Government departments have been cancelling freelance IT contractors supplied through SMEs and giving their interim staff business to Capita under orders from the Cabinet Office's Efficiency and Reform Group (ERG), in apparent contradiction of government SME policy. (Computer Weekly, 24 June 2011)
When the observed behaviour of a large complex entity seems to contradict its stated goals and policies, we may perhaps infer the existence of some contrary (possibly unstated) goals and policies that override or interfere with the stated ones. This is a classic application of the POSIWID principle.
In this case, however, the Cabinet Office defends the observed behaviour by appealing to a different set of stated goals and policies, relating to cost-cutting. Nevertheless, a representative of one of the affected SMEs suggests that short-term cost-cutting is likely to cost more in the longer-term, as a result of reduced competition.
There are also counter-claims that Capita is merely acting as a gatekeeper, passing on 80% of the business to SMEs, thus possibly contradicting the contradiction.
Thus the interpretation of purpose depends on interpretation of evidence as well as variation in timescale. Applying the POSIWID principle to a politically charged situation like this can often be subject to strong disagreement between stakeholders.
Engaging SMEs as 2nd tier suppliers to big companies like Capita is a convenient way for Government departments to pretend they care about SMEs. Reality is that the supposed 80% of work passed through by Capita to SMEs will be the work that Capita doesn't want to do or can't do itself (so it gets first pickings on everything). Even when it passes work through, it does so at really low markups to the SME to allow it to make its own margin. Only people who really win are the big players like Capita - the SME loses out as it gets a rubbish rate, the Government department loses out as it pays margin on margin, Capita wins as it has a monopoly supply position and takes a cut on every deal. For a longer discussion, see our thought piece on how the Government strategy doesn't work.
ReplyDeleteChris Stokes, Naritas Consulting
While I fully sympathize with Chris's strong feelings about this situation, we can be pretty sure that his interpretation would not be accepted or agreed by all other stakeholders.
ReplyDeleteThe civil service and large private corporations (such as Capita) generally possess a kind of defensive intelligence, which gives them the ability to construct some kind of meaningful justification for any given position they may take up. So I am pretty sure that they would present a rather different "reality" to the one presented by Chris. Therefore it is quite possible that Chris's point of view will not prevail in the relevant political circles.
My point here is that once contradiction and ambivalence have crept into the situation (as perhaps they always must) the chances of reaching a single consistent consensus on what-is-going-on are vanishingly small.