Written evidence submitted by DXC Technology
DXC Technology (“DXC”) is a global technology systems integrator and solution provider for governments in multiple countries including the UK. We supply digital transformation to hundreds of clients in public and private sectors.
Through experience of delivering digital transformation solutions with and for hundreds of global clients, including government organisations, DXC continuously augments a global knowledge library by learning lessons and driving improvement in what succeeds, works well, and should be repeated. This also means that we know what detracts from success and should be avoided in future. Common themes and patterns are therefore evident for both success factors and risk/failure drivers. This includes factors for optimisation and efficiency.
Our research organisation, DXC Leading Edge, includes recognised global experts in strategy for procurement and delivery of digital transformation solutions, and the optimal delivery methods for different strategic needs.
Below, we have briefly outlined our experience and point of view for key barriers and other significant issues affecting efficiency in relation to digital transformation in government:
Summary of Impact
Disjointed data and organisations
Added time and effort to deliver services that span multiple UK Government organisations
Procurement approach inflexibility
Drives focus on defensive behaviours instead of partnership and collaboration
Balance of risk is not always optimised
Too much risk loaded to suppliers or authority is too risk averse, driving the wrong solutions and reducing innovation
Competition for resources and lack of skills
Drives up cost and contracted resources
Failures to use joined-up buy and build programmes
Heavy focus on build without simple integration to bought capabilities, lowering cost of change but raising total cost & time
2.1 Disjointed data and organisations
Digital services often span across multiple departments and government organisations. Each organisation typically works with its own data siloes and standards, and its own mix of legacy and new technology systems. UK Government is rightly focused on delivering digital services that are focused on the user journeys rather than dictated by the organisational structure of departments. However, there are often significant challenges to creating cross-department services due to the disjointed data repositories, differing standards, organisations which are not setup for joint working, and little reusable interfaces (e.g. APIs) that would rapidly support composable digital services.
DXC’s experience of creating joined-up digital services in partnership with clients such as Flemish Government have shown that standardising data, interfaces, and reusable composable product assets are critical underpinnings to successful digital services, speed of change, and reduced operating costs.
2.2 Procurement approach inflexibility
Delivering digital services requires a mix of buy and build. Buying commodity technology and services is simple, but the bought components often go beyond commodity which means there is a greater degree of uncertainty in exactly what needs to be delivered. Procurement often focuses on commercial measures and minimising cost rather than what would support the best outcomes. As noted, this drives both parties to focus on defensive behaviours instead of partnership and collaboration.
An inability to precisely define and scope the requirements for procurement is also a barrier. Again, this can be due to uncertainty which would ideally lead to an agile or lean start-up approach, or a discovery exercise to address the uncertain areas. However, where programmes are driven by short timescales, for example due to looming contract end dates, there have been examples of moving ahead with unclear and imprecise requirements but nevertheless expecting suppliers to deliver priced solution proposals as though these uncertainties were not a problem.
This problem can be exacerbated by a culture of refusing to share feedback with bidders. The winning bid gets minimal feedback with, often, the losing bids getting even less. This lack of transparency and feedback does not create a diverse sector, because no company is aware of what they need to address.
2.3 Balance of risk is not optimised
Compounding the above issues around procurement, there have been numerous examples where the procurement method to address the uncertainty is to load additional risk on suppliers rather than taking a balance of risk with a lean agile approach to progressively manage the reduction of risk.
There sometimes seems to be an institutional fear within the civil service of failure, and decisions are driven by avoiding risk rather than working within appropriate margins of error and iterative risk management to drive risk down and increase the speed of positive outcomes. For example, due to the weight and proportion of supplier risks, DXC felt that it could not provide priced proposals for the Civil Service Pensions and Met Office Supercomputing opportunities in a way which was financially sound with manageable commercial risk. Such examples lead to a position where the competition is skewed by potential suppliers not bidding, and the best, most innovative solution approaches being removed from consideration.
The balance of risk for digital solution delivery in private sector clients (as executed by DXC and other suppliers) provides many valuable examples of where UK public sector clients can improve procurement risk through adopting better practices.
2.4 Resources and skills
For several years, the challenge has been increasing within the UK to recruit resources with suitable skills and experience to support government digital services and technology programmes. This challenge is continuing to worsen, as evidenced in several NAO reports. UK Government has had an increasing focus on insourced solutions and resources to reduce the cost of change and with an aim to reduce the cost of operation/ownership. However, ever-reducing availability of skilled resources and increasing prices has led to extensive use of contractors in meeting the insourced resource needs. This has a double impact in terms of cost and alignment of motivations. It also often has an impact on the availability of vital knowledge when contractors move to a different role in another company.
Insourced solutions and teams are an important part of developing and delivering digital services. They can use agile methods and product-oriented approaches to increase efficiency and reduce the cost of change. However, this approach is not suited to every requirement. A mix is needed of buy and build, and its vital that built solutions can be easily and rapidly integrated with each other as well as with bought solutions. Furthermore, it’s important to ensure that built solutions are designed from the outset with reuse in mind. This reuse must be for all possible UKG client reuse, and not just the first intended usage. In using a mix of buy and build, it’s critical to understand all the required parts of a solution and where these lie on a continuum of their degree of uniqueness. More on this in the next section on joined-up buy and build programmes.
A related issue on resources and skills is the training needs of existing staff in UKG organisations. This is not about recruiting new resources and skills, but rather about ensuring that existing staff have the level of digital skills required to use digital services efficiently and effectively. Inhouse resource digital skills have been noted as an issue in several organisations, e.g. the Crown Prosecution Service. This skills issue has sometimes led to a solution approach that suits the available skills rather than the best solution supported by appropriate upskilling. This is another barrier associated with skills and resources.
Officials across professions including policy, commercial, and international trade are often prohibited in transferring from, or to, industry. This creates a challenging bottleneck of expertise: procurement and policy officials are not necessarily experts in the area in which they are either procuring or advising Ministers. This issue will be enhanced with the expected reduction in civil servants, or in trying to do “more with less”. There needs to be an appropriate Learning and Development package in place for civil servants, and indeed Ministers, with clear KPIs on completing relevant courses. Anecdotally, we are aware of procurement bids that are scored by civil servants who are available, rather than those for whom it is their day job. This is a concern.
2.5 Failures to use joined-up buy and build programmes
As introduced above, for the fastest and most efficient delivery of digital services, a suitable mix of buy and build is essential. However, for this to work, the buying authority needs to understand what is best to be bought, what is best to be built, and how these can be integrated together without excessive effort and cost.
For different clients and programmes, DXC has experienced numerous efficiency barriers in this area, as follows:
Wardley Mapping is a well-proven method which can help to decide on buy versus build, and can then map these against contract lotting in a way which supports a successful procurement and successful delivery of digital services through a mix of inhouse teams and multiple third-party suppliers. DXC would be happy to provide case studies if desired.
There is a complex and wide-ranging set of factors which all contribute to efficiency barriers for digital transformation in government. These span across the three domains of policy and culture, technical solution and resources, and commercial and procurement. DXC has summarised our experiences of barriers in each of these domains in this document. The commercial and procurement barriers were covered earlier in the section on key barriers. Additional summaries of policy and culture barriers, and technical and resource barriers are explained below:
3.1 Policy, political, and cultural barriers
Whitehall organisations competing with each other and separation of organisations in UK Public Sector / UK Government
Any shared and cross-org capability which does not have aligned stakeholders and teams is at higher risk of failure or will have significant effort expended in dealing with the misalignments, reducing budget for the execution of change
Short term planning and execution for technology and digital capabilities
Long-term stewardship and product ownership essential to continually grow and evolve with changing needs and to avoid obsolete capabilities such as Gov.UK Verify
Lack of political key stakeholder ownership and championing due to risk aversion and lack of overall stability in govt and civil service
Stability and lean agile "do and learn" with innovation cycle is not supported by current situation in civil service
Problems around organisational agility and resilience to rapid changes
Delivering new or changed services which span multiple organisations takes much longer due to siloes and ossified processes, e.g. new payments needed when Covid-19 occurred
3.2 Technical and resource barriers
Heavy need to "relearn" business logic and solution logic for legacy systems, especially old and large legacy, with issues in how this is achieved
Replacing legacy with new digital services regularly underestimates the complexity of understanding existing rules and processes, and the pareto effect of the last 20% of use cases requiring more than 80% of effort to transform
Many programmes not focusing on reuse / product families / product-oriented agile
Investment in digital cannot be harnessed for greater future efficiency and speed if the assets created are not fit for reuse and produced with a product mindset
Lack of solution patterns and Enterprise Architecture
There are great examples of using a product-based approach, e.g. HMPO, but not enough cross-UKG focus on what can be reused and how to develop assets in a way that makes them reusable
Insufficient appropriate use of Technology Platforms as an accelerator and integrator
Technology platforms can be an accelerator for creating, changing, and integrating digital services and components, including a mix of platform and inhouse built, and there are economies of scale from using bought-in platforms
There are many factors which affect the efficiency of digital transformation in government. The factors which are extant vary from one government organisation to another. There is effectively a maturity model that can be applied to every organisation to understand where their maturity lies for each set of factors in a best-practice framework.