The Emerging Landscape for UK Government IT Contracts
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Introduction
A perfect storm has hit the UK public sector IT market. The British government is looking to reduce departmental spending drastically, with IT costs one of the key target areas. In this brief Ovum analyzes the current situation and the likely shape of things to come.
Features and benefits
The pressure is on the government to continue to deliver public services and achieve some degree of ongoing modernization at the same time. The onus of investment in IT projects is going to shift towards suppliers. Output-based pricing and risk/reward-style contracts are going to come to the fore.
Your key questions answered
Introduction
A perfect storm has hit the UK public sector IT market. The British government is looking to reduce departmental spending drastically, with IT costs one of the key target areas. In this brief Ovum analyzes the current situation and the likely shape of things to come.
Features and benefits
- This brief Highlights the drivers for change in the UK public sector IT market.
- It sets out a number of options for the government and its suppliers to share the costs and risks of investing in IT.
The pressure is on the government to continue to deliver public services and achieve some degree of ongoing modernization at the same time. The onus of investment in IT projects is going to shift towards suppliers. Output-based pricing and risk/reward-style contracts are going to come to the fore.
Your key questions answered
- The outlook for public sector IT in the UK
- Cost- and risk-sharing options for IT suppliers
- The spending review and getting clues from the Cabinet and departmental plans
- The likely effects on the supplier landscape
SUMMARY
Catalyst
Ovum view
Key messages
FLEXIBILITY IS KEY IN THE NEW GOVERNMENT IT LANDSCAPE, BUT WITH OPPORTUNITIES COME RISKS
IT is not the only area to be heading out of its comfort zone
Output-based pricing, risk-reward contracts, and private finance to star in the next chapter of UK public sector IT
Business process outsourcing with shared services make a winning combination
Standardization and commoditization of IT should be on the cards
Intellectual property rights are part of the equation
Co-production and 'government 2.0' pave the way for innovation
UNDERSTANDING THE FORCES AT WORK IN THE GOVERNMENT GIVES CLUES ABOUT WHAT'S TO COME
The government's language of budget cuts suggests no room for compromise
Bluff, counter-bluff, and the influencers in the Cabinet
The Ministry of Justice
The Ministry for Transport
The Foreign Office
The Cabinet Office
The Ministry of Defense
The Home Office
The Department of Works and Pensions (DWP)
THE MARKET LANDSCAPE IS SET FOR BIG CHANGE
Smaller suppliers face a rough ride
Partnerships and collaboration will take on increased significance in the new government IT marketplace
Playing blind man's bluff with big government IT suppliers could backfire
RECOMMENDATIONS
Recommendations for the public sector
Get a measure of the risks
Increasing efficiency and reuse of existing systems
Going for lasting process improvements
Press the government for clarification on cloud computing
Recommendations for suppliers
The outlook is not all doom and gloom
Cloud computing offers a silver lining
Prepare for BPO and shared services
Taking the risks out of IT
Software vendors should get on with building strong partnerships with IT services companies
APPENDIX
Further reading
Methodology
Author
Ovum Consulting
Disclaimer
Catalyst
Ovum view
Key messages
FLEXIBILITY IS KEY IN THE NEW GOVERNMENT IT LANDSCAPE, BUT WITH OPPORTUNITIES COME RISKS
IT is not the only area to be heading out of its comfort zone
Output-based pricing, risk-reward contracts, and private finance to star in the next chapter of UK public sector IT
Business process outsourcing with shared services make a winning combination
Standardization and commoditization of IT should be on the cards
Intellectual property rights are part of the equation
Co-production and 'government 2.0' pave the way for innovation
UNDERSTANDING THE FORCES AT WORK IN THE GOVERNMENT GIVES CLUES ABOUT WHAT'S TO COME
The government's language of budget cuts suggests no room for compromise
Bluff, counter-bluff, and the influencers in the Cabinet
The Ministry of Justice
The Ministry for Transport
The Foreign Office
The Cabinet Office
The Ministry of Defense
The Home Office
The Department of Works and Pensions (DWP)
THE MARKET LANDSCAPE IS SET FOR BIG CHANGE
Smaller suppliers face a rough ride
Partnerships and collaboration will take on increased significance in the new government IT marketplace
Playing blind man's bluff with big government IT suppliers could backfire
RECOMMENDATIONS
Recommendations for the public sector
Get a measure of the risks
Increasing efficiency and reuse of existing systems
Going for lasting process improvements
Press the government for clarification on cloud computing
Recommendations for suppliers
The outlook is not all doom and gloom
Cloud computing offers a silver lining
Prepare for BPO and shared services
Taking the risks out of IT
Software vendors should get on with building strong partnerships with IT services companies
APPENDIX
Further reading
Methodology
Author
Ovum Consulting
Disclaimer
