ISA encourages local software firms to chase Govt contracts

15 Apr 2011

The Irish Software Association is working with indigenous SMEs to encourage them to bid for more public-sector IT work.

Next week, on 19-20 April, the ISA is hosting a two-day public-sector sales enablement event aimed at company owners, sales managers and technical leads. It covers workshop-based training and a closed-door session with public-sector buyers. Topics to be covered include strategic approaches to public-sector sales, customising the sales process, communicating competitive differentiation and assessing opportunity pipelines.

The ISA is planning a series of further events over the next 12 months aimed at bringing together public-sector buyers and software SMEs, allowing them to network freely in small groups. “To get business, ISA members need to understand the market. If you wait until you see it in eTenders, then you won’t win the bid,” said Brendan O’Reilly, chair of the ISA’s working group on Government procurement.

In preparation for the event, ISA representatives have held IT strategy discussions with senior technology architects at five of the key public sector departments: CMOD, Revenue, Agriculture, Social Protection and LGMA. These talks identified several key IT areas for the public sector in the coming years, including geocodes, software engineering techniques, such as Agile, and the road map for technologies, like service-oriented architecture and extensible markup language.

The association’s move comes just as the public sector appears more willing to engage with indigenous firms than in the past. A memo from the Department of Finance last year instructed Government departments to alter the terms and conditions for tenders, including lowering the threshold professional indemnity insurance, revenue figures and even the number of years that companies have been trading. In effect, this has made bidding a less onerous process for small firms lacking the resources of large vendors. Many indigenous firms say they have also noticed a changed climate, with Government buyers more amenable to working with local providers.

Applying the lesson of the PPARS debacle, which grew far beyond its initial scope and budget, public sector agencies are also starting to divide some large projects into smaller job lots – a move which also benefits smaller companies. “That’s a good step, and it leads to better quality tenders,” said O’Reilly.

European Space Agency model

According to O’Reilly, the European Space Agency uses a procurement model that could work if applied here. Before embarking on a large project, the agency sets aside some funds and issues a call for small firms to act as advance teams, scoping out the work in greater depth.

What’s more, the SMEs involved in those initial teams get the kudos and the money of working with a large agency, and because their research helped to inform the final scope of the tender, that company is automatically included in the consortium that ultimately gets the job. “There is no equivalent model here, but I’d love to see it emerge,” said O’Reilly.

O’Reilly said the Government would benefit from reducing their risk by having SMEs do advanced forays, since any resulting project would have the benefit of an external view instead of being informed only by staff within a particular department. It would also improve the chances that the final development would be built using the latest available technology. “They’re going to get a degree of innovation from SMEs working in advanced technical areas. The Government has an opportunity to plug into that,” said O’Reilly. The cost of that initial investment could be €50,000 or €100,000, he said.

It would also help to deliver a return on the investment being made by Government agencies like Science Foundation Ireland, he added. SFI-funded research could find its way into an indigenous firm via a spin-out or licensing, which could then be used to solve a particular technology issue in the public sector. If successful, the company could also sell the same technology to Governments in other countries.

The question of who owns the intellectual property once a project is completed has been a thorny issue in the past but the European Space Agency has found a way to resolve this, O’Reilly said. The business model is that if a company develops a bespoke application for a public-sector agency, that customer retains the rights for the application only in the context of the Irish Government. This would leave the developer free to exploit the same IP for commercial opportunities in other sectors.

More information about the event, which takes place in the Burlington Hotel in Dublin, is available at the ISA website.

Gordon Smith was a contributor to Silicon Republic