Aligning investment with reality
An interesting article appeared at the end of last week, highlighting a shift in thinking towards IT projects within the UK government:
Gov.uk was launched quickly and iteratively, with a new simplicity that has resulted in a website containing fewer than 10% of previous separately hosted pages and is set to save as much as £70m on previous arrangements.
A new online system for people to apply for Power of Attorney on behalf of others had taken 10 working days to procure, 24 days to build and code a prototype alpha system for live testing and a beta was due to go live in two months, he said. The whole project had been commissioned from a small business using the G-Cloud for around £50,000 a year, compared with a quote obtained from one large existing provider of £4m set up plus £1.8m per year
There are two reasons why the costs to deliver an IT project should drop significantly to the established normal. 1. At the tail-end of a previous disruptive innovation, 2. At the beginning of a new one.
The hype curve of innovation applies to just about any industry. A new concept is invented. It starts small and is highly specialised but creates demonstrable value to customers. Such success never goes unnoticed and demand begins to grow. That brings competition and rival proprietary solutions. To begin with, more value is created, usually at an increasing pace as different companies come up with more innovative features to compete with one another. But then a tipping point is reached and, for a short while, everything gets a bit chaotic and messy. Hidden costs emerge, problems arise, competitors get acquired and solutions are suddenly discontinued or dramatically altered. Out of the disruption comes a new demand – standardisation that allows for continuity and economies of scale. And so the market settles down into slow growth, cheaper solutions and small incremental improvements. Until a new disruption comes along.
Building traditional web sites for publishing content are at the end of 15-year innovation cycle. The standards for design and formatting of web content have become so well established that even Microsoft has just about embraced them within the latest versions of the Internet Explorer web browser. Most popular public-facing web sites now follow familiar conventions regarding navigation and page layouts. To consolidate multiple different government departmental web sites under a single umbrella gov.uk web site makes absolute sense and should save a lot of money.
Using agile approaches to software development has grown in popularity in recent years. The goal being to do ‘just enough’ design to build a working solution, and quickly tweak and iterate based on actual usage patterns rather than predicted requirements. It requires far less ‘up-front’ investment due to much shorter planning cycles and usually results in far better user adoption rates. But it doesn’t guarantee a cheaper solution over time. That will depend on the iterations and ongoing development.
Applying an agile approach to business systems is at the early stages of the innovation hype cycle. Some solutions are simply brilliant, but growth in competition means some are not. The disruption and hidden costs are yet to emerge and it’s a little early to be celebrating dramatic savings in annual operating costs. I have already seen one government project that I know is so under-costed, it will take the supplier in question into bankruptcy unless they are able to renegotiate down the line. Yes, the bigger systems integrators were insanely expensive in their quote for what was needed. But insanely cheap is a short-lived improvement.
A comment was made by Tom Loosemore, deputy director of the Government Digital Service (GDS) responsible for the projects quoted above:
“We don’t talk to IT departments other than to ask what legacy can offer”
That’s not a healthy comment and was not well received at the conference where it was made. Today’s IT legacy is just yesterday’s innovations gone stale. I think the GDS could look to the automotive industry for how to better embrace IT as part of doing business. The current approach may be saving a lot of money in the short term (and that’s an understandable driver in the current economic climate) but there are going to be consequences.
Seeking innovative ways to use technology to solve business problems is a good approach. But assuming it is a panacea for all IT projects is not.
- Government digital guru Loosemoore stumbles into a diplomatic incident – UKauthority.com, April 2013
- How clouds enable IT to create value – blog post, November 2012