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What are the prospects for public sector ICT suppliers in 2017?

03/02/17

Rob Anderson, analyst in the public sector team at GlobalData, predicts a buoyant market for public sector ICT this year and in the longer term

In a post-referendum, pre-Brexit world of economic uncertainty, what are the prospects for public sector suppliers in 2017? Theresa May and Phillip Hammond may have signalled the end of the era labelled ‘austerity’, but the country’s budget deficit is still a millstone. Although control of public finances will be kept under tight rein, there is definite scope for optimism.

The Cabinet Office, through its Crown Commercial Service (CCS) and Government Digital Service (GDS) arms, has recently reiterated its intent to expand its business with SMEs, but has also indicated it is open to new propositions from suppliers of all shapes and sizes. In local government and other areas of public service delivery, transformation remains a vital, if thorny, issue.

In addition to transformation, cloud platforms and data exploitation will be priorities. These may seem familiar to established observers of public sector ICT, but there are definite indications that the next year will see a confluence of these three strands that accelerates real adoption, resulting in a buoyant market.

A new way of thinking for public bodies

True transformation involves consideration of technology, processes and people – the latter necessitating culture change. What has passed for digital transformation to date has mostly been a neater user interface and digitisation of forms. To effect the required step change in efficient service delivery, public bodies must genuinely invert their thinking in redesigning end-to-end processes to reflect a citizen’s needs using techniques such as customer journey mapping and robotic process automation. It’s taken some time to pervade, but the message on Liam Maxwell’s iPhone case exclaiming “What is the user need?” is finally coming of age, evidenced by a proliferation of job openings such as Business Management Analyst, Head of User Research, Business Change Strategy Lead, and UX Designer.

Cloud computing is now an inevitable by-product of transformation as the availability of lower cost standards-based (open or de facto) platforms and superfast broadband tips the balance against the continuation of multiple iterations of on premise infrastructure. G-Cloud has been much vaunted as the key driver in the move to the cloud, and will continue to evolve, with contract lengths likely to be extended to the delight of customers and suppliers alike.

2017 will bring greater acceleration of cloud usage due to the arrival of UK data centres from three giants of technology: Microsoft, Google and Amazon Web Services. Data sovereignty has been an oft-quoted though much-abused barrier to cloud service uptake which will disappear at a stroke. With partner ecosystems for all three delivering a plethora of as-a-service solutions to meet all manner of application requirements, the last vestiges of all-encompassing IT outsourcing arrangements will tumble as they reach their contract end dates.

The third area offering hope to IT providers is data exploitation. The government remains committed to delivering open data sets that facilitate re-use and innovation in public service delivery.

Aggregated data opportunities

Undoubtedly it faces challenges in getting necessary data sharing legislation passed by Parliament, though this is in no small part due to a lack of clarity in categorising different types of data. Of course there will be a public backlash against citizens’ personal data being openly shared and consequently put at risk of misuse. But the unfettered availability of operational data, performance data and aggregated anonymised data on individuals offers tremendous opportunities for more timely service delivery, more and better connected services, reduced losses due to fraud and error, and ultimately a much improved user experience.

In terms of routes to market, CCS continues to strive to corral departments, agencies and authorities from all parts of the public sector to use its services and frameworks, and a healthy pipeline of market-centric frameworks is being built. Brexit will almost certainly have no immediate impact on procurement regulations, and is unlikely to over the longer term either, given the UK’s position in driving such legislation. So, the rules of the game remain the same. Yet there is no substitute for good old-fashioned selling: Getting to know your customer – either directly or through partners – and building a relationship that delivers value and addresses their individual needs.

Opportunities abound for those organisations that clearly understand the public service market, its challenges and drivers, and can deliver agile dynamic and innovative solutions which satisfy the key needs. Furthermore, the skills gap in the public sector is well documented. Supporting clients with knowledgeable, well-trained staff pays dividends. Investments in relationships will always trump investments in products.

 

Rob Anderson

Analyst – Public Sector Team

GlobalData (formerly Kable)

 

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