No blood was spilled, but listening to the three main political parties debate their digital policies together for the first time this week laid out the battleground for their likely general election technology manifestos.
Computer Weekly, with help from TechUK and the BCS, brought together the Conservative, Labour and Liberal Democrat parties to face questions from an audience of IT executives about their priorities for supporting the tech sector and growing the UK’s digital economy.
Reassuringly, there was much agreement between the three. On further support for the burgeoning tech startup sector; on expanding the work of the Government Digital Service (GDS) and supporting local authorities in their digital plans; and on the need for reforms around data protection and privacy – all three parties concurred.
You can read all about the debates in our coverage here:
- Digital Question Time: Growing UK tech
- Ed Vaizey: Ambition to have local government on one platform
- General election 2015: Major parties focus on tech agenda
And you can watch video highlights from the event here:
- Digital Question Time: Political parties discuss the tech agenda
- Digital Question Time: How will the next government support the emerging tech startup sector
But perhaps the most significant theme from the debate was the need for better engagement between politicians and the IT sector.
In past elections, the IT community has been at the back of the room, desperately waving its hand in the air for the politicians to take notice, trying to tell them how important it was. This year, for the first time, the main parties have invited us forward to sit closer to the front.
There is widespread recognition – at last – that technology can and must play a major role underpinning some of the major reforms needed in the UK in the next five years, in the economy, health and social care, national security, education and welfare.
The IT community has, justifiably, pointed to the lack of digital literacy in Parliament, urging MPs to become more aware of how technology can help deliver the changes they all call for. But all three of our panelists – digital economy minister Ed Vaizey, shadow digital government minister Chi Onwurah, and the LibDems’ Julian Huppert, agreed that IT itself needs to become more politically aware too – “The challenge for the tech industry is to meet politicians half way,” said Vaizey.
And they’re right. For the digital community, your time is now – the doors are open at last. There has never been a better opportunity to engage with the UK’s political leaders and show them how technology can make all our lives better.
The financial services industry has yet to experience the digital disruption that radically changed other sectors, such as retail and media. But the influence of the commoditisation of communications, processing power and storage – more popularly known as the internet and the cloud – is going to hit finance too, that much is inevitable and unstoppable.
Arguably, the 2008 crash protected the banking industry from such disruption – increased regulatory scrutiny made it impossible for new entrants and restricted innovation from existing players. But everyone can see the cracks emerging from the lack of digital investment – those ageing, batch-processing mainframe transaction engines at the core of every major bank were simply not designed to handle real-time web and mobile services.
Governments have realised too, that they need to introduce more competition to the market, to reduce the dependence on the global players that let down the world economy so badly.
And what is the one, proven way to increase competition, and break down barriers to entry? It’s technology, of course. Once you could sell online without the cost of a physical store, it transformed retail. Once you could publish content on the web without the cost of a printing press, paper and ink, it transformed the media.
We are seeing the emergence of new, challenger banks based on digital technology, which do not suffer from the complex, legacy IT that the incumbents depend on. Also, banks find some of their services being cherry-picked by the new tech giants – payment services such as Apple Pay, for example, not to mention Paypal. Research suggests more of us will use smartphones to pay for things than credit or debit cards by 2020.
Some banks are responding, of course. Barclays is pushing hard on new mobile services, and even providing training in branches for children to learn coding. Santander is going further, and taking on the cloud suppliers at their own game, offering cloud storage to corporate clients. If data is the new currency, there’s a logical progression to store it with your bank, even if the chances of one bank building the scale of cloud infrastructure needed to compete with Amazon, Google or Microsoft is unlikely.
Banks still control the global flow of money – but trends like Bitcoin are starting to demonstrate that even here, technology can offer alternatives.
The big finance players are vulnerable – even if they don’t want to see it – in the same way as Woolworths, Blockbuster, Comet and others were vulnerable and missed the digital boat. Expect the banks to go through a decade now that will change their industry as much as the last 10 years has done for so many other sectors.
It’s been impossible to ignore the biggest technology headline of the week – especially as it became the biggest business headline in many places too. Apple declared the largest quarterly profit in corporate history – not bad for a company dismissed as a failure 15 years ago and derided as behind the times when it launched its first smartphone.
Apple sold 74.5 million iPhones in the last three months of 2014 – that means 1% of all the people in the world bought an iPhone. You can’t say anything other than it was a remarkable achievement – perhaps the zenith, so far at least, of the consumer technology revolution.
I must admit I wasn’t convinced by the iPhone when it first launched. I feel the same way about the Apple Watch, which means it’s guaranteed to be an instant blockbuster product.
Apple’s success has been widely attributed to its focus on product design – making tech cool, fashionable and desirable for the first time. But great design underpins the real reason Apple has changed the tech world – it made the technology secondary, invisible even.
People bought iPhones in their millions because they didn’t need a user manual – the intuitive nature of the product meant they looked at its utility not its functionality or technicalities. Even the simplest Nokia phones in the past typically needed you to read through the manual first. That’s also a contributor to why Google Glass failed – it was the complete opposite of invisible.
Technology works best when you don’t notice it. The suppliers that realise this will be the winners from the digital revolution – I’m not sure, for example, that IBM, HP and Microsoft quite get this yet.
The smartest CIOs that Computer Weekly meets get this – and in some respects, it’s what makes them stand out from their IT leadership peers. If your CEO notices your technology, it’s usually because it’s gone wrong, or when it causes endless frustration to use. “We need to turn that irritant into something that has value,” as one such CIO said to me recently.
Technology is great, we all love it, and it’s a part of our lives. But the technology that works best – and in a corporate environment in particular – is invisible. For IT to lead in business, it needs to disappear.
The software company with 14% share of the global operating systems market announced the latest version of its flagship product this week. It’s called Windows – you might have heard of it.
It’s not that long ago – barely six or seven years – that Microsoft could claim that Windows ran on more than 90% of all the computers in the world. Since those computers disappeared into our pockets, its global influence has plummeted like no product ever before. More than 90% of PCs still run Windows – but that’s a declining market.
Of course, those statistics don’t tell the true story of Windows today, and in particular of the Windows 10 launch this week. A 14% market share or not, Windows is still every bit as important as iOS and Android – especially for business technology buyers – even if it has failed to extend its PC dominance into the mobile market.
Perhaps the most important reaction to the latest announcements was not the product reviews, but the widespread acknowledgement that, under CEO Satya Nadella, Windows 10 proves conclusively that Microsoft is a very different company than it was under his predecessor, Steve Ballmer. Nadella has taken the company a long way in his first year in charge.
We now have Office apps for Apple and Android devices – anathema in the Windows-centric Ballmer world – and this week we even have the first version of Windows that will be given away for free, albeit only for its first year, and to Windows 7 and 8 users. Better to get that user base onto Windows 10 for nothing than lose them to non-Microsoft devices.
Most of the coverage of the 10 launch focused on the mobile and consumer features, but actually much of the work went into satisfying the enterprise buyer, with advancements in security, cloud and mobile device management.
The failure of Windows Phone compared to iOS and Android hasn’t dented Microsoft’s revenue or share price, and corporate sales of Windows and related products on PCs remain the bedrock for the Seattle supplier. The HoloLens “holographic” headset will excite gadget lovers, but will be much less important to IT managers than the claimed software portability for Windows 10 applications across every device from smartphone to tablet to PC.
Much like Windows 7 was the operating system everyone hoped Vista would be, it looks like 10 will make up for the botched job that was Windows 8. So, most importantly for Microsoft, Windows 10 ensures it stays firmly in the plans of its corporate customers. And yet…
For Microsoft to really prosper in the new age of mobile and cloud, it still has to shake off some old habits. The 12-month giveaway for Windows 10 will be welcomed, but there are too many lucrative Software Assurance deals in place for Microsoft to make Windows free forever, like iOS, Android or Apple’s OS X for Macs. The company described its approach to supporting 10 as “Windows as a service”, which implies it is slowly moving towards a pay-as-you-go or subscription service, rather than the complexity of Software Assurance – a move already evident with Office 365.
If Microsoft really wants to win IT managers over once and for all, a radical simplification of its software licensing would be the number one priority.
The availability of Office on rival mobiles was a big step to existing in a multi-vendor world – but was also a defensive measure to protect Office revenues against the “bring your own device” (BYOD) trend in corporate IT. Ease of integration between Microsoft’s enterprise products has always been its biggest attraction for IT managers, but the future is far more heterogeneous than that and IT leaders would far prefer to see more Microsoft products unbundled and better able to integrate with rival software.
I would expect that in five years’ time, Office will be a far more strategic product for Microsoft than Windows. You will only pay for the PC version of Windows, and that market will be a lot smaller as more employees use tablets for work – even if they are Windows tablets, where the operating system will be effectively free, with corporate integration features charged extra.
The new, different Microsoft is welcome and necessary, and Nadella deserves plaudits for making it happen so quickly. But a lot of this is about playing catch -up – all he has done is bring the company back up to date, and brought back a little of its old buzz. The Microsoft of the near future is going to be even more different yet.
It doesn’t feel that long ago that the information security community were bemoaning the lack of attention they received from the government, national press and wider public. No danger of that happening now, is there?
Data protection, privacy and surveillance are leading front pages and parliamentary debates, particularly after recent high-profile incidents such as the Sony Pictures hack and internet snooping by the intelligence services.
The Paris terror attacks have brought widespread calls from politicians for greater powers to monitor our internet activities, countered by privacy campaigners pointing out the terrible irony of terrorism causing a reduction in our civil liberties as a result.
David Cameron’s naïve and careless call to outlaw “communication between people which we cannot read” has rightly led to criticism of what would be a technically unfeasible and highly dangerous attempt to ban encryption.
I can remember writing nearly 15 years ago that privacy would be the defining challenge of the internet era, and so it has proved.
Nobody can argue that targeted electronic surveillance is anything but a good thing for fighting crime and terrorism, but blanket recording of all our communications – even if it is only the meta data – on the basis the data is stored “just in case” is self-evidently a step too far in a liberal democracy.
When the Regulation of Investigatory Powers Act (RIPA) was passed in 2000, many observers warned that its loose language and broad powers could be misused. Politicians assured us that no such thing would happen, relying on the common sense and altruism of the authorities.
Fifteen years later, we have seen how the law has been abused, just as those experts warned, with councils citing RIPA to snoop on parents trying to get their children into schools outside their catchment area, and the police using it to uncover journalists’ emails and expose their legitimate sources.
Let’s not forget too, that the French authorities already have greater surveillance powers than the UK, and it was still not enough to prevent the Paris attacks by known extremists.
There is no easy solution, and none will be found in knee-jerk reactions or a tribal approach that creates a binary debate when nuance is needed. Both politicians and public need to understand the arguments and issues, and to reach an informed consensus on how best to balance privacy and national security. That debate is not currently taking place, and more education and awareness is needed before it can be conducted sensibly and fruitfully.
This, then, is the opportunity for the information security community. They are, finally, in the centre of the debate they have always called for. They need to lead, to educate and to listen – and most importantly, we and the UK authorities need to listen to them.
It’s usual at this time of year for journalists to make predictions – something I’ve tended to avoid as a fool’s game beset by needless optimism, over-excitement or the patently obvious. But for 2015, I’ll make an exception and offer one forecast as a counterpoint to some of the hyperbole you will no doubt have come across.
My prediction is this: nothing much particularly different will happen in technology in 2015.
Yeah, I know, a bit dull. Sorry.
We will continue to hear a lot about the buzzwords we heard a lot about in 2014 – cloud, mobile, big data, digital, internet of things, wearable technology – all of which are at different stages of adoption and maturity, and all of which will continue their merry progress along those paths.
The giant Consumer Electronics Show in Las Vegas this week was dominated by announcements related to the internet of things (IoT), but nothing that is going to break through into the mainstream this year. Wearables will get plenty of headlines, particularly when the Apple Watch goes on sale, but aside from the inevitable Apple fanboys and early adopter geeks, it’s not going to set the world alight yet – the form factor is too unproven.
Cloud adoption will continue to grow – as it continued to grow in 2014. Mobile will continue to expand in enterprise IT, as it did last year. Big data will still be big, but mostly for the big companies with big budgets. More companies – and government bodies – will come to realise their future is digital, and wend their way in that direction at varying rates of change. But these are all journeys that are well underway, and are mostly unstoppable trends now.
Having said all that, we are on the cusp of something very big. Not this year, I suspect, but starting in 2016, and then progressing over the subsequent two or three years, such that in 2020 we will look back on this five-year period as a dramatic time of change – the time the digital revolution really accelerated.
Today, we’re still waving red flags in front of motor cars to warn passers-by, in terms of where we are in that revolution. But the digital equivalent of the Ford Model T is very close. It needs cloud to gather more trust, mobile to be more secure, data to be better protected, and the internet of things to commoditise. It needs digital skills to be more widely available, and companies to be confident enough in the economy to invest again in innovation – although many will not, and will fall by the wayside as a result, including some very big names.
So spend 2015 doing what you’re doing, but in the process take a deep breath and get ready, because the inevitable, unstoppable and dramatic acceleration of the digital age is getting very close.
BT is changing. Under CEO Gavin Patterson, the former monopoly telecoms giant has expanded into content through BT Sport, paying heavily for broadcast rights to English Premier League matches, and now is on the verge of splashing out £12.5bn on EE to get back into the mobile market that it exited when it sold O2 (then known as BT Cellnet) in 2001.
There has also been speculation that BT wants to merge its wholesale division with Openreach, the regulated subsidiary that manages its national telephone and broadband network. BT Wholesale sells access to some Openreach network services to other telcos and ISPs.
That would be a more complicated move, given the strict Ofcom rules under which Openreach operates. But what it would effectively also do is give Openreach greater in-house sales capability, separate from the main mothership of the consumer- and business-facing BT Group.
BT continues to generate controversy and opprobrium in equal measure from rural broadband campaigners over its dominance of the government’s BDUK programme to roll out superfast broadband to areas outside the regions BT considers commercially viable for fibre to the cabinet (FTTC) broadband. Critics are equally keen to point out that BT’s copper network is an effective monopoly, is outdated and will eventually have to be replaced by an all-fibre network at some point in the future as the hungry apps and browsers of internet and mobile users need to be fed by bandwidth-heavy services such as Netflix or the BBC iPlayer.
BT, of course, argues its case equally fervently. I discussed the arguments over BT and broadband last year – you can read the article here to save repetition – but concluded then that the problem is the lack of competition in the wholesale telecoms market, which can only be solved, in my opinion, by divesting Openreach.
I just have a sneaky suspicion that Gavin Patterson is moving in that direction.
His new BT is becoming more like a modern, integrated, internet-savvy communications provider – offering high-speed broadband, landline telephony (itself a diminishing market), 4G mobile, online and broadcast content. That’s a model more like Virgin Media or Sky than a traditional telecoms infrastructure player. Do BT’s long-term shareholders really want to invest in a creaking copper network subject to heavy regulation that will inevitably need to spend billions on upgrading its core infrastructure? I suspect not.
I think Patterson can see the writing on the wall for Openreach – hence merging with Wholesale gives it an opportunity to be a standalone company, similar to National Grid in the energy sector which owns most of the UK’s electricity and gas distribution networks. National Grid has been able to expand internationally as an energy infrastructure player, using its freedom as a publicly quoted company to buy similar businesses overseas, particularly the US.
It’s a model that could offer a future for Openreach outside of BT.
FTTC-based “superfast” broadband is going to last the UK for a few years yet – as it turns out, roll-out is well ahead of consumer adoption, which lags behind several European countries – but by 2020 the cracks will start to show. Even though 5G mobile does not even exist yet, it is equally inevitable that mobile networks will in future offer connection speeds far ahead of what even FTTC broadband currently provides. No way will BT want to keep spending on a declining, heavily-regulated asset in those circumstances – hence the purchase of EE.
A BT free of Openreach and its regulatory handcuffs becomes a very different proposition – but more importantly, so does an Openreach freed from BT; free also to expand internationally and invest sensibly and prudently in all-fibre networks with its own access to capital and debt. And without the parental relationship between BT and Openreach, perhaps other telcos large and small will be more enthusiastic about setting up wholesale network competitors in the UK.
BT will deny this of course – I can already imagine the emails from its press office, similar to the reaction to my article last year. But it feels to me like the new BT knows that, in the long run, it won’t need and doesn’t want the legacy of owning Openreach. And if Gavin Patterson does go down that route, then good for him – and good for the UK’s communications infrastructure.
If Universal Credit were made into a Hollywood rom-com, you just know that Margaret Hodge and Robert Devereux would be the central characters.
Thrust into repeated opposition on different sides of a heated Public Accounts Committee (PAC) table, the two star-crossed combatants would bicker and argue in ever-increasing circles of conflict. Then, in the final act, in a moment of outrageous serendipity – such as Universal Credit actually going fully live – they would realise their true feelings for each other.
You can decide which outcome – Universal Credit going live, or a future romance between PAC chair Margaret Hodge, MP and Department for Work and Pensions (DWP) permanent secretary Robert Devereux – is the more likely. (Remember this – nobody would have believed John Major and Edwina Currie…)
Last week the soap opera continued as Devereux was once more hauled in front of MPs by Hodge to discuss the latest National Audit Office (NAO) report into the troubled welfare reform programme. The latest act ended with Hodge insisting Universal Credit is a shambles, and then shutting down the meeting before Devereux had one last opportunity to deny the accusation. For the two pugilists, “shambles” is a binary measure – it either is (Hodge) or it absolutely isn’t (Devereux).
On Universal Credit at least, it’s increasingly clear that “shambolic” is in fact a sliding scale, with the programme veering in one direction or the other to different degrees of shambles. Let’s call it the Devereux-Hodge Scale of Shambolicness, to represent the end-points at either extreme, where 100% Devereux represents everything tickety-boo and working as expected; and 100% Hodge representing a total shambles.
So, based on recent revelations from the NAO and the PAC hearing, where on the scale is the project right now?
Wasted spending or value for money?
The discussions last week in the PAC meeting between Devereux, the Treasury’s Sharon White, the NAO and Hodge veered into the arcane terminology of accounting and economic modelling. At one stage, Hodge highlighted that £697m has been spent on Universal Credit so far – that’s all costs, not just IT costs – and yet DWP said only £34m of that will make it onto the balance sheet as an asset as a result of the “twin-track” approach now being taken, and once the digital system currently being developed is live.
On face value, that certainly seems like close to 100% Hodge on the shambolicness scale. Some reports claimed this means DWP could “write off” £663m, but that’s not the case. As White – soon to be leaving the Treasury to become the new CEO of Ofcom – explained, much of that £697m is normal operating expenditure which would never be recorded as an asset, and part of it is “Plan B” contingency spending so the existing Pathfinder system being used can stay in place if the digital system is delayed or doesn’t work.
We know for sure that £131m of assets will be written off by the time Universal Credit is fully live, but it is certainly likely that the true figure will be much higher.
Much of that £697m has gone on things like staff costs – money which would have been spent anyway – and up-front design and planning work. The only way that expenditure will have been wasted is if Universal Credit is scrapped entirely. That’s unlikely as Labour is entirely supportive of the policy, if not the implementation plan.
But Hodge is absolutely right to say that spending £697m and still not yet having a fully agreed business case is a shambolic way to spend money. In the unique language of the Civil Service, DWP has so far had its Strategic Outline Business Case approved; next year the Outline Business Case is due for approval; and then in 2016, the Business Case should finally be approved.
Devereux, on the other hand, maintains that spending £697m is chicken feed compared to the £7.7bn that will be saved as a result of the twin-track approach compared to the other alternatives considered when the programme was “reset” last year. That £7.7bn figure is derived from those arcane economic models based on more benefit claimants being on Universal Credit sooner, and the assumption that more of them will go back into employment more quickly.
If you want to consider the programme on the basis of a good old-fashioned return on investment calculation, then Devereux’s figures make such spending seem minor compared to the promised returns. This has, consistently, been the DWP line – that for all the spending, all the write-offs, and all the delays, the benefits to the UK of Universal Credit vastly outweigh the problems in getting us there.
So how do you decide where this stands on the Devereux-Hodge scale? You could consider the views of the independent Office for Budgetary Responsibility (OBR), which stated last week that in its opinion, “there remains considerable uncertainty” around the plans for Universal Credit, and that “weighed against the recent history of optimism bias in Universal Credit” it expects at least a further six-month delay in the latest revised timescales – which themselves are considerably delayed compared to the original plans back when the project was launched in 2011.
So in terms of the value for money so far, we’re very much at the Hodge end of the shambles scale – but if you’re looking long term (and believe the DWP economists) then it’s closer to the Devereux end.
The business case; or, does anyone actually know what they are doing?
As mentioned above, the phrase “business case” seems to have a flexible definition in the Civil Service. But there is no disputing that DWP has yet to produce what the NAO calls a “target operating model” for Universal Credit.
In layman’s English, this effectively means the DWP has yet to define what Universal Credit will actually do, how it will work, and what its processes and workflows will be. And you’d have to say that if this were the business case in a company, you wouldn’t get the project past first base if you had not defined what the end result would be. Even an agile project has a good idea of the desired outcome.
One of the independent advisors to Labour’s review of Universal Credit told me that for any project of this scale, failing to determine right up front what the target operating model will be and how the future processes will work, is a fundamental error. Labour has promised a three-month pause to the project should it win the general election in 2015, and one of the primary reasons for that is to step back and define that target model.
DWP would counter that it is pursuing a “test and learn” approach – a vaguely agile concept whereby it introduces new features and functions, then learns from their trial implementation, feeding the results back into the roll-out process. Bear in mind of course, that “test and learn” only came about when the project was so out of control that it was halted, reviewed and “reset” because it was without any doubt 100% a Hodge-level shambles.
In many ways, this comes down to the IT argument of waterfall versus agile, and if ever a project was trying to shoehorn both approaches into one, it’s Universal Credit. Agile is not a panacea; as the Labour advisor put it, it’s “horses for courses”. And in its desire to be seen to be agile, Universal Credit forgot some of the basics – namely, agreeing up front what they were all meant to be aiming for.
The NAO’s previous September 2013 report made the same criticism, stating: “Throughout the programme the department has lacked a detailed view of how Universal Credit is meant to work… The department was warned repeatedly about the lack of a detailed ‘blueprint’, ‘architecture’ or ‘target operating model’ for Universal Credit.”
Work has started to address that gap – the Treasury refused to sign off even the Strategic Outline Business Case without it – but the truth is that no matter how much testing and learning takes place, it’s difficult to say with certainty how much of the work completed so far will be relevant for a target operating model that has yet to be fully defined.
So on the business case, you’re looking at 80% Hodge so far.
The digital Holy Grail
The digital system being developed as part of the twin-track approach will eventually replace all but £34m of the IT assets created to support the Pathfinder trials – that’s just 17% of the £196m of IT assets created so far being retained, according to the NAO.
Digital has become the Holy Grail for Universal Credit – the knight in shining armour riding over the horizon to rescue the programme. It’s easy for this to be the bright future when it’s only just passed its “alpha” stage of development, and the initial trial of the system in Sutton is processing just 17 claimants so far, with a fair amount of manual intervention still required. It is simply too soon to tell how well the digital development is going – especially since the pilot started six months later than planned, based on a timescale established only 12 months ago.
Insiders are saying good things about the management of the digital project under DWP’s digital transformation director Kevin Cunnington. The reason for the delay came from problems recruiting suitably skilled digital expertise into DWP – Computer Weekly reported back in January that the initial recruitment plans were already proving over-optimistic.
It’s worth remembering at this point, that the Cabinet Office and the Government Digital Service (GDS) had recommended that DWP put all its Universal Credit eggs into the digital basket, and scrap the Pathfinder system entirely. The latest NAO report shows that the DWP has managed to play with its accounting and economic models well enough to demonstrate that the twin-track approach will save the UK £7.7bn more than if they had waited for the digital system to be ready and stopped the current system roll-out last year, as GDS advised.
At the PAC meeting, Hodge set out her wariness over the optimistic promises around the digital system, compared with the reality of how the programme has gone in the past. For Devereux, digital can be the bright future for only a short time before it has to prove itself.
The NAO, meanwhile, warned that failure to complete the digital system, and relying instead on the existing system for full roll-out, comes with a £2.8bn bill to taxpayers.
So, 50-50 on the Devereux-Hodge scale so far.
The moving target of roll-out timescales
Gauging the shambolicness of the Universal Credit roll-out to date depends very much on the tint of the glasses through which you view progress.
Based on the original plans, over four million claimants were meant to be on Universal Credit by April 2014. So far, fewer than 18,000 people are claiming the benefit. By any standard, that is 100% Hodge of a shambles.
But through DWP-tinted glasses, it is far more important to get Universal Credit right in the end, than to adhere to an unachievable timescale – even if that was DWP’s own timescale you’re talking about.
As with the digital system, it’s easy for DWP to be confident about its latest roll-out plans because most of the work (and the risk) is so far away that within the confines of a House of Commons committee room everything can easily be 100% Devereux. Even Hodge finds it hard to disagree when asked, “What would you prefer, that we get it right in the end, or we get it wrong on any timescale?”
The roll-out plans are still very risky because they are so back-ended. Millions of claimants will have to be migrated onto new systems over an 18-24 month period – and even then, migration of tax credits has been further delayed until 2019. That scale of migration is simply unprecedented under any government.
The NAO report said that a further six-month delay (which is what the OBR expects to happen) will mean the loss of £2.3bn in potential economic benefits to the UK.
If nothing else, you have to give DWP credit for not blindly sticking to its wildly unrealistic former timescales. But based on progress to date, it’s been a comfortable 75% Hodge shambles – and the risk of further delays is at the same end of the scale.
The Devereux-Hodge Shambles Rating
Overall, based on progress to date, Universal Credit sits very much nearer to the Hodge extreme of shambles than to Devereux. The DWP’s argument is based very heavily on future promises, of jam tomorrow – and of course, if they are right, that’s going to be one heck of a tasty jam sandwich.
It’s not too late to swing Universal Credit towards the Devereux end of the scale. But with national roll-out of the most basic benefit claims due to take place in 2015, and the early promise of the digital system set for its biggest test, we will learn in the next six to 12 months if the needle is going to move along the scale towards Devereux any time soon.
Soon after Computer Weekly launched our UKtech50 programme to identify the most influential people in UK IT, over four years ago, we were approached by a couple of the female IT leaders that made the list at that time. They were in a clear minority – only eight or nine women on the list, even if that was reflective of the meagre 17% of IT professionals who are female.
That conversation was about how we find more female role models in IT and give them the recognition and profile that will help to encourage women into IT. That led to our first programme to highlight the 25 most influential women in UK IT. That first poll was won by Jane Moran, then the global CIO of Thomson Reuters.
We were, therefore, especially pleased to see that three years later, Moran – now global CIO at Unilever – this year became the first woman to top the overall UKtech50 list as the most influential person in UK IT. What’s more, 16 of this year’s top 50 are female – almost one-third.
But of course, Moran did not top the list because she is a woman – she won because she is a high-profile IT leader, driving digital and technology innovation at one of the UK’s most important companies, one that touches most of our lives through its consumer products every day. Her gender, in this context, is not the issue. But nonetheless, it is great to see more recognition for the women driving the role of technology in the UK economy, and as examples of the digital glass ceiling being shattered.
The first is the rise of “digital” – the IT leaders acknowledged that digital is already becoming one of those buzzwords that means different things to different people, but all agreed that it is a trend that is transforming how IT is managed and delivered, and its role in the organisation.
That leads directly to the second major theme – the changing skills and organisational profile of the corporate IT team. Increasingly, IT chiefs see two distinct functions. There are the back-end operations teams, running the traditional IT infrastructure under well-governed processes that focus on stability and reliability. And increasingly there is the digital team, often using agile methods to rapidly respond to business needs, developing software close to the customer, iterating, testing, experimenting, learning as they go – but highly reliant on those back-end experts for infrastructure.
From that comes the challenge of recruitment – finding people with the new digital skills needed. And here, the IT leaders shared successful experiences of growing their teams – Royal Mail, for example, which needed to find 300 new IT staff during a skills shortage, but thought smart recruitment using non-conventional methods, attracted nearly 30,000 applicants.
The message for skills recruitment was to target diversity and to recruit different profiles from those traditionally brought into IT – not just engineering or computer science students, but linguists, historians, economists, psychologists and so on – reflecting the importance of technology across all aspects of culture and society.
The final theme concerned IT suppliers – and really should concern IT suppliers too. Many of the IT leaders felt their traditional providers have not changed with the times and are stuck in a model of software licensing, hardware products and expensive and often unproductive consultancy services.
One speaker, Bank of England CIO John Finch, cited a large supplier brought in to help with a software audit, which ended up sending a £2.5m bill because the Bank was using virtualisation and cloud services in contravention of the licensing terms.
IT leaders agree that their world is changing, but they do not feel their key suppliers are changing with them. This is why speakers like John Lewis IT director Paul Coby highlighted the work he is doing with tech startups, and why government CTO Liam Maxwell flagged that over 50% of purchases put through the G-Cloud framework have gone to SMEs.
The best IT leaders – those featured in our UKtech50 list – are leading digital change, driving innovation, and establishing the best practices for others to follow. They are not short of challenges – and they are certainly not short of work to do. But everyone on our UKtech50 list shows that IT leadership in the UK is thriving and leading the world.
“Unacceptably poor management” and “wasted time and taxpayer’s money” – that’s how Margaret Hodge, MP, the chair of the Public Accounts Committee described Universal Credit this week.
The latest National Audit Office (NAO) report into the troubled welfare reform programme simply added to the catalogue of concerns. It is easy for secretary of state Iain Duncan Smith to continuously say that the project is on time, when the timescales are put back every six months. At any point in time, delivery is on target – until it’s delayed and is back on target again.
The headline findings from the report have been widely covered – still unable to determine value for money; no contingency plan should the new digital service fail to work; lack of an overall blueprint for delivery of the policy.
But reading through the 60-page NAO report also reveals some startling nuggets of information that the Department for Work and Pensions (DWP) would no doubt prefer to have kept under wraps.
For example, in April 2014, a software update caused an increase in incorrect payments to benefit claimants, which meant that every payment had to be manually checked for three months. The cause of the problem was an un-named supplier that released an update containing “significant changes” that the DWP had not been told about, and were therefore not properly tested.
The supplier is likely to be one of IBM, Accenture, HP or BT, the four key vendors supporting the flaky system that will be mostly replaced by the future digital service. Those suppliers have received far too little criticism or scrutiny of their role – even being allowed to audit their own work, what one MP called “marking their own homework”.
Only 17% of the work that these suppliers have done will be used once Universal Credit is fully live, according to the NAO.
In January this year, Computer Weekly revealed that DWP was already struggling to recruit the skills it needs to develop the digital service – a fact the DWP denied at the time. The NAO revealed that this has been the key reason for delays in the progress of the digital system, and that recruitment is still required to reach the necessary capacity. The report said that DWP was offering maximum salaries between 8% and 22% lower than the market average.
The DWP Digital Academy programme launched by the department’s digital transformation chief, Kevin Cunnington, is proving to be successful in training internal staff – but it’s a longer-term solution.
The real problem is that DWP chose to ignore the warnings and recommendations of the Government Digital Service for too long – blundering along with poor project management and misfiring suppliers. Now that digital has been placed at the centre of the programme, it’s been a case of catch-up in a recruitment market where digital experts are in short supply and high demand.
The risks around Universal Credit remain, and if future progress follows past history, the cost to the taxpayer of those risks being realised will be significant. There are chinks of light emerging and insiders say they have been impressed by Cunnington’s approach. With full roll-out of the new benefits now put back until 2019, there is time to get things right, but only if the DWP has finally learned its lessons over implementing modern, digital government IT.