From Obamacare to Universal Credit, government has a poor record when it comes to handling major IT projects. Happily research by Dr Mark Thompson is laying the foundations of a new IT strategy which many hope will open up new markets and opportunities for innovation.
By laying the foundations of the Government’s current information technology (IT) strategy, research by Dr Mark Thompson, University Senior Lecturer in Information Systems at Cambridge Judge Business School, is enabling local and national government cut IT costs – and helping open up new markets and opportunities for innovation for small businesses across the country.
When academic research changes government policy, its impact can be far reaching, but when that policy concerns the way government procures IT, its impact on design and delivery of public services can be profound. Thompson’s 2009 white paper – Open Source and Open Standards – for George Osborne (now Chancellor of the Exchequer) is a case in point.
A pioneer of open innovation thinking in the UK public sector, Thompson runs Methods – a multi-million pound business – as well as studying the business world. He believes that by learning from the success of platform-based business models like eBay and Amazon, local and national government can not only save money but stimulate innovation.
It’s about replicating as many benefits of the platform model – as exemplified by the Apples and Googles of this world – in public services to reform and eliminate the current overspend, bottlenecks, duplication, and inefficiencies, both reducing cost and vastly increasing innovation – whilst also realising where government needs to be different,” he explains.
In 2009, Thompson’s research revealed that of the £21 billion government spent on IT, 80 per cent went to 12 suppliers. “The whole point about outsourcing is aggregating demand so suppliers cluster around you and compete for that business, but over the last 20 years government has done the reverse and aggregated supply, creating a top-tier of suffocating suppliers,” he explains. “Government has been buying endless bespoke suits when it could have bought a few off the peg.”
So while a few huge suppliers have reaped the benefit of both volume and market, small businesses, innovation, and the UK tax payer paid the price. “Imagine building a car or a house where every single nut is a different size and requires a different tool. Nothing fits together because it’s all been designed in separate silos,” says Thompson. “You would never design a public service like this.”
In both his peer-reviewed research and his white paper, he argues that if the problem is closed proprietary standards, the solution is open. The lessons from history are salutary.
Look at video,” says Thompson. “VHS won over Betamax because it was an open standard. As Betamax lost out, it became steadily more expensive to maintain, there was less you could run on it, and if it broke nobody could fix it. That’s precisely where we have been with government IT.”
Thompson is one of a small group of people whose ideas have brought about a sea-change in the government’s technology strategy. Closely involved with the procurement elements of the Government’s technology manifesto, his white paper’s recommendation of a £100 million contract cap for all government IT projects is now Government policy, and two years ago he was one of only three academic experts drafted in for the Public Administration Select Committee inquiry on IT.
This sea-change has taken root with the formation of the Government Digital Service, which now ensures all major technology investments across central government require Cabinet Office sign-off, the resultant development of digital strategies in almost every government department and Arm’s-Length Body, and the replacement of Chief Information Officers across government with Chief Technology Officers.
As well as its impact on the public purse, opening up ‘government-as-a-platform’ for new innovators in the market is already helping SMEs in the technology sector. Market demand drives innovation, and government is one of the few institutions large enough to make markets. One start-up already benefiting is Arcus Global. Set up by two MBA students from Cambridge Judge, Thompson mentored the pair and the business is now working with the London Borough of Hounslow delivering the first enterprise-wide transfer to a platform-based business model.
Such a transfiguration Thompson finds hugely exciting:
It’s one thing to write academic papers and policy documents but it’s another to show this can be implemented on the ground,” he says. “Technology is like a Trojan horse, it encapsulates ways of doing business and business processes, and the explosiveness of these concepts for the way we organise ourselves as a country is enormous.”