Spotlight on Onyx Group – An interview with Neil Stephenson

This month Neil Stephenson, CEO of Onyx Group, provides his view on why IT in the public sector will change significantly in ‘austerity Britain’. 

The Government’s full cost-cutting plans will be detailed in October but it is clear the face of the public sector will change significantly. The Coalition’s dependency on science and technology businesses – like those that Newcastle Science City supports in the North East – as a key driver of the economy will attract a lot of attention, undoubtedly, but the role of IT in the delivery of government initiatives will be under scrutiny too. In my mind, IT will undergo a sweeping transformation to assist the Coalition’s efficiency drive, as outlined in the Government’s new Information and Communications Technologies (ICT) strategy.

Like other IT solutions providers, I agree that reform within the public sector is long overdue. As Government CIO John Suffolk stated, cost, citizen involvement, transparency and localisation are key ICT issues the Government has pledged to focus on. On paper, this ICT reform looks promising for SMEs and taxpayers alike. If implemented properly, there is no doubt it will change the entire landscape of public sector IT for the better.

The strategy’s headline attraction is a centralised hub where all ICT systems from every public body within the UK can be hosted as one unified communications network.  Called the G-Cloud, it will be an online ‘store’ where public sector organisations can go to buy pre-procured services for different departmental needs such as email solutions, remote network access and accessible software.

If effectively adopted, the G-Cloud will save the Government £3.2 billion each year and provide enormous benefits to the public sector. Aside from cost, it will generate increased reliability, better consistency and encourage innovation.

But I think the most profound change will be the G-Cloud’s effect on the entire culture of public sector IT - moving away from the traditional procurement process that favours large corporate businesses such as IBM and BT, over to SMEs.

The G-Cloud gives the chance for smaller IT firms to host their products on the network, which also creates the possibility of government using more software from SME suppliers. Critically the G-Cloud means SME IT providers will be able to break into the public sector market for the first time.

The challenge, however, is the reality of the G-Cloud. Will SME suppliers win more contracts from the traditional large IT companies? The spending cuts will lead to increased outsourcing but it is still unclear how SMEs will get a bigger bite of the cherry, given government’s existing relationship with large companies and also the opportunities offshore outsourcing provides. Hopefully the G-Cloud will offer fast-moving start-ups an effective incentive to develop IT solutions for a market from which they were hitherto excluded.

The UK’s SME market is what drives the UK economy. Yes, the G-Cloud offers a significant step forward for small business growth – and many of those software businesses could be based in the North East – but this will only come to fruition if the Government is fully committed to the concept. If not, the G-Cloud will merely become another Government IT project failure that, to put it simply, the Coalition cannot afford.