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Information Technology: Government Could Save £8bn By Choosing Second-User Hardware

By: Dr. Stephen Castell
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The new government has announced the areas that it has identified for dramatic cuts in public spending. One of the most effective reductions should be derived through more professional, better-managed government IT spending.

A year ago, the government's IT Operational Efficiency Programme review (OEP) under Martin Read pointed to savings of £3.2bn per year to be delivered through better management of information, more benchmarking of systems and review of costs, and &better governance of IT enabled change programmes", including failed IT projects.

Public sector IT spend is estimated to be about £l8bn a year, about one-third of which is reckoned to be for the software, project/programme management and other services addressed in the OEP. In other words, it found that much of the £6bn a year involved ought to be saved by better procurement and project management. Given the problems the IT profession has in defining, designing, developing and delivering large-scale software &solutions", this is a rather difficult challenge.

However, about two-thirds of government IT spending, or around £12bn a year, is estimated to be for IT hardware. Recent independent research into major public sector datacentre IT hardware infrastructure provisioning reveals that significant savings could readily be achieved by procurement of refurbished second-user IT hardware.

The market, covering mainframes, high-end servers and networking kit, is well-established, vibrant and growing. It offers products that are equal in capability, reliability and resilience to new equipment, "cleansed", checked and tested to manufacturers' standards, and covered by similar warranties and engineering support and maintenance contracts.

The savings would be substantial. Second-user high-end IT kit, equivalent in all material ways to new equipment, can be acquired from reputable, trusted, brand-name IT suppliers for between 5% and 20% of the list price for comparable new equipment.

This approach, rigorously and carefully applied across the whole of government IT infrastructure spend, under professional, commercially-savvy expert direction and management, could result in savings to the exchequer of about £8bn a year. George Osborne please take note.


Dr. Stephen Castell Chartered Information Systems Practitioner and Member of the Expert Witness Institute, is Chairman of CASTELL Consulting. He is an internationally acknowledged independent computer expert who has been involved in a wide range of computer litigation over many years. He is a member of the Legal Affairs Committee of the British Computer Society, and a Committee Member, British Computer Society Law Specialist Group.

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