So the cat is finally out of the bag. Gershon has landed, with a bang, but is it necessarily as bad as you may have feared?
The review of Federal government IT expenditure, released last week, has, for months, been the source of trepidation and speculation in the IT industry. In the week since its release, many domestic commentators have focussed on the double doom-and-gloom of Gershon's razor and the ongoing world financial crisis. Adding to the confusion is the upcoming restructuring of Federal tendering processes, coming into place in December.
But what does it all mean?
1. The Rudd federal government, approaching its first anniversary in power, is passing adolescence. The first six months were characterised by huge spending on election promises and significant machinery-of-government changes (with ensuing chain-reactions through most governmental doctrines and operations). Following these budget-heavy changes, Rudd has handed Lindsay Tanner, the Minister for Finance and Deregulation, the task of sweeping up the sawdust. Tanner will be especially keen on savings, given the damage that the credit crunch will deal to his formerly impressive surplus. Tanner's moves towards procurement centralisation and services insourcing should be seen in the context of wider reform.
2. Although figures being bounced around in the IT media are intimidating, there is a silver lining to the cloud. Certain opportunities are diminishing, but others are on the up. The area expected to take the biggest body-blows is the provision of IT services to the Government. Gershon has identified agency BAU programs as being heavily overcommitted to outsourced staff and wants to attract more ICT professionals into the public service by developing more attractive career paths. Also in his sights are fragmented, heavily duplicated datacentres, which Gershon wants amalgamated into Canberra-centric cross-agency models.
3. Tanner seems aligned with Gershon in moving towards processes of centralisation and inter-agency cooperation. Tanner's December reforms to procurement are expected to focus on standardising tendering templates and encouraging a whole-of-government approach. Meanwhile, critically, Gershon has placed a system of inter-agency IT procurement panels at the top of his agenda. He has proposed both a ministerial committee and a committee of agency heads. Furthermore, collaboration and information-sharing between agency heads and CIOs is to be boosted.
So what is this silver lining again?
Despite how bad things are for IT services, significant opportunities still remain in the federal public sector. Up to 50% of Gershon's recommended savings (in some areas) are to be reinvested in streamlining BAU processes - he highlights legacy systems as an example. Additionally, niche opportunities will be generated by these reforms - for instance, the push to increase dependence on internal servicepersons will invariably require training consultation and contracting.
Funding for new projects will remain at considerably high levels, as Gershon seems more concerned with project management of maintenance programs than with that of development programs.
Also, the December procurement reforms, by combining tender simplification with centralisation, will open up the federal government sphere for niche SMEs to market their products to a wider array of federal agencies. Larger companies can benefit from partnering with these niche companies.
You can also take optimism from the Gershon review's focus on inter-agency cooperation. Gershon's model of centralisation is cooperative rather than top-down, and Tanner's department has strongly denied rumblings that all procurement will go through AGIMO (part of the Finance Department). Such collaboration will give your public-sector marketing teams the continued ability to network both within and across agencies and thus generate leveraged sales.
What to do for the moment
The simple answer: sit tight. Ensure you have established contacts in the organisations you've identified as potential marketing targets. If you haven't begun to build up those contacts yet, now is the time. Establish and consolidate those relationships and wait for the changes to fully settle in in the new year. You can use the downtime to get your public-sector marketing plans up-to-date with any changes as they occur. Large-scale machinery-of-government changes are unlikely in the near future, so set yourself a target of Q3, next year, to launch your organisation into the public sector with a clear understanding of the opportunities that the new channels of government procurement will provide.
If you still find yourself concerned with negative impacts of the Federal changes on your public-sector sales, consider also targeting other tiers of government. State government spending has remained high this year, and schools across Australia are currently finalising next year's capital equipment budgets to catch the last waves of federal Digital Education Revolution funding.
To ensure you have accurate and current marketing contacts for Federal government, or other tiers of government, contact A-ZGovBiz.
Our database totals nearly 50,000 managers and business decision-makers throughout Federal, State and Local governments, as well as incorporating 10,000 schools. We can deliver these contacts to you and provide support and expert consultation to make your public sector marketing campaign a success. We can get you the leads you need to keep your sales program afloat throughout the impacts of Gershon, and to emerge into 2009 ahead of your competitors.
