In a market that has slowed dramatically in recent months, suppliers are keen to identify any news about where future opportunities may arise so they can develop strategies to capture those opportunities.
Intermedium’s January Quarterly Executive Brief suggests the market has suffered from the coincidence of three significant forces: the electoral cycle, the political cycle, and changes to procurement arrangements. Together they have contributed to a continuation of the slowdown in the Federal Government ICT market that emerged in 2007-08 results.
And that’s before the Global Financial Crisis hit!
While the GFC hasn’t yet had a direct impact on the Federal ICT market, many suppliers have been forced to cut staff, a result of the market slowdown and pressures felt in commercial markets. Their sales and marketing staff are being asked to each cover much greater territory.
Intermedium has been approached by a number of suppliers seeking to enter government markets for the first time, and needing intelligence about the market. Others are taking on new accounts for the first time, and are keen to “come up to speed quickly”.
Two valuable sources of information about future requirements are agency procurement plans, and details of contracts that will expire within a given period for products/services that will need to be continued. Combining these data sources provides the best possible means of identifying prospective business.
Although Gershon-related cuts and the absence of major new projects coming to the market has resulted in a depressed ICT procurement market, it has not changed many of the ongoing ICT requirements of agencies.
Some of the ICT items listed in agency procurement plans for 2008-09 will have been cut as part of the post-Gershon Business As Usual reviews, and are now unlikely to go to the market by 30 June 2009, as planned. However, we’d expect some of the procurements (particularly those for commodity products), put on hold as part of the co-ordinated procurement process, to re-emerge in the next 12 months.
Many agencies will be eagerly anticipating funding arising from the reinvestment of 50% of BAU savings into new projects. Some of the casualties of the 2008-09 procurement plans may resurface as candidates for reinvestment projects later this year, or subsequently.
Existing contracts within agencies that are due to “expire” may also have suffered the same fate. While we would normally have expected many contracts coming to an end to have been renewed with a return to the market, a number may have been extended with existing suppliers in the short-term due to the BAU cuts. In some cases, there will nevertheless be an ongoing requirement for products and services that will need to be satisfied in future. This may be achieved by taking advantage of one of the co-operative procurement options, or by going back to the market.
According to Intermedium’s scout IT prospecting tool, existing contracts valued at $424 million are due to end between February and June 2009, including:
- Human Resource Management software contracts worth more than $2m
- Desktop hardware contracts (11) worth $25m
- Managed Services contracts (33) valued at $367m
- Almost $50m worth of contracts (51) at Centrelink
- Defence Hardware contracts (30) valued at more than $13m
Agency procurement plans are a “moving feast”. Each month, significant changes are made as agencies update their published plans. Amongst these changes are a number of major changes including the listing of new items, and deletions of others.
For example in January, four new ICT procurement opportunities were listed. Three of them involved Software solutions. The scout IT report for December 2008 shows five agencies added new ICT procurement plan entries, including Department of Department of Climate Change that added 12 new ICT projects. The January 2009 report also showed approximately 20 ICT items that are specifically scheduled to go to the market during March 2009, including:
- Intel-based servers
- Hardware security network
- Router, hardware and services
- Offsite data storage and data tape storage
- Web design and development
- Call recording system
- Information management solution
- Email archiving solution
- Incident management software
- Email filter software
- Intrusion prevent system
- VOIP telephony
Information obtained from procurement plans is a great source of intelligence about agency ICT procurement plans. Even if they may not result in tangible opportunities in the short-term, they can provide a great "opening" to speak with clients about future requirements.
For more information about scout IT click here.