26
Jun
11

Is a career in the public sector (re government) a good career choice?

The dynamics of a changing world especially as it relates to the economy as well as other factors means that a career in the public sector is not what it used to be . . . if it ever was.

Here is the question by way of our Procurement Insights Poll . . . is pursuing a career in the public sector a good choice?

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18
Jun
11

Elcom’s Burdon weighs in on the question of analyts firm creditability

In Tale of Two Cities fashion re it was the best of times, it was the worst of times, this is definitely the worst of times for analyst firms.

Back in the late 90s I had been chastised with great regularity for suggesting that analyst firms such as the Aberdeens and Gartners were perhaps more Madison avenue than independent and objective guardians of market interest. At the time I felt like Christopher Columbus trying to convince everyone that the world was indeed round and not flat.

Where analyst firms have led the market?

Suffice to say, time not only heals all wounds (not that there were any wounds inflicted beyond the occasional scornful remark) but, time can also reveal the truth at least from the standpoint of supporting a particular position or belief.

In the case of the analyst firms, and as demonstrated by the responses I have received to recent blog posts questioning their continuing relevance, my position is no longer on the fringe of mainstream market sentiments.

For example, here is a response that was submitted by Elcom International’s Director of Strategic Business Development, Ian Burdon. A long time public sector veteran, Burdon has certainly earned his stripes and with it the ability to provide a broad and informed lens through which to view the industry’s evolution through what can most certainly be considered tumultuous periods of significant change.

I read the comments on Gartner’s assessments with interest as they chimed with the deeply sceptical view which I developed over a period of ten years while working on the inside in Government procurement. At the risk of impudence, my scepticism extends also to the technical press and to modern journalistic realities, characterised as “churnalism” by Nick Davies (http://www.pressgazette.co.uk/story.asp?storycode=40117).

The context for my comments is not precisely in point as it relates to assessments of software and software vendors but is sufficiently similar to be relevant I think.

There is a natural process in place which begins when an IT company develops applications about which it becomes very enthusiastic and which it then wants to sell. The launch of the product is accompanied by an effusive press release which has been professionally drafted as though it were a camera-ready article and at least some technical journalists will simply reformat it slightly and then print it as a news item without any critical analysis. This then sits in a cuttings file for further recycling and will also be picked up on by analysts who will often not look behind the press reports. In this way the press reports which do no more than reprint the press release tacitly function as an independent verification and reinforcement of that same press release!

In fact, once this process gets going, delivery of an actual product is not necessary: a well publicised piece of vapourware is enough to gain a reputation for innovative thinking and “thought leadership”.

The net effect is that a buzz and a hype is built up around particular products and/or companies. The buzz and hype bear little or no relationship with either the underlying reality of the product, or the alleged benefits of its application, or the capability of the company to deliver.

In the case of enterprise products as opposed to consumer products, neither the analysts nor the journalists who write about them are also users of the products. The analysts who pronounce upon the market and market trends rarely undertake the level of research and analysis which equates to the end-user experience and certainly real live end-users are not often asked what they think. And so, unobtrusively but conclusively, the emphasis has shifted from “analysis” based on what buyers might want to buy to one based on what vendors want to sell.

Pronouncements are made on “market leading” products and companies based upon criteria which are quite unrelated to whether or not the products are fit for purpose. Instead judgements are made based upon the halo effect of the favourable buzz and the ensuing attraction of investment capital to those “market-leading” suppliers. This is an edifice built on sand. While the dot.com boom and bust of 1995-2000 should constitute a salutary lesson, in fact it is largely forgotten in day to day practice where irrational exuberance continues to flourish.

If traditional analyst firms (at least as we have known them) are in the final throes of being legitimate sources of industry insight, who or what do you believe will take their place?

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13
Jun
11

The same old song? Former senior government exec provides yet another interesting take on the cloud

It’s the same old song, but with a different beat . . .

from the hit It’s the Same Old Song by the Four Tops (1965)

Ian Burdon, who is the Director of Strategic Business Development at Elcom, and a former senior executive with the Scottish Government, offers the following bitingly relevant take on the myriad of points raised in last week’s cloud computing series.

A business acquaintance of mine was, in a former life, a senior executive at IBM. When “Cloud Computing” was first explained to him he realised immediately that it was essentially what he had promoted at IBM as “Bureau Computing” reinvented for our time. Then he begin to laugh, observing that, having made a fortune moving the world to distributed computing, the IT industry was poised to earn another fortune putting that process into reverse.

Veterans of Network Computing in the late nineteen nineties will no doubt have a familiar glow of recognition too.

Cloud computing is not a technical term, it is a marketing term and much of the activity which passes for analysis and comment is neither more nor less than a form of demand creation through marketing. More accurately it is marketing for a particular consumption model which does not pay sufficient (or sometimes any) attention to underlying business needs.

It is not obvious that the model of ICT as a “utility” is an entirely happy one. ICT is a multifaceted and generic term encompassing a range of products and services and is not a single product; ICT may often be vapour but it is not gas. A good case can be made for the provision and consumption of some services and applications as utilities – but this is hardly a new phenomenon.

That “cloud computing” is something of a portmanteau term which encompasses several shades of meaning and activity led to brutal criticism from Oracle’s Larry Ellison in 2008:

“The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop? We’ll make cloud computing announcements. I’m not going to fight this thing. But I don’t understand what we would do differently in the light of cloud.”[1]

Similarly, software innovator and guru Richard Stallman said of cloud computing that

“It’s stupidity. It’s worse than stupidity: it’s a marketing hype campaign,”[2]

Here at Elcom we have been providing software and platform as a service since 1998 and, in 2002, powered the Scottish Government as it went live with one of the earliest and most successful examples of what we would now call Cloud Computing – eProcurement Scotland. The only box in the NTIS criteria for a cloud service which ePS does not fully tick is that it is paid for by subscription rather than by transaction but that is by the choice of the customer.

So I chuckle when I read the latest froth in the trade press around “Cloud” issues and marvel at the money being raked in to discuss something which is not new. What is new, of course, is the delivery channels in an age of convergence of (a) data and telephony and (b) fixed and mobile devices. Convergence and other developments raise seriously exciting possibilities for transforming what we do, but these aren’t the things being discussed.


Do you have an opinion on Ian’s take on computing in the cloud? Remember to use the comment section within this post to share your thoughts on this as well as the other commentaries from industry experts.

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06
Jun
11

GSA $2.5 Billion Cloud Computing Procurement RFQ: Real Opportunity or a Mirage for SME Vendors

The Federal Cloud Computing Initiative is partnering with GSA SmartBuy and the Defense Department’s Enterprise Software initiative for the cloud services contracts. The contracts are reported to be worth an estimated $2.5 billion over five years. Multiple contracts are expected to be awarded.

from May 10th, 2011 Washington Technology article GSA launches $2.5B cloud computing procurement

Let’s play a round of Government Procurement Jeopardy . . .

Answer: Fat and Slim

Question: What is the real opportunity for SME vendors to successfully pursue and win the recently announced GSA $2.5 Billion Cloud Computing RFQ?

Okay, maybe it is not quite Jeopardy . . . after all, Alex Trebek was busy today. However the end point is still the same in that announcements of large dollar government contract opportunities are often dismissed by the majority of SME’s as an elusive quest that warrants little more than a mumbled chagrin of why bother.

However, if one is to believe that cloud computing and in particular Enterprise-as-a-Service (although I like the Everything-as-a-Service version of the acronym) is as Peter Fingar wrote in an April 2010 article Enterprise-as-a-Service – That’s where BPM Comes in, is a disruptive delivery model that represents an economic versus technological shift, we could be talking about an entirely new playing field that might actually favor qualified SME vendors.

Focusing on what the RFQ refers to as being the five key areas of acquisition interest, which are; mandatory email-as-a-service, migration and integration services; and optional office automation and electronic record management services, that can be provided as a government community cloud, provider-furnished-equipment private cloud, secret enclave or public cloud, may be an indication that the government has finally eschewed the overarching, monolithic platform mindset of yesteryear that favored the big players. Or to put it another way, the government has realized that the best way to eat an elephant is one bite at a time.

It will of course be interesting to watch this one as the RFQ progresses, to actually see if the apparent glitter of government opportunity is indeed laced with SME gold. In the meantime, and over the next week, I will be examining the likely vendor candidates for each of the five areas of service focus referenced in the RFQ in an effort to identify the likely winning candidates. That’s right, a qualified opinion in which I hope I do a better job than I did in picking this year’s Stanley Cup playoff contenders.

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01
Jun
11

The Universal challenges of health care procurement

It seems that hardly a week goes by when there isn’t one story or another involving health care.

From Medicaid reform to the spiraling costs tied to an increase in chronic illnesses – according to health care expert and author of the book Navigating The Healthcare Maze Jeff Knott, a surprisingly large percentage of the American population struggles with at least one and in some cases two forms of chronic illness.

Now one might wonder how this ties back into procurement, after all this is the main focus of the Procurement Insights blog.

In the past, establishing the link between patient care and purchasing may not have been to the outsider a natural connection. However, for those involved with the day-to-day responsibility of delivering health services on the front lines, the link is not only recognized but of critical importance.

One of the most glaring examples of the consequences associated with an interrupted supply chain is the Veterans Health Administration’s Bay Pines facility in Florida where, as a result of a failed Oracle/JD Edwards implementation the medical professionals were unable to deliver essential care to their patients. The end result was a highly publicized Congressional Hearing.

These problems are by no means limited to this side of the Atlantic, as demonstrated by my extensive coverage of the challenges faced by the largest socialized medicine program in the world, the National Health Service in the UK.

In my December 3rd, 2010 post UK Government Puts An End To The Gravy Days of Big Budget IT Initiatives: Another Nail for Large ERP Vendors?! I wrote the following:

After the National Health Service “NHS” spent more than $4 billion US to “create ideas” on automating its health care system, of which only a paltry $224 million US actually had an impact on patient care, it is not surprising Cabinet Office minister Francis Maude told companies such as Hewlett-Packard that the UK Government “will no longer offer the easy margins of the past.”

Against this backdrop of universal challenges within the sector I was particularly interested in Colin Cram’s recent article on the Public Leaders Network website.

Cram as you know is the 30 plus year public sector veteran in the UK who wrote what I have frequently referred to as the seminal paper on improving public sector procurement. I am of course talking about his Towards Tesco paper that using the giant retailer as a model, provided some very interesting and insightful pointers on how the public sector can drive greater efficiencies as well as savings.

In this latest article, Cram focuses his attention on the NHS providing some equally compelling perspectives on how the organization can improve by building on what is already in place.

The following is a brief excerpt from “Incentives and persuasion do not work in NHS procurement.” I would encourage you to access the article in its entirety through the provided link.

The public accounts committee report on the £4.6bn a year procurement of consumables by the NHS highlights problems that exist throughout the public sector. The government, on behalf of the taxpayer, provides vast funding for procurement with little accountability for the efficiency and effectiveness with which it is spent. It is gaining greater control over central government procurement (£70bn a year), though this week there was a critical report about an MoD project, which is included in the £70bn.

That leaves £150bn-£160bn of procurement spend in the wider public sector, managed in a fragmentary way, over which the government has little control and where accountability is limited. Procurement policies of successive governments, including the present one, when applied to this spend, have been nothing more than empty words. The government has limited knowledge of how much is spent, by whom, with whom, on what and the proportion of spend with small to medium enterprises (SMEs), even though such an exercise could be undertaken with little difficulty, starting with transactional information that already exists in all finance systems. It has no plans to find out.

The PAC report emphasises the disjointed nature of procurement by NHS hospital trusts, the poor quality and inconsistent data and a reluctance to use organisations that have been set up to maximise the purchasing power of the trusts. The Department of Health believes that the requirement to deliver 4% efficiency savings, year on year, will incentivise the trusts to improve. However, experience in other parts of the public sector, such as local government, which has had to report efficiency savings for each of the past few years, suggests that this will be wishful thinking.

Once again, you can access the article in its entirety through the from “Incentives and persuasion do not work in NHS procurement.” link.

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19
May
11

Failure and a lack of preparation pose the greatest risk to public sector shared services success

Recently the House of Commons Public Accounts Committee’s 2009 report, Central Government’s Management of Service Contracts, found there were no documented plans for managing 28% of contracts. A further 56% of contracts did not have a contingency plan in case of supplier failure.

from the overview of the late David Kaye’s Briefing Paper – Public sector supply chain: risks, myths and opportunities sponsored by Zurich Financial Services

As I reviewed the overview of the briefing paper regarding the late David Kaye’s incredible work on supply chain risk within the public sector, I was at once amazed that the inevitable collision between the irresistible force associated with risk and the immovable object reality of the high rate of supplier failure in key areas such as outsourcing continues to go unchecked.

Given the serious consequences of such failures in the public sector one cannot help but wonder why this issue does not take on a greater sense of urgency, especially as industry experts like Colin Cram are as outlined in one of my posts yesterday, advocating a shared services strategy.

While there is no doubt that economies of scale can be achieved and thus drive significant savings, centralizing Agency and/or Departmental service responsibilities with a core group whether internally managed or outsourced in whole or in part means that key elements of their organizational deliverables as the Briefing Paper points out, will be placed entirely into the hands of third parties. The question is simply this . . . are these third parties up to the task and are they prepared to assume this linchpin role?

If they are not, the consequences as Kaye was quoted as saying are diverse, serious and wide-ranging based on the fact that authorities not only have contractual and legal responsibilities in tort, but critical statutory and political responsibilities as well.

This is one of the reasons why the PI Window on Business’ coverage of Executive Director, NASA Shared Services Center (NSSC) Richard Arbuthnot’s presentation at the 3rd Annual Business of Government Summit in Washington in April 2010 continues to carry so much weight in terms of relevant insight.

Arbuthnot,who managed the largest A-76 public-private procurement competition in NASA’s history, as well as leading the Agency Transition Team that was tasked with executing the minute details associated with consolidating Agency-wide administrative activities across ten geographically dispersed centers in the areas of Human Resources (HR), Procurement, Financial Management and Information Technology, has the distinguishable advantage of having been there, done that relative to successfully implementing and managing a shared services initiative.

With this in mind, I would like to invite you to tune in to our coverage of the Rick Arbuthnot presentation titled Defining Business Viability with Advanced Service Portfolio Management (Click to Access), which originally aired on the Blog Talk Radio Network on April 28th, 2010 from the Ronald Reagan Building and International Trade Center in Washington, DC.

Richard Arbuthnot, NASA

Session Overview:

Wednesday, April 28th (Session 1, 9:00 to 10:30 AM EST)

Session 1 Title: Defining Business Viability with Advanced Service Portfolio Management (Click to Access)

Appointed to the Federal Senior Executive Service in 1999, Rick Arbuthnot is recognized for his executive leadership and credited with introducing significant initiatives across the Agency, such as the Competency Management System, Executive Succession Planning, and Manage to Budget. He is also recognized for his expertise in organizational structure and design. Most recently, he managed all aspects of NASA’s Shared Services effort and has served as the Executive Director, NASA Shared Services Center (NSSC), since March, 2004.

As Executive Director, Rick managed the largest A-76 public-private procurement competition in the Agency’s history, as well as leading the Agency Transition Team, tasked with executing the minute details associated with consolidating Agency-wide administrative activities across ten geographically dispersed centers in the areas of Human Resources (HR), Procurement, Financial Management and Information Technology.

In addition to leading the competition and Agency transition activities, Rick now manages all aspects of activating NASA’s newest field Center, including defining the organization structure and staffing the nearly 500-person organization, ensuring all facility, IT and business systems, including charge-back mechanisms, are in place to operate the organization.

Richard E. Arbuthnot, Executive Director, NASA Shared Services Center, NASA

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18
May
11

UK public sector veteran Cram stirs the pot of both creative thinking and controversy

The following is an excerpt from the May 16th, 2011 article by 30 plus year UK public sector expert Colin Cram titled “Connecting the dots: shared services” which appeared in the guardian.co.uk Procurement Leaders Network website.

The public sector needs to take advantage of economies of scale and join up its services states Colin Cram

In my 2008 white paper Yes Virginia: A Profile In Excellence (see SlideShare Viewer below), I had reached the conclusion that shared services was another name for outsourcing, especially in terms of the public sector.

While I will suggest that you read the paper, which is now for the first time available publicly at no cost, to draw your own conclusions as to the veracity of my observations regarding shared services and why the Commonwealth of Virginia’s eVA program continues to be a model of success in terms of government purchasing automation, it is on Cram’s most recent take on this subject that I would welcome your feedback.

Colin Cram "Towards Tesco"

Here is the excerpt from the article:

Delivering UK public services costs some £475bn a year – £240bn if one excludes procurement of goods, services and works. However, duplication in the public sector is rampant. There are thousands of independent and different finance and payroll systems in the public sector, even for organisations that have identical functions. Most organisations have their own IT, legal, estates and buildings management and procurement teams (back office services). Most have independent approaches to frontline activities as diverse as waste collection, social care and passenger transport.

In a time of budget cuts, can such independence be justified? Independence loses economies of scale; duplication creates huge costs. This takes money from frontline services. Also, expertise varies hugely between different organisations. Not everyone can employ the best. Career development opportunities may be limited and organisations may be over-dependent on certain people. This can lead to wage escalation, for example through over-promoting people. Independence reinvents specifications; unwise IT specifications can boost costs by two or three times.

Some would argue that joint services risk losing the local touch and could cost more through bureaucracy. However, service level agreements and cost transparency can counter that. Where do we spend most of our money – at Tesco or in corner shops?

My experience is that 10-20% of the cost of back office services should be saved through joining together on a large scale. The New Local Government Network recently identified that this could save local government some 3% of its total costs. There is less evidence for the size of potential savings through joint frontline services, but 10% would seem a safe bet. Such savings are probably typical of the public sector as a whole and could save many services.

Remember to use the following link to access the article “Connecting the dots: shared services” in its entirety on the guardian.co.uk website.

Yes Virginia: A Profile In Excellence (White Paper)

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