Central government credit agency last year moved away from long-term single-supplier outsourcing deal to embrace disaggregated model
After a decade and a half of working with a single IT supplier, UKEF now works with about six providers in different areas
Over the last few years, the message to Whitehall departments from the Cabinet Office – and its subsidiary, the Government Digital Service – has been clear: disaggregation is your friend.
Numerous single-supplier long-term outsourcing deals have been broken up into a number of smaller engagements, invariably with smaller providers. Meanwhile using a tower delivery model – in which one large company manages and leads a consortium of suppliers – has become almost forbidden, on pain of GDS disapproval.
With just 270 employees, UK Export Finance (UKEF) – a credit agency providing backing for UK firms that wish to sell goods and services into overseas markets – is one of the smaller central government departments. But it is one that oversaw funding of £3bn in the 2016/17 year, as part of its mission “to ensure that no viable UK export should fail for want of finance or insurance from the private market”.
What is more, when it comes to technology, UKEF prides itself on being “a small organisation with a big risk appetite”.
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Such adventurousness last year helped the department ditch a monolithic 15-year IT outsourcing engagement with solitary supplier Logica and, latterly, CGI, which in 2012 acquired the UK-based services and consulting giant.
In its place has been a disaggregated approach, a move into the cloud, and new relationships with various SMEs. In 2016 the department implemented Microsoft’s Azure cloud technology, with software and support provided by Stafford-based IT consultancy Risual. Elsewhere, Nottingham-headquartered SME Littlefish has been tasked with running UKEF’s IT service desk. Through its use of the G-Cloud framework, the organisation also buys applications from specialist providers such as Idox.
The department claims that, in its first year in operation, the new disaggregated model has already delivered cost savings of more than 20%. PublicTechnology asked Lawrence Nichols, head of IT at UK Export Finance, to tell us how the organisation went about changing how it works, and what the major benefits – and challenges – have been.
PublicTechnology: What was the motivation behind disaggregating your previous IT services contract to move to a model of working with smaller specialists?
Lawrence Nichols: After several years with the same supplier, it was the right time to look at the available options. The move to a multi-supplier model was in line with the Government Digital Service’s strategy; we wanted a more flexible relationship, and we hoped that smaller, specialist suppliers would be more likely to support this aspiration.
What have been the chief benefits of doing so?
We wanted to be able to introduce changes more quickly, and we wanted users to feel that their needs were being met quickly, and in an agile way. In our annual satisfaction survey… our users reported significant service and satisfaction improvements.
Is it just about improving service, or can it save cost as well?
From the outset, we believed that we would be able to save money, and this is a big priority across government. We estimated that we should be able to achieve a 20% cost saving, and this is what we have done.
How many IT suppliers do you now work with, who are they, and what are some of the things they have brought to UKEF?
We now work with half a dozen main suppliers to deliver the full range of services that we need.
Does working with numerous suppliers increase the complexity of managing relationships? If so, how do you mitigate that?
There is no doubt that moving away from a single supplier has changed the way that UKEF has to manage its suppliers. Having Littlefish as the central point for incident and change management has huge benefits, and makes it very easy working with multiple suppliers.
Does moving to a disaggregated model require you to cultivate integration skills in house?
Yes. We have upskilled our internal staff so that we have a better in-house understanding of how our systems relate to each other; this means we can be a more intelligent customer. The existing staff have seen this as a chance to increase their capabilities and work as partners with a number of suppliers, rather than the more passive role required when working with a single vendor.
Will you continue efforts to disaggregate contracts, where appropriate, and work with more SMEs?
At the moment, we’re very happy with what we’ve achieved and we feel that the current number is about right. But we would not be worried about working with new SMEs, should the need arise. Our experience to date is that smaller businesses are well-equipped to meet our needs.