Smaller VARs may need to sub-contract from big fish on procurement: Clement

OTTAWA – With the federal government’s move this summer to develop a shared services approach to IT service delivery and procurement, the coming shake-up to the stodgy world of government IT is the key topic of discussion at Canada’s Government Technology Event (GTEC) on Tuesday.

In his keynote to conference attendees, which include government IT professionals and decision-makers as well as IT vendors and partners, Treasury Board president Tony Clement said the government was re-elected in May with a mandate to eliminate the deficit while keeping taxes lower and reducing spending. IT will have to play its role, and he said Shared Services Canada is being developed in that context, as the government moves to consolidate IT personnel, data centres and purchasing across 44 government departments.

It’s not just about cost savings though, Clement added, but also modernizing government. He sees technology as bringing people and government closer together through tools such as social media. He also wants greater use of video conferencing within government, and is piloting tablet use to take the federal cabinet paperless.

“Ladies and gentlemen, change is on the horizon,” said Clement. “Work with our government as we establish this new mode of operations that will leverage technology in new and creative ways.”

In an interview following his speech, Clement told CDN that he wants to make sure smaller IT resellers and vendors can compete. When he was Industry Minister, he said he put a strategy in place to showcase smaller Canadian IT firms for public sector procurement. But at the same time, he said firms need to be competitive and the government needs to make sure it gets value for money.

“We’re always looking for ways to make sure the smaller players have a level playing field. But sometimes you’ve got to aggregate, and that may mean larger vendors and sub-contracting,” said Clement. “All of these solutions are important to make sure we’re helping the local suppliers, but at the same time have a transparent and accountable process for the taxpayers. That’s the balancing act.”

Adjusting to the new world

In her own keynote address, Corinne Charette, chief information officer for the Government of Canada, said she wants to work with the private sector through the reform process.

“It will not be business as usual. Our modernization strategy requires a rethink of how we do things with you,” said Charette. “You need to participate in this as well.”

Charette said the government will be consulting with vendors and partners on its IT strategy, particularly around cloud computing architectures and standards.

Supplier ecosystems develop a personality consistent with their clients said Kim Devooght, Cisco Systems‘ (NASDAQ: CSCO) vice-president of public sector in Canada. In the past, government wanted component suppliers, and that’s what they got. Now they’re looking for a more value-based approach, and the IT community will need to adjust.

“In the end, the real customer is the taxpayer and the government is the keeper of taxpayer dollars, and their obligation as the custodian is to ensure they’re getting value for service,” said Devooght.

Partners he’s talked to are concerned about the procurement and service reforms, said Devooght, as any time there’s consolidated buying it will mean fewer decisions. There are ways the government could structure procurement to ensure smaller partners and vendors are still able to compete, but Devooght said he’s not a fan of building artificiality into the marketplace.

“My advice is to concentrate on value, concentrate on what government is trying to get done in the best interest of taxpayers, and align your strategy and resources in a way that’s consistent with that,” Devooght. “That’s what we’re doing, and that’s what we’re advising our partners too.”

The proposed shared services reforms make sense for both taxpayers and for government efficiency said Shawn Cruise, Canada country manager for Adobe Systems (NASDAQ: ADBE), as would taking it to the logical next step (beyond e-mail, data centres and networking) and getting government out of the application and software development business as well.

Government needs to reward trusted advisers

The new model will require a re-think and adjustment from the channel that serves government, but Cruise warned the government must be sure to build a procurement model that still values the knowledge and best-practice advice of experienced, trusted adviser partners, and doesn’t just make the lowest-bid price the be all and end all. Partners will need to learn to bid not on point solutions, but looking at total cost of ownership and margins across offerings they provide to the customer as a whole. And government needs to find a way to value that partner investment and advice in understanding their business needs.

“If the government doesn’t maintain an understanding of the channel and vendor community it risks having that value disappear,” said Cruise. “They need companies like Adobe and its partners investing, teaching, and sharing best practices and customer references. It needs to be a balance between (lowest cost and added value).”

One Adobe partner already investing in preparation for the shared services era is Ottawa’s IMP Solutions, a professional services partner with a focus in business process management (BPM) and methodology with several public sector clients. Don Denovan, director of their BPM practice, said it’s too early to tell how shared services could affect the applications space but his group is looking at what it would mean for his public sector clients and what he needs to do to get ready.

“We’re doing the planning by bringing industry expertise to BPM, and looking at how you take that horizontally as a solution, not just in a department but across government,” said Denovan.

GTEC continues through Thursday at the Ottawa Convention Centre.

Follow Jeff Jedras on Twitter: @JeffJedrasCDN.

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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