How is procurement important to ITAC members?
One of ITAC’s top six priorities, there are a number of reasons why procurement is vitally important to our association and the industry we represent. Let me outline just two ways procurement fits into ITAC’s modus operandi.
First, one of ITAC’s primary goals in dealing with government is to remove any barriers that prevent companies from bidding on potential business – i.e., by working to change any contract terms and conditions that could unintentionally prevent a company from participating in the procurement process. Our government does not design policies in order to purposefully block ICT companies in this way; after all, they want open, fair, and transparent procurement across the industry. But, if and when the opposite does happen, we work hard to remove the barriers and improve our members’ access to business opportunities.
Second, we want to encourage procurement because we believe that our government should be a model user, and an early adopter, of technology. If the government is both a model user and an early adopter of the latest ICT products and services, it will be able to provide better, more efficient, services to Canadian citizens, in the end ensuring a more efficient government. And when a government is more cost effective, it becomes more competitive, its citizens become more competitive, and the nation’s companies become more competitive worldwide. We want our government to be the smartest, best informed buyer of ICT products and services possible, because this demands only the best from our ICT industry – and only this will make ICT companies nationwide capable of not only competing, but leading, on the international stage.
We saw these principles work in the past with telecom, as Canadian companies like Nortel, RIM, and Mitel became world leaders – and we want this to happen in other sectors of ICT, so we can become world leaders all across the board.
We are in a good position to help make this happen. For one, the government is very motivated to talk to an industry association like ours, because it gives them insight into the industry perspective without taking a partisan stance or siding with an individual company. That’s why it is my job to seek out what our members’ expert voices have to say, and to foster an educated and transparent flow of communication between the ICT industry and the government.
It is important to note that our work in procurement supports our industry’s SMEs, as well as larger firms. Business in Canada – especially government business – would come to a halt without strong SME participation. Working with service integrators, they provide the resources for business transformation projects, as well as key expertise on many other types of projects. Canada is extremely fortunate to have such excellent ICT suppliers – small, medium and large – to supply goods and services to government and the private sector.
Finally, we believe in the importance of a knowledgeable government buyer, and that when government invests in ICT, it can achieve great successes. Likewise, members of the ICT industry can become better suppliers and use their Canadian successes to become international stars, taking the business they do in Canada with the Canadian government, and using it to sell worldwide, developing into stronger and smarter businesses all the time. This is our vision, and our work in procurement aims to bring this vision to life.Tell us your thoughts on this story
Board Member Profile: Meet Charlie Whelan
Having marked its 50th anniversary last year, it’s no stretch to state that Computer Sciences Corporation is a pioneer in its field. CSC’s Canadian arm, which dates to 1994, is also a veteran in the IT services sector. A leader in outsourcing, IT infrastructure and security, CSC Canada has extensive experience in selling services to the federal government. President Charlie Whelan joined the company in 1999—following stints at SHL Systemhouse, Andersen Consulting and IBM—and was named to his current position in 2005. We asked him about his experiences dealing with federal government procurement.
ITAC: Has the amount of federal government work that CSC does decreased over time?
Charlie Whelan: It has come down a little bit over the past few years, as the government’s focus on buying components has replaced its focus on buying solutions. But the large part of our revenue—and headcount—in Canada is in the delivery of large-scale IT outsourcing services in the commercial environment.
How do you approach the procurement process with government? Do you have a dedicated team that responds to RFPs or do you pursue it on a project-by-project basis?
We have a practice that sells and delivers IT infrastructure and security services to the federal government. We also do some work around engineering and logistics services. So, we have a number of people in business development, and we try to get in front of opportunities, but what we really seem to be doing now is responding to skill-augmentation opportunities.
In your area of business, are you listed on standing offers or are you responding to individual opportunities as they come out on MERX?
Both. We’re on Task-Based Informatics Professional Services and Solution-Based IT Professional Services contract vehicles, and we’re on the cyber-protection supply arrangement. We also have some other contract vehicles in place with the Canadian Coast Guard and at DND. We also look for and respond to other one-of opportunities in terms of IT consulting.
What are the key issues that ICT companies face now as they attempt to sell to the federal government?
Governments are important customers, just based on their sheer size. The public sector is one of the two largest verticals—the other being financial services—in Canada. They’re large and complex, and they’re complicated to deal with in terms of the bureaucracy you have to deal with, and that’s driven in many cases by trade agreements that they need to implement. I believe that the government has stated that it wants to build a sustainable, national competitive advantage that’s based on science and technology. I think that the Canadian government has a duty to lead by example, and by that I mean Canada needs to re-establish itself as a leader of innovation. The government needs to demonstrate leadership in this area by transforming its own service delivery through the adoption of innovative technologies and a more collaborative approach with the private sector.
Have you seen the procurement system improve over time?
On the contrary, I think it’s going the other way.
What are the primary challenges you see?
They’re really focused on buying inputs as opposed to outcomes. They’re focused on the Crown acting as the systems integrator, and they’re not taking advantage of the investments that industry has made in changes in technology and processes as it relates to large-scale IT operations or projects. Right now, I think there are two compelling events that should drive improvements to government procurement. First, about 40 percent of the public sector will retire over the next five years, so there’s a huge amount of skill, resources and experience that will be leaving the system. Exacerbating that is the Canada-wide IT skills shortage. Secondly, the Economic Action Plan and associated stimulus spending is driving the government to build huge deficits. So, there’s an opportunity right now to recognize that the skills are going away and we need to be more cost effective. The opportunity exists for government to collaborate with industry and, from a procurement point of view, work toward buying outcomes and solutions as opposed to inputs. Those inputs—like skilled IT resources—are going to become more difficult to come by. I think they need a significant change in how they address procurement.
With the appointment of Stockwell Day as Treasury Board president we’ve been reminded that the Harper government intends to focus on reducing the deficit by cutting spending. What are the challenges for ICT companies as they face selling into this kind of environment, and what can be done?
Right now, there is a fear of large IT projects in the government. There is a belief that they are very expensive and risky, and there has been a history of delays, overspending and performance shortfalls. What we need to do is to get at the root of the problem of why these big IT projects have not been as successful as they should have been. In my mind, that’s all to do with governance and project management. We in ITAC would be delighted to work with the government at the senior level and help them implement a regime of good governance and project management around large IT projects and operations outsourcing. I think that we could help government become much more effective and efficient. The current approach, in many cases, avoids Treasury Board project approval processes and PWGSC procurement processes. So, you have a huge amount of the ICT spend that’s actually under the radar, and in my belief, not very cost efficient. We have to get the government to get around the fear of IT projects, figure out how to manage them, and then go out and buy solutions. That will allow them to leverage best practices that are working very well in the private sector and in many other public-sector institutions.Tell us your thoughts on this story
Serving the Public Service
The procurement of public-sector business has long been touted one of the most difficult, competitive aspects of operating in the ICT industry. But a Maritime professional services firm has found a way to establish public-sector contracts as a significant portion of their work. Based in Fredericton, New Brunswick, Accreon Inc.’s approximately 100 employees represent one of the largest privately held business solution and information technology consulting firms in the Atlantic Provinces. Specializing primarily in health care, financial services, and government, Accreon is a multiple award winner, having been named to the Branham300 list of Canada’s top 300 ICT companies within its first four months of operation, as well as one of Atlantic Progress’ Top 100 companies in Atlantic Canada, and having won multiple KIRA awards and a Business Excellence Award. For an inside look at how the company competes for government business, we spoke with co-CEO, Neil Russon.
ITAC: What opportunities are there in terms of procuring public-sector business on the East Coast?
Neil Russon: It’s a very, very competitive marketplace, so with most opportunities – whether public-sector or private-sector – our work in procurement starts before the RFP is ever released. You need to know your client, and your client’s requirements. Your client needs to know your skills, and your ability to deliver a quality team, so that when the RFP comes out and the selling is over, the client knows who you are and has a level of trust that you can deliver on their project.
What sort of unique strategies does Accreon put into place in order to win business before the release of an RFP?
We think of some unique differentiators not only in this market, but in the IT professional services business, and we really work hard to let clients know what that differentiator is, and how we’re able to step up to fixed-price opportunities with a significant level of certainty on our own part. Fixed-price opportunities are a challenge for professional services firms, but we have processes in place that allow us to be confident in our quotes and our pricing, and we believe that our methodologies allow us to enter the market at very competitive pricing.
How much of your business is private-sector, and how much is public-sector?
It’s about 50/50. We do a lot of work outside Atlantic Canada. We have major clients in Ontario and in the United States; and we deliver service following a near-shore type of model. We have about 100 employees, all but a handful of which are here in Fredericton. We have a few employees outside of Fredericton in Ontario and in Atlantic Canada but our focus has been near shore opportunity. Going forward, we may need to establish offices in other jurisdictions to allow us to better serve new markets.
As mentioned, we have a near-shore model, which allows us to leverage the efficiencies of our tools and methodologies and reduce travel cost to our client’s advantage. We do not have a low-cost workforce, but by leveraging our methodologies and our toolsets we can successfully win near shore business.
Are there differences you notice between dealing with clients in the Maritimes versus outside the Maritimes?
Not really. All our clients are looking for pretty much the same thing. They want quality services and excellent resources, at the lowest possible price – they want value. And most clients, I think, get their best value from longer term relationships, because that allows their vendor – or their professional services firm – to begin to demonstrate to them the value that they can bring, and provide some support that you might not normally provide for a client that you’re only going to be with for two or three months.
How do you think ICT companies, in general, look at the procurement of public-sector business?
The problem with public-sector procurement is that it can tend to be a bit of a crapshoot. You can do all your homework, you can do everything you need to do to be ahead of the opportunity, but you can have a dark horse come in and get the business. You really can’t predict who is going to bid, and often, procurement processes are somewhat binary. You’ve met the criteria, or you haven’t. As you move through the proposal assessment process, you can be out on your ear pretty quickly because most times you are not given the opportunity to provide clarification.
In a private-sector process, there’s a bit of a negotiation along the way, so that the vendor knows exactly what the client is looking for, and so the vendor can more precisely propose a solution that meets client requirements and price it accordingly. When you’re going through an RFP process, often the RFP itself isn’t as clear as it needs to be, so you’re making assumptions as to what the client is looking for. Obviously you need to document your assumptions, but if you miss an assumption or if you miss something along the way that is critical to your response, then it can be devastating to your ability to win.
To have 50 percent of your business coming from the public sector is a high percentage, comparatively speaking. Do you have any advice for other ICT firms who are looking to procure more public-sector business?
It’s a tough market, but because it’s public-sector – generally speaking, there aren’t any payment issues. If you win a contract, and you deliver, you get paid, and generally within 30 or 60 days. That’s pretty steady revenue. As a result of that, everybody is pursuing public-sector business. So, if you’re not doing your homework, if you’re not well differentiated, it can be a pretty tough sled.
What would you like to see change in the ICT industry, in terms of procurement?
I think there needs to be renewed thought and effort put into how one procures in the public sector, that is reasonable from a vendor’s perspective in terms of cost. Some procurement can be cost prohibitive.
Some enterprises bring benefit to projects in addition to skilled resources: flexibility, quick decision making, and limited hierarchy to name three. These factors provide the client with a value-add which cannot easily be measured or quantified. Some have the added benefit of having resources available for ongoing support in the local market, or have processes in place to assure the client of a “local market feel.” It would be interesting if procurement processes could be modified to consider these factors.Tell us your thoughts on this story
Respecting the Public Purse
With the entire citizenry as shareholders, government can be a particularly challenging client to sell to—especially during trying times. In Ontario, the current challenges include a record-setting provincial deficit and the fallout from the controversy in healthcare spending. As Microsoft Canada’s Director, Ontario Public Sector, Craig Sisson has a decade of representing one of the world’s largest ICT vendors in a marketplace that accounts for up to 40 percent of the company’s business. We asked him to share some of his views on dealing with the province.
ITAC: What’s the extent of Microsoft Canada’s product offering to the public sector?
Craig Sisson: We sell our entire range of Microsoft system management and information worker productivity products to governments, at all levels, throughout Ontario. We verticalize the public-sector business into healthcare, provincial and municipal, and we regionalize it, so I have a colleague in the West, one in Quebec, and we also have an organization in Ottawa that manages all our federal business.
From your experience, what are some of the key issues that face ICT suppliers who are trying to sell to the Ontario government?
Right now, the government acknowledges that there is pressure internally to make procurement more transparent across the board. So, establishing an element of fairness and transparency that provides a balance between enforcing government policy and maintaining efficient, timely procurements is a challenge, and government understands that. Certainly, the health scandal brought that out in spades. It’s a challenge for vendors to understand that too, but we’re pleased to see that government recognizes that transparency and fairness are important while at the same time we caution against paralyzing the process to enforce policy.
Given the huge deficit that the Ontario government is facing over the coming years, how does that affect the value proposition that Microsoft and other ICT vendors need to present?
From Microsoft’s perspective, we strongly believe that IT is not just a cost centre, but a powerful business enabler. Technology enables businesses and government to reduce costs by driving efficiencies for the public service and hence better outcomes for taxpayers. We advise that, in this kind of economic environment, governments should be investing in technology, to reduce costs and increase citizen service delivery, to do more with less.
As you look over your experience in dealing with the public sector, what would you cite as the best practices that ICT companies should follow?
Being in the position to set up standardized agreements with government—a single procurement contract—is important. That allows you to establish a set of terms and conditions that meet the risk requirements of both the vendor and the government. Then you don’t have to re-examine each procurement under a different lens.
I think, overall, it’s the ability to strike a balance between the level of risk that protects the taxpayers’ interest and the risk that any particular vendor is willing to build into their relationship with the government. The more risk that the government chooses to push into the marketplace lessens their ability to negotiate the best price.
Any closing thoughts?
Just in summary, on behalf of the industry, I want to say that we believe that the Ontario government is sincere in acknowledging that there are challenges in the procurement process, and the industry is very compelled to work with government policy makers to bring about change that benefits all stakeholders; the Ontario Public Service, technology vendors and the Ontario taxpayer.Tell us your thoughts on this story
|February 11, 2010||Allan Collins, Rethinking Education in the Age of Technology|
|February 12, 2010||Lavalife Prime: Extending an Iconic Online Brand|
|February 16, 2010||Silicon Halton Meetup - Milton|
|February 18, 2010||Sales & Marketing Executive Think Tank – Toronto|
|February 18, 2010||“ARE YOU READY?” Workshop - Hiring Internationally Trained Immigrants|
|February 24 - February 25, 2010||The Hospitalist Model|
|February 25, 2010||Human Resources Planning Forum – Toronto|
For a full event listing, and to register for ITAC events, go to: http://www.itac.ca/events
Other News and Events
CTO of Xerox Kicks Off ITAC CWC Speakers Series
Dr. Sophie Vandebroek, the Chief Technology Officer and President of Xerox Innovation Corporation, will be the inaugural speaker in a new Speakers Series co-presented by ITAC and CWC. Dr. Vandebroek was recently identified by Channel Web as one of the top 25 technology thought leaders for 2010. She is a fellow of the Institute of Electrical and Electronics Engineering and a Fulbright Fellow. She holds 12 U.S. patents and is sought after as a judge for innovation awards as diverse as MIT’s Young Innovators Award and FIRST Lego and Robotics competition regional awards.
The ITAC/CWC Speakers Series is designed to introduce distinguished women in information and communications technology to Canadian women (and men) working in technology or planning careers in technology. The series provides opportunities for networking and for learning from inspiring leaders in the industry.
Dr. Vandebroek will speak at a breakfast event on March 9, 2010 from 7:30 to 9:30 a.m. The event will take place at the Xerox Research Centre of Canada, 2660 Speakman Drive, Mississauga. All are welcome and encouraged to bring along colleagues, daughters, and friends who may benefit from hearing about Dr. Vandebroek’s career and her insights on technology. Register for this event.
This Speakers Series is part of a larger initiative of the ITAC Board to improve gender diversity in our association and in our industry. Jim Muzyka, Vice-President and General Manager, Xerox Global Services, leads this initiative, which is guided by ITAC’s Diversity Forum. For further information, please contact Lynda Leonard (firstname.lastname@example.org).
Join the Canadian delegation at WCIT 2010 in Amsterdam
On May 18, 2008, the World Information Technology Services Alliance (www.witsa.org) awarded Canada and ITAC the responsibility to host WCIT 2012, the most important ICT conference in the world. The conference will take place in Montréal, Canada, May 21-24, 2012.
In less than four months, Amsterdam, the Netherlands, will host WCIT 2010 from May 25 to 27, (www.wcit2010.org). Canada and ITAC will be present with a large delegation of Ministers, ITAC board members, and representatives from Canadian ICT companies interested in exchanging ideas with the most senior leaders of the ICT industry. They will have the opportunity to meet potential partners from more than 80 countries and listen to CEOs from all over the world debate the top issues related to the use of ICT under the theme of “Challenges of Change.”
If you are interested in joining the Canadian delegation in Amsterdam, please express your interest on the WCIT 2012 website at: www.wcit2012.org.
Tremblant Venture Forum 2010
May 5 and 6, 2010
Calling all up-and-coming companies and venture capitalists.
If you are looking to invest, or be invested in, the ultimate venue for your next business move is coming in May, to Mont Tremblant, Québec.
On May 5 and 6, ITAC is organizing the Tremblant Venture Forum. This forum enables Eastern Canada’s ICT and cleantech companies to present their business plan to 40-50 leading Canadian and American Venture Capitalists. This event takes place at the Fairmont Tremblant, in Québec.
ITAC is organizing the event in cooperation with its partners: Communitech, Ottawa Centre for Research and Innovation (OCRI), Research Centre in the Information Technologies (CRIM), Québec Technology Association (AQT), Réseau Capital, and Canada’s Venture Capital & Private Equity Association (CVCA).
If you are a company seeking between $2-million and $10-million in financing, please send your business plans as indicated on the website before March 15, 2010.
If you are an investor, an early-stage or growth-stage company, or a participant in the conference, please register online at: www.tremblantventureforum.com.
Places are limited.
Join the 22nd annual PROFIT 100
Every year the PROFIT 100 turns successful entrepreneurs into the heroes of Canadian business. You can be one of them.
Now in its 21st year, the PROFIT 100 is the definitive ranking of Canada’s Fastest-Growing Companies. Its alumni include some of the biggest names in Canadian business, such as Research in Motion, Open Text, 1-800-GOT-JUNK? and WestJet Airlines.
You’ll enjoy many great benefits as a PROFIT 100 company, including coverage in the June 2010 issue of PROFIT Magazine and online at PROFITguide.com. PROFIT 100 leaders also receive an exclusive invitation to the PROFIT 100 CEO Summit, Canada’s most rewarding conference for entrepreneurial achievers. What’s more, a PROFIT 100 ranking can attract new customers, employees and business partners—and lead to higher sales.
The entry deadline is March 31, 2010.
Business venture competition, TiEQuest Toronto, accepting applications
ITAC would like to help call on all entrepreneurs and innovators seeking a potential showcase for their work. The 2010 installment of TiEQuest – the annual business venture competition held in Toronto aimed at encouraging entrepreneurship, fostering emerging entrepreneurial talent, and stimulating the entrepreneurial ecosystem – is now accepting applications.
TiEQuest attracts more than 200 entrepreneurs every year. These contestants include existing and emerging entrepreneurs, patent holders and/or applicants, university students, and alumni across North America. TiEQuest offers more than $150,000 in prizes to the winners, and to encourage youth participation, TiEQuest offers a New Entrepreneur Prize to the best student team. The top teams also have an opportunity to win up to $1 million in investment from sponsors.
TiEQuest boasts more than 25 success stories, where contestants have taken their business idea to established enterprises, and have obtained financing, signed partnerships, acquired customers, and generated revenue. Contestants see value in participating in the competition as it offers networking opportunities with leading entrepreneurs and investors, recognition with investment, legal, and accounting firms, opportunities to practice pitching their venture to investors, and opportunities to turn an innovative idea into a real business.
Founded in 2005, the mission of TiEQuest is simply to connect entrepreneurs with angel investors, venture capitalists, and fund managers. Visit www.tiequest.org for details.
The Ninth Annual RE$EARCH MONEY Conference:
“Industrial R&D: Is Canada Really Lagging?”
National Arts Centre, Ottawa
March 25, 2010
Corporate R&D is being transformed. The large industrial research lab is no longer the norm. Multinational firms now globally distribute their R&D and collaborate with partners in public and private sector institutions. Does the “new normal” offer opportunities to a country like Canada?
Speakers and panelists include H. Douglas Barber, co-founder and former CEO, Gennum Corp and Distinguished Professor in Residence, McMaster University; Bill Buxton, Principal Researcher, Microsoft Research; Fred Gault, Professorial Fellow, United Nations University MERIT; Raymond Leduc, Director, Bromont Manufacturing, IBM Canada; and David Miller, Senior VP, The Woodbridge Group. Join RE$EARCH MONEY to discuss and debate the present reality and future of industrial R&D. For more information and to register, visit http://www.researchmoneyinc.com/conferences/201003/index.php.
ITAC Presents an Executive Forum on Green ICT
Information and communication technology is green technology. The tools of the ICT revolution enable us to work smarter, and ‘smarter’ increasingly means in an environmentally sustainable way. ICT has already demonstrated its capacity to solve the society’s great challenges – from mapping the human genome to exploring space. From the simplest solutions to the most complex, ICT plays an integral role in the solutions to climate change and in reducing our impact on the planet.
Teleconferencing and tele-commuting, for example, can displace the need for carbon-fueled travel. Smart sensors in buildings, traffic grids and power plants work to ensure that our energy supply is both produced and used with a minimum of waste. The application of RFIDs and online tracking can streamline the supply chain and significantly reduce the environmental impact of business. And newer technologies, like telematics and global positioning systems, are already making great contributions to more efficient road travel.
ICT companies are working hard with their customers to provide the means to operate greener 21st century businesses and households. And they are walking the talk of sustainability, ingeniously using their technology to reduce the environmental impact of their products and services, their facilities and their business practices.
Join us in Toronto on April 27 for a celebration of this unheralded but vital aspect of information and communication technology. Benchmark your firm’s environmental strategies and practices with some of the industry’s leading experts on sustainability and green ICT. Hear from policymakers and policy influencers on what Canada must do to leverage our know-how to bequeath a greener planet to future generations.
Keynote presentations will explore the role of smart grids and smart networks in achieving sustainability targets, and simple changes that even smaller firms can make to green their operations. Panel discussions will address topics such as design for the environment and product stewardship, and the use of sensor technologies to achieve environmental efficiencies.
Study Reviews Policy Options to Encourage Technology Adoption
The under-use of technology by businesses is a problem confronting many jurisdictions around the world. A new study shows that policymakers have deployed an array of measures to try to encourage businesses to make greater use of technology. The study suggests that a combination of these measures might hold the best prospects for substantively changing the technology use patterns of Canadian business.
The paper, “Leveraging ICT Adoption: What Can Work for Business,” was prepared by Jacek Warda on behalf of ITAC. Tax incentives such as the accelerated capital cost allowance on hardware and some forms of software introduced as a stimulus measure in the last federal budget are widely used. But the paper also notes that direct grant-based measures such as technology voucher programs are gaining popularity, particularly in European countries. The paper notes these, “programs are designed with administrative simplicity in mind… Countries such as Austria, Belgium, Denmark, Finland, Netherlands, and the United Kingdom implemented the vouchers with more attempting to follow this path.” The paper points out that voucher programs can be designed to target specific business segments, such as small and medium-sized businesses, and to cover not only technology investment but investment in training and consulting expertise as well.
The under-use of technology is now understood to be a major contributing factor to lagging productivity. This has been identified as an important public policy challenge for Canada. A recent report from the Centre for the Study of Living Standards shows that in 2008, Canada’s investment in information and communication technology per worker was 62 percent that of the United States. This troubling rate of technology use is particularly acute among the small- and medium-sized businesses that play such an important role in the Canadian economy.
The paper also suggests other measures to encourage technology adoption, noting for example that public procurement has the “potential to stimulate technology adoption in the private sector. Government can be an influential customer and partner for the private sector through its contracting out of research and procuring innovative products and services from business. Public procurement policies can play an important role and governments are increasingly interested in using this lever to stimulate business demand for innovative products and services.”
The full paper, published by ITAC with support from Accenture Inc., Intel of Canada Ltd., SaskTel, and the Government of Canada, can be found here: http://www.itac.ca/uploads/news/Leveraging_ICT_Adoption_-_January_2010.pdf.