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IT Procurement

March 14, 2010

The subject of IT Procurement has been a real hot button at IACCM this week. I am not sure precisely what is going on out there, but it seems we are back to some fundamental battles over whether IT Procurement should be within Procurement or within the CIO organization. The water appears to be further muddied by the question of where supplier relationship management should belong – and many CIOs are clearly pushing to have both, at least in respect of their suppliers.

I wrote about this some weeks ago, following a session with CIO Magazine, and I can certainly understand why CIOs are concerned about having high quality commercial and contracts teams, given all the change they face. However, this post is not about the organizational or skills question (on which I am happy to share my advice and views), but actually about a report that one of the IACCM research team brought to my attention.

This report is based on a survey of some 200 CIOs in UK local government (state, district or city governments in other countries). It is probably no surprise that these CIOs do not welcome the thought of more central control over their projects and related spend (something that current budgetary conditions make more likely). The article criticizes the performance of “central government in procuring IT, citing a string of major IT project failures and quoting media reports of the cost to the taxpayer due to abandoned central government computer projects, which was most recently estimated by the Independent to be in the region of £26 billion during the last three Labour governments”.

It goes on to recommend that “service-related government IT projects should have a timeline of no more than 18 months and that the framework for selecting suppliers should be restructured to make it more flexible, fairer to small suppliers and more conducive to innovation”. 

I think this has the makings of a fascinating debate that is likely to take place in many countries in the coming year or two, not least because of the fundamental role of IT in managing the delivery of public services, plus the fundamental questions raised by the advent of cloud computing. There are certainly challenges associated with central decision making and the political considerations which undermine many projects. But interestingly, the report is most damning about the issue of central government skills and argues that local authorities are better at defining, procuring and project managing their acquisitions. Given the relative lack of trained procurement and project management personnel at a local level, this raises some massive questions over the investments that have been made in training and ‘professionalizing’ such staff in central government.

Of course, another reason for better performance (if indeed performance is better) could be that local projects are smaller and far less ambitious. Perhaps many national projects are simply too big and too complex. This might suggest that central government needs to do more to create enabling agreements (gaining the savings from consolidation) and to become more prescriptive regarding required outcomes, but less so regarding specific solutions.

Overall, this makes for a fascinating debate in which the contracts, commercial and procurement community should be involved and from which it should learn. Our interest should be both as professionals and also as taxpayers.

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