Commercial Success in Remedying MOD Legacy IT
INTRODUCTION
The great militaries of the future are those with resilient, future-ready digital foundations and who are pulling away from the rest; while those that lack digital transformation expertise and rely on legacy technologies will further behind. With global military third-party IT spend at an all-time high, what does the MOD need to achieve from its commercial agreements with industry partners to continue to deliver improved Defence outcomes?
Both the Central Digital and Data Office (CDDO) Transforming for a digital future: 2022 to 2025 roadmap for digital and data and the Digital Strategy for Defence call out the pressing need to address legacy IT across government with funding earmarked to support this. Underpinning this digital transformation will be a significant step change in the commercial landscape – does the MOD have the structures and strategies in place to manage this?
WHAT IS LEGACY IT?
Legacy IT has been identified as one of the key barriers to not only
Digital but organisational transformation. As per the Digital Strategy for
Defence, the MOD’s IT infrastructure and systems, hardware, and related
business processes have elements of legacy IT operating within them.
The Cabinet Office has determined that if any of the following points are met, the associated technology
is considered legacy as it is:
- an end-of-life product;
- out of support from the supplier;
- impossible to update;
- no longer cost-effective; and/or
- above the acceptable risk threshold.
CHALLENGES FACING COMMERCIAL LEGACY IT REMEDIATION
“By modernising our legacy estate and fully addressing our technical risks, Defence users will be working on robust, interoperable and cost-efficient technology infrastructure”
Digital Strategy for Defence (April-2021)
Whilst the task of delivering commercial change can seem daunting from the outset, a decision to continue to retain legacy IT opens the estate to risk, service continuity complications and does not achieve longer term value for money. Additionally, there are often major security factors to consider with widespread vulnerabilities and cyber concerns across legacy IT estates escalating the threat of attacks and/or falling out of step with compliance or regulatory rules.
Further compounding the issue is that, as legacy IT suppliers’ pivot their businesses to new IT solutions, the legacy support available in the market will reduce over time. Therefore, as market competition decreases, costs increase for re-procuring legacy IT services. At some point a supplier may even decide to no longer support the legacy IT services with the MOD then having to procure costly specialist support before making the inevitable decision to move to the new IT.
Once a decision has been taken to remedy the legacy IT services, there are a host of commercial challenges that will likely arise and the MOD needs to be prepared to manage:
LEGACY IT REMEDIATION: COMMERCIAL CRITICAL SUCCESS FACTORS
As a Commercial Manager do I….
- Have a comprehensive view of the legacy IT
across my estate and associated risks? - Know when my key legacy IT contracts are expiring and have commercial plans in place to ensure service continuity?
- Have a plan to address capability/skills gaps within my area for commercial, operating model transformation, business change and exit/transition functions?
Understand the Drivers for Change | Build a Credible Commercial Strategy | Shape | Develop | Plan |
There are multitude of factors driving the need for legacy IT remediation across the MOD. They include expiring contracts, a pressing need to align to the Digital Strategy, significant technical/security risks with existing IT or support for legacy IT that is expiring. Knowing the strategic intent of business needs, options and the scale of the transformational journey – whether this root and branch change or just prolonging inefficiencies – is vital in obtaining buy-in across the organisation and to coalesce a sense of purpose.
| The Commercial
| Legacy IT remediation offers the MOD the opportunity to shape new commercial ecosystems. There is now an array of CCS Frameworks that can provide legacy IT remediation services and, with the upcoming change in procurement regulations, the MOD has a greater array of routes to market to utilise
| New contracts need to be able to provide flexibility for the future. Examples include convergence to the Digital Backbone and to prevent future legacy IT issues arising whether that be supplier lock-in, IPR issues or difficulties during exiting the contract. The MOD should look to utilise new contracting methods appropriate to digital delivery such as ‘agile contracting’. These newer methods aim to close the gap between a contract not accurately reflecting the reality on the ground and managing suppliers. An understanding of whole life costs and funding i.e. dual running, ad hoc upgrades etc. is essential in avoiding ‘commercial cliff-edges’ where emergency action is needed which doesn’t necessarily achieve the best value for money longer term.
| For the MOD to successfully replace and embed new commercial arrangements requires a plethora of supporting capability across the organisation. A new contract/technology can mean significant business change in terms of ways or working/processes and operating model. Having these capabilities working alongside commercial resource will ensure the replacement of legacy IT is a success and likely requires a rethink around resource models.
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KEY TAKEAWAYS
In many cases, an expiring contract(s) can act as the trigger to remedy legacy IT, with organisations suddenly struggling in real-time to deal with the challenges highlighted above as well as yield benefits from the critical success factors.
To rapidly address the churn of expected commercial activity, the MOD should consider proportionality when determining routes to market; are there quicker and faster routes that can be pursued which lead to the same, or better, outcomes e.g. using existing frameworks, pitching the right questions alongside the right opportunities?
Key to a future where legacy IT is not a significant problem is moving to a culture where change is expected and built into designs from the outset and not managed on a reactive basis. Additionally, decisions to appropriately earmark funding to rectify this problem are made quickly to avoid the emergence of ‘burning platforms’ i.e. proactivity not reactivity.
Due to the criticality and time to implement, what may initially seem a simple project can soon become a complex body of work and looking across Public Sector, the MOD is not unique in tackling this challenge. Indeed, the majority of government departments have complex legacy IT remediation projects within the Government Major Projects Portfolio (GMPP) such as HMRC’s Technology Sourcing Programme (TSP), those within Evolve Portfolio at the Ministry of Justice (MoJ) and the Home Office’s Technology Platforms for Tomorrow (TPT). Understanding the lessons learned from these and other programmes can highlight the structures, effort and change needed and MOD colleagues are encouraged to reach out to other departments as well as internal MOD teams with experience. It is evident from the vastness and complexity of the MOD estate that there will be a continued stand-up of major legacy IT remediation programmes in future.
