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Five things that the 2015 local authority IT market taught us – lessons for 2016 and beyond

As a small but expanding local government technology provider we place great importance on formally evaluating our performance at the end of each year and planning our strategy for the coming year, as well as monitoring our performance throughout the year and making changes to the course we plot once we see how things are going. In large organisations changing strategy can be a slow process, akin to turning around a super tanker. However one of the benefits of being a relatively small organisation is that we have the flexibility to adapt to changing market conditions and the market intelligence that we pick up as we go along.

To illustrate this point, four years ago we realised that we had placed too much emphasis on continuing to rapidly develop our native app technology (where we are strong and had made amazing early local government inroads), to the detriment of our web-based technology. As good as our native app technology was, we quickly and painfully realised that we were losing opportunities because local government IT buyers still favoured the web over native mobile. Indeed, that’s probably still the case now. Back then we were able to pick up pretty quickly that sales were not as expected and to easily identify the reason for this deficit. As a small but agile company thankfully we were able to take remedial action and rebalance our development and sales priorities, salvaging what looked like a bad year into a respectable one.

Sensible business for a small technology provider means evaluating all aspects of your previous year’s performance, from personnel through to profitability, in order to place the right bets for the following year. We’ve just been through this process for 2015 as we set our priorities for 2016. With that in mind, here are five things that we’ve learnt about the government IT market in 2015 which have helped us shape our plans for 2016.

1. Cuts, cuts and more cuts

You’re probably thinking “tell me something I don’t know”. The public sector has been living with cuts since 2007 so what’s different about the latest round of cuts? In my view, as someone who has worked on both sides of the fence as both customer and supplier, there is no more fat on the proverbial bone. Gone are the days where department heads could simply salami slice to meet budget cuts, or where budget surpluses in other business areas could offset other departments’ end of year shortfalls.

Even the most change-resistant local authority chief executive knows that in order to survive and provide adequate public services over the next five years they will have to radically rethink their operating models, and to do that with considerably fewer staff and services.

Overall, for commercial IT vendors this isn’t the greatest news. However, what it does mean is that vendors who develop and deploy innovative lower cost and lower risk solutions which clearly demonstrate value for money and return on investment (ROI) will be best placed to take advantage of the opportunities that will be out there as these changes take place.

2. It’s all about the cloud now

When we started out selling to local authorities in, explaining that our technology was cloud-based often sent many running for the hills. They loved the product but were reluctant to switch to the cloud. Many IT staff saw moving to the cloud as being like turkeys voting for Christmas and viewed it as a big threat to their job security. Therefore, internal IT departments were rarely the greatest cloud advocates in the commercial debate.

Thankfully, that’s now all changed. IT departments are rethinking their models and managing costly large IT infrastructure on premise solutions is no longer the preferred approach. Most will now happily switch to the cloud as long as the vendor can demonstrate that their solution meets all of the cloud basic principles, the most important of which being security.

One final footnote for smaller and mid-sized IT vendors. In 2016 we will see a much greater cloud presence from the larger vendors. Having seen the way the wind has blown they will be re entering this space offering the majority of their solutions cloud-based. So watch out – the 1000lb gorilla is back in the room, but he’s been to the gym and he is leaner and fitter!

3. The importance of mobile working

Perhaps one of the most significant local government changes we have seen in the last twelve months is a greater drive towards mobile working, whether in an administrative or fully operational context. Indeed, we’ll be running a seminar on this topic soon in response to this demand.

We see two main reasons for this drive towards mobile working.

The first is that with fewer staff and less money, all government departments, whether local or central, are selling off their property portfolios. This is particularly the case in London and the South East, where commercial property prices are at record levels. Chief Executives are bridging budget shortfalls with revenue from property sales. The knock on effect of this is that the staff that remain need to become much more agile in their approach to work, or indeed to adopt a fully mobile working model.

Secondly, operational heads want to benefit from the efficiency gains that come with automating historic paper-based processes, and to maximise the time that their staff are actually on the ground working rather than going to and from bases as part of their work routines. Such mobile working technology also enables organisations to much more accurately monitor and evaluate their performance. You can find out more about how our own suite of products enables mobile working here.

Unquestionably mobile working has arrived in a big way and it’s here to stay.

4. Consolidation of IT Architecture.

Pretty much every client conversation I had in 2015 included some discussion of consolidation of IT applications.

For IT vendors, there’s no simple way to ensure that your IT application isn’t culled in the inevitable rush to consolidation that will take place over the forthcoming year but I do have three quick suggestions that might mitigate the risk of losing customers in 2016.

  • Just because you’re subscription is being paid doesn’t mean your product is being fully utilised. If local authorities cannot see the ROI they will take the decision to lose it. Thus it’s important to stay in touch with clients and users to ensure that the organisation is getting as much value as possible from your product.
  • Don’t be resistant to integrating your solution with other 3rd party applications. Instead, commit to working with other vendors to achieve this. Local authorities need to realise savings and the integration of applications will assist in this. The better integrated you are, the less likely you are to be culled. Don’t put up barriers to this, financial or otherwise.
  • Continue to develop your product in an efficient and affordable way. Transformational change programmes across the UK public sector are running at a pace and you must ensure you are keeping up but in a customer-focused way.

5. Channel of choice

My final point is about channel of choice. This issue doesn’t necessarily applicable to all IT vendors but it will be a big issue for some, particularly those whose solutions are public facing.

During 2015 the debate around channel of choice has changed. Previously, conversations with local authorities generally went along the lines of ‘this is the way that we make our citizens interact with us and we are content with the channels that we have set up to do this. We don’t need anymore.’ The position could best be described as rigid. Therefore, if your solution did not fit with the channels that the organisation viewed worthy of support then you simply were not an option.

So how did the debate change and why? Once again the cuts play a role here. With no money available, local authorities were compelled to look at cheaper channel alternatives and fully embrace them as opposed to having a disproportionate reliance on face-to-face or phone contact. Secondly, the continued growth of social media as a communication tool has been an unstoppable force. The reality is citizens will contact you when they like and using the channels that they like, whether you like it or not.

So what’s the punch line here? For the public sector the citizen / customer and their experience has to be the number one priority. Don’t offer solutions unless they are efficient multi-channel alternatives otherwise they simply won’t fly.

So that’s what we’ve learnt from our experience in 2015. Ask me in a year whether and to what extent the pause to evaluate was a positive exercise, and the very best of luck for 2016.

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