Doing government IT procurement better, and why it matters

A recent survey by Gartner found it takes government purchasing teams an average of 22 months to make decisions about acquiring IT – longer  than any of the other 12 industries analysed. This doesn’t necessarily mean technology leaders are doing anything wrong, but they need to be more agile and creative in their approach, writes VP analyst Dean Lacheca.

Dean Lacheca

It’s important to acknowledge that the buying cycle for public sector tech starts well before any official procurement process is initiated.

The initial phase starts with exploring options, then proceeds into a process of reaching agreement in terms of high-level scope and developing the business case to get funding approval.

This phase can often represent a 6-12 months timeframe. The bigger and more complex the scope, the longer this phase of the buying cycle gets.

Many government legacy modernisation initiatives never get past this stage as they struggle to agree on a scope and approach that avoids a long and risky proposal, which leads to a lack of support for a business case or a lack of sufficient funding. This sends them back to the drawing board.

The formal procurement phase of the process is more structured and less susceptible to delays once it goes to market. But the preparation of tender documents is often protracted because of the various stakeholders impacted by the purchase, and involved in governance of the process. Avoiding scope creep and navigating governance requirements can often delay the preparation of procurement documents.

Risk aversion

Given the scale of public sector procurement it is not surprising that it takes so long, and it is not necessarily the case that they are actually doing anything wrong. In fact, it is the opposite. Government takes procurement very seriously and spends a lot of time and resource to ensure that the process is fair and defendable. But at the same time most government technology leaders are frustrated by impacts of the buying cycle and will actively avoid going to market where possible.

They would prefer to use other purchasing mechanisms like panel agreements, standing offers or whole-of-government agreements which remove some of the time and risk from the process.

When it comes to getting business cases approved for application modernisation initiatives, it is often difficult to explain the value of the investment. The programs are time consuming, can be perceived to be high risk and more often just offer the potential for future improvements, making it a difficult for business leaders and ministers to support and finance/treasury departments to fund.

Technology leaders need to be more creative in their approach, focusing on the quantifiable value of the investment from a business/community perspective.

Keeping pace with changing expectations

Government equivalents of a C-level executive are still most often the ones with the authority and responsibility to make the award decision. They are obviously heavily guided by the buying team’s evaluation results and recommendations. Government C-level executives tend to be less involved (41%) than private-sector counterparts (55%) to avoid association with the process and creating the perception of political influence in the outcome.

However, public sector buying teams are significantly more likely than other industries to be composed of lower-level operational staff (46%) who are impacted by the buying process, taking on the role of business subject matter expert. This can lead to a disconnect between the transformational agenda of the executive and the evaluation process used to assess the options.

The last few years of disruption have shown how important agility is for government’s ability to respond to changing demands. If government’s agility is hamstrung by inflexible legacy technology and addressing this legacy technology in hamstrung by legacy or restrictive procurement processes then governments will continue to struggle to keep pace with changing expectations.

Proactive approach

Individual government CIOs need more purchasing mechanism available to them that allow them to be more agile in their response. Whole-of-government agreements need to be a less daunting process, not just restricted to the largest players in the market, but should also be capable of supporting SMEs and ecosystem partners that can rapidly enhance government investments.

These central agencies need to be more proactive rather than reactive, engaging the market to understand what needs to be in place to allow individual CIOs to act when required. This will allow them to take a more composable approach, allowing them to establish common capabilities that can be easily adopted across different government departments as the need arises rather than waiting for individual agencies to be prepared to tackle the procurement challenges.

At the same time individual CIOs need to stop pitching long, high risk and complex programs. They need to adopt an approach that offers incremental value to business leaders and ministers. They need to stop treating technology investments as an administrative requirement and position technology investment as a tool that can have a tangible impact on the mission or public purpose of the government or department.

*Dean Lacheca is VP Research Analyst at Gartner and a Research Director in Gartner’s CIO research and advisory group

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