Information and communications technology (ICT) is critical for the effective operation of government and the delivery of the services it provides to citizens and businesses. An efficient ICT system can offer key benefits, and give businesses and citizens simpler and more convenient access to transactional services and the opportunity to collaborate and share information. However, a functional ICT strategy must also be cost-effective. The coalition government’s ICT strategy has been designed to deliver better public services for less cost, release savings by increasing public sector productivity and efficiency, and reduce the structural deficit in order to continue to fund front-line services.
This drive for efficiency is perfectly illustrated by the new deal the Cabinet Office and Oracle have recently signed. The deal will deliver in excess of £75 million in savings by 2015, according to the Minister for the Cabinet Office, Francis Maude. Oracle is one of the Government’s largest IT suppliers and works with almost every department and agency across Government. The deal redefines the way the government works with suppliers. The new type of contract offers several advantages including:
- A single discount
- Historically different sectors of government bought software from Oracle on different terms and at different discounts. The new deal will mean that the government acts as a single, intelligent client, with all departments buying software using the same discount rate.
- Licence sharing
- Software licences can be re-used across departments rather than each department having to buy unnecessary additional licences that the government already owns.
- Bulk buying
- The government can maximise its buying power and buy in bulk as a single customer.
- Shared services saving
- The deal will reduce the government’s spend on back office , the so called “shared services” like HR and payroll by reducing the requirement for software upgrades.
Taken together, it is hoped these measures will deliver efficiencies that will result in savings in excess of £75 million for taxpayers by 2015 from just this one deal, releasing funds to support the delivery of frontline services.
The deal follows on from the agreement reached earlier in the month with a deal with Capgemini which will deliver £200 million in savings. Tight controls on spending and a business-like approach to government have already led to cash savings of £3.75 billion for the period May 2010 to April 2011 and the government anticipates a further £5 billion in savings this financial year.
Oracle offered the single discount package because of the strategic importance of the deal with the government and the special nature of the on-going relationship. The deal it’s hoped will deliver greater value for the UK taxpayer whilst providing the government with technologies to build a robust and agile 21st Century IT platform.
Cabinet Office minister, Francis Maude, commented on the deal:
“This deal ensures better IT for Government and savings for the taxpayer. The days of the government paying different prices for the same goods or services are over – we will no longer sign inflexible contracts that tie the taxpayer into unfavourable terms. We are pleased to have made these savings with Oracle and expect more deals with other suppliers to follow.”
In response to the Government's call for better capability, Oracle will also establish a Centre of Excellence where government’s investment in its Oracle estate will be maximised by leveraging expert resources. This will be aligned to the Government’s ICT Strategy, ensuring the delivery of this important programme across government.