Can cloud services save the govt £3.6bn?

A recent survey of public sector senior finance functionaries has calculated the public sector IT budget needs to be cut by £3.6bn. The survey was sponsored by VMware, which unsurprisingly was using the findings to strengthen its cloud infrastructure proposition.

On the face of it, it’s a no-brainer to suggest outsourcing government IT infrastructures as a way of achieving quick wins in cost-cutting, but there are still many serious warnings against doing so.

Successful employment of cloud services by the government to make these savings will depend a great deal on public sector CIO’s attitudes to their departments and their IT teams, and their approaches to supplier management, according to Dr Zafar Chaudry, CIO at Liverpool Women’s and Alder Hey NHS Foundation Trusts.

Being a VMware customer, he is a champion for cloud services and he espouses a hard-line sentiment to IT team’s responsibilities to the cost-cutting challenges that lie ahead.

He said: “We expect to be asked to do more with less. There aren’t going to be any big surprises [in the coming Comprehensive Spending Review, due out 20 October] and we know we need to be leaner. We are here to support front-line staff.”

Making savings in public sector IT isn’t going to happen unless some investment is made in new, more cost-effective technologies, Chaudry said. But, he believes it is possible to make the expected savings requirement of £3.6bn. For him, cloud services of some sort can greatly contribute to that saving.

This sounds a little optimistic, given the concern amongst CIO over security issues. The public sector has a reputation for being successful in maintaining the security of sensitive data, which many CIOs would be keen to lose. They may need a great deal of persuading that the demonstrated savings in cloud infrastructures outweigh their perceived security concerns.

Chaudry insisted that public sector CIOs need to do some due diligence with providers to make sure data security is maintained. Actually what he is advocating is a hybrid solution, where data is still stored internally, but is distributed over a hosted network. He is a supporter of shared services and his combination of shared infrastructure, with VMware’s services has helped him save £300,000 this year for the trusts he supports.

That’s about half of the 22.5 per cent the public sector IT budget needs to save overall and Chaudry admits he’s looking for other ways to make up the saving.

Even Chaudry’s saving, as admirable as it may be, is tiny compared to the massive savings public sector IT as a whole is expected to make. Does he really think his approach can scale? Technically, yes. But, Chaudry admits the biggest issue is communication.

He said: “Communication in big organisations sometimes gets bottlenecked and IT leaders might be tempted to protect their own domains, but this can be overcome through effective dialogue. Just considering the NHS, there are big structural models in the US where hundreds of hospitals share the same services and they’ve managed to save tens of billions of dollars. If they can do it, we can too.”

Effective communication will be a key factor in department IT heads working together to make the savings of the scale required, but that’s simpler to identify than it is to achieve. Any dialogue that can be created with two NHS trusts may not be possible between central government monoliths.

And this may be even more difficult to achieve when implementations like cloud will probably make a good many IT roles redundant.

Chaudry is sanguine about the loss of staff, but other public sector IT heads may want to fight to keep their teams, and so be less enthusiastic about outsourcing their infrastructure.

He said: “[CIOs] will have to reduce headcount to improve efficiency. It’s a difficult place to be in, but at the end of the day, we are employed to run a service and have to put our feelings aside. As an IT leader, you can’t afford to have any friends, because you don’t know what you are going to have to do in the future for the business.”

A hard sentiment perhaps and possibly not one that every CIO would agree with, but it’s likely that like Chaudry, the Comprehensive Spending Review next week is going to cause all public sector IT leaders to have to make some uncomfortable decisions, whether it is handing over infrastructure to a third party or losing valued colleagues.