Public sector ‘must help tech firms achieve scale’

7 Sep 2006

A change of attitude amongst purchasing officers in Ireland’s public sector in terms of buying IT from home-grown technology firms is urgently needed, the managing director of one of Ireland’s largest and oldest indigenous technology firms has said.

Tony McGuire, managing director of System Dynamics, said that the Irish government sector is by far the biggest buyer of IT goods and services. As such, he said, it should support Irish firms and in turn help them achieve scale.

“I am not looking for favouritism, which is unfair and I hope illegal,” said McGuire. “What I am looking for is a change of attitude by purchasing officers within the public sector. At present, I would say that nine times out of 10 they choose to buy what I term ‘reassuringly expensive’ IT services from the big-brand service providers.

“There is no discussion about the fact that Irish IT companies, and I will include some of our home-based competitors here, are every bit as good as the overseas companies yet government departments continue to choose brand names, at brand name prices, because of a culture of playing safe,” said McGuire.

System Dynamics has been in existence for almost 40 years in Ireland and in recent years has doubled in size every two years. “I think any right-thinking analyst could only describe us as a ‘safe bet’. For System Dynamics to grow to its next level — competing internationally — there needs to be a new attitude when it comes to public procurement.”

McGuire said that the recent scare whereby Intel’s decision to lay off 10,500 people worldwide sent a shudder down the spines of its 5,500 workforce in Ireland should serve as a wake-up call. Luckily for the Kildare workforce, Ireland is unlikely to be materially affected by the restructure.

He said that Irish technology companies need to grow rapidly in size and as a result lessen the country’s reliance on multinational technology firms.

“We need businesses of size,” he said, “so that we can compete with foreign companies; businesses that grow big enough to be able to handle the swings and roundabouts that are part and parcel of all business but that are particularly acute in the IT industry.

“The good news for those being laid off at Intel is that there is what I can only describe as an enormous demand in the Irish market for trained, experienced, IT sector workers.

“But the fact that a superb-quality employer, which is the world leader in its sector, can still cause a major scare across the sector in this country should be a wake-up call to the country, particularly the government sector which is by far the biggest buyer of IT goods and services, that they should support Irish firms,” said McGuire.

By John Kennedy