Departments are breaking down integrated IT contracts, and bringing in ‘SIAMs’ to manage their new supplier systems. Winnie Agbonlahor reports on a round table held to discuss how this new model can be implemented.
Anyone who has built their own home will have stories to tell about managing a multitude of different contractors. One firm comes in to work on the electrics, another to put in floors, another to lay down the pipes, and yet another to landscape the garden. It’s almost impossible to buy all your services from one firm, because not everyone can be good at everything, and you want the best deal on every component in order to build your perfect house.
In the civil service, organisations traditionally met most of their IT needs through a single supplier, signing an umbrella contract to provide everything from desktop computers to databases, storage to software. But departments and agencies are now moving away from single large contractors toward a ‘tower’ model, in which each service is provided by a different supplier. The aim is to improve services, spread risk and, of course, save money.
To facilitate the new model, departments bring in a contractor to oversee and co-ordinate these different suppliers: a ‘service integration and management’ company, or SIAM. It’s a whole new layer to IT service management, and there is uncertainty about how SIAMs can work most effectively – both with departments, and with their various supplier organisations. Yet the success of the tower model – and the amount of money it can save – will depend largely on the efficiency and efficacy of these SIAMs.
That big question – how departments can use SIAMs to secure the benefits of tower contracting – was the subject of a recent CSW round table, held with the support of government IT supplier Siemens.
Stephen Dines, deputy chief information officer at the Department for Environment, Food and Rural Affairs, said the savings achieved through this new model could be significant, but warned against focusing too much on the financial benefits. “I think the initial emphasis was most certainly on savings, and while most of us are convinced that we need to demonstrate savings to obtain Cabinet Office approval, we also need to demonstrate to our organisations the business benefits of these changes,” he said. “There will be a considerable [financial] bounty, but through the changing model and investment we can deliver better services – and in particular services that are more dynamic and change with our role.”
Michael Bowyer, director and chief technology officer at Siemens Enterprise Communications, said the new model has the potential to achieve improvements not only for government but also for suppliers: “From an intelligent supplier’s perspective, we like the idea of what a SIAM can do for us. We think it can streamline our services.”
I am SIAM. SIAM I am
During the discussion, several hurdles emerged which will need to be overcome if the SIAM-led tower model is to be successful. One issue lies in defining the SIAM’s role, and Bowyer called for more clarity from the government in stipulating what a SIAM should do: “One of the problems we have is that the SIAM model is still relatively new,” he said. “Departments are still finding their way through how the model is going to work. We as a supplier are seeing a slightly confused picture about what the SIAM is supposed to do. When you say: ‘Can SIAMs do this?’ and [departments] say ‘We don’t know’ or ‘not sure’, we want to know when they’ll be in a position to tell us.”
The government has attempted to address these issues through the creation of a new interdepartmental working group, which meets every three months to discuss the development of the SIAM model and also offers departments advice on tower procurement.
Dines, who sits on the panel, said the precise role of the SIAM will vary according to each department’s needs. “It feels right to me that the Cabinet Office puts forward a proposition to departments which they then think about,” he said. “Because each department is at a different point [in moving towards the tower model] and the structures in the organisations and business needs are very different. I think it’s inevitable they will come up with variations of the model.”
Despite this variation across departments, Dines added, there remain underlying similarities. “I’ve seen six different models in six different departments, with different interpretation of some elements – they change the titles, the categories, they have their different interpretations over which elements are insourced and outsourced. But by and large all models look the same. They’ve all got a helpdesk in them. I think each department should be allowed to decide for itself what works for its business, rather than trying to fit a model.”
Dines’s view was echoed by Peter Osazuwa, head of application services at the Ministry of Justice (MoJ), which is currently seeking a SIAM. He agreed that while the template is similar across the board, SIAMs should not be viewed as uniform. “It’s not a one-size-fits-all,” he said. “How departments tweak and get it right is down to them individually, because their requirements will be very different. What the MoJ does in terms of prison and probation, for example, is very different from how HMRC operates and its priorities. So I think it’s right that the Cabinet Office can prescribe a template, but then each department needs to do some work to ensure that it can dovetail and align things in a way which works.”
Shelagh Brown, Universal Credit programme manager at HM Revenue and Customs, concurred. She said that while there is “a common understanding of what is happening across government, tailoring is very important”. She added: “one size is not going to fit all, but I think this is a massive opportunity to use the framework [set out by Cabinet Office] and tailor it to the specific needs of every department.”
Capability and capacity
The question thrown up by this reasoning was whether departments have the capability to successfully tweak the SIAM model according to their specific needs. A lack of experience often leads to money “being burnt” on temporary consultants, Bowyer said. But Dines said he has no concerns over a skills shortage, and added: “It’s not rocket science. We’re not trying to do something overly novel or contentious. I have absolute assurance from people I’ve worked with – and am working with at the moment – that we can go about this transition and that the vast majority of skills we’re looking for are either transferrable from our internal people, or we can build them through good training capability processes with full engagement of our HR units.”
Osazuwa also said he did not see a problem with capability, and he was positive about the potential to share information and best practice across government. “In the civil service we have a unique platform where we can share infromation, bring it back to the office and implement it,” he said, arguing that engagement beween departments should be a “top priority”. He warned, however, that departments must focus enough staff and money on the work to ensure capacity does not become an issue. He said: “If we don’t keep the light on getting our capacity up, the capability will suffer, because the two are aligned and closely linked.”
A changing context
Even if the capability is there to tweak the SIAM model in each department, the task of setting out the exact role of each SIAM is complicated by the continuously evolving contexts in which they work. Changing circumstances brought about by agendas such as the move to cloud computing, or the Cabinet Office mandate to engage more small and medium-sized businesses (SMEs) when procuring services, mean the model has to be flexible.
One example of changing requirements within government lies in the MoJ’s recent announcement that its ICT tower procurement has been halted. TechMarketView LLP, a technology research and analysis website, reported earlier this month that the Cabinet Office had decided the planned procurement was out of alignment with the government’s ICT strategy, shutting it down – and rendering all the costs accumulated by the bidders a waste of money. The MoJ declined to comment on the reasons for halting the process, but told CSW: “Our IT requirements have changed so we will be retendering some revised contracts in due course. Getting value for money will be a top priority.”
Projecting cost savings without knowing what changes SIAMs may have to manage is a serious problem for departments, warned Osazuwa, adding: “It is almost a moving target of the technology, capabilities and, of course, the competency itself within the department.” Finding the required savings from new ICT models within this changing policy and technology context will be a “big challenge,” he said.
Bowyer also highlighted the difficulty of forecasting savings:“The expectation is that SIAMs will produce substantial savings. Treasury tends to be quite blunt: it wants cash savings. But it seems to be blurred about how those savings are going to come through. The most important thing is to avoid delivering a model that layers cost on cost – in other words, a SIAM that just adds cost rather than saving money.”
Making it work
Even if the issues around defining SIAMs’ roles and dealing with change are resolved, fundamental questions still need to be answered about the transition from the old procurement model to the new.
One major challenge of the move to the new model is the task of breaking up existing contracts so that departments can procure the services individually. Bowyer said the transitional aspect adds “layers of complexity onto the SIAM model”, adding: “The issue we have with the model is that there are staggered ends of existing contracts.”
While many departments currently obtain a wide range of IT services from one supplier, the different elements are set out in separate contracts – often with different expiration dates. So while a department may have found a suitable tower provider for, say, its desktop services, it may have to stick with its current provider for other services because the contracts do not all end at the same time.
The creates an obvious risk: as Dines said, it is crucial to maintain “a really good relationship with our supplier during the transition, so that they understand what’s in it for them beyond their huge prime contracts”.
Once the new model is in place, one “killer question” has to be addressed, according to Bowyer: concerns over security and safety. The government’s Public Services Network allows for different levels of security accreditation, and IT providers thus acquire a particular rating. A firm providing IT services for the Home Office, for example, will need a higher level of accreditation than one working for the Department for Energy and Climate Change, due to the data’s greater sensitivity.
However, as soon as a supplier with PSN security accreditation begins to integrate its services with a SIAM provider whose software is rated to a lower security level, it risks its own accreditation for those services – creating awkward barriers between tower providers. These issues “are rumbling around in the background,” Bowyer warned.
Securing co-operation
There is also the question of how to instil into the plethora of new service providers the unity of purpose demanded by the tower model. The right ethos among suppliers can be created with the help of a master service agreement (MSA), according to Osazuwa, who described it as a “carrot and stick” approach to encourage a shared sense of accountability.
The MSA, he explained, was devised in the construction industry and is comparable to a “bucket of money” that is shared out when things go well. But part or all the cash is withheld from everyone if something goes wrong, regardless of which individual provider is responsible. “We used to have a war room scenario with people pointing fingers at each other,” Osazuwa added, “but this is a collaborative approach, which overrides every single contract you have with the individual tower providers.”
Bowyer is a fan of MSAs, and described them as a “fascinating” idea. However, he said that in practice it’s proving difficult to convince suppliers to sign up to voluntary MSAs. “Contractualising the MSA is turning out to be a nightmare, because a public body can’t enforce something that is voluntary between the supplying organisations in the tower,” he pointed out. “There are still quite a few suppliers out there reluctant to sign up to it, and some of them will drag their heels for as long as they can, because it introduces complexity into some of their existing contracts.”
The trick to get suppliers on board, Osazuwa said, is to “work on the wordings” so that the MSA does not come across as “scary” to the supplier but instead makes it clear that it is intended to achieve a “positive outcome”. Bowyer said he wants the government to be aggressive in pushing the MSA concept, which he sees as essential to the success of the tower model. “If a supplier turns around and says: ‘That’s too hot for me’, I’d like to think that big departments get more aggressive about those organisations that say ‘no’,” he argued. “Because if we don’t get these good models put into these contracts, then the savings and the improved business models won’t get delivered and the SIAM model will not work.”
One issue dividing participants at the round table was the question of whether a SIAM should also be able to bid for elements of a tower contract. If the process is conducted in a fair, open and transparent way, allowing one company to fulfil both roles might seem straightforward. But Bowyer pointed out that SIAMs are meant to help manage the tower providers and oversee the integration of their services – a role likely to involve arbitrating disputes between them, “I think you’re either a SIAM or a tower provider,” he said. “If I hear the SIAM is bidding for the same services as one of the tower providers, I, as a tower provider, clam up, because how can I trust the SIAM to be independent and neutral?”
On the other hand, some departments have already seen a significant drop in the number of suppliers bidding to be SIAMs, and ruling out any of their tower suppliers risks narrowing the competition down still further. So restricting a SIAM to only one role could lead to departments “missing out on opportunities”, Dines argued: “Where there is a SIAM that has great capability in the tower service and the price is competitive, aren’t we missing out?” Tim Waters, requirements manager at the Treasury and Cabinet Office ICT Service, was also open to the idea: “Some of it depends on time and knowledge and current situation,” he said. “I don’t think there’s a single right answer.”
The government decided the model of system integrators provided poor value for money and reduced competition. But while the tower model has the potential to bring down prices and sharpen up the suppliers’ offers, it also introduces greater complexity. If government can work out how to manage the SIAMs effectively, it can reap the rewards of tower procurement. But, as it is the case with building a house, it takes a long time to create the perfect home – or, in this case, the perfect ICT tower.