A piece of the action

Six billion pounds for the NHS, £4bn for the Ministry of Defence (MoD), billions of pounds for local government, and seemingly countless other government IT projects. You would think that with so much money sloshing around resellers must be able to get their hands on some of it.

Sadly, it is not that easy. To have a chance you need to be selling the right product or service and to target the right opportunities.

The initiatives behind the spending spree mainly are driven by the Office of the e-Envoy. This part of the Cabinet Office supports the heart of government in going about its business. In other words, the targets and initiatives that have pushed current government IT spending to twice that of Germany or France come from the very centre of the current UK government.

As well as overseeing many of the government's IT initiatives, the e-Envoy also is responsible for driving the enablement of 'joined-up government'.

This is the improved management of processes that span multiple government departments. The E-envoy has also set the 2005 targets for local governments to meet e-service guidelines.

The e-Envoy will be replaced by an 'e-government unit' in September 2005, which will be aligned with a darker force that is a big influence on how the government's IT budget is spent: the Office of Government Commerce (OGC).

The OGC has the task of making sure the government gets a good deal when buying products and services. It runs the government IT catalogues: GCat for products and S-Cat for services. To supply direct to government, you must be registered on either or both of these.

But this is not really the issue. Most government IT contracts go to specialist consultancies and systems integrators that are registered in the catalogues and do not require suppliers they deal with to do so.

The OGC has put up other barriers for smaller resellers that want a slice of the action. The OGC's Gershon Review aims to ensure government gets a good price from IT suppliers. It has negotiated contracts with the major product vendors to provide discounts on products aggregated across many areas of government.

These vendors have, in turn, nominated supply routes for these discounted products. For example, Microsoft has named certain of its Large Account Resellers to supply products to government, which is tough if you are a smaller reseller.

Getting a look-in on services is no easier. The projects are awarded to large system integrators which then control the sub-contracting of services. BT, Computer Sciences Corporation (CSC), Fujitsu Services and Accenture all picked up £1bn-plus contracts from the NHS in the past three months.

CSC and EDS are the final two competitors chasing the £4bn being spent by the MoD, to be awarded in 2005. All will have to sub-contract some of their services, and some of this will go overseas.

Fujitsu has already sub-contracted a big chunk of its NHS contract to India-based IT services firm Tata.

So, is there anything left for the smaller guys? The answer is yes, but you need something unique: a product or service the big guys don't have.

You might be an ISV or a reseller representing one. There are plenty of requirements: biometrics for ID cards; web service enablement of legacy applications; RFID for drugs and patient management; and expertise for automating specialist business processes. Even the biggest vendors cannot cover all of these.

And the right type of projects? Targeting the huge central government projects is risky. You get one shot at it, but screw up and the opportunity has gone. Going for projects in smaller organisations such as local government, healthcare trusts and police authorities offers a better chance.

Lose out once and you can move on to the next one, doing a better job having learned from your mistakes. Succeed, and you can sell the same product or service multiple times, reference in hand.

The UK government spending spree will not go on forever, but even when government funds start to dry up - or indeed, if the government changes - these spending plans are long-term and the funds for many projects are already set aside. So don't be deterred. If you believe you have the right product or service, start looking for the right government opportunities now.

CONTACTS

Quocirca (01753) 855 794
www.quocirca.com

To see the illustrations associated with this report please click here.