New Research: Improving the Outcome of Government IT Procurement
Categories: Procurement Research, Procurement Strategy & Planning, Public Sector | Tags: Incendiary Tidbits, L2
This is the fourth post in a five-part series based on Billions in the Balance: Removing Barriers to Competition & Driving Innovation in the Public-Sector IT Market, a new report from Public Spend Forum and Censeo. The report is written by Raj Sharma, CEO of Censeo Consulting Group, and David Wyld, Professor of Management at Southeastern Louisiana University.
Earlier posts in this series covered the “check-the-box” culture and lack of alignment characteristic of government procurement that has led to a high rate of IT program failure. The authors of the report gave six recommendations that can be implemented immediately to positive effect, and this post will summarize the third and fourth recommendations. They are as follows.
Engage the market early – “As the White House ‘mythbusters’ campaign has pointed out, there is no regulation that prohibits open dialogue with industry. Engaging the market early leads to innovative problem solving and better alignment with industry capabilities. However, participants in our study, including our lively discussion in Silicon Valley, pointed to misalignment with the marketplace as one of the most costly practices undertaken in public-sector procurement.”
Spend Matters analysis: in the private sector, some of the most innovative and successful sourcing approaches come from more open RFI models that are designed to solicit supplier creativity and ideas. Supplier engagement (early and often) represents a next generation sourcing approach that can yield not only savings, but better overall supply chain outcomes (e.g., reducing Co2 emmisions, lowering overall packaging footprints, reducing supply risk, etc.)
Develop a cost/outcome (ROI)-focused program IT strategy – The authors break this recommendation down into a number of guidelines:
- Focus on minimizing cost/outcome (instead of generic criteria like price, schedule, and performance)
- Implement flexible IT architecture and allow adoption of new technologies
- Emphasize prototyping and Minimum Viable Product
- Avoid monolithic acquisition approaches
Focus on minimizing cost/outcome, implement flexible IT architecture, emphasizing prototyping and “MVP,” and avoid monolithic acquisition approaches.
Jason Busch says, “Looking at IT (and sourcing IT) from a business value perspective is an ideal means of gauging whether the right performance metrics are aligned from the start. From an architecture perspective, get smart on such areas as service oriented architecture (SOA) models, platform-as-a-services (PaaS) and general API-based integration/interoperability. While investment in no monolithic systems continues (much to our chagrin) how all systems interoperate and talk with the world outside (and within our four walls) is becoming more important than ever.”
To read about these recommendations in detail, download the free report here.