Government shared services delays – the FT picks up on our story

You may remember we featured our exclusive story a couple of weeks back about delays to the UK Cabinet Office Shared Service Centre programme. Operation of the first centre (SSC1) was outsourced to arvato, a subsidiary of German mega-firm Bertelsmann, and we found it was behind schedule in terms of both transitioning the Department for Transport from SAP to Agresso software, and in moving other departments such as DCLG and DCMS into the Centre.

The story was picked up by the Financial Times, and Sarah Neville, their Public Policy Editor, managed to get confirmation of the delays from the Cabinet Office, and a quote from arvato, which she reported on today.

“Arvato said that, together with government, it had made “a strategic decision to adjust the timing of the migrations to a new [software] platform. This is to ensure the right balance between speed of implementation and continuing to provide a low risk, high-quality and reliable service to our clients. We expect the first migration to take place at the end of 2014, with others following throughout 2015”.

And I got quoted in the article.

Peter Smith, a former senior civil servant, now managing editor of Spend Matters, a procurement website, said Whitehall must have been well aware of the potential for serious embarrassment if the scheme had been implemented too rapidly. “Operational problems can hit the headlines quite quickly, for instance if staff and suppliers are not being paid.”

He said the decision to use Arvato had been motivated by a desire in the Cabinet Office to “move away from some of the usual suspects in outsourcing… the problem with that is fresh faces maybe don’t understand the specific issues or complexities of UK government work and although Arvato are a decent sized company generally they are not experienced in UK public sector work”.

As Neville points out, the project was championed by Stephen Kelly, the Government’s Chief Operating Officer, who resigned recently to go and make loads of money in the private sector. That may prove to be good timing. As well as the shared services initiative showing signs of strain, we’ve heard recently of a major IT supplier who is refusing to deal with Cabinet Office because of the way senior executives feel they have been handled. And now, major firms in the health supply field have also complained at the highest levels about the way relatively junior Cabinet Office people are behaving.

It’s a difficult balance of course – large firms may have made “excess profits” in some people’s eyes from their government business, and a tougher line will be applauded by many. But as we’ve said before, government does still need these suppliers, so perhaps it is about getting unpalatable messages across, and being firm in negotiation – whilst also remaining non-adversarial and acting in a respectful manner. That is perhaps the key to success for the Crown Commercial Representatives and others in Cabinet Office.

Anyway, back to SSC1 – we will be keeping a close eye on progress now, as will the FT I’m sure!

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