Need for massive reforms in procurement

In all my engagements with the Government, one factor remains constant. The government needs help in procurement of IT Solutions. Depending on the stage of the project and the officers involved, the nature of help they request from me varies from mere "rubber-stamping" to "do-everything-from-conceptualization-to-program-management".

I began my journey in this area with a conviction that the government is the villain from whom the private players need protection. This, in a way is still a truth. Every government body I've worked with is guilty of

• utter disregard to the project schedule - adversely impacting project plans right from the word "go"; leading to inordinate schedule delays and cost overruns;
• inexcusable delays in processing payments of vendors; and
• not discharging their responsibilities diligently even in utterly clear situations like taking delivery of products / services - thereby frustrating vendors in no small way.

However, the vendors are not angels either. Their crimes (in a figurative sense of the word) range from "minimalistic interpretations of requirements" to "brazen undermining of customer interests" and every shade of gray in between - arising from sheer profiteering, lack of competence, risk aversion at the cost of the customer, and so on. In this, the consulting community is as guilty as is the SI community. There are loud whispers of unholy alliances between consultants and OEMs. I hang my head in shame for being a part of such an eco-system.

Due to the increasing emphasis on end-to-end solutions procurement, it has become a field day for 

• consultants (cut and paste RFPs at exorbitant price-tags to the customer rule the roost), 
• large systems suppliers (thriving sales of consultant-sponsored over-sized high-end systems), 
• software product vendors (sale of product licenses and grossly overpriced annual-maintenance charges that would otherwise struggle in any cost-justification)

I haven't included large System Integrators in this list because they are as much victims in this scenario as they are perpetrators. On one hand they bear the brunt of the Government's "crimes" - and in return, they try their best to pass on the costs to the hardware and software OEMs. 

As a result of all this, the Government eventually ends up paying an exorbitant price for something that doesn't deserve a fraction of the price-tag. Since it is all coming from the tax-payers, no one cares.

To compensate for this the government only responds by increasing the eGov budgets - thus, enriching the vendors at the cost of the citizens. This is the reason why we need massive reforms in eGov procurements. 

Consultants must stop playing to large budgets and OEM partner interests. Instead of playing on the customers' fears  they should show to the customer, lower cost alternatives that may cause some uncertainty in SLAs, but are not significantly inferior. They must challenge SIs to deliver value and OEMs to rationalize their pricing structures.

It may be possible a fill whole book if we are to explore all the issues involved. However, I will focus on one area that is firmly in the hands of those who write the RFPs and do the technical evaluations of large projects. 

On a concrete note, I propose that:

1. Clear benchmarking and sizing exercises must precede system configurations and put an end to hidden OEM-sponsored sizing;
2. Include open source alternatives; ensure these are done not just to satisfy technologists, but to arrive at clearly understandable cost-benefit structures;
3. Instead of overplaying on fears, propose to the customer, how the downsides of lower-cost alternatives may be compensated - and what the cost (of such compensating measures) would be;
4. Convert as many components into commodity components; encourage purchase of commodity components (hardware and software); and
5. Demand that all non-commodity and premium-feature components be declared openly and cost-justified.

I don't know where it will lead, but it will surely be a good beginning to do these. I don't claim that it will rid us of all evils. But it will put a check on one area that we (in the consulting community) have reasonable control of.

If we don't help our customers bring in these reforms, we will all lose our credibility. That much is certain.