As the IT leader of one of the most high-profile local authorities in the UK, Westminster City Council CIO David Wilde is spearheading a radical agenda for change.
Under pressure to help the council make cuts in spending of up to 27 per cent following chancellor George Osborne’s Comprehensive Spending Review in October, Wilde, like many local authority CIOs, is looking to make economies through shared services and the cloud. He recently announced a shared services agreement with neighbouring London councils Hammersmith & Fulham and Kensington & Chelsea. A similar arrangement has come into being at Newham and Havering councils, while in Cheshire six councils recently merged into two.
However, Wilde’s shared services initative is by far the biggest of its kind in the UK: the three councils have a combined population of 600,000 and budgets totalling about £3bn a year.
Although there are many issues to consider when merging services, the relationship between the council and its constituency should be uppermost, Wilde says.
“All local councils looking at shared services have to strike a careful balance between on the one hand local accountability and recognised political structures, and on the other the need to join up and distribute services more efficiently,” he says.
“We are arguably trendsetting in terms of what we’re doing here, but all councils should consider it. They all buy network, desktop and datacentre services, and the argument for having separate versions is not strong. Convergence and shared services around these areas is a natural progression in the IT world.”
Wilde expects the move to shared services to take three years to complete. The management team, which includes Wilde and his fellow IT chiefs from Hammersmith & Fulham and Kensington & Chelsea, is in the process of deciding which systems will be converged, which teams will need to move and to where, and whether the merged services will be outsourced and if so, to which suppliers, bearing in mind each council has its own established relationships.
“When converging services we need to work out whether the numbers stack up, whether the move delivers the same or better quality of service for each authority, and whether it is a sensible thing to do,” he says.
Wilde refuses to put a figure on how much the new shared services structure will save the three councils, but staff costs are likely to be significantly lower. In Cheshire, the merging of six councils into two in April 2009 saw IT headcount cut from 420 to 220.
The first big step towards convergence will be the award of a contract for managed wired and wireless network services. This is likely to be announced in the next few weeks and will cover voice, video and data. One interesting aspect to this contract will be that other London boroughs will be able to jump into the framework and have their own direct relationship with the provider. “This will potentially increase efficiencies for all involved,” says Wilde.
A second big joint contract, due to be announced in the spring, will see the procurement of a converged social care system. The councils are currently using three systems between them: Northgate, Careworks and Frameworki.
Wilde says there are significant challenges around migrating the data and retaining its integrity, as well as ensuring standardisation across the boroughs in terms of how case details are managed, recorded and stored. Most of the work around this will be done over the next 12 months.
The councils are also looking into the feasibility of sharing HR and finance systems. The difficulty here is that each council currently has a different outsourcing model for their accounts payable processes.
“Hammersmith & Fulham outsources some of its accounts systems, Kensington & Chelsea manages accounts internally, while we outsource to Vertex, which subcontracts to Capgemini, a company that manages our HR and customer services,” explains Wilde.
Each council therefore has different skill sets and expectations regarding how their accounts and HR should be managed, he adds.
Wilde is becoming well known on the speaker circuit as a passionate advocate of cloud computing. As Westminster CIO he is an early adopter of cloud technologies and has said his aim is to achieve a 100 per cent infrastructure-free environment for the council by 2015.
The council is already way ahead of its schedule, with about 60 per cent of the infrastructure already outsourced.
The organisation is two thirds of the way through moving its desktops to a private cloud service managed by Capgemini. The outsourcing company hosts all the desktop applications, and remotely manages the council’s extensive fleet of mobile devices. The cloud is run out of Capgemini’s facilities in Rotherham and London Docklands.
Having outsourced 60 per cent of its infrastructure, Westminster was able to turn off the datacentre in City Hall before Christmas.
The 40 per cent of IT that remains in-house includes social care and built environment systems, and Wilde argues that it makes sense to retain the equipment until it has delivered its return on investment.
“The council’s goal was originally to become infrastructure free by 2015, but we will probably get there by late 2013 or early 2014,” he says.
The migration of its desktop systems to the cloud went remarkably smoothly, partly because the council used it as an opportunity to pare down the applications it uses.
“We had a broad range of about 40 business applications, managing everything from social care and environmental services to registrars. We have rationalised these down to 12 major systems,” he says. Wilde has also cut the number of software packages staff use from about 500 to just 150.
Wilde is fairly open-minded about the way the cloud should be used.
“Some people are very ideological about it,” he says. “They either say the cloud isn’t right for public services, or that everything should be hosted in the cloud. In reality most organisations will adopt a hybrid environment.”
Of the 60 per cent of Westminster’s infrastructure now in the cloud, 10 to 15 per cent is in the public cloud, with the remainder being run privately.
In terms of the private cloud, Capgemini runs the desktop and datacentre services, and US-based cloud provider Ariba runs a managed procurement service in conjuction with Oracle.
While in the public cloud, the council pays for a customer relationship management service from Salesforce.com that it uses to manage its events.
“Cloud computing, whether public or private, is a good refinement of managed service provision and we should all be making better use of the latent infrastructure that’s out there,” says Wilde.
Similarly, he disputes the idea that the private cloud is more expensive than the public cloud.
“There is an assumption that it is, but when you start building resilience and certainty [into the public cloud] the gap narrows considerably. And when you start adding two-factor authentication, the business models begin to change again.”
And with the pressure on councils to reduce their costs by about 30 per cent, Wilde argues that suppliers that don’t change their business models will lose out to more versatile competitors.
“Suppliers need to be offering virtualised managed services at 60 to 65 per cent of current costs. Those that don’t will not be around in three years’ time. It will be that brutal in terms of the shift in the market.”