Government Failing To Leverage Its Credit Rating And Scale In IT Procurement

The Government Efficiency review, conducted by leading businessman Sir Philip Green, which highlighted what he terms ‘the inefficiency and waste of Government spending, which is mainly due to very poor data and process’, has been welcomed by the Software Industry Research Board (SIRB).

The report claims that government has consistently failed to leverage both its credit rating and its scale to manage its IT assets effectively. It stated that ‘expensive IT services are contracted for too long with no flexibility.

It also points to clear reasons why Government conducts its business so inefficiently including the lack of data, which is often both poor and inaccurate.

Matt Fisher, chairman of the SIRB, stated: “Software, like any other asset, must be managed throughout its lifecycle to achieve its maximum potential benefit. Effective management of software assets by public sector organisations improves financial performance by addressing such issues as how acquisition should be affected by utilisation and disposal,”

“The Efficiency Review calls for Government to produce accurate spend and consumption figures as well as centralising procurement for common categories to leverage buying power and achieve best practice. Crucial to this will be the need for an effective solution for managing and disposing of software assets. That is why the SIRB has today launched its own Guide to SAM for the Public Sector.”

In his report, Sir Philip Green references that central government spends £61m per annum on laptops and desktops. A total of 460,000 desktops and 60,000 laptops comprise the central government IT estate, supplied by 13 different IT service providers. Sir Philip Green has made the strong recommendation that Government should in future buy directly from a multinational manufacturer.

Sir Philip Green also references two IT contracts, one for the provision of hardware and software development, the other is a three year contract from one supplier across several departments all at differing terms because of a failure to standardise services.

Any one government department may be using thousands of computers, based across the country in a mixture of centralised and remote locations, running numerous versions of operating systems and applications residing in data centres and distributed environments alike. Given the highly dispersed nature of many government departments that is an additional reason to manage software – control and compliance.

Software Asset Management (SAM) should not be viewed as an optional administrative process but a key mechanism for transforming software from a cost centre to a strategic asset. For the public sector struggling with budget cuts it can deliver a number of benefits including controlling costs associated with software assets, improving the performance of those assets as well as the organisation and its employees and compliance with the law.

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John Lovelock has been with the Federation Against Software Theft since December 2002, having run his own business and several others at Managing Director and General Manager levels for twelve years in the UK after many years in business in South Africa. He was Chairman of the Alliance Against Intellectual Property Theft’s Digital Group for several years until, at his recommendation, it was taken back into the main body of the Alliance. The Digital Group included the music, film, games, software, publishing and copyright licensing industry sectors, and was responsible for lobbying Government on law changes to protect their members rights, as well as education and profile of the digital content industry within the employer organisations such as the CBI and FSB (Federation of Small Businesses) as well as the Institute of Directors (IoD). From his knowledge gained in the IT Sector and legal issues surrounding IT Compliance, Software Asset Management (SAM) and Software Licence Management (SLM) within The Federation, coupled with a vast experience in commercial businesses, John offers a down-to-earth, entertaining, succinct blend to presentations.

  • Yes, more thorough governance of software assets can save considerable money and reduce non compliance risk, however, when discussing software procurement and license today we should also take into account that more and more software will be obtained as a (cloud) service and not as traditional licenses. This holds the promise of “pas as you use” and only when you use it, and requires a differentiated approach to license management.