Georgina O’Toole, Chief Analyst at TechMarketView, explains why, in a digital environment, public sector organisations cannot afford to be insular
TechMarketView’s recently published analysis of the UK public sector ICT market revealed a picture that can be viewed in the context of ‘micro’ trends and ‘macro’ trends.
In our view, the ‘micro’ trends, i.e. the direction that the UK government is taking in terms of its ICT strategy, are largely unchanged. There has been a softening in some areas, for example, a more pragmatic approach to the disaggregation of contracts in central government and a hardening in other areas, for example, a stronger emphasis on the need to deal with complex data issues, and greater concerns around cybersecurity following the recent ransomware attack impacting the NHS. And these changes in emphasis will, undoubtedly, impact the pace of progression.
But in general, despite ministerial changes following the snap General Election in June 2017, we do not see any strong desire to backtrack on previous commitments. For example, there is still a push to work with more SMEs, to let smaller and shorter contracts, and to implement common technology services where appropriate. And since the middle of 2017, our view is that there has been increasing emphasis on how to best rationalise, manage and utilise data, as well as a desire to ramp up the open data agenda.
Rather, the change has been in the ‘macro’ picture: around budgets (dependent on the chosen approach to reducing national deficit and debt, as well as the Brexit ‘divorce bill’); around resources (impacted by ongoing reductions to the civil service, changes in the treatment of contractors (IR35), contract disaggregation and the desire to upskill internally, and the potential impact of Brexit); and around Brexit itself (the potential brain drain and the need to resource Brexit-related programmes). These are the 3Bs illustrated in this article. Those ‘macro’ trends are making the market increasingly volatile and challenging to predict across all subsectors.
Balancing short-term digital investment with long-term goals
The combination of ‘micro’ and ‘macro’ trends is creating a push-pull scenario, driven by the need to invest to attain increased efficiency and productivity fighting with the requirement to control budgets in the short-term. This is where the need to accelerate the digital transformation agenda comes in. Digital transformation has risen to the top of the agenda in the public sector. Austerity has been the catalyst, but as the benefits of digital has become better understood, increasing numbers of organisations are taking the journey. They know, though, that they must be able to prove investment now will deliver a return in short-thrift.
Breaking the boundaries
That is a big challenge in the context of tight budgets, a shortage of skills and resources, and a fear of some of the newest emerging technologies. And it will force organisations to look beyond their four walls when it comes to skills & resources, to data, to technology and to innovation.
Skills & resources – Pressures such as Brexit, the challenges of IR35 and a digital skills shortage means the government will need to be creative in sourcing the requisite transformation capabilities. That might mean considering the use of public freelance marketplaces or crowdsourcing to achieve greater flexibility and agility when responding to rapidly changing digital requirements.
Data – Organisations are waking up to the value of data – pursuing the open data agenda, creating new data and looking to external sources. Those external sources might be public, but they might also come from forming innovative partnerships with data owners.
Technology – As the adoption of as-a-service and ‘internet of things’ solutions (e.g. for smart cities) grows, organisations must increasingly put their trust in infrastructure and technology beyond the four walls of their internal server room or data centre. New challenges around reliability and security will abound.
Innovation – To ensure that their use of technology is advancing at an appropriate pace, innovation can also come from the ‘outside’. Drawing on ideas from academia, hackathons, innovation hubs, as well as the traditional supplier network, will necessarily increase.
In many cases, new approaches will mean reconsidering traditional operating models and breaking the boundaries between departments, agencies, regions and partners, whether via closer collaboration, transference of skills, the re-use of technologies or the sharing of data. Even harder, though, will be breaking cultural boundaries, adopting a completely different data-driven mindset to unlock the true potential of digital technologies.
Over the course of 2018, TechMarketView’s PublicSectorViews team will continue to publish in-depth supplier and market analysis, as well as shorter viewpoints on the 2018 ‘Breaking the Boundaries’ research theme. The result will be an invaluable mix of research designed to help government organisations and ICT suppliers understand the opportunities and threats represented by the changes in this ever-evolving area.
References
1 TechMarketView report: UK public sector SITS market trends & forecasts 2016-2020 (http://techmarketview.com/news/archive/2017/12/06/out-now-uk-public-sector-market-trends-forecasts-to-2020)
2 TechMarketView research theme 2018: Breaking the Boundaries
3 TechMarketView Public Sector Predictions 2018 (http://techmarketview.com/news/archive/2017/12/14/new-research-public-sectorpredictions-2018)
Georgina O’Toole
Chief Analyst
TechMarketView LLP
Tel: +44 (0)1252 781 545
