At a recent conference in London on enabling government efficiency, auditor general Sir John Bourne spoke of how public sector departments needed to 'sweat the assets' if they were to realise not only the 'Transformational Government' and Gershon efficiency review targets of £21bn a year by 2007-8, but were also to position themselves for further year on year net cashable savings of 3-5 per cent, as recently announced by the Chancellor.
In making this observation, Sir John was not claiming for himself any brave new ground. 'Transformational Government' states that legacy systems must be 'progressively refreshed' and that 'by taking advantage of open standards, commercial off-the-shelf products and asset re-use, expenditure will be reduced and capacity freed for the transformational agenda'.
While public sector efficiency clearly requires much more than modifications to its underlying technology, such as some far-reaching business process reforms, the simple fact remains that every pound spent inefficiently on complex back-office systems is a pound unavailable for front line services. Government must indeed sweat its assets, and must also do so with an eye for the risks involved.
Many of the core systems on which public services rely are silos of custom-built capability that have been created to meet specific requirements of government policy. They have been adapted, enhanced and optimised over many years, further increasing their complexity and apparent intransigence.
And yet, they run the business. They account for more than 70 per cent of transactions executing in the modern world, from pensions to public transport, and represent a stable core of services too valuable to lose and ripe for inclusion in any modernisation and efficiency strategy.
Conventional wisdom tells us that new is better than old. Invariably new hardware is cheaper, faster and more agile than ever before, and contemporary operating systems not only cost less than proprietary mainframe environments, but offer a direction more in keeping with current skills.
However, when deciding the fate of legacy hardware platforms, it is vital that organisations independently assess the business value of the applications running on them, and do not risk losing the baby (their valuable business assets) with the bathwater (end-of-life platforms or high-cost, low-value systems).
Technology now offers more ways than ever to 'sweat the assets', and when considering IT's contribution to the transformational agenda, the starting point must always be an understanding of where the value lies within the existing IT infrastructure. Only then can a strategy be created that adequately balances risk mitigation with cost, and ultimately with the needs of the business.
St Helens Council is one example of public organisations doing just this. As part of a modernisation strategy aimed at boosting operational efficiency, ICT staff were able to identify the parts of their application portfolio suitable for replacement with commercial packages and those bespoke systems for which no alternative existed and yet which still delivered considerable value.
The ability to migrate these critical COBOL applications to a cheaper operating environment allowed St Helens to remove £1 million per year in mainframe infrastructure costs. The ability to do so without major application changes meant the savings could be achieved with minimal risk to business continuity.
Organisations are realising that technology is now bringing tremendous opportunities to drive efficiency through legacy re-use. Applications can be extended and opened-up whether they reside on the mainframe or off.
Back office logic can be exposed as .Net, Java or Web services for delivery direct to the citizen or to other back-office systems, both within and across departmental boundaries, via secure XML gateways such as Government Connect or as part of an SOA infrastructure.
This is good news and a clear path forward for resolving the challenges faced by many heads of IT. Through the application of contemporary tooling, valuable legacy systems are providing a solid foundation on which to build shared services, participate in more efficient procurement processes and ultimately drive real transformation through back office reform to where it can make a difference in the every day lives of citizens.