Resellers and integrators chasing government business need to create a portfolio and be more proactive in engaging with staff at all levels of government, according to speakers at CRN's IT Leaders Summit.
Matt Tutaki, formerly of Syntropy and an advocate of local participation in government contracts, says the market is so tight and so compact that there is little money going around in the corporate markets.
'Because the market has contracted, we need to look outside of our traditional sales models that are directed towards the corporate market.'
Tutaki quoted ABS statistics that claim governments spend $10 billion on various IT&T infrastructure programs every year, for example from the upgrading of network services at the Australian Tax Office to weapons firing system for the Department of Defence.
'What I'm suggesting is that you should concentrate enough effort into selling to government and creating a government portfolio sales model. Because if you want to survive the next few years then hopefully [government sales will] account for at least half of your business revenue.'
He says local suppliers need to create a value proposition that is useful to government departments. 'Create a value add proposition that is specific for that organisation. You make it specific for the Federal Government. The thing that government departments really enjoy the most is that you're taking time to understand what their organisation is. Review what the methods are, the strategic plans. You can take your existing products and just morph them into what that strategic plan is.'
Tutaki says that engaging with key contacts within various local, State and Federal government departments is critical if resellers and integrators want to be recognised. 'There came a time two years ago when people were afraid to pick up the phone and make a phone call. Now they're sending emails,' he says.
He claims that people are no longer employing traditional selling models. 'They don't make time to pick up the phone and make the phone call or engage the contacts,' he says.
He points to the government Websites gold.gov.au and fed.gov.au as useful resources for finding information about government departments and the CIOs that work in those departments. 'It's always good to engage people at a political level. A lot of people bag Richard Alston because he doesn't do anything for Australian IT companies.
'The fact of the matter is if you sit down and talk to someone like Senator John Tierney (senator for New South Wales) he will genuinely listen to you and go into bat for you. If he sees that you have something to contribute to the Australian economy - he'll go into bat for you,' he says.
'The CIO of Defence [the Department of Defence] might not take your phone call first up, but he will actually return your call and take time to respond to an email if you write him one. Involve a cross-section of government departments - just because you may be a small organisation doesn't mean to say you can't pick up the phone and ring Patrick Hannan at the Department of Defence.
'You should not just solely concentrate, just because you're a small organisation, on small government departments. You should in fact target small, medium and large government departments.'
Despite the big dollars that are spent at Federal and State government levels, Tutaki claims there is big money in local government. 'There's a huge amount of money. Local government tends to purchase from Australian-owned organisations. They also aren't so much constrained by supplier and panel contracts that exist in the Department of Commerce here in NSW,' he says.
Corporate lunches
'A couple of months ago, we hosted a number of senators in our boardroom and I contacted all the people that I knew that owned a small business,' Tutaki continues. 'All these people came in and engaged discussions with these senators.
'Now from that was formed a working group around how small to medium sized business can work with Federal governments and basically do business.'
He adds that local companies are not out in the market promoting their wares. 'We don't actually get out there enough and beat the drum that we are proudly Australian - 88 percent of Federal government agencies have no business continuity plans. I took the time to read the ANAO report and thought I've got some things I can do here,' he says.
'If you're staring in the face of a public servant with the ANAO report about business continuity and you've taken the time to research it, you've got your business proposition lined up,' he says.
Channel companies should also be researching the issues that are affecting government departments today. 'We actually used to take the time to educate ourselves about what our customers want. I've seen salespeople literally come in and speak to us and they have no idea what we require. We want you to think about how consumers interact with the Tax Office and pitch a solution [based around that],' he says.
'Government people like nothing more than you going to them and showing not only what your business proposition is but how involved you are in your local community; how involved you are in speaking up about issues that affect the national interest in terms of IT&T,' he says.
Finally, he says that it is a mistake for local industry to sit back and expect to be subcontracted on jobs that their vendor partners had won. 'We have offered governments the world and failed to deliver, hence the move from outsourcing to insourcing,' he says. 'Engage government actively, but do not lie to them about what your product can do. Emphasise the fact that you are an Australian organisation; package boring products so succinctly that there is value to a government department,' he says.
Market trends
Andrea Webster, tender preparation consultant at Tendersearch, says future government deals will be smaller and managed by multiple vendors. 'More components will be involved, such as application development, help desk and voice services.' She says government is asking for smaller, better-defined packages across shorter time scales.
Webster advises that suppliers should always ask questions about forthcoming government contracts and 'never assume that the tendering process is about price'. 'They [departments] want to know that the supplier will do the job and not go bankrupt during the contract period,' she says.
Webster says government contracts are harder to win because they require transparency, availability and responsibility - all the time. 'The decision time line is longer, there are more shareholders involved in the outcomes. Shareholder involvement is broad,' she says.
'Government is a labyrinth of contacts and contracts and defining the entry point is hard. Partner with an existing government supplier or suppliers that work in the same areas that you do,' she advises.
She says suppliers should be targeting growth areas such as health and security and compliance requirements that have arisen from changes in government legislation. 'There's no easy and fast way to do it - it's all about time, time and more time,' Webster says.
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