Public Sector and the Cloud: Doing more for less

GROWTH AND TRUST Global cloud insiGht - public sector

Space to transform

Global cloud insiGht – public sector

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summary

• people want their governments to act more quickly, so processes and systems that support quick changes in laws and regulations have to be in place.

• public sector bodies need to: focus on doing more for less; make sure they deliver services reliably and consistently; get the most out of existing legacy systems; and use technology to encourage collaboration and quicker decision making.

• More and more people, especially younger people, expect to get services when they want it and where they want it. and getting people to look after themselves – the ‘self-service’ approach – is a big benefit for the public sector too.

• budget cuts in the public sector are severe, so it’s no surprise that clients see ‘cutting business costs’ as the cloud’s number one role. but they also believe cloud services offer simple and speedy solutions to business issues.

• public sector clients have started to think about how cloud services could help them achieve their top priorities and get rid of costly legacy services.

• consolidating services, making them virtual, and sharing them is a key part of moving from a fixed-fee service or licence to a pay-per-use model, and bringing down costs and capital investment.

• ‘data security’ is the number one concern for public sector clients. some even see it as a ‘show-stopper’ because of the sheer amount of legal and regulatory requirements that they need to comply with.

“all applications that can be shared will be shared and hosted on a common infrastructure.”Donald van Gasteren Global Insight Director Logica

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“the cloud is just common business sense.”

is the cloud just another delivery model or will it change the public sector’s relationship with citizens? can it give them better services or is it a distraction? is it just about cutting costs, or about finding new ways to do things? or a bit of both? this research report puts forward evidence that these questions can be answered, and in fact have been already. and that getting the implementation right is critical.

“our clients’ cloud assessment.”

We had more than 250 conversations with our public sector clients across Western europe in 2011 and found many interesting attitudes towards the cloud.

in this report, we’ll look at how these public sector organisations see the impact of cloud services on their business, now and in the future, and what concerns they have.

introduction

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the public sector’s use of the cloud has picked up momentum over the past few months, and the way these organisations use it has changed, too.

some public bodies see the cloud as an evolutionary move from delivering products to delivering services; others see it as a fundamental change in how a government organisation works internally and with others. however they see it, our public sector clients are assessing and developing their cloud strategies. it isn’t hard to imagine how cloud services could dramatically change current business processes.

the cloud’s getting a lot of interest

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We found that the issues our clients want cloud services to deal with changed a lot in the first half of 2011. this is because they now understand much better what these services can do.

in one out of three client conversations We talked about hoW iMportant it is to Make orGanisations More aGile

in fact, ‘becoming more agile’ has moved into first place. people want their governments to act more quickly, so processes and systems that support quick changes in laws and regulations have to be in place.

Most clients see agility as being flexible enough to cope with sudden peaks in demand – at both the development and service delivery stages. they need to improve the way they develop new, updated or enhanced services for citizens, for example, by improving the development cycle or by taking advantage of developments that have already been made centrally. clients recognise that

some of the current services lack flexibility and choice, but more citizens are asking for more flexible access to public sector services.

a number of facilities could help here – those that support changes in governmental organisational entities, encourage different departments to work together more, can ‘ramp up’ and ‘scale down’ infrastructure capacity, and speed up the deployment of new networks and storage. they would also let organisations introduce smart working practices, make their workforce more agile, cut down the number of offices they need, provide self-service portals for citizens and make more use of conference calls and technology.

some clients also see agility as being able to deliver integrated services alongside private companies. for example, hospitals are sharing patient information with other health professionals like laboratories, family doctors and independent nurses more often. these programmes need flexible it services, modern tools at reasonable prices, flexibility in capacity, shared application support and flexible software licensing.

“We have been able to reduce our headcount by 40% over the past two years.”Client quote

the cloud: it’s all about delivering services to citizens


Figure 1. Top 5 most mentioned business issues

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0%Improving business operating models

Reducing operational risk

Moving to a variable cost structure

Improving business agility

Enhancing the current customer experience

Central Government Local Government Healthcare Public Safety and Justice Space and Defence

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froM siMplifyinG processes to iMprovinG the business operatinG Model

at the end of last year, clients were more concerned with simplifying their business processes, delivering services and cutting operational costs. but 30% of them now see improving their business operating model as a big issue to sort out, specifically in areas of public safety.

public sector bodies have a number of reasons to do this. in particular, they need to:

• focus on doing more for less. this is about being more efficient, not just cutting costs. one item mentioned was consolidating data centre services to significantly reduce costs across estates, communications and staffing as well as improve services. another was increasing the support for front and back office business process outsourcing services

• make sure they give their citizens reliable and consistent services

• get the most out of existing legacy systems. clients see partnering with a commercial body as the best way to do this, for example, in the area of web hosting

• offer services so citizens can get more involved with policy and other decisions (for example, new ways of communicating with citizens based through social media)

• make decisions more quickly, both for national and local authorities and community bodies.

MakinG the custoMer experience better

another challenge clients mentioned a lot was how to make the citizen’s experience of dealing with the public sector better – a key part of becoming more ‘citizen-centric’.

everyone should get the same high service – even those who live in rural areas. so a number of existing web-based facilities need improvements. one of these areas is mobile web-based applications. More and more people, especially younger people, expect to get services when and where they want them. and getting people to look after themselves – the ‘self-service’ approach – is a big benefit for the public sector, too.

cloud services could well help at both ends, giving citizens premium services through simple but innovative products, and public sector organisations smart working facilities.

“cloud services would allow us to move to a mission-based structure where a new mission can have resources assigned to it from the cloud.” Client quote

“a unified support service will eliminate duplication in staffing, estates, and contact centre infrastructure (processes, telephony, tools, etc.) whilst delivering a more consistent, better quality, user experience.”Client quote

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cuttinG business costs

budget cuts in the public sector are severe, so it’s no surprise that clients see ‘cutting business costs’ as the cloud’s number one role, switching places with ‘improving access to technology’ from the end of last year.

public sector clients see how the cloud can consolidate and standardise processes and make them more cost effective. but they’re concerned about the cost of moving to the cloud and the possible loss of control.

iMprovinG access to technoloGy

clients believe cloud services offer simple and speedy solutions to business issues. they’re not really interested in how the technology works, but in the way it lets them offer citizens better and richer services, give up physical documents, share more, get economies of scale and better accessibility.

clients realise that younger citizens have grown up with devices in the palms of their hands and that they need to reach them through these new channels. but they also understand how important it is to keep a service up and running 24/7 and performing well. so they often experiment with the cloud on non-critical business elements first, like twitter, as a way to encourage working together and changing behaviour in the organisation.

vieWs in the sub-sectors

clients from three of the five sub-sectors – healthcare, public safety and justice, and space and defence – mentioned

‘improving the business operating model’ as their top business issue. clients from the other two – central government and local government – put ‘becoming more agile’ at the top.

Moving existing solutions and applications to the cloud does come with some cost. so you need a solid business case and a short payback period for it to make sense.

“any scope to reduce costs without loss of service is very welcome.” Client quote

“all applications that can be shared will be shared and hosted on a common infrastructure.”

Donald van Gasteren Global Insight Director Logica

Figure 2. Top 3 most mentioned roles of cloud

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0%Reducing business cost Improving the business’ access to technology Other


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neW ideas for cloud

an interesting change has taken place over the past couple of months: clients are now mentioning other business roles the cloud could have. for example, clients think of the cloud as a way to improve operations and make sure services are available 24/7, while making less impact on the environment at the same time. the cloud could also encourage different departments to work together more and cut down the number of local applications the public sector has to manage (some governments have more than 2,000 of them). and of course new ways of communicating, like social networking, have taken off, which call for cloud-type models.

vieWs in the sub-sectors

almost a quarter of clients put ‘cutting business costs’ as their top role for the cloud, as did the majority of clients from the local government, public safety and justice, and space and defence sub-sectors. Many central government clients are still trying to find a role for the cloud. healthcare clients gave a mix of responses, like ‘cutting business costs’ and ‘achieving service excellence’.

business reasons: providinG a better service

now that cloud services are easier to get hold of, public sector clients have started to think more about how these services can help them achieve their top priorities

and get rid of costly legacy services. the way they deliver services is a key element in this, as it has to strike the right balance between being cost effective and fitting with the organisation. since capabilities in some areas are scarce, it makes sense for departments to share cloud investments.

cloud services bring the flexibility the public sector needs. for example, hosting a number of existing local and national applications in one place boosts cooperation between governmental organisations and provides a scalable platform for the future.

Figure 3. Top 3 most mentioned business reasons

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more important projectsLowers overall costs If it is only available as a service


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vieWs in the sub-sectors Many clients viewed ‘lowers overall costs’ as an important business reason for the cloud; almost half of local government clients and a third of public safety and justice clients mentioned it. the majority

of space and defence clients put ‘lets us focus resources on more important projects’ as their major business reason. healthcare and central government clients gave a mixed response.

focusinG resources

departments are losing skills: it’s hard to keep good people, and many are retiring anyway. so it would come as a relief to be able to focus on their core business and business critical projects, and let trusted suppliers look after the infrastructure and applications. for example, using a secure cloud environment to deliver infrastructure and applications as a service would save money and resources by reducing the hardware needed.

loWers overall costs

one of the biggest challenges for clients is lowering overall costs to balance their budget. they’ll carefully look at any proposition that makes actual cost savings each year, after taking transition costs into account. at the moment they think infrastructures are expensive and inefficient, and can’t cope with growth. consolidating services, making them virtual, and sharing them is a key part of moving from a fixed-fee service or licence to a pay-per-use model, and bringing down costs and capital investment, of course. but the formal purchasing procedures of the public sector could be an issue for pay-per-use.

Figure 4. Top 5 most mentioned business concerns

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location of serverVendor lock in Loss of control Data security Other


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security is the top business concern

‘data security’ is the number one concern for public sector clients. some even see it as a ‘show-stopper’ because of the sheer amount of legal and regulatory requirements in this area that they need to comply with. so there’s a strong need for a cloud service that supports secure operations.

there are different aspects of data security:

• Legislation. the movement of data across borders has to be strictly regulated. there is flexibility when it comes to moving data around the european union. but some people believe that governments should keep their data in their own country.

• Sensitive information. you should never store confidential government documents in a public cloud. data like personal medical, military and criminal records can be highly sensitive and needs its own solution.

• Privacy. for personal data you need to comply with national laws and privacy regulations. citizens want to know you can segregate data so that only the relevant officials can get hold of the relevant information. clients can be

reluctant to share projects because it breaks down the separation of different types of data. and because you have to delete some data after a certain amount of time, you have to be able to find it easily.

• Public opinion and reputation. recent security breaches have damaged reputations and fostered the opinion that data isn’t safe once it’s left your own premises.

• a big challenge is to set up different levels of access to data and services, without adding to the cost.

other concerns the security aspects above are closely linked to the second and third most important business concerns, ‘not knowing where the server is’ and ‘losing control’. some clients don’t want to be dependent on outside service providers – they might feel helpless if things go wrong. there are other concerns as well, like ‘being locked in to a particular vendor’, ‘not being compliant’ and ‘having migration problems’.

our approach to securing the cloud

1. Work out the risks for each cloud project, taking into account applicable regulations, data sensitivity and business requirements.

2. decide on the deployment model (private, public or hybrid) and the service model (infrastructure as a service, platform as a service, or software as a service) depending on the risks.

3. Make sure you integrate security with the existing technical, organisational and procedural set-ups. evaluate the need to add security services like digital signatures, time-stamping, secure archiving and logs.

4. if a third party delivers the service, make sure you understand exactly what security is in place.

5. set up and monitor performance indicators for security so you can make sure it keeps doing the job over time.

Thibault Chevillotte, Senior Manager, Security & Risk Management, Logica Business Consulting

A protected space


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is the cloud here to stay? We say yes, but we also say the cloud is just the beginning. as cloud services in the public sector start to mature, new business models will appear, eventually reshaping the whole business environment.

is it really that important? again, we say yes. cloud services will help you deal with the growing need to cut costs and put the citizen at the centre of what you do.

What about the challenges? Well, the it’s already in place – that’s not an issue. We do need to overcome worries about security and trust, which in time, we will. We need to be sensitive to how the public sector deals with change, and help it through these business and technological changes.

so challenging? yes. impossible? no. desirable? definitely.

conclusion

“When we talk to our clients we find Governments across europe are using the cloud to transform the way they operate and deliver public services. it saves them money, supports inter-departmental information sharing and new ways of engaging with their citizens.”

Monique Mulder, Global Director Public Sector, Logica


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logica is a business and technology service company, employing 41,000 people. it provides business consulting, systems integration and outsourcing to clients around the world, including many of europe’s largest businesses. logica creates value for clients by successfully integrating people, business and technology. it is committed to long term collaboration, applying insight to create innovative answers to clients’ business needs. More information is available at www.logica.com.

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Public Sector and the Cloud: Doing more for less