Steve Woollcott MSc, FIAP, MAPM has spent 17 years working in Public Sector IT, six of them in senior management positions. He recently took up directorships with P-SAZ Ltd and Publictemps Ltd, a company specialising in placing temporary and contract staff in the Public Sector. Here he gives his views on E-commerce opportunities in the Public Sector.
The UK Government’s drive to see its Public Sector using Internet technology to better serve the community has given the public sector organisations a major headache. By 2005, every such organisation will be required by law to provide access to their services on-line. They will also need to have in place on-line systems to meet their own demands of procurement and recruitment. But just who is going to do all this work?
British Telecom published (10th July) the first authoritative survey of public sector readiness to deliver services electronically. The report stated that although there was widespread enthusiasm that recognised the potential for e-government, a number of significant barriers lay ahead. Of particular concern was the lack of funding and skills necessary for the public sector to develop the services themselves within the government’s time-scale. These concerns received even higher prominence in the local government sector.
The problem they face is, in essence, that every section within the public sector will be required to introduce full B2C (business to consumer) and B2B (business to business) Internet solutions across their organisations by 2005 (that is, within the next three and a half years!). And they must achieve this while there is continued downward pressure on budgets exerted by the DETR (Department for the Environment, Transport and the Regions) coupled with upward pressure on performance. The gloomy prospect is that few organisations in the public sector have the necessary resources and skills on board to meet the target.
The Government has already conceded this point and has indicated that the answer has to come from outside the sector. Government E-envoy Alex Allan admitted that the target would not be met without substantial help from the Private Sector. Speaking at an e-business summit on 11th July, Allan said the main focus for e-business so far had been on the Private Sector, saying “the first [reason] is because that is where the demand is and where the opportunities are perceived to be the greatest and secondly because they are easier services to get on-line.”
The problem cannot be underestimated. Although many local councils, health trusts, an so on have web sites, few, if any, yet offer transactional functionality at anywhere near the levels that will be required to satisfy even just the B2C relationships with their communities. A cursory glance at most public sector sites will show that they are primarily information sites, a view expressed in a recent interview with Cabinet Office Minister Ian McCartney. There is little opportunity for visitors to these sites to conduct their everyday transactions with the organisation. Try it – how many local councils’ sites, for example, can you find that offer you the opportunity to pay your Council Tax bill, claim housing benefit or submit planning applications on-line? How many allow you to register your children with local schools on-line? How many health service sites allow you to register with a local GP or confirm or change hospital appointments on-line?
B2B is just as important and it is just as under-provided for. The public sector taken as a whole is a massive trading organisation. It employs around 6.2 million people (one out of every four people working in the UK). It spends around 25% of the UK GDP on services, provisions, accommodation and staff (the procurement market alone is worth in excess of £75 billion a year) and it needs goods and services from just about every commercial sector, from pens and paper through to specialised equipment and skills. But because of the need for probity, public audit and accountability it does not easily fit with conventional procurement models. Where e-commerce solutions do exist, and these are mainly supplier-side, the public sector finds it difficult to reconcile the electronic medium with their financial regulations and standing orders that set physical barriers to the e-commerce process. The need for written quotations, tenders and contracts, for example, prevents any council from simply logging in to “Computers ‘R’ Us” and buying half a dozen PCs on spec. If the value of any procurement exceeds a certain limit (about £160,000) the requirement must be advertised in the European Journal to provide for open competition across the EC. Although valuable in demonstrating that the public sector is seeking value for money at the point of purchase, these constraints slow down the procurement process. Few e-commerce systems can accommodate the delays and decision cycles built into public sector procurements.
As yet, there are very few examples of the public sector making active use of B2B services. Again, the Government has conceded that it is a difficult area to address. Recent initiatives by the Cabinet Office to develop (or rather, to have developed for them) a central procurement system have been put on hold until they can agree who is going to fund the work and where the resources necessary to implement it can be found.
In an embarrassing about-face, the Office of Government Commerce admitted that its plans to introduce an electronic shopping mall in 2001, to buy stationery and other staple items, had been abandoned to allow time for further evaluation. In an interview, the OGC Chief Executive at the time, Peter Gershon also disclosed that one of the sticking points of a public sector electronic procurement system was the question of which party would bear the costs of development. There are currently no plans to build an electronic hub similar to those being adopted by several industries, despite experience of a 7% reduction in the cost of goods, and transaction costs being cut by as much as 80%
Public bodies will react to the pressures in one of two ways if they are to deliver on the Government’s target. They will either commission bespoke systems from the major players in the Public Sector market or they will develop systems themselves by bringing in the e-commerce and web design skills that they currently lack.
Undoubtedly, some of the organisations will look to the private sector for bespoke systems. However, memories of the much publicised, high-profile failures of some of the major suppliers to deliver on such key projects as Community Charge and Council Tax, the computerisation of the London Ambulance Service and the Inland Revenue Self-Assessment systems, will mean that the Public Sector will be more cautious about resting the entire risk of their e-commerce systems in that direction. Many will, therefore, take the second option and look to develop their own systems employing staff on temporary or fixed term contracts. A Chief Executive of one London Borough described recently how it is a concern that one of the major areas where immediate skills were needed was in developing coherent and achievable strategies for web site and e-commerce development. It is this area where the major opportunities for consultants exist now. Once the organisations have determined their strategies, few will have the budgetary capacity to employ staff with the necessary implementation skills on a permanent basis, and this is their next concern. Fortunately, the Public Sector is familiar and comfortable with fixed-term contracts to complete complex but (relatively) short-term projects and in a large number of cases will choose this path to meet the e-commerce targets, and this is where the opportunities lie for all IT contract staff.
The subsequent demand for skilled contractors and temporary staff is projected to be high and placement agencies are beginning to recognise this and are looking to develop Public Sector offerings. However, as with the e-commerce model, the uniqueness of the Public Sector presents difficulties for agencies that have little specialist knowledge in that market. On top of this, a recent survey of Local Authority Chief Executives carried out by P-SAZ Ltd shows that the Public Sector is more likely to deal with agencies offering Public Sector knowledge. Over 70% of the local authorities canvassed said they would be more likely to use a company who offered Public Sector focus and exclusivity rather than an agency that did not specialise.
To meet this demand, new companies are beginning to appear to deal specifically with temporary and contract staff in the Public Sector. On 2 October, Publictemps Ltd launched their web site (www.publictemps.co.uk) which aims to offer high-calibre candidates to the Public Sector. With the offer of higher than normal day-rates for contractors and lower than normal fees for placing organisations, Publictemps predicts that it will attract the personnel with the skills that are in demand. It will fill an important niche in the market, benefiting both the organisations and the contractors and providing a service that meets the needs of both communities.
The message is: if you’re interested in working in the e-commerce and web-design arena, there are real opportunities for contract and temporary staff in the Public Sector.
To discuss this topic further with Steve, email him at stevew@publictemps.co.uk. If you’ve got a view you’d like to get off your chest, email me (Robin Jones) at eo@iap.org.uk.
