Successive governments have encouraged working with SMEs. Way back in 2015, Matt Hancock, Minister of State for Digital, announced a target of spending a third of all procurement pounds with SMEs by 2020.
It was a politically driven move – break down and split massive IT contracts and the significant number of billion-pound, headline grabbing IT project failures would stop. There was also – rightfully – the argument that smaller, short-term [2 year] contracts will drive more innovation and give a regular injection of fresh thinking.
Being selfish for one moment. The early reality for us at Mantis was this; we saw a period of time where a significant number of our SME clients were ‘snapped up’ by large, incumbent IT suppliers as a means for them to maintain the revenue from public sector, whilst meeting the Government’s desire to work with SMEs.
This seems to have slowed now, thankfully. This is in part due to the Government’s focus on numbers and benchmarks that endorse direct sales to SMEs only.
Since then, one could argue the policy is working. There’s no doubt that the Government has created the opportunity that SMEs are now rushing to grab. It reminds me of the early 2000s and the collapse of the NHS National Programme for IT; our phones rang hot with SME and international IT firms looking to understand the new opportunities in the NHS with the removal of four dominant suppliers.
The online Digital Marketplace, the directory for IT suppliers, now includes over 2,500 firms – 88 per cent of these are SMBs. Money spent directly with SMEs across the country via Crown Commercial Services [CCS] procurement frameworks has increased from £702 million (2015/16) to £879 million (2016/17). And, G-Cloud – perhaps CCS’ most famous procurement framework – was updated in May 2017 and now includes 2,847 suppliers, again, the majority are SMEs.
But, I see it differently. The Government has created an environment that’s good for Government. It now has thousands of suppliers to choose from – all willing to work on short-term, 2-year contracts. Innovation and fresh thinking is surging through. Government got what it wanted.
What you have in return is competition, and lots of it. And, you have the scenario whereby Government procurers still like to buy from firms they know. There are very few risk-takers in public sector – taking a punt on an unknown name is a risk few are willing to take [see paragraph two about politically motivated decisions!].
Here’s my advice. Don’t sit and wait for contracts to come to you, it will be a long wait. Don’t bash the competition publicly either – although a working knowledge of what they do is useful – but instead focus on yourself and on your own business.
You need to focus on your own profile – i.e. better company awareness. This doesn’t happen over-night, so a concerted, continuous effort to build this is needed. Second, you need a reputation that is built on the communication of success; customer references and proving where you have worked before is essential. You need to be able to turn your public sector customers into advocates for your IT products and services. And, lastly, you need to demonstrate knowledge and expertise in the project you’re trying to win.
Not every business is going to win a Govtech contract in 2017, but those with the best profile and reputations, and those which demonstrate experience, knowledge and expertise will be in with a great chance.