The G-Cloud Demands New Business Models

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Mutual issues

On the other hand, however, the report brought to light barriers faced by the new mutuals. This included a tendency for contract tenders to make requirements beyond what is legally necessary – such as demanding an organisation has a multimillion-pound bond before taking on the contract.

Other issues encompassed a lack of commercial resource and expertise; poor access to information about tenders; lengthy procurement exercises and financial regulations.

The nature of contracts acted as a further barrier with regards to details, such as contract requirements, and inexperience with contractual relationships. However, the National Programme for Third Sector Commissioning, in July, 2010, indicates how commissioning organisations can help to overcome these barriers.

Actions that can be taken to help include inviting contributions from all potential suppliers at the needs assessment phase, and inviting suppliers to contribute to defining specifications before launching procurement. Beside this, it is recommended that organisations ensure that risk management is proportional to the contract being delivered and ensure that contract size is not a barrier to market entry but is commensurate with the investment requirement and procurement costs.

Given that the development of an open marketplace that is accessible and beneficial to small, medium and emerging enterprises is a key objective of the government’s cloud project, mutualisation can slot into the G-Cloud programme. Supported by simplified commodity procurement processes that create a level playing field for all types of suppliers, the government believes this type of market place will help create a competitive arena where suppliers compete to offer systems that can be easily and quickly adopted by public bodies.

Stimulating possibilities

Mutualisation has the potential to create a wave of emerging suppliers, many of which may be able to employ in-depth public sector knowledge into developing highly relevant applications. Such an increase of potential suppliers can only stimulate the market. The government’s plans for its cloud strategy are enhanced by extending the range of service providers that are competing with to get their products chosen.

The aims of the G-Cloud have been clearly set out by the government. The core objectives comprise the ability to change service provider easily without lengthy procurement and implementation cycles. Another stipulation is to have readily easy-to-use complete services that are already assured for security, performance and service management.

This presses the government to create a truly competitive marketplace where a variety of suppliers have the ability to compete equally and fairly. Mutualisation has the potential to bring about a capability set which has so far been unavailable to the market. Unlocking these capabilities can bring greater choice, value, quality and innovation to public sector bodies and help strengthen the ability to deliver the promises of the G-cloud. Most importantly, mutualisation can help fulfil the greatest challenge of all, by changing the way the government works.

Alan Mac Neela is government director, UK, for Dell Services