Back in 2001, Australia’s smaller technology providers felt discouraged from competing for government business. InterData’s May 2005 Canberra report shows that some 20 Commonwealth suppliers signed $656 million in deals alone in the first third of this year. EDS, CSC and Accenture comprised 80 percent of that.
Yet, despite an environment that has become tougher on all service providers, smaller Aussie partners can still do well selling to government. A look at government’s AusTender website reveals a litany of familiar names, such as KAZ Technology Services and Corporate Express.
Some are winning smaller contracts worth tens of thousands of dollars, but others are partnering experienced multinationals such as EDS and CSC in large, long-term outsourcing deals that offer recurring revenue for years.
The turn of the century saw many SMBs feeling inhibited by government’s tendering process. Commentators complained there was not enough transparency in government IT outsourcing tenders, and “commercial confidentiality” was being used as an excuse.
Things have definitely improved. Rita Arrigo, government business development manager at Victoria-based web development and services firm WDG, has an encouraging tale to tell. “[Government business] is going very well,” she says. “We’ve had a lot of success in a few different areas.”
Nine-year-old WDG has been on a panel for supply of internet services -- such as advanced search engine technology -- to the Victorian Government since mid 2004, but has netted about 10 government deals over the years, including for Victoria’s Department of the Premier, Cabinet and Department of Human Services.
Arrigo says getting on a panel is critical and channel players must be prepared to put themselves forward as thought leaders and experts in their field, with something unique to offer government CIOs. “We’re the largest specialist web provider and that works for us,” she says.
Etiquette and probity abound, which can make creativity tricky. But governments have become more focused on what solutions they need. That makes it easier to fulfil their needs, she says.
WDG sees government business as key to its continuing growth for at least the next few years. “It’s mainly by working with panels and being able to provide leadership in key contracts with state government,” Arrigo says.
“It’s more about really positioning ourselves to provide customer focus.”
Web presence, workflow, search engines, database reworks and builds: there’s no end to the possibilities offered by government. A few years ago, what WDG does would sound too obscure to be a runner. Today, WDG has more than doubled in size in two years, partly organically and partly by acquisition, and government sales have been a big contributor.
What channel players need to do is get creative and offer real technologies and services that genuinely make a difference, not only to the bottom line but to practices, processes and performance. “[Also] I think definitely the government sales process is a lot longer. A lot more investment needs to be made in pre-sales,” Arrigo says. “And commitment to the long-term process.”
Cornel Ung, chairman of all-Australian boxbuilder Optima Technology Solutions, agrees with many of Arrigo’s comments. “We are doing pretty good. In Federal Government, we are on the panel of Defence contracts and an endorsed supplier,” he says. “We do a lot of state government stuff too.”
Ung says adding value is all-important, especially for a hardware supplier like Optima, which is focusing more on developing and supplying services -- such as IT support, deployment and installation -- in its state deals, some of which can involve 5000 seats. “And third-party procurement as well,” he adds.
He points out that local companies have the inestimable advantage of being on the spot, as it were, when government needs them. Optima works that fact for maximum effect and pays special attention to service level agreements (SLAs).
“I think that is a very good opportunity for local companies,” Ung says. “I think they got burnt in the past by multinationals that failed to provide SLAs and quality.”
Government is requesting more and better security features for every aspect of the deal, and the IT infrastructure involved, he adds. So a successful government business must increasingly appeal in that area as well.
Algerian writer Albert Camus famously said a government by definition has no conscience, although sometimes it has a policy. Despite Optima’s undoubted success in the government bidding wars, Ung feels strongly that government might do better for local companies than simply providing a level playing field.
Free market rhetoric notwithstanding, government should be able to think of ways to help local IT providers that don’t provoke accusations of unfair practices from multinational rivals, he suggests. “From my point of view, it is hard to do business with government because they make so many requirements for the local company but haven’t given any benefits or advantages to the local guy,” Ung says.
Recent Australian Government reports on the benefits of IT to government seem to indicate that a higher wave of government IT deals may continue. And government spends more on IT than any other group of bodies. Market researcher Gartner reported that the public sector’s IT spend across the Asia-Pacific region also grew 33 percent in the 2003-04 year, faster than any other sector.
Government employees (bureaucrats) like to solve problems. If there are no problems handily available, they will create their own.
– George van Valkenberg,
19th century US politician
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