After three years of radical change, the city council's systems staff are set to meet compulsory competition head on.
When Stephen Fletcher joined Plymouth City Council three years ago its computing facilities were in disarray. Some of the systems were 30 years old, staff were chronically overworked, and users were very dissatisfied with the service. 'The 1980s seemed to have passed the computer operation by and the IT staff had zero credibility with many users,' says Fletcher, who is now head of the council's Information Systems Department (ISD).
But since then, the computer users who run the West Country city have witnessed a revolution. The log jam of programming tasks has been almost cleared, the giant mainframe is being phased out, and a culture of delivering user satisfaction has been introduced. Morale is riding high and Fletcher is confident that his department will win the contract to continue supplying the council's IT service when compulsory competition is introduced in a few years' time.
The main problem, prior to 1991, was that the IT department tried to do everything itself. Instead of buying off-the-shelf software, its programmers and analysts were bogged down developing computer code to handle everything from financial management and payroll to personnel, housing benefits, business rates and the community charge. Some of the software dated back to the 1960s, and such packages as they had, had been added to so many times that it was almost impossible to maintain.
Nor was there any sensible system for prioritising the workload - users who knew a programmer or shouted the loudest got their jobs done first. On Fletcher's first day, he asked his senior managers for a list of the tasks in hand. He then watched in amazement as they went round consulting programmers who rummaged through their drawers fishing out envelopes and Post-It notes to check which jobs they were working on. 'I'm sure one even produced a cigarette packet with a reminder note scribbled on it,' Fletcher recalls.
The council was well aware of the need for radical change. Hence the hiring of Fletcher, 38, whose previous career had been in the commercial sector. He began as a computer operator at Lloyds Bank, and was a programmer at the Wellcome Foundation before being appointed a systems manager at Bank of America. He then joined Chase Manhattan Bank, but within months swingeing staff cuts left him looking for a job along with 5,000 others worldwide. When the offer of bringing an outdated department into the 1990s came from Plymouth, Fletcher readily accepted despite warnings from friends about the West Country being the graveyard of careers. 'The trouble is that once you come here the quality of life is so good that you never want to leave.' Part of the IT department's problem was that many of its staff, although very able, had never worked anywhere else. So the council took on more outsiders, including two top managers. The recession helped. 'It meant that there were very good staff in the marketplace with lots of fresh ideas based on their understanding of how other sectors work.' One of Fletcher's first big moves came in 1992 when he recommended the abandonment of the large IBM mainframe in favour of a three-tiered system comprising a small ICL mainframe, several medium-scale machines and a network of around 1,000 PCs and desktop terminals. This provided an integrated solution rather than a series of 'islands of information' as had previously been the case.
The mainframe was mainly for the financial systems, while services such as housing, environmental health and contract services could be run on the lower-cost, medium-sized machines. 'It sounds like a typical downsizing exercise,' says Fletcher. 'But we didn't set out deliberately to cut our costs by moving to smaller machines. They just turned out to be the best boxes for the job.' The council's members readily endorsed Fletcher's proposal to fund the new system through a lease that would allow him gradually to run down the old IBM mainframe. His goal was to maintain the budget approximately at its 1992 level - £3.4 million - until 1995/96 when it is expected to increase to £3.8 million. So far he has remained well within target. Apart from the cost savings and improved performance of the new systems, they also allow access to a much wider choice of off-the-shelf software. This is because they conform to so-called 'open systems' standards - agreed specifications that enable computers from different manufacturers to run the same software. In the old days, manufacturers trapped users into proprietary product ranges - when your needs expanded you had to buy a larger machine from the same supplier if you wanted to continue running your software. Open systems, in theory, liberate them from this.
But open systems have not yet fulfilled their promise. As Fletcher puts it: 'There are many different flavours of open system and some are still more open than others.' Even so, all local government users need to go the open-systems route because of the wide availability of packaged software. ICL has recognised this and happily sells packages from other suppliers, says Fletcher, but he reckons that the message has still not sunk in at IBM.
Dealing with the computer industry does not get any easier, says Fletcher. Price wars and technological developments have changed all the old fixed points. 'I sometimes worry when I see the big, old, established companies, such as IBM, Bull and Amdahl, tottering. Part of selecting a strategic supplier has to be working out if it is still going to be here in five years' time but that is becoming increasingly hard to do.' Another advantage of open systems is that they do provide a fair degree of protection - if one supplier drops out there should be plenty of others left to fill the gap.
Persuading IT staff that packaged software was the right solution for users proved difficult. Programmers were also worried that their own services might be rendered unnecessary. 'They thought that if we were going to put in packages we wouldn't need them any longer.' Computer matters are seldom that easy. During the past three years Fletcher's staff have been extremely busy putting in packages, and as yet they are only around halfway through the task of converting the 70-odd applications. There is also lots of development work involved in transferring data to the new systems.
Like all council department heads, Fletcher can only make recommendations as to policy, strategy and procurement. The final decision for any expenditure over £4,000 has to be made by the elected council members. The process starts either when a department comes to him with a particular request, or when he has an idea that would improve the IT service generally. He then produces a written report outlining the scope of the suggestion, the difference it would make to users, and the cost. The recommendations are first considered by the IT Steering Group which is chaired by the chief executive, Fletcher's boss. It also includes senior members from each of the council's directorates.
Its recommendations are then reviewed by an advisory panel and a sub-committee before being passed to the full body of council members to get the official go-ahead. The advantage of the decision-making process is that users get what they want and what they are prepared to pay for. The problem is that decisions take so long. Approvals cannot begin until Fletcher has presented a full report of his recommendations, and meetings of the full council are only held once every eight weeks. If a committee date is missed, there can be a further two-month delay.
Nevertheless, Fletcher has pushed through a whole series of changes. Another key innovation was to start charging other departments for the real cost of computing - previously it was, effectively, free. To his surprise, he had no difficulty in selling the idea. This was partly because the concept of charging for services is becoming more familiar through the sub-contracting of activities such as rubbish collection and the maintenance of parks and gardens. Users also appreciate being able to understand the true cost of IT and how it breaks down, says Fletcher. 'It helps people find out whether they are getting value for money.' Much of the change at Plymouth is being driven by the impending review of local government under which the city hopes to become a 'unitary authority'. This would mean that in addition to its responsibilities as a district it would take on county activities such as education, social services and highways. The workload would effectively be doubled, as would its budget.
Plymouth might be granted unitary status any time in or after 1995. In anticipation of this, Fletcher has already spent much time analysing systems to support the additional responsibilities. However, within 18 months of gaining unitary status, IT would be put out to tender along with a host of other administrative activities such as construction, legal, financial, housing and personnel. The precise form in which the sub-contracting of IT would be handled is not yet clear. Some activities do not seem well-suited to being farmed out, for example, corporate strategy, purchasing, contract monitoring and help-desk facilities. If the recommendations of the recent White Paper are followed, around 80% of the IT functions would be market-tested and the rest remain unchallenged in-house.
ware of the possibility that most of his department could be outsourced, Fletcher prefers to work as though he were already in a competitive situation. The IT department has to prove itself now, he says. 'It will be no good promising to improve if we are awarded the contract.' Things seem to be going quite well so far - the district auditor produced a glowing report on the way his department implemented the ICL Council Tax system when the poll tax was replaced. 'But whether we've got the lowest price and the best quality, only competitive tendering will tell.' Many local authorities have not recognised the urgency with which they must prove their competitive worth, says Fletcher. Plymouth is trying to show the way, playing host to many IT visitors from other local authorities. A number are referred by ICL, which is building up a powerful position in the local government market. For the past 18 months, it has provided several experts to work on the Plymouth site. 'It has gone far more smoothly than I'd have guessed,' says Fletcher, 'beyond my wildest dreams.' One of the gratifying things about working in local government rather than the commercial sector is that people tend to be much more open and willing to share their experiences, he says. Local government is also fortunate in having a particularly active association for its senior managers known as SOCITM. 'The attitude is that we're all in it together. It's nothing to receive a phone call from other local authorities asking what you are doing about a particular problem, because we are not competing with each other. We pool our resources much more.' Local government has changed from being a poor relation to one of the most challenging places to be for IT professionals at present, Fletcher says. Indeed, it is fast becoming one of the UK's larger IT sectors, forking out around £1.1 billion this year on goods and services, according to ICL. The sector faces a plethora of rules and regulations with the constant pressure of legislative changes, spending caps and competition. Internal IT departments that win their contracts will have to compete for them again at least every five years. 'Commercial companies don't make their IT departments face that kind of competition,' says Fletcher. 'Nor do they have EU-type purchasing restrictions.' He admits that some departments still think his team has too much power but is confident that they will have changed their minds by the time compulsory competition is introduced. 'When we work with users on specific projects their opinions do change and I hope most come away thinking the IT department is trying to give them the solution they wanted.' That Plymouth will become a unitary authority seems reasonably certain. Whether or not it will choose to keep all its IT in-house remains to be seen.