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Review of Public Procurement in Scotland - Report and Recommendations

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15 Procurement of Information Technology

Background

The acquisition of information technology capability from an external company or companies is usually one of the highest value and often most complex of procurement transactions. It is the role of the procurement officers to work with internal parties and external IT suppliers to achieve best results at best possible whole life cost.

Findings

The most common features of a less than satisfactory information systems implementation are those of timing, delay and cost overrun. Often this is due to underestimating the business process re-engineering effort and/or the adding of new requirements to a systems specification which already requires a bespoke project.

In my opinion, a significant part of the business need and associated volume transactions in the public sector, including those of procurement, can be satisfied by standard applications or the use of existing applications that have been tried, tested and proven effective elsewhere in the public sector.

15.1 Recommendation

To achieve savings in initial procurement and in life time running costs, and to assist in implementation timescales, industry standard or existing already designed applications should be procured from and, wherever possible, installed directly by the software company. Organisations should have a policy to avoid the process re-engineering, consultancy and bespoke system cost premiums associated with long analysis and design cycles. The package procured should have wide applicability.

15.2 Recommendation

I believe that a clear and unambiguous central information systems strategy for the Scottish Public Sector would deliver major benefits in terms of effectiveness of services, staff productivity and overall cost, including improved benefits to procurement. As stated at 15.1, it is my view that this strategy should be founded upon maximum use of standardised and integrated applications for significant transaction-related aspects of public-sector business and not new bespoke or unique local systems. If this is not possible or practicable for the overall public sector then at a minimum a strategy for each major element of the sector ( e.g. Health) should be adopted. This is not a recommendation to establish a heavily centralised IT organisation but more to ensure that requirements are orchestrated, rationalised and standardised as much as possible across the public sector before entering the market place for solution acquisition.

15.3 Recommendation

The procurement of standard and generic applications such as for Finance or Human Resources should be regarded as a Category A item and be contracted for by the National Centre of Expertise. If this is not practicable then default should be to the B Category standard and generic applications should not be contracted locally at the individual unit level.

15.4 Recommendation

The procurement of other sector specific standard applications ( e.g. for Health) should be categorised as B commodities and should have contracts established by the B Category Centres of Expertise.

15.5 Recommendation

Although large-scale standard applications are often provided by multinational companies, it is also the case that specialised and innovative functions can be provided by niche applications from smaller companies. This area offers an opportunity for local IT companies. The User Group recommended at 9.2 should be used to introduce these offerings to the public sector.