Two of the biggest IT failures in Australia over the last decade appear to have a common theme:
1. IBM’s implementation of SAP and WorkBrain for Queensland Health’s payroll
2. IBM’s 2016 eCensus.
IBM was awarded both contracts after the correct procurement procedures were followed. While the Queensland Government and the Federal Government may argue that IBM has failed them, IBM will surely argue that both governments got what they asked for.
That is the common theme – you get what you ask for.
In the past fifty years, government departments and large corporations have been approaching large IT companies to provide IT solutions for them. These solutions often take a significant number of years to implement and cost an insane amount of money. They also cost all those involved a significant amount of time and effort in the evaluation process. A process that is largely tilted in favour of these large IT companies.
The reasoning behind such a process is to reduce risk. A larger IT company has a wealth of experience and will ensure the system does not fail – right?
Well, no. As we see in both these instances.
How does the procurement process begin?
A project always goes through a number of gates before it goes to market. For large projects, the department or corporation will often seek external help with the requirements, business case and/or tendering process. This is a key decision as it determines what is being asked for. This first step begins the house of cards. The customer believes the best company to help them to make such a decision, is another large IT company or a boutique IT procurement company who specialises in selecting large IT companies for large IT projects.
At this stage, the customer has the opportunity to challenge the business on what is required. This is a great opportunity to introduce some disruptive thinking. Otherwise, this will become a missed opportunity where the tired approaches from yesteryear are perpetuated.
How did this work in the 2016 eCensus?
The 2016 eCensus contract is a great example of this procurement process as IBM won the contract in 2005 for the 2006 eCensus where the take up was in single figures. In 2011, the contract was still with IBM and about a third of the responses were online. The new contract for the 2016 eCensus expected 65% of responses to be online. Much has changed in IT since 2005 but not much has changed in IT procurement.
Where to from here?
Everyone must challenge the procurement norm. Customers must challenge their internal procurement processes that keep potential suppliers at arm’s length. Your project must be collaborative from the very beginning to succeed, so your procurement process must encourage and reward this behaviour from the start. The “mandatory” requirements that demand a fully compliant response may not deliver the best outcome for you, the customer.
No matter what you’re asking for, wouldn’t you want to encourage innovative thinking to solve your problem? A compliant response to 100 questions may be the worst outcome, especially if you’re asking for the wrong thing. Focus on the business outcome, not procurement compliance. Let’s challenge procurement to allow for, and in fact encourage, agile, disruptive and innovative solutions.