The Incumbency Trap

Recently, I’ve been speaking to many boroughs about the procurements of their key services. It is clear that some council services are dominated by a small number of technology companies in the local government space.

Incumbency isn’t inherently problematic when the market is highly competitive and interoperability standards ensure a level playing field. Incumbent suppliers offer advantages: they drive innovation, incorporate new technologies, and simplify contract management by serving as a sole supplier who manages all subcontractors. They are also staffed to meet additional requirements like social value and detailed financial reporting.

However, this process has significant weaknesses. Long-term contracts struggle when specifications are unknowable or shift due to policy changes, technological innovation, or staffing volatility.

The options for moving from incumbents are difficult and often presented close to market expiration. Boroughs may be stuck in the unenviable situation of trying to bring in new suppliers, change market dynamics, deal with legal challenges all while trying to procure a new large contract and effect massive transformation on a tight deadline.

In these types of situations, a complete shift to an in-house built solution is very difficult and taking the responsibility for such a shift is often daunting.

So what is the way forward?

We have some ideas that can help one move out of the incumbency trap. Read more here: https://loti.london/blog/the-incumbency-trap/ and I'd be interested in your thoughts and reactions.