A collective of London borough councils are pulling together their purchasing power in a mega IT products and services framework worth up to £1.1bn over four years. An invitation to tender was sent to prospective suppliers late last week covering three lots - distributed computing, service desk and data centre services. …
Crystal ball mode=on
Theory = buying in bulk gets discounts, by pooling all our buying we will get massive discounts.
Practice = only IBM will be big enough to bid on this contract. They know they have a captive market so will charge 2x retail price for everything. The costs will then double again as every council has to throw out all their existing Dell/HP/local-shop stuff and be integrate din the new IBM only system
Re: Crystal ball mode=on
"Theory = buying in bulk gets discounts, by pooling all our buying we will get massive discounts"
And a crap theory it is too. Big IT services contracts are let very infrequently by the buyers. For IBM, HP, Capita, bidding is all in a days work - well, almost. Their sales teams, lawyers, and commercial people do this so regularly that they know all the pitfalls (to prepare for the unwary client), they know the terms that will or won't stand up in court, they know how to lead a client on in the incorrect belief that the vendor will work for the client's benefit. And so on. Meanwhile, like rabbits in the headlights, the buy-side management swallow all the marketing pap, lean on their over-stretched IT procurement bods, and then wonder three years later where all the savings went.
And clubbing together to get some extra scale doesn't even change that asymmetry of experience - if anything it means there's less buy-side experience to go round, without materially altering the scale of the market for vendors.
This works in any specialised market, from airliners to power stations, and the only buyers who stand a chance are the ones who have sufficient experience and sufficient work to keep them going. Sadly there's few IT buyers who can say that - even if you've got a 100,000 employee business.
O much for letting smaller businesses get a bit of the Government cherry.
You tax pounds at work!
This is a fantastic idea... whilst wearing pink shades... and standing on the moon. All you need to do is imagine a world where Capita or Serco run the IT for every single council in London... go on, imagine it, i dare you!
/duck and cover
Doomed to fail right from the start.
Frameworks are not obligatory
Councils are under no obligation to use this framework, except perhaps Westminster who are expending resources on setting it up.
There are lots of others in place such as gCloud, Sprint ii etc, so Councils are free to play the winner of this framework off against other suppliers.
"This enormous purchasing juggernaut will devour us all"
Er - shouldn't that be "... will bankrupt us all"?
Large government led IT poject
What could be simpler to save the taxpayers money....OH, wait.....didnt we try that someplace before like....in Whitehall last year?
Another large contract awarded on the basis of turnover, doesn't matter if the company makes a loss then? When will they learn?
Rock & hard place
Previous posts, too true, too true.
However, you haven't identified the hard place on the other side of the equation. What the organisations need is a fleet of foot, responsive, collaborative partner to evolve an IT system at a reasonable price.
Just how should local authorities or indeed the NHS set about identifying such companies? From the glowing examples elsewhere? By commissioning an independent expert report?
And even if they luck onto a good provider, how do they then make it play nicely with everyone else's 'solutions'?
Re: Rock & hard place
David, the answer is staring them in the face!
It's David, David & Co - IT solutions. We're the one-stop shop for consulting, solutions and resourcing for any task, project, company or indeed council. Admittedly it's currently just you and I, but before long I'm confident we can scale up with a load of street hobos... errr... IT experts. We will make a killing by taking a modest 1% on top of the prices for kit which we'll get from <big online retailer>, the gov will save a fortune and all the actual work we'll just contract out to the hobos.
Let's have our first jolly... umm, team meeting... tomorrow?
Also, I think it'll be fun if we only employ people called David - or at least rename everyone David - it can be our USP.
- Exclusive HP slaps dress code on R&D geeks: Bin that T-shirt, put on this tie
- Analysis Ballmer's billion-dollar blunders: When he gambled Microsoft's money and lost
- Blighty tablet sales plunge 31 per cent in saturated market
- Exclusive + analysis How to waste two years and lose $415m: Cisco's now-dead Whiptail deal
- Q. How much did Google just spend applying political pressure in the US? A. $4.6 million