IT cuts, Open Sauce and harsh reality
Don't cut new, useful projects, start questioning what you pay for existing services
Published 15:02, 20 August 10
I expect ICT news like the latest from Essex County Council to be become commonplace, so before we are all inured to stories like theirs, whilst the shock is still fresh so to speak, here's a brief analysis.
Firstly, the facts:
The Council has just axed £1.2 million-worth of ICT deals due to 'unforeseen' (by whom?) changes in 'budget' and 'circumstances'.
The Council has just begun an eight-year ICT outsourcing contract to 'slash costs' which will cost between 2.3 to 5.4 billion pounds sterling.
As the costs cut amount to between 0.02% to 0.05% of the costs not cut from the outsourced computing services, it is difficult to see it as anything other than fiddling whilst Rome burns. In a private sector business this would be suicide... the equivalent to arguing the toss over the budget for paper clips whilst the company sinks tens of millions into the red.
To be serious about cutting costs means to look first in the places where the greatest costs are. Not to do so is avoidance of reality at best, laziness at worst. One might even think the cancellation of potentially useful and relatively cheap new services that would amount to less than a rounding error in the real budget issue facing the authority might resemble the sound of toys being thrown out of prams? A sulky protest at the unwanted imposition of fiscal responsibility perhaps?
Let's dig deeper...
The unspoken and unexamined assumption in the Council's announcements is that nothing can be done with the existing costs other than pay them. The result, therefore, is that cost reduction can only come from axing new programmes, or cutting services, or cutting jobs. Like most unspoken and unexamined assumptions, it does not stand close examination.
When I commented on the news earlier on twitter, as feedback I received some great insights as to why some authorities currently have blind spots as to how Open Source helps in cases of 'Essex Billions Blindness'.
It was mentioned that proprietary software licence costs amount to a small(ish) proportion of the costs in Public Sector technology provision, by far the greater proportion going to services.
Whilst this is factual, it is a fallacious and lazy argument - for multiple reasons... the two most significant being:
- The cost of proprietary software licences is not zero. Other proportions of total cost being greater does not mean that a smaller proportion of cost should not be eliminated, especially where this can be done simply.
- Legacy ICT systems have strictly limited numbers of end-users. Per-user licensing, as a percentage of total project cost, sets the bound as to how far the system can scale, and acts as a financial break on the scalability of the system. Modern online systems demand enormous scalability to reach vast numbers of end users.
Proprietary software licensing is a dead model, and one the Public Sector can no longer afford.
Turning to the greater proportion of costs taken up by services, this is precisely the reason that the Public Sector can no longer afford, and must break it's reliance on, a small handful of enormous ICT companies and move to a triple-Open strategy (Open Data, Open Standards and Open Source).
By migrating existing infrastructure in line with a triple-Open strategy, the Public Sector enables itself to escape ICT provision from the existing monopolies and oligopolies, freeing itself from lock-in, systemic risk and ruinous costs. In fact there is no choice in this matter (Public Sector ICT costs are unsustainable), but let us assume there is and explain why.
The triple-Open strategy opens the way to placing both software and services with a free market of smaller, more competitive firms (local firms too if this is regional regeneration is politically important to the Authority).
Open Data means that Authorities data does not disappear forever into the proprietary depths of some particular piece of software.
Open Standards means that any of the companies in the market can take over the provision of the service.
Open Source means that any of the companies in the market can take over the running and development of the application.
Doesn't it just make sense to have Public Sector ICT infrastructure that a large number of local, national or international organisations can compete for, look after and develop?
Let's stop making futile gestures and just get to the point...