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Innovative Approach Needed In IT Industry To Face Challenges Of UK Public Spending Cuts

360 IT : 02 June, 2010  (Technical Article)
With large budget cuts expected from UK Government departments looking to shave expense from IT services expenses, 360 IT urges the industry to revolutionise their service offerings
As the IT industry digests the Chancellor of the Exchequer's plans to shave £6.25 billion from the expenditure spreadsheets of various government departments, a leading IT expert from the 360°IT Blog has warned that if IT is to maximise its potential to stave off the potentially devastating effects of the cuts, the sector needs the most resilient, persuasive, creative and revolutionary IT leaders the profession has ever seen.

According to Jim Mortleman, a leading IT industry commentator, there will be massive repercussions for IT in the sector as budget reductions are ramped up. While George Osborne's cut-backs include £95 million of IT savings, the pain doesn't stop there, as the Government has also mandated £1.15 billion in 'discretionary areas' such as consultancy and a further £1.7 billion through the scrapping or renegotiation of existing contracts. 'Since IT is a big user of consultancy services and a big contributor to overall spending on third-party suppliers, it is likely to have to swallow a fair chunk of these cuts too,' he said in his blog on the 360°IT Event website.

And, he warns, individual government departments facing large cuts may decide to make IT shoulder an even greater share of their burden. Inevitably, says Mortleman, there will be job cuts in public sector IT as a result, not forgetting the knock-on effect this will have on private-sector suppliers of IT products and services to government.

But, he argues, the big question is where Osborne and LibDem Chief Secretary to the Treasury David Laws will apply the paring knife next. 'Over the course of this parliament, we've been told, cuts to tackle the deficit will need to be 10 times greater than last Monday's 'gentle introduction' to the coming austerity,' he says.

So should IT leaders in the sector be bracing themselves for similarly exponential levels of budget reduction over the coming years?

Not necessarily, says Mortleman, but bold IT leaders must step up to the plate if their departments are to be seen as part of the solution rather than part of the problem. 'I'd argue that if the public-sector needs to find £60 billion of cuts over the course of this parliament, and still maintain adequate service levels, IT will be key,' he said, adding: 'In almost every respect - from streamlining processes to automating manual tasks to driving innovation - IT is critical.'

In addition, Mortleman notes IT will need to play a central role in delivering many other government commitments such as making departments more transparent and responsive to citizens, hitting energy efficiency targets, reducing bureaucracy and enabling collaboration among the wider public sector, private enterprise and social ventures.

He goes on to say it is vital IT leaders fight their corner with passion and conviction when it comes to continued investment and the imperative for innovation and transformational change. But, he argues, they will not have much of a case unless they deliver results fast - which means taking a radical approach.

They will, he says, need to wield the axe over inefficient systems, processes and infrastructure and reinvest in more flexible, nimbler and less costly alternatives. 'They will need to rethink procurement processes, supplier management strategies and licensing arrangements - how can they reduce dependence on traditional vendors and open up to a wider range of smaller, more innovative partners? And they need to keep staff and teams motivated and engaged. It's a heady mix of technological, business, human and cultural challenges,' he said.

So do they have the mettle for it? Mortleman, who has been researching and commenting on IT developments for almost two decades (in the trade and national press as well as online), says yes. And some would-be revolutionaries, he reports, are relishing the forthcoming battle since it will allow them to take a much-needed radical approach to rethinking how public-sector IT operates.

'To these people I say, your time has come - now make it so,' he said.
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