Today is the day of the Local Government Communications conference in Leeds, which is themed around the topic of “Better for less”, so I thought this would be an opportune moment for my first blog posting. Every member of the ocProducts team believes that the Open Source Software model is a perfect fit with this ethos and we fully support initiatives such as the UK Government Open Source Strategy, which aims to share and re-use IT purchases across the public sector.
With this in mind, ocProducts have been seeking to establish a foothold in the public sector, seeking to demonstrate the potential of our software within a nominally hospitable environment for open-source software. Although we have not been entirely unsuccessful in this endeavour, we have found securing public sector contracts to be extremely difficult, even when we prove ourselves to be extremely competitive on full life cost. Thus, we were extremely concerned to read reports of the £2.8 million budget that has been authorised for the Birmingham City Council website over the last 5 years and the litany of errors with which has become synonymous.
As a small enterprise marketing a product that is directly targeted at large scale web development projects, ocProducts would be delighted to secure an ongoing contract for even half of the budget that has been wasted on birmingham.gov.uk; There is no reason why a generic city council website should land the taxpayer with a bill in the millions of pounds and we are certain that the open source development model would provide far greater value for money.
One of the more interesting points in the report that outlines the failures of the Birmingham City Council website project is that it highlights excessive and “unnecessary” customisation of the proprietary FatWire CMS; although I will not comment on the relative merits of a rival product (though comparisons can be made through CMS Matrix), it does seem strange that proprietary software was selected for customisation when there are many freely available, mature and feature-rich open source packages that would be capable of producing a website of comparable quality at significantly lower cost.
The report goes on to describe the customised Birmingham City Council CMS as unstable, stating that it requires more work in order to function effectively for its users. After five years of extremely well funded development, there is no compelling reason why this bespoke CMS should still not be fit for purpose. Unfortunately, as the development budget is being spent on licensed modifications to proprietary software, the improved code (and associated costs) cannot be shared with other public sector organisations without purchasing another commercial license. This means that there is no way that the taxpayer can effectively recoup the overspend, nor is there any way for the customisations to be “reused” or “shared”, in line with the government IT policy.
If a bespoke CMS was always specified in the original tender documentation for the Birmingham City Council project, I find it extremely curious that a proprietary software product was selected to be modified at great expense and would be very interested in reading the criteria that were used. Choosing a modular and open source platform would have assisted the developers in working on individual customisations to the CMS without destabilising the platform as a whole, so the choice of proprietary software for this project appears to be a critical error that has cost hundreds of thousands of pounds.
Now that we have entered the new “age of austerity”, there can be no excuse for this kind of flagrant overspend. The beauty of open source software is that you do not have to pay for intellectual property licensing, nor do you have to rely upon any single organisation for permission to look at or modify the code. This competition ensures lower development costs, even whilst working with the organisation behind the original software; there can be no monopolies in the OSS market, which guarantees a lower full life cost than proprietary alternatives.
Despite the prolonged development schedule and excessive budget, the report goes on to state that “The site itself now requires all remaining content to be uploaded and we feel that it also requires a look more in keeping with the vibrant city which Birmingham is. Navigation and design could be improved as part of this process”.
But wait! There is more; the Birmingham City Council website complies with neither the Birmingham City Council accessibility policy nor the Disability Discrimination Act. This last statistic is particularly saddening for us, as ocPortal has been designed to exceed the all major web accessibility standards (which is a source of great pride for the team).
So, after 5 years and £2.8 million, the CMS is unstable, the site is lacking content, there are accessibility problems and the interface requires a new design. All of this leads us to ask the inevitable question; what has this expenditure actually achieved? One obvious answer from an OSS advocate would be vendor lock-in; having spent so much of their budget on a customised CMS, Birmingham City Council will find it very hard to justify dumping the system in favour of one built by a competitor (particularly one from a small enterprise with an unproven history).
The former Business Secretary, Peter Mandelson, was once quoted as saying “Every year the government spends many billions of pounds on public sector contracts. It is vital that we actively help small and medium sized companies take advantage of these business opportunities. In the current economic climate this is more important than ever. SMEs often have smaller overheads, local knowledge and great flexibility. Often they can offer the public sector better value for money than big business”. Unfortunately, public sector procurement officials are notoriously risk averse and will often look past the smaller and more innovative organisations who vie for their attention during the tender period, focussing on established heavyweights who provide a low theoretical risk at a seemingly inflated cost.
There are many benefits of securing public sector contracts, especially during a time of recession, however the perceived barriers that stand in the way of new businesses entering the field will certainly deter all but the most tenacious contenders. Even the process of building proposals for tender can be extremely costly in terms of man-hours, which add up to a significant burden on a small enterprise operating in a risk averse environment. This is especially relevant for new businesses that build their business model around creating and supporting open source software, despite government initiatives for increasing public sector utilisation of OSS solutions.
The process of promoting innovative solutions built on open source technology has the feel of a chicken and egg scenario : how do you generate new business without brand recognition, but how do you afford to build your brand without the revenue provided by a steady influx of new business? This is particularly true within crowded markets, such as Web Content Management Systems, as the budgetary limitations felt by small enterprises can necessitate an uneasy compromise between marketing or product development.
When financial constraints prevent a direct direct marketing strategy, it becomes essential for development groups to find showcase projects that highlight the quality of their service; It is extremely hard to secure large commercial contracts when the market remains unaware of your product, so one logical step would be to find contracts that have been put out to tender; this will naturally lead development groups towards the public sector.
The risk-averse nature of public sector procurement processes guarantees that recognised brands and organisations hold a distinctive advantage over small businesses, despite the fact that the smaller businesses offer more innovative or cost-effective solutions. The public sector is prohibited from actively showing bias against new businesses during the tender processes, however there are other obstacles can be placed into selection criteria that effectively bar new entrants from the market.
Pre-Qualification Questionnaires that require the provision of financial records for the tender process is a prime example of this, as the cash flow of OSS agencies is often less cleat cut than that of other business models. SMEs built around the open source support agency model frequently generate very low levels of revenue during their formative years, partially due to the protracted nature of community building and product development. This extended gestation period can ensure that startup OSS support agencies are disqualified from the majority of public sector projects on the basis of their financial history alone, irrespective of the quality of the product or the expertise that they can bring.
Software takes time to develop, communities are slow to build and market penetration can be an extremely drawn out process, so enterprise built around the open source model can take several years to generate significant profits. When an OSS project reaches maturity, there is often insufficient evidence of financial stability for these businesses to succeed in the tender process.
The low overheads incurred by these businesses during the development process are irrelevant in the eyes of procurement officials; the level of detail requested in standard Pre Qualification Questionnaires is simply insufficient to make an objective judgement upon community driven OSS enterprises.
Many procurement officials see the low turnover of OSS suppliers as being a financial liability; that the lack of financial muscle indicates a weak organisation that is at risk of failing at any time. There is no common understanding that community driven initiatives require a much lower amount of financial backing for them to be viable long term prospect and that a small number of high value contracts can provide OSS projects with a comparatively healthy future.
If the Pre Qualification Questionnaires for competitive tenders took the open source support model into account, OSS suppliers would stand a much greater chance of putting their ideas and innovations forwards for consideration. If the financial bottom line didn’t trump the quality of your product, many more SMEs would survive and expand to challenge the industry giants; it is a sad indictment of our public sector procurement process that businesses marketing their own products can be identified as a financial risk, whilst established companies are given a license to waste money by dint of their bank balance.