Despite market inhibitors, there's a growing opportunity for resellers to peddle hardware, software and services into the public sector. Start pushing enterprise applications, CRM solutions, portals and e-procurement - and that's just the beginning.
Hi-tech has arrived in force in the public sector. Local, state and federal government agencies are clamouring to access confidential data or networks via facial recognition or iris scanning. And biometrics - the use of body parts to identify individuals -is one of many IT projects being adopted by government bodies across the country.
IDC vertical markets research manager, Phillip Allen, said others included upgrading legacy systems and working across government to ensure interoperability.
While it is tough to survive the government bidding wars - and tricky to navigate the complicated tendering process - the benefits of cracking the elusive government market are huge.
"It is a fragmented area to go after, but it is a good sector and offers attractive growth rates," Allen said. "Stakeholders have a positive attitude toward IT - they may be a bit risk averse and cautious, but they do buy and they do pay."
He warned though that anybody looking to play in this space had to know their stuff. Resellers and vendors needed to understand the different purchasing processes including the Endorsed Supplier Arrangement, as well as the Government Information Technology and Communications (GITC) contracting framework.
The government sector contributes almost 15 per cent of Australia's total IT spending, according to IDC numbers, and spending by all three tiers is forecast to total $3985 million this year.
"Process integration, electronic service delivery and efforts to coordinate across agencies will push the Federal Government to kick in $2120 million of this spending while state and local governments are expected to deliver $1865 million," Allen said.
Doing it tough
Before we get down to the details of desired technology, let's chat about some market inhibitors.
"Government spending on IT can be slow, and IT vendors that supply to the government sector must set up ad hoc processes to respond to large tenders often involving long and costly due diligence processes," IDC's Allen said.
Vendors and resellers are also likely to encounter lengthy sales cycles, as IT decisions that require input across multiple agencies blur organisational lines about who has ownership of projects.
In preparing for the push towards interoperability and network - and cross-agency architecture - there are issues of integration, information sharing, ethics, access, equity and governance, Allen said.
Complicating matters further, each agency is like its own market. Resellers should treat the federal space like an enterprise, while local and state should be viewed more as SME or SMB customers. "It's a very complicated space," Allen said. "It's so broad, it's difficult. The bottom line is a reseller needs to understand the business, have a real grasp of what the agency does."
Computer Sciences Corporation (CSC) vice-president, Chris Cook, said partners could sift through the complicated purchasing process by hooking up with a large firm such as CSC in order to get some traction.
Strict government guidelines, particularly those spelled out in the GITC, make it hard for a small player to make it in the space, he said. "CSC can manage the risks and terms and conditions," Cook said. "It's difficult and frustrating for a smaller organisation to prove its track record."
CSC gets lots of traction in software development and mobility, particularly at the federal level and with the ACT state government, and is on a host of government panels including the Department of Human Services and CentreLink.
Hot technology buttons
The general business environment for government spending on IT in Australia was changing, Allen said. "This is being driven by the need to deliver citizen-centric services," he said. "The creation of technology-led initiatives has seen Federal Government bodies becoming more dedicated to technology investment."
Government agencies are looking for ways to simplify their IT infrastructure; lower the overall cost of computing; achieve greater responsiveness from IT; and ensure data integrity.
There are a number of technologies fuelling IT investment. Enterprise applications including HR, payroll and financial management solutions to optimise resource management, as well as knowledge management systems and collaborative technologies were key areas of interest, Allen said. "Document management seems to be on everybody's lips," he said. "Transferring and managing paper across agencies is essential."
Other notables include e-procurement platforms, CRM applications, including customised services, and Web portals to deliver services in a flexible way.
On the security front, privacy of data and secure transactions must be ensured, Allen said.
"This will continue to be an important area for investment."
Dimension Data's ACT state manager, Michael Gration, agreed security would continue to be hot, particularly at the federal level during the next two years.
The company's staff of 40 caters to both the Federal and ACT state government and it is looking at bringing on more employees to address the market.
"The big things in government are consolidation, both in terms of the network and the data centre; business continuity, which is driven by renewed security concerns; and improving efficiency," Gration said.
Eyeing opportunities in the CRM space, specialist player, Snapdragon, wants to jump into the government game, and is in the midst of submitting its application to become a government-endorsed supplier.
It has hatched an innovation division in a bid to develop specialised, vertical applications ideal for the government market, director, Guy Riddle, said. Application integration - and pooling resources - was needed across all levels of government, he claimed
"We can present CRM, which is typically about leads and sales opportunities, in a non-commercial way and make it relevant to government," Riddle said.
Whereas CRM in the commercial sense manages customers, the technology in government would also manage suppliers, people and resources.
"We recognise we need to do something to help government solve the CRM issue. By taking the 'c' out of the equation, and thinking of it as relationship management, it becomes very relevant," he said.