G-Cloud, Procurement Reform and SMEs

Strategic Adviser Tony Singleton OBE, discusses the strategy and ideas around G-Cloud’s inception, as well as its success to date.

Without a doubt, the G-Cloud framework has been a major success. Arguably, it has done more than anything else to transform the way Public Sector buys IT and digital services by creating an open and competitive market, giving innovative and quality suppliers the opportunity to work with the public sector. It has allowed the public sector to buy commodity services rather than be locked into expensive contracts. Many of these suppliers have never worked with the public sector before. The figures speak for themselves. According to the latest (August2017) published data:

• Sales have reached a total of £2,415m;
• 47% of total sales by value, that’s more than £1 billon, has been spent with SMEs; and
• Sales with SMEs account for 73% of the total by volume
• 2,856 suppliers applied to be on the 9th iteration of the G-Cloud framework

G-Cloud has come a long way since the Government Cloud Strategy was published in March 2011. The key to the success of the strategy was that Government cloud (or G-Cloud for short) was not a single, government owned, entity; it was, and still is, an ongoing and iterative programme of work that enables the use of a range of cloud services, and has changed the way the public-sector buys and operates IT. It was also part of the vision for government to adopt a cloud first policy.

The strategy was published at a time of real change in the way government bought and delivered IT services. This is how government used to do things:

Any new service delivery programme would undoubtedly be policy driven. The first thing that would be done would be to spend several months defining the requirements for the service. With a fair wind, this could take six months to complete. Then would begin the lengthy procurement process, following EU public procurement directives known as an OJEU (Official Union and the Economic Union). It’s difficult to say definitively how long this might take as it depends on a number of factors related to the complexity of the procurement and the amount of pre-market engagement (talking to potential suppliers before issuing the tender) that is carried out. Here’s a process chart I found online showing the full extent of the process:

All very simple isn’t it!

Ok so let’s be generous and say that we have carried out our requirement definition phase, completed our OJEU and let a contract 12 months after the policy announcement. Fantastic. Now let’s build the thing. How long will that take? Who knows. Might be 12 months. Might be 24 months. When GDS launched their Transformation Programme they gave themselves 400 days to transform 25 major services, making them digital by default and simpler, clearer and faster to use. So rather than give our hypothetical service two years, let’s go all out and build it in a year.

So, two years after the policy announcement the service goes live. Nobody uses it. Hardly surprising as two years ago PCs were the main way that people transacted online (bear with me this is historical) and now we all use smart devices. And the service wasn’t designed to work on a smart device as that wasn’t stated in the requirement. More money spent making it work. But still people don’t use it as no-one has bothered to ask them how they want to transact. It was only at this final stage that the product was tested and released to the public and only then that there was real feedback to find out if it works for users
So things had to change. Now government does this:

First, a quick discovery phase is carried out to understand and map out the user journey. Then an alpha (or prototype) of the service is built and tested with users of the service. It gives the service provider the opportunity to demonstrate that the service build is technically possible. Next comes the beta phase where a working version of the service is built. This is based on the alpha prototypes and enters a pubic phase where it is being used for real. When the service goes live it is used as it’s been proven to meet user needs. But just because the service is live doesn’t mean it’s job done. Far from it. The service must be continually improved and iterated.

What has this got to do with G-Cloud and public sector procurement reform? Simply put it is at the heart of it. There is very little point coming to the end of the discovery phase and having to sit on your hands for six months while the alpha phase goes through an OJEU process. Momentum must be maintained. G-Cloud is faster and easier to use, which results in substantial process efficiencies. Buyers don’t need to carry out lengthy OJEU procurements. This reduces the time it takes to commission services by a factor of between 2 and 18. It also removes duplication of effort as departments do not need to run their own OJEU procurements time and again. In just the same way that service design and build is done using an agile methodology, so must procurement.

And a solution to this is what G-Cloud offers.

There is no need to worry about the OJEU process. That’s all been taken care of and buying through the framework is legally compliant. G-Cloud does not sidestep the competitive procurement process. It gives organisations an overview of the services available to them before they begin their own procurement. And then, by making it easier for smaller companies to win business, it is creating a more competitive marketplace for both buyers and suppliers.

G-Cloud saves money for the taxpayer through both direct savings and wider efficiencies. An independent review showed that average efficiency savings of 50% could be made through using G-Cloud. These savings came from:

• buying products and services at lower prices
• lowering the barriers to work with more SMEs
• a quicker buying process: reducing costs for the buyer
• being agile: buying what you need, when you need it

Opening procurement in the way that G-Cloud has not only helps SMEs win secure long-term work, it also provides the government with access to innovation, often at a lower cost. It can boost local economies. The work some SMEs have gained through G-Cloud has doubled their workforce, and others have grown beyond being classified as SMEs.

Could you be one of those suppliers?