Should IT suppliers outsource framework applications to experts?

External experts can charge thousands of pounds to get on frameworks

With sales through government frameworks such as G-Cloud reaching into the billions of pounds, it is no surprise that public sector suppliers are keen to win a place on them. Since its inception in 2012, sales through G-Cloud has surpassed the £1.5bn mark, and is home to hundreds of IT providers - both large ones and SMEs.

The framework is so popular among suppliers that external consultancies and agencies specialise in helping them win a place. Some providers offer services ranging from getting suppliers on the framework in the first place, optimising their position in the listings, and helping them win business through it.

While the use of such companies is not mandatory - and many firms win places on G-Cloud and other frameworks on their own - concerns have been raised about the value for money offered by some external firms.

CRN understands some firms in the channel offer to get suppliers on big frameworks for a fee of up to £7,000 per listing, increasing if extra services are to be listed. However, other companies of a similar nature told CRN that a basic listing can set suppliers back around £1,000, with extra charges for things like listing optimisation and further consultancy.

Kelvin Kirby, CEO of Technology Associates, told CRN that some suppliers charge far too much.

"There is a place for these companies but I think the price is horrendously expensive - charging six or seven grand for services which I could effectively get someone in the office to spend a few days doing," he said. "For me, that's a cost of £250 a day, or whatever - much less than paying these guys. So when you weigh it up, you have to make a judgement call. For companies who have money to burn, it's great. But I don't think there are that many who have that money to burn.

"This [price] is per entry - you might want multiple entries but that's where it get very expensive. I think, on balance, it seems to be an extraordinarily expensive option. When I heard the price, I did a double take.

"I am not against these guys and if they get their cash and make money then good for them. But certainly I wouldn't pay that amount of money when I could pay 10 per cent of that as an internal cost and get the same job done. It does not make economic sense and there's no return on investment for us."

The use of external companies to win a place on frameworks is not compulsory. The Cabinet Office did not directly respond to CRN's request for comment, but instead directed us to a recent announcement of a pledge to ensure that by 2020, £1 in every £3 invested by Whitehall in goods and services will got to SMEs.

"For companies who have money to burn, it's great. But I don't think there are that many who have that money to burn."

The boss of one consultancy, which helps companies win a spot on G-Cloud, told CRN that some of its services can reach up to £5,000 for extremely specialised services.

But he insisted that suppliers have a choice and often prefer to have a helping hand.

"For someone who has not done it before, having someone to hold their hand for a few hours is great," he said, speaking on the condition of anonymity.

"The reality is, it is very, very simple. You can fill out your own tax return and once you've done it once, you can do it again. But would you be willing to pay £50 for someone to hold your hand the first time doing it? For the average bod on the street, they do need a helping hand.

"The thing I find offensive is emails [from consultancies] implying there's something special about getting on G-Cloud. Whenever we do a conference, we say if anyone here has a five-year-old, they can get you on G-Cloud. It's as simple as that. Making money from G-Cloud is a different matter though, and it's reasonable to charge for that."

Roger Newman, senior partner at DeNove consultancy - which offers G-Cloud services as a small part of its business - said that his company offers a valuable service.

"The fact of the matter is that we've got one company in the top five [G-Cloud suppliers], and we've got five companies in the top 30 - and they're all SMEs," he said. "My SMEs are outselling all the big boys. Yes we have a role to play, but it's not [only] about getting onto G-Cloud."

Richard Blandford, managing director of Fordway, told CRN that he sees pros and cons of working with an external company to get on frameworks.

"If you're brand new to [G-Cloud], it can accelerate your learning and help you get into a good place," he said. "But it's not particularly difficult to work it out for yourselves, as long as you understand government security accreditations and that sort of stuff. Where they could well be useful is accelerating knowledge for when the go onto G-Cloud. I wouldn't have thought there is much benefit in paying them any sort of management fee because there's not an awful lot [to do].There's just a bit of search optimisation.

"If you're new to G-Cloud, they could well be useful. But you shouldn't need to pay money for ongoing services if you manage your entries well yourself."

Mark Elkins, director of New View Market Services, suggested that rather than charging IT suppliers up front, they could instead charge on a commission basis - ensuring suppliers only pay when they win business through the framework.

"I have worked with a large organisation where there were several meetings - what should we put on [G-Cloud], what should we take off, what needs to be included, and all the forms, and so on. It did involve a lot of people and nobody ever thinks about that cost. How much does it cost a large company to get on to get it done?" he said.

"For an SME to part with that kind of money, I certainly wouldn't want to bang my wallet on the table and open it up."

"But having said that, for an SME to part with that kind of money, I certainly wouldn't want to bang my wallet on the table and open it up. What might be a more interesting model would be if the companies were so good at what they do, why not work on a percentage basis of what they earn on G-Cloud? It would be a more pain-free way of doing it."