Public sector still to find £2.6bn of IT savings following Comprehensive Spending Review cuts
VMware research suggests senior finance officers in the public sector regard IT as essential to achieving cuts and transforming operations
London, 15th March 2011 – VMware Inc (NYSE: VMW), the global leader in virtualization and cloud infrastructure, today released survey results showing that more than half (54%) of public sector organisations having to make cuts in their IT budgets following the announcement of the Comprehensive Spending Review (CSR) in October 2010, are yet to even begin. With senior finance bosses responding that they have only implemented less than 9% on average of the planned cuts to IT spend so far, the public sector still has to trim £2.6bn from its overall IT spending over the next three years.
The survey, carried out among senior UK public sector finance officers by ComRes on behalf of VMware in March 2011, finds that, despite the CSR aiming to protect front-line services, 61% of senior financial officers say that reduced budgets are already impacting front-line services. It also reveals that the public sector is struggling to make the budget reductions – more than two thirds of those surveyed (69%) believe the cuts will be difficult to achieve within the three year timescale. A forthcoming full report will be available at www.smartsavingsideas.com.
A striking element of the study is a strong belief among public sector bosses that IT is of strategic importance – not only for achieving the cuts but for providing the foundation for organisational change. Despite public sector IT often being associated with well-publicised IT failures, the majority of respondents now believe IT is integral to cost cutting efforts (73%), possesses the ability to transform the ways in which organisations operate (91%) and delivers the organisation value (87%). The overwhelming majority (83%) of public sector bosses believe IT to be essential to the delivering of shared services.
“We’re seeing a major shift in the way IT is perceived in the public sector,” commented Mark Newton, UK MD, VMware. “This research clearly shows that financial decision makers recognise that smart allocation of IT spending and resources can make a fundamental impact on their organisation. Rather than seeing it as a drain on resources, IT has the power to drive positive organisational change.”
Newton continued, “By simplifying IT and accelerating the transition to cloud computing, where the goal is to deliver IT as a service, the public sector has a real opportunity to lead the way in achieving major transformational benefits. Cloud computing is an enabler for shared services, and as this model is increasingly adopted, the role IT will play in the delivery of vital public sector services will become even more crucial.”
Many public sector organisations have already successfully used IT to help achieve the spending cuts whilst protecting jobs and services. The www.smartsavingsideas.comwebsite features several examples of how public sector organisations such as Hillingdon Council, the University of Greenwich and the Bradford and Airedale NHS trusts have used technology to reduce IT spend.
Roger Bearpark, Assistant Head of ICT at Hillingdon Council, believes technology offers real promise for government services. “Our council administration saw the need for cuts long before the CSR was on the political agenda, but without question we are far better placed to deal with the need to find savings because of a virtualized infrastructure. Not only can we contribute to the overall cuts by keeping our own costs low, but we can also drive efficiencies throughout the rest of the organisation, and because we have such an agile infrastructure, we can make these changes quickly.”
“We already run what you could call a ‘Hillingdon Cloud’ and are currently working on a project to share services with three other councils that also have their infrastructure virtualized using VMware. Moving government services to the cloud makes perfect sense; it assists with capacity management during peak periods, avoids duplication, increases security and stability of the system and most of all could save billions in IT costs.”
According to the research, 39% of public sector organisations are actually looking to shared IT services as a revenue generator. Liverpool Women’s and Alder Hey NHS Trusts are in the process of migrating all of Alder Hey’s IT services to the cloud, a project that Liverpool Women’s hope will result in the creation of an efficient data centre that will allow them to build a new hospital within three years.