The TechMarketView team has just completed its analysis of FY13. In a new report, it takes a look at the impact of changes in the UK public sector on the competitive landscape and at the performance and prospects of leading suppliers.
It also considers the current stance of the Cabinet Office: how has its view of its ICT suppliers altered over the last six months and what does that mean for suppliers – large and small, established and new – looking to win business with UK Government?
Capita has taken the UK public sector SITS provider crown after delivering an 11% rise in sector revenues to £1.59b. It topples HP, which reported a similar % decline in its UK SITS revenues. Capita benefits from its focus on business process outsourcing, an activity far less impacted by the Cabinet Office directives around ICT contracts. It also derives the majority of its revenue from local government as opposed to Whitehall. But other suppliers would do well to observe its proven ability to identify new target subsectors – such as police and education – by making selective acquisitions and ‘landing and expanding’. This has enabled it to maintain strong growth rates despite the maturing of its traditional local government BPO hunting ground.
The view of the report is that the market was about ‘flat’ year-on-year in 2013. Analysis leads TechMarketView to conclude that it is those players just outside the Top 20 that are significantly outperforming the market – mid-tier alternatives, like Computacenter for infrastructure services or UNIT4 for ERP solutions; Indian outsourcers, like TCS and HCL, determined to replicate their UK private sector success; and management consultancies, like Deloitte and PA Consulting, experiencing a revival of their public sector fortunes. Indeed, one such mid-sized player – Agilisys – made it into the Top 20 for the first time.
As these ‘newer entrants’ make their mark, the larger SITS suppliers are trying to reassert themselves. Notably they are playing the “working with larger suppliers can bring significant benefits” card. And it is a strong card to play in some situations. After all, you will be hard-pushed to find an SME willing to help out at the ‘drop of a hat’ in an emergency situation and think about the commercials later. And that’s just one example.
Indeed, the Cabinet Office seems to be accepting that a mixed supplier economy is the right answer. But for any supplier – large or small – to be accepted as a “strategic partner”, it must be unwavering in its support for the UK Government’s strategy and determination to transform. Some suppliers are finding that an easier ask than others.
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