Smaller providers are welcomed as partners for one or many deals, and should directly approach the larger partner. That helps them get around the resourcing and cashflow problems that tend to count against small companies in complex, long-winded government pre-sales, Smith says.
“Try to identify a niche that most probably is not being fully satisfied,” he says.
Large providers like EDS cannot be all things to all people, and are keen to meet partners that can help them better fulfil their customers’ needs. “We’re working effectively with a large number of service providers,” Smith says. “And we have programs to help SMBs.”
Smaller providers should also work to be more professional in their dealings with customers and partners. Some have lacked a little attention to detail in their approach, Smith says.
Mike Shove, chief executive at CSC Australia, wants partners too. CSC attacks government sales by working hard with its current contracts. Rule one is to hang on to what you already have, and then you can look at winning new deals. Put in deliverable milestones that help agencies see how you are performing, for example. “And we keep going back and saying, ‘Is this what you meant?’,” he says.
If it means working harder to prove you are still competitive with what else is on the market, so be it. Track record is all-important in government, Shove suggests.
That said, CSC is seeing more project-based activity now too, from agencies such as Centrelink and the Department of Foreign Affairs, and for SAP-related offerings.
Wireless networking is getting big too, Shove says. “But it ebbs and flows. Outsourcing is alive and well, pretty much all selective sourcing.”
Chris Cohen, delivery executive at Volante Group, concentrates on Federal Government deals, which account for some 10 percent of Volante’s work. He says the value of many contracts has started to rise.
“About 50 percent of our contracts are less than $10,000, but that’s just 3 percent of our overall take. Less than 1 percent [of contracts] accounts for 54 percent,” Cohen says.
That said, he tips consolidation, with “fewer real players” in the market. Small companies should therefore mitigate the risk by partnering with the market leaders. “I think there will be a greater degree of collaboration,” Cohen suggests.
Jane Lancsar, national managed services delivery manager at Volante, says service providers must remember that successful business is always about serving the customer. If you don’t do that well, you will fail whether you are targeting the public or private sector. Be consistent yet flexible, and work hard to understand your customer’s needs, Lancsar says.
One successful partnership has been between global business intelligence software vendor Cognos and local service provider Pelion. David Merchant, marketing director at Cognos, reckons local providers in particular are favoured somewhat in government deals.
Like Optima’s Ung, he points to the advantage of knowing everything will be available in the correct country.
Local partners are absolutely critical for Cognos, which, as a result, can boast 25 percent of its Australian business has come from government work. There are things Cognos just cannot do without help, Merchant adds.
He advises providers to remember that government – even more than corporations -- is all about relationships. Yet staff change often and pre-sales procedures take many months, meaning further new relationships must be formed and cemented in the course of winning a deal. All suppliers can do is take a deep breath and go over everything again. Remember, too, that the original person will likely reappear in another government agency -- providing a lever for future opportunities, Merchant says.
“It’s all well worth the effort,” Merchant says. John Twomey, managing director at Pelion, says his company has been slowly building up its government portfolio for about four years. About 50 percent of Pelion’s work is government-based.
Twomey has worked on government deals in Ireland and the UK before coming to Australia. If anything, the Australian Government is keener on supporting local suppliers than in those nations, he says. “But there are the same kinds of hurdles.”
For governments, it is all about risk. So they must take longer and consider more carefully what they do before agreeing on a deal. If things go wrong, the risk of it being plastered all over the news media is also higher, he adds. The IT provider that understands that may do very well.
Twomey says Cognos has leading products and larger sales and marketing teams. Pelion offered its government expertise track record, cost-effective services and desire to build long-term relationships with the customer.
“The benefit of this partnership is we are sharing the cost of sale -- which is high for government -- and contributing our respective strengths,” he says.
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