G-Cloud and the ambition for SMEs
Rewind to 2011, and the Cabinet Office articulated, in its Government ICT Strategy, an intent to “streamline the procurement process to break down the barriers that impede SMEs from bidding for contracts”. They could thereby create a fairer and more competitive marketplace.
The launch of the G-Cloud framework a year later, started to realise that intent. It opened up the market to SMEs via the Digital Marketplace. And it provided the wider public sector with a simpler, faster and cheaper way to find and compare cloud services. Typically these have a maximum contract length of 24 months, although there is now a potential for extensions.
In its 2013 report Making Government business more accessible to SMEs: Two Years On, the Government set itself an ambitious goal of at least 50% of spend on new government IT flowing to SMEs directly.
The current state for SMEs
Since those formative months of G-Cloud, sales have grown steadily to a cumulative £2.4bn by the end of July 2017. And as the volume of sales grew, and an increasingly clearer picture of sustained growth in the SME share emerged. However, in recent months, as shown above, SMEs have lost ground.
Dig a little deeper, and we do see variation by sub-sector. And that’s after setting aside those buyers with cumulative G-Cloud spend below £100k, where large enterprise suppliers are less likely to compete.
The box-and-whisker plot shows:
- Central government, with its big-spending departments, and police favouring large suppliers. This may reflect, among other things, their ability to scale.
- Local government and health, in contrast, favouring SMEs. And this despite their looser tether to central government strategy.
Irrespective of whether service integration is taken in-house or handled by a service integrator, large enterprise suppliers have much to offer:
- The ability to deliver at scale;
- A breadth and depth of capabilities exploitable during discovery to better articulate the “art of the possible”;
- A re-assurance that there is always extensive capability on hand.
SMEs offer flexibility, fresh thinking and broader competition, often deploying their resources and building their mission around a narrower focus. They tend to do one thing, or a few things, exceptionally well.
So, large and SME suppliers must continue to find ways to co-exist. In this way they can bring the best of both worlds to buyers across public sector.
An update to this article is published as Digital Marketplace. Six months later.
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Contains public sector information licensed under the Open Government Licence v3.0.