Bernard Courtois is the President and CEO of the Information Technology Association of Canada (ITAC).
ITAC Viewpoint
IT Procurement Should be Flexible

By Bernard Courtois

FrontLine Defence, vol. 3 no.1
January 2006

As President and CEO of ITAC, I come to the “great debate” from the angle of the role of an industry association in dealing with procurement policies and needed changes. We are often the first to hear about challenges presented by procurement and, indeed, it is our role to speak on behalf of our members so that issues get solved.

We succeed as good stakeholders of Government when we offer our best practices knowledge gained through the combined experience of our members. Therefore, I offer some basic points that we know are key to procurement success.

Buy Value and Outcomes
First and foremost, whether it is for IT products, services or anything else, procurement should start from the premise that Government wants to buy an outcome or result.

This simple principle – buying value – can get lost in the rush to obtain the best price. As taxpayers, we want Government to be efficient and buy wisely. But we need to recognize that the lowest price is not always what it appears to be – we shouldn’t buy piece parts. We need to focus on outputs or outcomes rather than the lowest price inputs.

Imagine if you bought a car that way. You search for the best price for a battery. If the dealership charges more than the local hardware store, you buy the battery from the hardware store. Next, you buy tires and again you may get a lower price at the hardware store. As you move along, you end up buying the whole car that way. Imagine you buy all the components and car parts individually at the very lowest price. Now you need to assemble it. You need to test it. You need to maintain it. You have paid several times more than you would if you had bought that car through the dealer. What started out as the need for a car turned into a very expensive and elongated journey where the lowest cost parts produced the most expensive automobile. Finally, product quality is not certain, as you really aren’t in the car assembly business. So, where are you?

Ensuring Government buys outputs should be a first priority.

Another priority should be accepting commercial terms and conditions when buying off the shelf (COTS) software. Too much time and money is spent trying to negotiate terms that private sector clients consider a given. This is indeed an area where ITAC is focusing on for the New Year. Imagine the savings in procurement costs: staff time, the increased client satisfaction and the savings in dollars if procurement people were re-deployed to more complex procurement teams rather than trying to change normally accepted terms and conditions of COTS software.

But the biggest impact may well be in the area of large projects. These projects are often called IT projects because they are large business transformational projects with ICT tools as the enabler to achieve the outcome desired.

Ensuring Success
ITAC members have done a lot of work on how we can be successful in large projects. Here are some of the general themes we believe are necessary to ensuring large projects succeed:
  1. Establish a clear link between the project and the key strategic priorities including how to measure success.
  2. Establish ownership by senior management who functions as a champion and stays with the project from the beginning to completion.
  3. Establish effective engagement with stakeholders.
  4. Obtain skills such as project management skills, risk management and business management skills – in both government leader and vendor team.
  5. Ensure there is a complete understanding of supply industry at senior levels in Government.
  6. Evaluate proposals with long-term value for money as the driver.
  7. Ensure work is performed in manageable tasks.
  8. Ensure the right dedicated skills are available to deliver the work.

In the end, large projects succeed because the right team comes together, tasked with the same objective or outcome. The reason some teams succeed more than others depends on the degree of freedom the teams have to alter the path of the project when needed. By their nature, complex projects need to be adjusted to ensure the original objectives are achieved. Often when a project is in trouble, things can get exacerbated by focusing on the original contract terms rather than on the intended end-user or client outcome. With the right leadership, motivation and the freedom to innovate, the team will be successful.

Key Principles
ITAC’s key principles for successful large projects are:

Public Works and Government Services Canada has the talent and the experience to do the actual procurement to select the successful vendor. The client, for example Defense, knows what they want and are able to articulate it. The vendors are able to respond effectively. All we need is to empower the right team, give a clear and championed objective or outcome and we should achieve success.

© FrontLine Magazines 2006 Copyright © 2006 FrontLine Defence, Beacon Publishing, Inc. All rights reserved.