The opportunity for cloud to not only dramatically reduce the costs of a service but also facilitate a wider transformation of the organisation’s processes was seen by all Public Sector IT professionals in a recent workshop. In fact, the transition from in-house to cloud systems was generally seen as a way to ease in use of new applications and to establish new ways of working. Cloud will also give organisations more flexibility once they have made the move, as contracts are flexible in the ‘pay as you go’ cloud model – which both supports seasonality in service patterns and enables the organisation to grow or shrink in response to demand.
The public sector benefits from cloud are similar to those of the private sector, with the focus on operational efficiencies and large scale change. A survey by KPMG5 published in December 2014 shows that technology leaders see clear benefits in the potential for enabling a more flexible workforce, improving alignment and interaction with customers, suppliers and partners, and making better use of data for business decisions. There is also great benefit to be had from the ability to set service level agreements that provide compensation for any downtime or other problems. All of these can be amplified and all apply to the public sector.
Estimates of direct savings are made difficult by the fact that such transformations generally involve transition to a different financial model – from the capex on legacy systems to ‘pay as you go’ opex on cloud – so there is no direct ‘apples to apples’ comparison to be had. In addition, transformation often opens new horizons for service delivery and improvement.
However, the Crown Commercial Service (CCS) has estimated that savings of 20% are available from using G-Cloud to buy best of breed commodity components compared with more traditional, legacy based, single vendor agreements.
Using CCS-predicted savings as a base, then focusing on outcomes and the impact of new operational efficiencies derived from cloud – such as reduced in-house labour costs and the support of mobile working – can provide a compelling business case for change.
Due to all the above considerations, cost vs savings was a universal issue for our workshop participants. Getting a full view of current baseline costs right was seen as essential – indeed a prerequisite to evaluating future savings – as was the ability to identify the relative ‘value add’ of any solutions put forward. “Price is not always the best factor to make a decision on!” was one comment at the workshop.
Identifying desired and potential benefits – then tracking them from the outset – is advisable and key to keeping control of costs.
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Next week: Exploring the Necessary Skills and Capabilities Needed for Public Sector Cloud