We believe it is time for governments to elevate their policy thinking about cloud services to confront their ICT strategy conundrum.
They must address increasing fiscal constraints and disappointment with existing approaches to boosting ICT productivity with an approach that enables cross-agency sharing. Mature enterprise cloud services are “capitalist economy” shared services that work.
Cloud services break the cycle of agency investment in dedicated ICT solutions that are difficult or impossible to share. In contrast, each procurement of cloud services incrementally develops the capacity of the vendor to offer the same service to other agencies. A policy position of “cloud services first” is a strategic commitment by government to the development of the next generation of shared services.
Let’s get realistic about government’s ICT strategy conundrum
Ovum believes it is time for government policy executives to start considering a more visionary stance on cloud services, which explicitly acknowledges the stark realities of their ICT strategy conundrum:
First, fiscal constraints mean that few agencies and few jurisdictions can now afford to sustain dedicated agency-by-agency, on-premise, or outsourced ICT environments and application portfolios. These constraints have led to unsustainable underinvestment, which will only worsen in the future.
Second, “kicking the unruly ICT teenager out of the house” by entering into long-term outsourcing arrangements has, in many cases, proven to be a high-cost, high-risk, and inflexible strategy, with disappointing results.
Third, government-owned in-house shared services have also, too often, proved to be high-cost, high-risk, and inflexible, with disappointing results. Their closed “socialist economy” markets, complex governance, underinvestment, and customer dynamics inevitably lead to real or perceived underperformance, compared to more open-market-based service offerings.
Fourth, mandated ICT strategies that attempt to consolidate, standardize, and rationalize ICT infrastructure and applications across agencies have also proved to be high-cost, high-risk, and inflexible, with disappointing results. The organizational and cultural forces of devolution and differentiation tend to be stronger than the forces of central control and coordination.