Debunking some old CIO myths

Dear Tim,

I enjoyed our belated New Year lunch. A vigorous discussion as you challenged me on the points I raised in my Xmas letter. So let me capture here the essence of the strategic observations I made.

This vision of cost savings through government shared services that you are suddenly now so enthusiastic about: the sceptic in me says, a recession-driven deathbed conversion. The informed observer in me says: a half-decade of apparent departmental commitment to shared services has crystallised into one simple reality of 'You come and share my services' - and little actual progress.

My first challenge has to be to your attitude that there is something special about the majority of the services that government consumes and delivers. I recognise that many frontline services will be distinct in their requirements, supporting the work of social services teams in the UK's inner cities for example. But much of the underlying machinery of government is very little different from the underlying machinery of the modern corporation: means for effective real-time communication, document and case management, collaboration and team working tools, HR services including record keeping and payroll, a range of operational financial services...

The challenge lies in the phrase 'my services'. Fifteen years ago I was completing a major outsourcing of ICI's telecoms services infrastructure. The pharma business had been floated off as Zeneca. My inherited IT management team was all for maintaining the existing (ICI) shared telecoms services model at an estimated investment of £1.5m for dividing the systems in two between ICI and Zeneca, and a consequent increase in tariffs of 20 per cent. But by going to the newly competitive telecoms services markets we were paid £3.5m for what we handed over as a going concern, and tariffs dropped by 20 per cent.

Your defensive feint is always security. There is an assumption that government alone has to work with secure operations. As an experienced senior in the private sector I take genuine offence.

I told you the story of Bechtel: global engineering major, 45,000 employees and the same number of contractors on the payroll as it builds dams, airports and motorways. They work to reward stakeholders in a very competitive environment, and with Chinese and Russian rivals a growing threat, security is an absolute necessity for survival.

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