The hardest job in public sector IT?

Does David Myers, newly-appointed director of shared services for government, have the hardest job in public sector IT?

At the moment, departments and agencies across the civil service all have their own individual systems for administrative functions such as human resources and finance.

According to Ian Watmore, head of the Cabinet Office eGovernment Unit, there are as many as 1,300 different entities of government with their own back-office systems. And big organisations such as the Department for Work and Pensions (DWP) have multiple systems within their own environment.

There is no doubt that the concept of shared services – different

organisations using the same standard system – is a good one. Just as national software licensing agreements for the public sector make the most of the enormous economies of scale, so too would mass-processing of civil servants’ pay cheques or holiday requests.

Private sector businesses have been developing shared services for a decade or more, often to significant financial benefit. Five years ago, for example, database giant Oracle famously shaved $1bn a year off its running costs by consolidating its back office.

And a report published earlier this year by EDS consultancy arm A T Kearney says that, in the private sector, shared services typically cut costs by between five and 15 per cent. It also predicts savings as high as £3bn in the UK public sector in two to three years.

Last year’s Efficiency Review committed the government to stripping more than £20bn out of its annual administration costs by 2007/8. Streamlining cost-heavy, replicated back-office functions is an important part of the plan.

‘Shared services take the cost out of low-value transactions, and they improve effectiveness by providing better processes and better systems,’ Myers told Computing last month.

Though the scale involved may be awesome, the technology is not the hard part. Straightforward number crunching is what computers are good at. And despite the appalling reputation of government IT systems, some of the biggest systems – those that process our taxes or calculate benefit claims – are the most reliable and longest running.

The issues will be cultural, procedural, even legal. And they combine to make Myers’ job a challenge of prodigious proportion.

Work is under way to establish ‘families’ of organisations that can feasibly join together to share services. Clearly not everyone can share everything, either in terms of scale or compatibility. And even those departments and agencies that do have a potential fit will not have the same procedures.

Business process re-engineering is always tricky, but in the public sector it is especially difficult. There can be carrots. There can be sticks. But there is not the same hierarchial power structure that exists in the private sector.

In fact, Myers has as much real power as he could legitimately hope for. As Computing reported when he took on the role (4 August), Myers’ team will work with Treasury colleagues to develop a monitoring system, which will in turn be linked to the Spending Review (SR)

departmental budgeting programme.

If ever there was a way to whip Whitehall into line, it is through the SR.

But the Chancellor recently postponed the next review, which was due to take place next year, until 2007.

The motivations for the change are a heady mix of everything from Gordon Brown’s aspirations to Number 10 to creating an investment balance to cope with an ageing population and Asia’s rising economic power.

But the delay will make Myers’ job more difficult.

The original plan was that funding for shared services would be in the

now-defunct SR 2006, to be spent from 2007 and show returns in time to meet the requirements of the efficiency agenda and the next General Election.

With the SR held off until the following year, that timetable takes

a knock.

Of course, arbitrary targets should never be a yardstick of success. But it would be a shame if government IT’s hardest job got any harder.