Government can save significant sums of time and money by
improving how it engages with technology suppliers; but only if
it learns from its past procurement approaches to large-scale
digital transformation projects which have experienced decades of
poor progress and billions of pounds in cost increases.
In seizing this opportunity, a cross-government sourcing strategy
needs to be established that takes account of how to deal with
‘big tech' suppliers who are bigger than government themselves.
Government also needs to address other areas where it has fallen
behind and not kept pace with the significant changes that have
taken place in the technology market over the last few years.
This is according to the National Audit Office (NAO), whose
latest report looked at what
lessons can be learned from government's approach to large-scale
digital procurement.
In July 2024, the new government announced a restructuring of the
digital centre of government. The NAO's report has six
lessons for the government to consider, split between three
lessons for the centre of government (the centre) and three
lessons for departments to consider.
Lessons for the centre of government
1) There are not enough people with digital commercial
skills in government. The Government Commercial Function
(GCF) – civil servants who support a range of commercial
activity, including digital – does not have all the digital
skills needed to reflect the distinct procurement challenges of
major digital change programmes. Conversely, government's central
digital function, which leads on digital and data policy, is not
formally responsible for and is not resourced for more extensive
engagement in digital procurement.
2) Government procurement guidance does not address all
the complexities of digital commercial issues.
Government would benefit from greater departmental and external
input on the more complex issues in technologically-enabled
business change.
3) Government struggles with the breadth of issues that
affects its ability to engage effectively with
suppliers. It needs to invest in capability to improve
its understanding of digital markets, its technical expertise and
how to partner more effectively with suppliers.
Lessons for departments
4) Departments do not make full use of their digital
expertise when procuring for technology-enabled business
change. Commercial teams do not always engage their
internal digital experts at the right time.
5) Digital contracts are awarded with insufficient
preparation. Programme teams often hasten to award
contracts because of pressure to deliver, including before fully
understanding what is actually needed from a
contract.
6) Approaches to contract design can negatively impact
successful digital delivery. Government can opt for
mechanisms which limit the flexibility for suppliers to use their
expertise to help government deliver the desired outcomes.
Recommendations
The NAO is recommending that the centre decides who should take
ownership for addressing the problems identified in the report.
The centre should produce a sourcing strategy to include
improvements in how it deals with ‘big tech' and strategic
suppliers. It should also create a digital skills plan to plug
recruitment shortfalls and to better equip and train
decision-makers responsible for digital commercial activities.
For departments, the NAO recommends departments strengthen their
‘intelligent client function'. They need to identify and develop
key requirements before tenders and bid processes commence, and
improve how policymakers and technical specialists work together
with procurement specialists. Departments should also improve
their capability to collect and use data to inform a pipeline of
supply and demand. This would help the centre of government build
a more strategic approach to
suppliers.
, head of the NAO,
said:
“A lack of digital and procurement capability within
government has led to wasted expenditure and lack of progress
on major digital transformation programmes.
“Government needs to rethink how it procures digitally,
including how to deal with “big tech” and global cloud providers
that are bigger than governments themselves.
“The creation of the new digital centre of government
provides an opportunity to make the systemic changes that are
needed.”
