Multinational firms in the Federal Government information technology (IT) market will no doubt have seen the Prime Minister’s recent announcement that their Australian Industry Participation (AIP) Plans will soon be publicly disclosed.
The PM’s announcement seems to have set the cat among the pigeons, with the realisation in industry that AIP Plans are not a tick-and-flick.
For those not already aware, an AIP Plan lists the tangible actions a large prime contractor will undertake in Australia to:
- communicate their supply chain opportunities locally; and
- introduce competitive small-and-medium sized enterprises (SME) to their global operations.
Implementing an AIP Plan is mandatory for most Federal Government IT contracts valued above $20 million.
The impending public disclosure of multinationals’ AIP Plans brings with it a weight of expectation from the SME community that AIP Plans will be of a high standard and that, where commercially appropriate, SMEs will be afforded the opportunity to make contact and prove their worth as suppliers.
At risk of sounding cynical, I can already anticipate the cries from some at the big end of town:
- “we already know our industry’s supply chain inside-out” ;
- “we can’t offer partnering opportunities without disclosing our commercial secrets” ;
- “we already engage lots of local SMEs”; and
- “doing an AIP Plan is an unnecessary overhead”.
But fear not — an AIP Plan needn’t be “War and Peace”, and firms certainly aren’t expected to disclose their commercial secrets.
When you boil it down, an AIP Plan is just a declaration stating a few tangible actions large prime contractors will undertake to connect with and support the endeavours of local SMEs.
And it’s the quality, the concreteness and follow-through with those actions that makes an effective AIP Plan — not general statements of good intent or ambiguous assertions.
I’m pleased to say I’ve seen multinationals setting some excellent examples of AIP actions, which the wider industry can learn from:
- First and foremost, assign someone responsibility for AIP Plan actions and SME engagement. Experience has seen AIP fit nicely with staff responsible for business partnerships, channel management and procurement management;
- Give a presentation to local industry to convey what SMEs must do in order to work with you. Don’t be shy — tell them the sort of hurdles they have to jump and the standards they have to meet. The good SMEs will rise to the challenge.
- Industry networks, like CollabIT in Canberra, will happily organise an industry briefing event on behalf of multinationals so long as staff come prepared to mingle and swap business cards;
- Develop a supplier portal to communicate opportunities to market and to allow SMEs to submit capability information. Make sure someone has responsibility for following up — a short coffee to hear an elevator pitch is all that’s needed, and it’s an opportunity SMEs would kill for.
- Establish a simple AIP web page that, at the very least, directs outsiders to the best point of contact in the organisation. Again, make sure someone is assigned responsibility for genuine follow up;
- Offer training to local SMEs when they need to achieve accreditation with proprietary technologies for a project. Training in proprietary technologies helps SMEs develop the skills to pursue other business opportunities, so show how Australian SMEs have the same access to training as incumbent or overseas suppliers;
- Take steps to introduce successful SME suppliers to other global operations. A simple internal introduction to a colleague in say Texas, California or Tokyo is most valued by an Australian SME looking to bridge the tyranny of distance;
- Agree to provide written references for those SMEs that prove to be genuinely competitive suppliers. The SME can write the letter once the content is agreed, but being prepared to sign it in recognition of a job well done is what counts;
- Issue joint media releases with local SMEs when partnerships yield newsworthy innovation or solve a challenging problem. Sure, competitive priorities must be respected, but when kudos can be shared a joint media release will help SMEs gain credibility with future customers;
- Host a couple of seats for SME partners at the next industry networking event or awards dinner. While multinationals are probably tempted to entertain a major client, perhaps it’s still possible to take a few trusted suppliers along. Don’t underestimate how such an invitation could help open doors for local SMEs; and
- Consider the possibilities of social media. There is an increasing use of tools like LinkedIn and Twitter to make contact with suppliers and engage local networks.
It really is that simple!
Often it’s those very small AIP actions — that would appear seemingly insignificant to a multinational — that are most valued by local SMEs.
AIP Plans are flexible and multinationals need not dread them. AIP Plans are an opportunity to reflect on local supply chain engagement and to satisfy yourself that you’re getting the best value from suppliers.
CollabIT Canberra runs a range of activities to foster local IT industry collaboration and have already helped a number of multinationals link with SMEs under their AIP Plans.
No one expects multinationals to throw out years of history with reliable suppliers, but they are expected to keep an open mind to considering suppliers in Australia.
You just never know who might be trading around the corner with a better value proposition.
To help make the preparation of your public AIP Plan smooth sailing, give some thought to the types of goods and services that could be provided or supported by local SMEs, and keep this question in mind: Will my AIP Plan assist SMEs in gaining knowledge of, or access to, a business opportunity?
Don Easter was appointed IT Supplier Advocate by the Australian Government to work with the IT industry on practical activities that promote the competitiveness and development of SMEs. Don is the former Managing Director of EDS Australia and a member of the Australian Institute of Company Directors (www.innovation.gov.au/supplieradvocates).
Further information on AIP Plans is available at www.aip.gov.au.