delivering with the right SME team

The UK Government has just been listed on both the United Nation’s E–Government Development Index and the E–Participation Index. In accepting, the Minister said: “We are committed to the UK’s Open Government National Action Plan, which sets out our commitments to greater openness, transparency and civic participation.” The Government has tried to harness the potential benefits of involving SMEs in the public sector marketplace for many years. The departments the National Audit Office spoke to, agreed that SMEs can offer a number of benefits to the public sector, compared with other providers, including more flexibility and innovative approaches (NAO March 2016).

However, that demand for speed and success is set against a backdrop of legacy technology, processes, suppliers and procurement methods. And that demands a massive culture shift, to the extent that Digital Transformation may be about change management as much as it is about technology.

Change means culture means team

Culture is intrinsic to effective change management. According to DeAnne Aguirre and Rutger von Post of PwC, “Culture can be a great enabler of organisational change – whether the change involves digitisation, faster product development, or a systematic lowering of costs.”

Of course, being able to create the right culture depends significantly on the team you have, and that, in turn, depends on the team’s ability to agree a shared goal and to move, as one, towards that goal. Getting the right team in place is no small challenge. At the most fundamental level, Digital Transformation demands more people, new skills and different ways of working before the transformation work can even begin. So how do you put your team together?

Public sector blog fig 1-2.jpgPeople, process and procurement are at the heart of Digital Transformation

 

Assembling your team: 5 key options

1) Employing more staff

It may seem tempting to take on additional staff with the required skillset – after all, employment gives you greater control. But the acute shortage of those skills makes good people very hard to find – and correspondingly expensive. While they may be more cost effective than an outsourcing firm or a big consultancy, their ‘digital bonus’ could well unsettle and demoralise your existing staff.

Fast-rising, highly skilled specialists may not find the public sector sufficiently attractive, especially given the arduous job-application process. There’s no guarantee that they won’t leave prematurely (perhaps affected by a lack of morale in the existing team, or demotivated by legacy approaches), leaving you facing the same recruitment challenge all over again. Nor is there any guarantee that, should they stay, they won’t absorb the pre-existing culture or fall behind with their skills.

Furthermore, a room full of disparate people doesn’t instantly become a cohesive, high-performing team, no matter how skilled or enthusiastic. There’s a steep learning curve when it comes to your domain expertise and you need to create a project culture, all while designing your roadmap. And that’s without having to get today’s work done, too. And what do you do with all of these people once the project is up and running?

2) Contracting staff in

Contracting has its appeal: you get fast, flexible access to skilled people without affecting your own staff budget or pay scales. Contractors just want to get the job done, and then move on somewhere else – and you can tell them what to do. On the downside, they just want to get the job done (perhaps not fully participating in the team culture or the wider project); they may move on too soon; and you have to tell them what to do!

Contractors may have the technical know-how, but they’re unlikely to know your domain. And because they’re effectively self-employed individuals, they may not work well as part of a team and need a lot more oversight and management. While some will show initiative or take responsibility, most will have limited commitment to the organisation or the project. Plus, with their skills in such demand, they could be lured away at any moment. It may also be painful for existing staff to discover the pay rates of contracted staff.  

3) Outsourcing

Historically, outsourcing all or part of a project or service has been a commonplace model in the public sector. After all, you benefit from pre-determined costs and timescales. You devolve a large piece of work, along with the risk, to another organisation in exchange for a set fee, leaving you free to get on with something else.

But outsourcing is inherently problematic, which is why the Government has stated it wants to move away from it. For example, there’s the long and costly process of negotiating and specifying the project to begin with – and once the deliverables have been carved in stone, there’s little scope for flexibility or change. You are locked-in and it is costly to change. Outsourcing firms often have their own ways of working, so you’re more likely to have to adapt to them than they to you, all of which makes outsourcing a poor match for the flexible, modular approach demanded by Digital Transformation.

4) Consultancy 

Consultancy offers the appeal of a well-respected firm of specialists, but it also shares many of the disadvantages of outsourcing. Traditionally, the big consultancies have tended to deliver discrete projects to a defined specification, and at a relatively high cost, under the terms of a detailed contract. As with outsourcing, this is at odds with the vision of Digital Transformation, which doesn’t seek to have all the answers before a project begins – or to have a single organisation deliver the lion’s share of a project.

Since consultancies, unlike outsourcing companies, tend to work alongside you, you might expect to participate in two-way knowledge transfer: you hope to add to their domain knowledge while they add to your technical knowledge. However, it doesn’t always work out that way; some consultancies are less generous when it comes to sharing expertise, and you may be left with no one in-house who can solve similar challenges in future. 

However, a tendency towards using their familiar technologies may lead to 'lock-in' and difficulties in the transfer of Intellectual Property Rights (IPR). Plus, your snagging phase may last long after the consultancy’s departure (‘parachute in, catapult out’).

5) partner with an sme 

The Government’s stated intention is to pull back from large, unwieldy contracts with large, unwieldy suppliers. As a result, SMEs now supply more to the G-Cloud than big businesses do; in June 2016, for example, 63.5 per cent of G-Cloud sales were by SMEs. And this will only increase, since SMEs can represent a very good fit with the Technology Code of Practice.

But according to the National Audit Office (March 2016), the Government reported that more than 25 per cent of its spending reached SMEs in 2014/15. It now aims to increase this to 33 per cent by 2020. However, the NAO can't be certain the amount the Government spends with SMEs has increased since it set its original target in 2010. The NAO recommends that if the Government is serious about increasing its use of SMEs, it will need to focus on those areas where SMEs can deliver real benefits.

Scottish finance secretary Derek Mackay has argued for “more ‘co-design’ of digital government, insisting collaboration with micro businesses and even individuals could revolutionise the way public-sector services are delivered”.

SMEs are typically nimble, adapting readily to changing requirements. And because they operate in a very competitive band of the market, they tend to be highly responsive, willingly accountable and, of course, cost-effective. They also sit in that sweet spot of size, scope and approach; they don’t need every last detail ironed out before they’ll get started, like an outsourcing company; nor do they take the ‘land and expand’ approach of the large consultancies. On the other hand, neither are they a small team of 10 independent contractors waiting to be told what to do.

SMEs often bring with them invaluable thought leadership, plus the latest technologies and best practices from across the commercial sector, which may not yet be commonplace in public services. You have a good chance of finding a business which is already up to speed with the criteria required by the Digital Service Standard; for example, many will be familiar with Agile methodologies, and will favour pragmatism over substantial pieces of bespoke development.

One approach increasingly offered by SMEs, and of major appeal to Digital Transformation projects, is to place a team of experts in-house with you or a hybrid flexi-working, thereby augmenting your own staff. This team is scalable at short notice; you might begin with one or two technical architects to help you define your roadmap before ramping up the team with service designers and user experience designers, adding developers as and when required. Potentially, you might culminate with a team of trainers and support staff for the early stages of delivery.

The team imported from a reasonable sized SME always has access to additional expertise back at base. Significantly, SMEs are far more likely to be concerned about building trust and developing a long term relationship, ensuring that they have carried out the knowledge transfer work so that your team is comfortable self-managing the outcomes. Overall, this enables you to build an agile, highly skilled team in less time, with a shorter learning curve for both the implanted team, in terms of your domain, and for your own staff in terms of methodologies and technologies.

Summary of options

  Employ new staff Bring in contract workers Outsource projects/modules Bring in consultants Partner with an SME
Speed of procurement Medium Fast Slow Slow Medium
Ease of procurement Hard Straightforward Hard Hard Straightforward
Degree of contract lock-in Medium Low High High Low
Pace 'out of the blocks' Medium Fast Medium Fast Fast
Level of day to day management required High High Low Medium Medium
Need to define precise needs in advance Medium Medium High Low Low
Speed of forming an effective team Low Medium High Low High
Insight & best practice from other sectors Medium Medium Medium Medium High
Agility & adaptability Medium High Low Low High
Cost Low High Medium Very high Medium
Commitment to project High Low Medium High High

Scott Logic

Scott Logic offers teams of talented, experienced and commercially astute specialists who already meet – and will help you to meet – the Digital Service Standard. We take a partnership approach, offering a full range of services, including strategic technical advice, user experience design and software development, and project management.

We are a larger UK-based SME (200+ FTE) that has been delivering for over 11 years, with experts who have worked on more than 20 Government projects across many public sectors. In the last two financial years, we have grown revenues by 90 per cent and headcount by 72 per cent.

We welcome any conversation about contributing to Digital Transformation in the public sector. Please get in touch at enquiries@scottlogic.com.