Ouch

I did something I haven’t done for a long time yesterday. And as with most things that you used to do, you rediscover: a) Why you liked it in the first place and b) Why you stopped doing it after all. That’s right, I bought a copy of the Sunday Telegraph. More recently I have been buying The Sunday Times, but had started to worry that I’d do myself a mischief trying to carry the paper to the car. Plus I got to Tuesday and realised I still hadn’t read the section about Homes Better Than Yours. Or whatever it is.

The article on the first page that caught my eye was the one about Serco retrospectively demanding a 2.5% cash rebate on spend with suppliers in 2010. Cash rebates are not without precedent, and I know some vendors perform such schemes with the SI/reseller community to ensure that these middlemen retain net margin on very large, price-sensitive supply arrangements. If it’s in the contract of supply and been negotiated, fine. But it looks like this demand is being sent out without contractual terms in place, with a comment to the effect that Serco is looking to share the pain of Government cuts with its supply chain or else. It looks like the ERG (Efficiency and Reform Group) within Cabinet have had their attention drawn to this and are investigating, but Serco are appeared initially unrepentant (see here: http://www.telegraph.co.uk/finance/newsbysector/supportservices/8100744/Serco-isolated-as-supplier-squeeze-backfires.html), even in the face of hostile press.

The problem with this sort of activity (and I am at pains to point out that the morals of this are not really my place to argue or judge here, but call me if you want a good natured rant) is that it does a number of things that are counter to the needs of the current environment.

1. It does rather set an unpleasant precedent. If one organisation does it, others will follow, despite the report in today’s Telegraph

2. It rather flies in the face of the current administration’s drive to increase SME suppliers to Government. Only today it was announced that David Cameron has appointed former Thatcher Government Minister Lord Young to review how this can be done. 60% of UK Plc workforce are employed by SME businesses, generating 50% of GDP. It makes economic sense to make it easier for SMEs to work with Government, yet with many Government outsource deals forcing ALL suppliers to work with the outsourcer to get to the Government customer, a regime that absolutely forces the SME to take a further increased share of the commercial risk is not a happy one

3. Most IA suppliers are SME. Here’s the point of risk as far as I am concerned. The Con-Lib coalition has signalled Cyber Defence as a key area for investment, and many of the suppliers to this space are small specialised suppliers, providing either highly specialised services or specialised software. Providing our community with a firm bedrock for doing business is crucial so we can make the investment in our people and product, and a jittery supply chain is not one that is delivering its best.

I doubt this will be the end of the matter, or matters looking similar, but the IA space is too core to UK Cyber Defence to be prodded too hard. We all need to shoulder the burden of today’s economic turbulence, but it needs to be done in a collaborative and adult fashion.

And next week I shall be buying the Independent on Sunday. The Sunday Telegraph is OK, but waaaaaaaaaay too much cricket and not enough lower league football for my liking.

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About Graeme Stewart, McAfee

I work for McAfee as Director of Public Sector Strategy and Relations, UK&I
This entry was posted in Bristol City, CSR, Efficiency, Security. Bookmark the permalink.

One Response to Ouch

  1. Tamzin Matthew says:

    Pure magic, and they pay you for this?

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