https://digitalmarketplace.blog.gov.uk/digital-marketplace-strategy-march-2015/

Digital Marketplace Strategy: March 2015

Digital Marketplace strapline

Contents

Executive summary
Introduction
What the strategy is about
The benefits of the Digital Marketplace
A Digital by Default commissioning platform
Growing the Digital Marketplace

Executive summary

This strategy sets out how we will bring about lasting change to the way that government and the wider public sector think about, and commission, digital.

It will help fulfil the commitments made in Government Digital Strategy Action 10, as well as a number of other government policies1.
The Digital Marketplace is the online platform that all public sector organisations can use to find and buy cloud-based services (eg web hosting or site analytics). In the future, it will also become the home for services from other frameworks, including the Digital Services framework.

Two commissioning frameworks – G-Cloud and Digital Services – have already been created, designed to challenge traditional ways of buying digital and technology by encouraging more open markets and providing simpler forms of contracts. This has allowed SMEs to compete alongside larger suppliers and has delivered savings for the taxpayer.

The Digital Marketplace has replaced the CloudStore and will replace the Digital Services Store early in 2015.

This strategy builds on the successes and lessons learned while running these frameworks and stores, and supporting our buyers and suppliers as they use them.

Together with the Crown Commercial Service (CCS) we will:

    • encourage a competitive market and stimulate a responsive, evolving market that contains:
      • the right range of products and services
      • the right people to provide products and services
      • the right price and value against products and services
    • work with the Crown Commercial Service (CCS) to ensure that new iterations of frameworks meet the GDS design principles
    • ensure people use Digital Marketplace-accessible frameworks and that spend which could go through them, does go through them
    • support self-service buying by enabling simple, clear and fast purchasing by creating an end-to-end service that is digital by default and fully compliant with procurement regulations
    • create a government-to-government network where we will actively engage and educate buyers as well as promote the Digital Marketplace
    • build stronger communities, providing a way to connect:
      • people transforming public services
      • communities of relevant experts
      • resources to deliver the right project outcomes

This will:

    • save money for the taxpayer by continuing to drive costs out, efficiency in and expose departments to the type of private sector innovation they should be investing in
    • provide access for innovative suppliers and continue to support and encourage growth in the SME marketplace
    • match demand to supply with minimal friction for all parties and so save time
    • reduce the risk of successful legal challenge by being compliant by default

Introduction

1.

This strategy contains seven actions that build on the success of the G-Cloud programme and the Digital Marketplace. It will help those who are transforming public services by making it simpler, clearer and faster for them to buy what they need. Implementing these actions will:

  • give public sector buyers the confidence that they can buy what they need, when they need in a legally compliant way
  • provide opportunities for more quality suppliers to win more work
  • help buyers across the public sector better understand their technology needs and have the support they need to buy the right services
  • introduce innovation and technology that is driving results in other sectors

Action 1:

Continue to develop the Digital Marketplace to be a compliant and Digital by Default commissioning platform that both central government and the wider public sector can use to buy what they need.

Action 2:

Increase awareness of the Digital Marketplace across the public sector and improve support provided to commercial teams so that frameworks available under the Digital Marketplace are used properly.

Action 3:

Make more IT and digital frameworks available through the Digital Marketplace so that the public sector has one place to go to buy what is needed to build world-class digital services.

Action 4:

In collaboration with CCS, ensure that new digital and IT frameworks meet the GDS design principles so that they are simpler, clearer and faster to use.

Action 5:

Tailor the user experience to meet user needs and empower users to ‘do it themselves’ through a dedicated education programme. Provide straightforward guidance for buyers and suppliers so they can discover and buy what they need.

Action 6:

Identify the total potential value by department of spend that could go through G-Cloud and the Digital Marketplace.

Action 7:

Work with our communities of buyers and suppliers to increase take-up of the Digital Marketplace across the different government sectors.

2.

Since the G-Cloud framework was launched in February 2012, there have been a number of notable successes including:

  • current monthly spend of £36m with an annual run rate estimated at over half a billion. Financial highlights include:
    • total sales of £467m (January 2015), £300m in the last 12 months alone
    • around 50% of spend is direct to SMEs, which is transformational
    • research shows expected public sector efficiency savings to average 50%
  • 1,852 suppliers (87% SMEs). The launch of the G-Cloud means:
    • the framework has created an open and transparent marketplace, removing barriers and encouraging healthy competition, so more businesses can work across the public sector and creating new jobs and growth for smaller employers
    • SMEs can collaborate to provide joint solutions, eg providing Software as a Service and Infrastructure as a Service
  • a clearer, simpler and faster process for government. Now:
    • G-Cloud is delivering a revolution in procurement: cutting the time it takes to buy from months to days
    • the recent Digital 5 summit2 in London showed that the G-Cloud framework is a world-leading, business-to-government marketplace innovation
    • other frameworks will be progressively added to the Digital Marketplace with the Digital Services framework planned to go live early in 2015

G-Cloud sales by month
Growth in G-cloud sales

What the strategy is about

3.

This strategy sets out how we will build on the success of G-Cloud and the Digital Marketplace to make it simpler, clearer and faster for people transforming public services to buy what they need. We will work collaboratively with CCS to roll out the Digital Marketplace at pace and more widely, increase spend on cloud services, expand the Digital Marketplace into other digital and IT commodity frameworks, and broaden the customer base across the wider public sector.

4.

In transforming services, the public sector must be 'open, agile, and iterative'. However, historically, public sector procurement has been difficult, slow and wasteful, and cited as one of the main risks to the successful delivery of digital services. This is compounded by lengthy EU procurement processes which make agile service delivery very difficult. G-Cloud led the way in revolutionising the way the public sector buys cloud commodity services. The Digital Marketplace will build on this by providing a fast and agile route to market, becoming a platform to help deliver the transformation of digital services across the public sector.

5.

The government adopted a ‘Cloud First’ policy in May 2013 to drive wider use of cloud computing in the public sector, boosting business – and furthering savings and efficiencies. Cloud First will continue to be supported by the Digital Marketplace.

6.

User research has consistently shown that the public sector wants a quick and easy way to buy things. But buyers also need to be assured that they are using a compliant route to market that is virtually risk free from legal challenge. They also need to be supported by simple and clear guidance and user journeys. The Digital Marketplace will meet this need by being built in a way that allows the end-to-end, self-service commissioning journey to be legally compliant by default and provide a consistent user experience, by thinking individually about each step in that journey. Simple and straightforward guidance for buyers and suppliers will be produced.

7.

Providing access to other digital and IT frameworks will help deliver the vision for there to be one place for buyers and service delivery teams to go to buy all that they need to design and deliver digital services from the best, innovative suppliers.

8.

It is the government’s ambition that at least 50% of spend on new government IT flows to SMEs directly and in the supply chain3. One of the biggest achievements of the G-Cloud programme is the way in which it has reduced the barriers for entry for many SMEs who have never worked with the public sector before. We will continue to make it easier for SMEs to work with the public sector by reducing barriers to entry for all frameworks that are available on the Digital Marketplace.

Big IT and big failure have stalked government for too long; that is why this government is radically rethinking the way it does business. We are creating a more competitive and open market for technology that opens up opportunity for big and small firms.
Francis Maude, Minister for the Cabinet Office

The benefits of the Digital Marketplace

9.

The Digital Marketplace will save money for the taxpayer through both direct savings and wider efficiencies. An independent review showed that average efficiency savings of 50% could be made through the use of G-Cloud. These savings came from:

    • buying products and services at lower prices
    • lowering the barriers to work with more SMEs
    • a quicker buying process: reducing costs for the buyer
    • being agile: buying what you need, when you need it

10.

The actions set out in this strategy will allow these efficiency savings to be maximised by increasing the throughput of sales through G-Cloud and other frameworks.

11. Buying products and services at lower prices

Broader deflationary pressures are the hardest to estimate, although they may be substantial. As the number of public bodies who use the Digital Marketplace increases, so more buyers become aware of the lower prices available. As adoption grows, both inside government and across the whole market, prices naturally drop to become more competitive.

12. Lowering the barriers to work with more SMEs

Opening up procurement not only helps SMEs get secure long-term work, it also provides the government with access to innovation, often at a lower cost. It can also boost local economies. The work some SMEs have gained through G-Cloud has doubled their workforce.

13. A quicker buying process: reducing costs for the buyer

The Digital Marketplace is faster and easier to use, which results in substantial process efficiencies. Buyers don’t need to carry out lengthy procurements under the Official Journal of the European Union (OJEU) process as the frameworks on the Digital Marketplace are fully compliant with EU procurement regulations. This reduces the time it takes to commission services by a factor of between 2 and 18. It also removes duplication of effort as departments do not need to run their own OJEU procurements - this only needs to be done once under the Digital Marketplace.

14.

Fast, flexible procurement reduces waste by giving buyers exactly what’s required (and nothing more) at exactly the time when it’s needed. Additional procurement is fast and simple, creating less incentive to “overbuy” and encouraging projects to adapt and deliver better against evolving requirements.

15. Being agile: buying what you need, when you need it

The Digital Marketplace is more consistent with an agile approach to delivering public services as it provides a means for carrying out disaggregated procurements. This has several benefits including:

      • where projects don’t succeed, using agile means problems are likely to be discovered earlier (otherwise known as ‘fail fast’). This means lower costs are incurred against abandoned projects
      • GDS experience in the Transformation Programme of taking over projects in ‘mid flight’ results in projects being delivered significantly faster

A Digital by Default commissioning platform

15.

The Digital Marketplace will be developed to become a fully Digital by Default commissioning platform, covering the end-to-end process and able to be used by both central government and the wider public sector. User needs will be at the heart of its design. In the same way that the GDS transformation programme is designing services so good that people will choose to use them, so the Digital Marketplace will be an exemplar that buyers will want to use for commissioning goods and services.

17.

The Digital Marketplace will be:

      • compliant – users can be assured that frameworks comply with EU procurement law and can buy with confidence
      • easy – so that transaction costs are radically reduced for both suppliers and buyers
      • fast – the time it takes to select a supplier and place a contract is reduced to the minimum feasible

18.

The Digital Marketplace will give buyers who are transforming public services access to the services they need. This means, we will stimulate a responsive, evolving market that contains:

      • the right range of products and services
      • the right people to provide products and services
      • the right price and value against products and services

19.

Digital and IT commissioning frameworks must be designed to meet the user need (the right products/services, the right quality, the right commercial models, etc). They should meet a common standard, in the same way that digital services themselves do, with frameworks requiring approval through the spend control process and complying with the GDS design principles.

20.

The Digital Marketplace will support self-service buying by making commissioning simple, clear and fast through the creation of an end-to-end service that is digital by default and fully compliant with procurement regulations.

21.

We will help suppliers and buyers to better understand the market by publishing how the Digital Marketplace is being used by the public sector (ie work out loud with full, detailed open data). This will include visibility of what is being searched for, and what is being shortlisted and so on. This will allow suppliers to improve their products/services in line with what the public sector needs. It will also help buyers to discover others who are doing similar things to them so they can share their findings.

22.

We will build stronger communities by providing a way to connect:

      • people transforming public services
      • communities of relevant experts

We will:

      • provide resources to help buyers and suppliers deliver the right project outcomes
      • establish a community of supplier champions (ie those suppliers and organisations outside of government) and departmental champions (in government, local government and other related organisations)

Supporting commercial teams

23.

We will develop an engagement strategy showing how we will do this based on the principles of:

      • Discover: Understanding how users find out about the Digital Marketplace and how suppliers sell their services to government through it.
      • Learn: Helping buyers and suppliers understand what they need and create champions who can go and win the hearts and minds of their peers, creating a wider engagement team through working with communities.
      • Buy: Creating a clear process that is digital by default and providing educational material online

24.

This will increase awareness of the Digital Marketplace across the public sector and support commercial teams so that frameworks are used properly. More needs to be done to ensure that central government departments are following the Cloud First policy. In addition, encouragement is needed for the wider public sector to benefit from services offered on the Digital Marketplace. We will provide greater help and advice to government departments and the wider public sector including:

      • online and offline educational material and advice for public sector buyers, including a programme of regional events and discussions with buyer communities through an online forum
      • further promotion across the public sector, and through media, tying into wider government campaigns using case studies etc

25.

G-Cloud spend has consistently been split 80:20 between central government and the wider public sector. Local authorities have delivered a number of very ambitious and successful cloud infrastructure projects – some, but not all, using G-Cloud as their commissioning framework. We will continue to work with SOCITM4 and other organisations to understand how the Digital Marketplace can better meet the needs of the wider public sector and how engagement and education can support this.

We’ve done a full cloud implementation in 14 months. We’ve delivered thin client, virtualisation, wireless connectivity, packaged apps in the cloud, built cloud infrastructures and tested moving stuff across. Spending just £100,000 setting it up.
Rocco Labellarte, CIO, Royal Borough of Windsor and Maidenhead

Growing the Digital Marketplace

26.

In parallel with expanding the Digital Marketplace functionality, we will explore with CCS, what other frameworks might be included on it. This will allow more spend to be channelled through the Digital Marketplace, backed up by frameworks for new categories of spend with the same principles as G-Cloud where possible.

27.

The modular way in which the Digital Marketplace is built will enable other catalogue-type frameworks to be easily added to it. The immediate intention is to include frameworks GDS are responsible for, including digital services like the Public Service Network (PSN). We are talking to CCS about how this could be extended to other frameworks. This would truly help deliver the vision of providing one place for the public sector to go to find and buy from the best, innovative suppliers all that they need to design and deliver digital services.

28.

There is very little data available on the total IT spend that could go through G-Cloud and the Digital Marketplace. The National Audit Office has estimated that the total IT spend in 2011/12 was £6.96bn so it would seem that considerably more could be done to help government buyers follow the Cloud First policy and increase G-Cloud throughput. We will carry out an analysis to identify the estimated value of possible departmental cloud spend so that we can effectively target an engagement strategy to boost the amount of spend going through the Digital Marketplace.

Footnotes

1 - Buying and managing government goods and services more efficiently and effectively and
Creating an exceptional civil service - less bureaucratic and more skilled, digital and unified
2 - Digital 5 are a group of some of the most digitally advanced governments in the world
3 - Making government business more accessible to SMEs: 2 years on
4 - Society of Information Technology Management