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Jacky Ross on public sector cuts and tackling the impacts on non-core services and the back office
How to deliver technology for less
One of the biggest cost components of the back and middle offices is technology. In central government alone, I was recently told by somebody that there are 20 implementations of Oracle. Now if you can imagine the cost of upgrading that technology – that’s 20 upgrades – that’s anything between half a million and perhaps £100m, and that has to happen every now and again.
So increasingly, organisations are starting to think about the technology costs within their overhead and what they can do about them. There are some fabulous changes taking place in the technology world that I think play firmly into that agenda.
So the first thing I think, is the downsizing of technology – organisations realising that maybe they don’t need an SAP or an Oracle to run their business. Maybe their business isn’t that complex, and so maybe they could go to a slightly lower cost technology. But perhaps even better than that is to move to the new Cloud based technology where you actually pay for the service only as you use it, so you would get the use of the ERP system providing the support you need within your organisation but only for the level of business that you’re doing and only for the price that you wish to pay for the service that you get. That transformation I think is going to be massive in local government and health and probably in central government too, in time, because it’s going to change the way we view our back office costs and to transform them from being a fixed overhead to being an effective variable cost, and if it’s a variable cost we can control it better.
