The Press, June 2012

‘Great government customer service’ is an oxymoron up there with ‘military intelligence’ or perhaps ‘Piri Weepu’s healthy lifestyle’.

While intent on saving lots of money, the current government is also keen on improving the ability of its agencies to better serve the citizenry by using information and communications technology (ICT). As technology has transformed the ease of our interaction with the likes of banks and airlines, it has the same potential to make accessing government services a less painful experience.

The big challenge in all of this is whether it can be used to grow the indigenous technology sector, something which will take a mind-set shift for both governments and Kiwi technology companies.

At last week’s conference of government technologists, their boss Colin MacDonald, the government’s chief information officer said they “. . . have a plethora of systems, processes and service delivery channels that are largely in silos within individual agencies. This separation between agencies exposes citizens and businesses to the internal complexities of government.”

MacDonald said government departments needed to accelerate the government ICT programme to address this. One of the biggest challenges in doing this is their inherent conservatism, and tendency to use large, often foreign-owned vendors of technology.

At a recent procurement seminar, a government official said that 85% of the government’s spend on information technology goes on 14 companies.

The Inland Revenue Department is the latest government department to come in for criticism, attracting heat in recent weeks for spending up large on Australian consultants to fly into New Zealand to help build their new $1 billion plus computer system, based on the technology of US software giant Oracle.

Government ICT procurement is littered with tales of frustration and woe, as relatively small Kiwi vendors struggle to compete in cumbersome and inflexible tendering processes against the slick sales machines of Oracle, IBM, SAP and co.

The benefits of using more local technology are obvious, for the economy overall and for the companies themselves.

A 2010 study by economists BERL found that for every $1 million spent locally rather than overseas, 10.4 jobs are created or maintained, $108, 457 of tax revenue is generated and $128,685 saving on welfare payments.

For the companies they get the credibility and revenue of selling to a large organisation, which can help kick-start an export strategy that contributes much needed foreign exchange and creates more high value jobs.

The government is trying to improve the way it buys technology, while saving precious public money. The Department of Internal Affairs has a group called (no joke) GISMO – the ‘government ICT supply procurement office’, which developed an “open door to innovation” process designed to enable smaller, smarter companies to plug their technology into the needs of government.

While good in theory, this is unlikely to work in practice as government by nature exists to serve, not to lead. The “open door to innovation” is more like a “slightly ajar cupboard in a small corner of the large house that is government”, as it is something most government agencies can easily ignore.

How could our government encourage lots of local firms to dream up brilliant solutions to all sorts of problems? Isn’t creating a platform for hundreds of technology vendors to create solutions according to a common set of standards impossible?

Apple Inc. manages it alright, with their App Store at last count having over 500,000 apps for every imaginable use.

Government systems may be vastly different from iPhone Apps, but couldn’t we create some sort of open market for innovation based on some accepted technology standards, unleashing the creativity of our many clever Kiwi developers to create all manner of brilliant solutions to common and not so common problems?

Harnessing local technology to improve government service also requires Kiwi providers to change their mind-set too, particularly around the way they sell. They can be too focussed on whizz-bang technology without being sensitive to the challenges a risk-averse government buyer faces, and which drives their decisions to go for bigger, ‘safer’ providers.

Building a well-known brand, partnering with larger companies or using smart pricing strategies are ways Kiwi companies can improve the way they market to the government.

For example, we can produce innovation cheaper (a study commissioned by Catalyst IT showed NZ software can be made 20-25% cheaper than Australian providers, and even more so against UK or US vendors), but pricing too far below the competition can undermine the buyer’s confidence, and not provide sufficient margin to provide quality support and on-going innovation in the product.

Kiwis can sell successfully to their own government, with DataCom and Revera, both locally owned companies, able to attract significant public money for their ICT services. Getting more local providers becoming the engine for better government ICT is a challenge, but can be achieved if both sides shift their mind-set.

After all, even Piri has managed to become more focussed on the rugby field than the buffet table.

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