Going Public

Government departments and agencies were for years grouped into clusters that negotiated with preferred suppliers. However, a recent trend is for each agency and department to negotiate its own arrangements -- multiplying the possible overall number of deals.

Senator Eric Abetz, special minister of state in the Federal Government, says electronic procurement systems, for example, offer proven gains for transparency and efficiency, in line with modern beliefs in public sector accountability.

“Despite different approaches, motivations and situations of the e-procurement systems studied, a common theme was that, when implemented well, e-procurement delivers transparent, well controlled and documented procurement processes,” he says.
 
Government research showed that “end-to-end” information on purchasing, transaction costs and supplier relationships helps to manage a public agency’s total spend, Abetz says.
 
In March, the government started reviewing its ICT contract arrangements, with a view to cutting costs for suppliers and government alike by simplifying the purchasing process. That sounds like good news for all those hoping for a sweeter slab of business. “We will deliver a consistent, comprehensive set of procurement arrangements, including contractual agreements, founded on best practice,” Abetz promises.
 
Meanwhile, open source and open source-derived software was being seen as more viable in government. The Federal Government released a guide in April that outlines the potential of open source software in Australian government agencies, Abetz says.
 
Open source software is seen as an affordable and efficient option. For example, the government has produced a “white-branded” content management system, dubbed MySource Matrix, and promotes it heavily to its agencies and departments. “The government is committed to greater sharing and reuse of technology to get greater value for money from its IT investment,” Abetz says.
 
Con Zymaris, managing director at Victorian Linux, Unix and TCP/IP networking services provider Cybersource, argues that the open government swing towards open source creates a new route to government deals for local service providers.
 
“A number of [government] organisations are looking at open source,” Zymaris says. “Look at the federal level. They’re moving faster than what’s happening in the corporate space.”
 
Service providers should strike while the iron is hot, he suggests. Open source’s accessibility can mean easier continuity for government deals, because non-proprietary software can more easily be managed by different service providers.
 
That means government may be less leery of small providers that cannot promise the same fiscal stability or guarantees of long-term support that a CSC or IBM can, Zymaris says.
 
“This is the time to be an Australian ISV, solutions or service provider. We’re starting to get a lot more action from government,” he says. Cybersource has found thin client-type offerings particularly popular. Government is like other large organisations -- agencies may have thousands of PCs but most of them do not do very much. Some 80 percent functionality can be more than enough, Zymaris argues.
 
“Providing total lockdown, very simplified desktops -- this is of great interest to a number of government agencies, like remand centres and prisons,” he says. He warns that it can be hard to get the ball rolling, though. The trick for small channel players is to persevere and nut out the niches that need solutions or services and tailor something specific, Zymaris says.
 
There is still, however, a thorn in the side of Cybersource’s bullish analysis -- that the state education departments tend to go straight to Microsoft and offer mega-bucks for an all-encompassing software deal.
 
“If they need 1000 new printers, they go off to tender. They then need desktop software, operating systems, file print, office suites, but that does not go out to tender,” Zymaris points out.
 
Companies like Microsoft win “hundreds of millions” in such deals but local providers do not get a look in. Yet open source providers could -- if they could figure out how -- do the same thing for those education departments for maybe $20 million, Zymaris suggests. “It’s a big problem. Government should start looking at alternatives there,” Zymaris says.
 
A patriot must always be ready to defend his country against his government.
 – Edward Abbey (1927–1989)
US author
 
Mike Smith, government account executive at EDS, says the moves to whole-of-government outsourcing, coupled with a drive for greater efficiency and accountability, has been both good and bad for prospective IT providers.
 
The Humphrey report put agencies back in control and the furore over outsourcing in general has died down, freeing up providers and government to fashion the best possible deals. Agencies in transformation often need IT companies to assist, and EDS -- among others -- has taken advantage of that, Smith says.
 
Contracts have got more outcome-based too, Smith adds, which is surely a good thing. “With the standard input-based contracts, the supplier would come in and say, 'I’ve delivered three truckloads of widgets’, and they’d say, ‘No, we wanted only two of that kind and one of the other’,” he says.
 
Smith warns also that government really does not have the same values as private industry, since profit is not what it is about. EDS gets a cultural fit by hiring lots of former government employees, he says.