For the past 18 months or so, behind closed doors, three consortia have battled it out for a contract to transform the digital infrastructure of the States. Last month the front-runner for the £200m+ contract was announced, and now our Deputies are being asked to approve approximately £47m of initial expenditure for the project to go ahead.
This is undoubtedly the biggest IT venture ever undertaken by the States, and it has startled those who recall similar large government projects which turned out to be over-budget and overdue. This one is scheduled to last ten years, and the story thus far reveals the ambition involved.
The three bidders after an initial round were the UK arm of Fujitsu, whose principal local partner was Sigma; Agilisys of the UK; and DXC Technology (previously the HP Enterprise Services business) partnered with Sure and C5 Alliance. Other local entities directly involved were the telecoms companies Sure and JT, and – indirectly on an advisory basis – PwC and KPMG.
Last month, Agilisys was finally unveiled as preferred bidder, apparently on grounds of cost but also given its experience in the UK with several local councils. The DXC consortium was told last year it hadn’t made it to the final round, while the Fujitsu group, despite a strong run at the end, proved unable to exploit its advantageous position as an existing long-term provider of critical IT services to the States.
The States has released a considerable amount of information about the project over recent days, but for the layman, and probably for Deputies, it is written in dense technical prose which in its generality is hard to decipher, even if the message is fairly plain.
In its basics this message is that the States has out-of-date systems for most of its modern purposes, that its multiple IT teams have struggled to keep them fit for the job, and that there must be a transition to new arrangements which integrate with the previously-announced overhaul of the civil service itself.
Things came to this pass for the same reason that non-IT activities, such as HR or property, evolved as they did: because they could. Independent committees had their own IT staff, saw their bespoke IT systems languish behind the times, used duplicate software licences and redundant server capacities. Focused unduly on maintenance, they became ill-equipped to move to modern cloud-based technologies.
The result was that the Tax Office and Social Security systems remained inadequate, the Schools systems were proving insufficient, and the systems for Home Affairs and Health & Social Care also fell short. Worst of all, people dealing with the States became victims of a costly and frustrating lack of coordination, summarized by their inability to store details of any changed circumstances centrally and in one step.
Now it seems something is being done about it, thanks in part to the way modern technology has evolved. The negotiations have been hard for all sides. Hundreds of workshops and meetings took place between the consortia and the States project board formed for the purpose, and the expenditure by the consortia ran into the millions of pounds as the exchanges painstakingly pressed on.
Because of the iterative process being employed – in which what the States actually wanted became defined by the conversations with the bidders – the consortia each passed on considerable amounts of valuable intellectual property, only to be asked at the same time what they would do for the island should they win the business. The answer to this last point involves upgrading IT skills generally in the local workforce and assisting with the development of what is unhelpfully called ‘medtech’ and ‘fintech’.
Indeed, this aspect is the least easy to quantify when it comes to the overall cost and benefit of the project. Apparently it is too simplistic to see it as a £200m+ project. This figure is really the accumulated total of likely States IT spending over ten years if these extensive changes are not made. If the project is successful, the first steps alone could potentially save some £2m a year, permitting in turn a funding of costs further down the line.
To understand this better, start first with the fact that a single States IT team has finally been brought together as one group known as ISS. Under the plan, this team is going to be detached from the States payroll to work as a unit with Agilisys, but under existing terms and conditions.
From there, at least three work phases must unfold, either sequentially or simultaneously:
- It starts with a once-in-a-generation shift of all existing operations into the cloud, retaining the use of Microsoft’s Office 365 software system. This will allow a centralized system of storage, with network access to individual parts of the system from multiple locations, paid for by capacity usage and entailing significantly lower fixed costs.There is still some uncertainty about how much information would actually be stored on-island. A Guernsey-based “cloud” will require a large amount of computing power, which could mean the successful bidder will seek to recover some of the initial high fixed-cost investment – potentially by offering services to business entities outside its immediate orbit.
- The trickiest part of the project is to move from where things are to where they ought to be in system terms. This parallels the announced changes to the structure of the civil service, which itself entails fundamental changes to the way it currently works. In the jargon, we are talking overall of “people, processes, systems and physical infrastructure” across all departments and the adoption of better business practices.
Previously we have been told that the transformation of the civil service will mean the loss of some 200 roles. We can now see why, given that the new IT system aims to meet, for example, the specific requirements of schoolteachers and their pupils, contractors on capital programmes, workers paying tax and making social security contributions, doctors and nurses and patients in the health service, not to mention the management of the States’ internal accounts.
Some of these will sit apart from each other within that system, and that part of the Home Affairs system carrying sensitive security information for the police and Border Agency will be isolated altogether. It might be going too far to infer that Guernsey’s link with UK systems could otherwise be suspended, but some parallel IT activity involving people or systems will inevitably remain outside this vast project.
At a more basic level it is equally obvious that the States ought to be able to rationalize some of its property assets, as it has previously hinted. One thinks in particular of old offices at Raymond Falla House, Cornet Street and the Grange.
- The prospective benefits of the project further down the road are perhaps the most difficult to quantify, since it presumes that – alongside the indirect benefits to the community in terms of business development opportunities, efficiency and skills transfer – local business will profit in some way from the envisaged changes.
The risk is that this taxpayer-funded platform – with instant access to the States’ own locally-qualified workforce plus a guarantee of ten years’ work – ends up competing with the local IT sector. If local IT companies are fearful that they may be squeezed by the new behemoth in their midst, they may equally find the scope of the project vast enough to be able to participate directly in aspects of the transformation.
Deputies who must consider the proposed spending tranches laid before them will have a few other questions about all this, quite apart from whether such a Big Bang solution is the answer to the underlying problems. Are the requested appropriations – spelt out to the nearest £0.1m, no less – really that reliable? Can Agilisys – the cloud/IT/digital arm of the Blenheim Chalcot group – handle all phases of the project? And will top civil servants act successfully as an “intelligent client” in overseeing its work?
High-level answers to some of these are contained in an appendix to the policy letter. Deputies will also want to know how the project affects their committees’ authority and influence, and in particular whether those servicing these committees (hitherto chief secretaries) are going to be answerable to the small group of “uber” civil servants being placed above them. Deputies expect to retain the ability to launch policy and investment initiatives, and in respect of IT may worry that their committees’ specific needs may be overlooked. Either way committee heads will need to be clear-eyed about where they wish to head.
With details of this project now fully in the public domain, it must be added to a list of other big capital items under way or under consideration: the two-schools project, health service reform, a 5G network, the Eastern Seaboard development, a new electricity cable to Jersey, another to France, one day (perhaps) a longer runway. Involving outlays of around £500m, it all amounts to a highly complex and demanding programme of action. But the civil service transformation clearly forms the anchor. Expect it to press ahead.
