Talking Business

Will Government really work with Small Tech Consultancies?

We have been watching, with interest, coverage around the ICT Procurement Taskforce, which was launched with the goal of making it “easier and cheaper for ICT businesses to contract with the Australian Government.” One of its stated intentions is to enable smaller technology players to be more involved in bidding for government ICT contracts.

According to The Australian, Angus Taylor, Assistant Minister for Digital Transformation has stated: “We need to open up our ICT contracts to smaller players to solve Government problems.”

We certainly support the Federal Government’s stated objectives to remove small business barriers.  It seems to have taken another step towards that with its Digital Marketplace, which started in beta in August 2016 and by February 2017 has opened to “an unlimited number of sellers in an increased number of categories”.

This is positive action in the right direction. In the past, we have experienced a number of significant challenges registering for Government work, most recently with the cloud services panel. The design of the tender process itself has been a challenge, there have been issues with vendors not being able to update their own data therefore incurring costs and delays, and in fact entry into the cloud panel itself is a lengthy process. The benefits of our participation are yet to materialise. Despite this experience we are approaching the Digital Marketplace with a hopeful attitude.

Regardless of how the government may interact with smaller consultancies and what platforms we use etc., one of the key barriers is simply that the bigger players have typically been awarded multi-year, multi-disciplinary agreements – a challenge that also exists in the private sector. Often the driver for the organisation or Government department is to have fewer, larger contracts in place, which they feel will streamline procurement processes, allow the organisation to deal with fewer external suppliers and allow the agency to negotiate on bundled services – thereby reducing costs. While we understand this rationale, it doesn’t necessarily ensure that the client receives best-in-breed services and expertise across the breadth of the technology project or transformation program.

Levelling the playing field certainly would be an excellent result for small consultancies. However, the government shouldn’t choose smaller companies simply because they are small. They should seek to benefit from what the smaller tech players can bring to the table:

  • Independence – The smaller players can offer a level of independence that may not be possible for large consultancies, especially those already embedded in Government and closely aligned to major vendors. Whilst these large consultancies can provide a broad level of expertise and large teams, the smaller, more agile consultancy can provide an arms-length review, assessment, and bring in new perspectives.
  • Niche Expertise – As opposed to organisations that spread their expertise and experience across multi-faceted major projects, where they cannot be best-in-breed in all areas, smaller players will have their own niche areas of expertise and are used to collaborating and integrating with other technologies and suppliers.
  • Agility – It may be a buzzword but agility is important. Smaller firms need to be independent, innovative and agile as they seek their competitive advantage, and place a priority on exploring the market so they can source and act on new offerings, staying on top of innovation and bringing the latest and greatest to their clients. The bigger consultancies and vendors can take longer to adjust and change their partnerships and offerings to reflect an up to date range of products and services.

In order to really bring down the barriers to enable smaller technology players to be more involved in bidding for government ICT contracts, the government would need to ensure that

  • Opportunities exist for smaller projects (i.e. breaking up some of the traditionally multi-year /multi-discipline contracts);
  • The specialist skills of a smaller company are recognised/valued; and
  • Price is not the only selection criteria, as large players can usually outbid a small business, especially if they loss lead.

Won’t this just give government departments more vendors to deal with and projects to manage? Sure, ok yes, but isn’t the objective of government IT to make things work better and to get the best results for the users of government systems aka the constituents, rather than to reduce the number of contractors? There are benefits to streamlining procurement and there are efficiencies that can be found in that kind of approach, but there is an identified need to bring in diverse knowledge, new ideas and perspectives, and that means spreading the net wider in terms of the consultancies and service providers that the government departments are working with. If it is too much for a government department to handle, they could benefit from ensuring that one of the consultancies they engage can help them to manage (and periodically review) the group of service providers coming together to complete the overall program.

In this way, the government can ensure it is working with the best of breed and fit for purpose technology, based on solid assessment of its needs, objectives, and legacy systems.

Change is welcome and applauded. However, change is difficult, as anyone in the business of technology transformation understands very well. According to the Prime Minister’s former head of digital transformation Paul Shetler, as covered by The Guardian, changing the government’s approach to digital technology presents considerable challenges including dependencies on large vendors. So the impact of these efforts to address IT procurement issues and barriers, and whether they will translate into real change for technology SMBs, service providers and IT consultants, remains to be seen.


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