and a focus on benefits are all essential ingredients for ensuring the money invested in new systems and services has been well spent.

Service delivery
Of course, the story does not stop there. Projects may successfully deliver new systems and new ways of working, but the ICT department and users still need to make them work. If it is well organised, the ICT department will follow best practice service and security management practices. It will be properly resourced and closely managed to ensure the quality of service matches the levels agreed with their customers. It will be pro-active in its management of risk, ensuring all the right elements are in place to deliver the performance, reliability and continuity of service expected by their users. To achieve all this, managers will strike the right balance between in-house and external service provision, with suitably-incentivised long-term partnership working.
    
Maximising benefit
Get all that right and you can be confident that your ICT service will provide the value for money expected by the taxpayer – yes? No. Value is not merely a function of the service provided; it depends also on how that service is used. Managers need to feel ownership of the systems provided, together with a real commitment to gaining maximum value out of them. Well-defined processes, clear guidance for users and effective controls over data quality are all good ways to ensure that systems are used in the way that enables maximum value. Above all, users of ICT systems and services must feel motivated to use the systems properly and ensure that the information held is accurate, up to date and of the quality required by the organisation as a whole.
    
The ability to gain overall value for money from ICT is not simply a question of procuring the right services at the best price. It is an organisational capability, encompassing all the factors mentioned above, and many more. The good news is that there is a lot of best practice guidance available covering many of these areas, and a lot of it is published for free by the government. The bad news is that an organisation only needs to get one of these factors wrong and all of the value they have created can be lost.
    
Value chain
These factors do not all contribute to the overall value from ICT in a simple manner. They act more like a value chain, where any weak link can let value leak away. Consider the National Health Service, as an example. It has an IT strategy fit for the 21st century, it has invested billions of pounds in some of the most sophisticated systems around and it has selected the best value service provider on the market. It may have streamlined its business processes and trained all its users until they know the new functionality back to front. However, if those users did not trust the systems – due to concerns over patient confidentiality, for example - and they chose not to use them as intended, then the NHS would run the risk that its investments had been wasted.
    
Strategic IT effectiveness
Within Mouchel’s management consulting business we have developed a suite of tools and techniques we call our Strategic ICT Effectiveness proposition, as part of our Value for Money range of services. We use it to help organisations significantly increase the overall value they gain from the money they spend each year on ICT. It includes:

• An ICT Effectiveness Review which assesses organisational capability to gain overall value for money, clearly presented using a balanced scorecard;
• Metrics which measure the overall value gained from ICT, together with benchmarks which allow a comparison of costs incurred by similar organisations;
• Diagnostic tools which analyse the various issues which may be preventing an organisation from maximising value from ICT, identifying the underlying causes which need to be addressed first; and
• A range of best practice solutions which may be deployed selectively to address those underlying causes and so help organisations transform their overall capability at delivering value.