Nobody ever got fired for buying IBM. It’s an adage that has been around since the 1980s, and unfortunately, it’s still a mentality possessed by far too many procurement officers in both government and business.
Last month, the Australian government signed a five-year deal with IBM worth $1 billion, seemingly ignoring its own pledge of capping government contracts at $100 million that was made last year following the 2017 ICT Procurement Taskforce report.
I read the mixed responses in the media with great interest. Some supported the mega deal with its estimated $100m in savings.
Others highlighted the lost opportunity for SMEs and the persistent mentality that if you hire a big ‘safe’ multinational and a project goes pear-shaped, it’s their fault. If you hire a smaller Australian vendor and a project goes bad, it’s your fault.
The government as a whole commands one-third of the Australian economy.
It spends nearly $10 billion a year on ICT and needs to do more to help Australian businesses.
For an Australian SME, a government contract can be a game changer. It can give them the start they need to scale and the credibility they need to succeed, but the government needs to give them their fair shot.
There are positive signs of change.
The federal government has set a goal of propelling Australia into the top three nations for digital delivery of government services within seven years.
Although the strategy is yet to be released, it offers local SMEs a chance to contribute.
Last year, the government also pledged to inject an extra $650m into local SMEs as part of a set of procurement reforms.
The Digital Transformation Agency has introduced several online procurement portals. In 2016, it introduced the Digital Marketplace — in which 70% of the $50 million in sales so far has gone to SMEs.
More recently, in March, it announced its Hardware Marketplace for SMEs to bid on government contracts.
Meanwhile, AustCyber, the not-for-profit set up by the government to execute its Industry Growth Centres Initiative, has been running its GovPitch roadshows for Australian cyber companies, helping them pitch to government departments, which had some notable successes.
Should department CIOs and procurement officers be compelled to purchase or even evaluate Australian companies on a level playing field?
It may be one way we can overcome the compulsion of stakeholders to go to familiar multinationals.
As a nation we need to take control of our destiny.
We need to give Australian companies every chance to compete fairly and not be dismissed out of hand as being too small and too risky.
